Which soccer club commands the biggest slice of the sponsorship cake?
Chiefs and Pirates are thought to have the most funds, but it's a complicated business
It has been donkey's years since Kaizer Chiefs and Orlando Pirates sparked a transfer tug-of-war for the signatures of top-notch players.
The inability to attract marquee signings is a puzzle for the supporters of South Africa's two biggest clubs, who didn't even contest for Steven Pienaar or Daylon Claasen.
Considering that they command the biggest slice of the sponsorship cake, surely the Chiefs and Pirates are flushing in a fountain of finances that should afford them a war chest to capture the cream of top talent, no? Both share sponsors Vodacom and Carling Black Label, who provide the big bulk of their cash component sponsorship.
The Sunday Times understands each club gets in the region of R10-million appearance fees for the annual Black Label Champion Cup. That amounts to R70-million apiece given the seven-year duration of the competition.
Their coffers are further swelled by the R60-million per year each team claims from the mobile communications company's backing.
As sponsorship in kind Chiefs has Nike, Hollard, Toyota, Medshield and SuperSport while Pirates has Adidas, Acer, Greyhound and SuperSport.But from the value point of view, these teams may not have as much money as people think they have.
Because the value of the brand is not necessarily equivalent to the value of cash in the bank, if they are worth R70-million each, how much of that is long-term assets and how much is liquid cash? The less the liquid cash the less they are able to participate economically.
Gate takings and television money provide other streams of revenue, but clubs incur costs in overheads such as player and staff salaries, venue booking, flights and accommodation. Does that leave nothing in the kitty to play in the transfer market?
In South Africa there is a disconnect between the fans, the club and public in general whereas in Europe, most of the clubs financials are published because some of them are listed companies and they've got a disclosure obligation.
Here, what doesn't come out is the collective amount of money that each club has.Manga-manga business
That's the one thing.
The second thing is that South African clubs have not moulded the supporters' club to become a nonprofit organisation that would have a seat on the board, a bank account and shares.
Such transparency would eliminate any manga-manga business as to whether the club has money or not because the supporters' representative on the board would be privy to information.
There is less transparency in South Africa compared to Europe. The clubs are not prepared to discuss their inability from an authentic point of view. And the value lies in those areas.
A change of ownership model could lift the veil of secrecy. The way that they can open up is if the ownership model can change. If the fans can also have a stake in the club.
And also you move from being a family business to be a corporate. There was more transparency when Primedia had shares at Chiefs because Primedia would have had to account on the Pty Limited side.