A STUDY ON CO-OPERATIVE FOOTBALL CLUB MODEL- AN INITIATIVE TO REFORM INDIAN FOOTBALL Dr Indulekha R & Sijin B T
DR INDULEKHA R Assistant Professor Institute of Management & Technology (IMT) Alappuzha SIJIN B T Chief Sports Architect Sports & Management Research Institute (SMRI) Trivandrum & Ernakulam
GLOBALLY FOOTBALL IS A BIG BUSINESS & GREAT EMPLOYER. WHAT ABOUT INDIA?
THE INDIAN FOOTBALL We lost many clubs we loved like Kerala Police, Mohammadens, Premier Tyres, Mahindra & Mahidra and JCT Professional clubs like FC Cochin, Viva Kerala, Bharath FC and Pune FC stopped their game Around 75 I-League players lost their opportunities in 2016 ISL stars such as Denson Devadas & Susanth Mathew were in search of clubs to play Thousands of next generation footballers are getting ready in our academies to be unemployed
WHAT WE NEED TO DO
Objectives To get a good insight about the different football club ownership models universally To identify the scope and significance of co-operative model ownership in Indian football business To identify methods to leverage India s strong co-operative heritage in football club business. To present a practical football club business model which upholds both business and social aspects of football
ARE WE GAME FOR FOOTBALL?
FOOTBALL ECOSYSTEM 3 Masters of football Fans Players Football Governing Bodies & Government Investors & Sponsors Other Football clubs Football Club
WHAT THE MASTERS NEED? Great Opportunities Great fame & fortune Support Great matches Great players to love Great clubs & teams to belong Great return on investment Great brand value
WHAT CLUBS ACTUALLY NEED Professional Club What - Great financial stability - Great opposition teams - Great fans & sponsor interest - Great opportunities How - Investment, endorsement, gate collection, prize money and other income opportunities - Great players in team - More matches & tournaments - Professional management
Football is a beautiful game but tough business. When other businesses are driven by profit, football is driven by passion. Our task is to blend profit with passion perfectly.
WHY COOPERATIVE OWNERSHIP
THE INDIAN COFFEE HOUSE STORY The India Coffee House chain was started by the Coffee Cess Committee in 1936. In the mid 1950s, the Board decided to close down the Coffee Houses. Encouraged by the communist leader A. K. Gopalan(AKG), the workers of the Coffee Board began a movement and compelled the Coffee Board to agree to handover the outlets to the workers who then formed Indian Coffee Workers' Co-operatives and renamed the network as Indian Coffee House.
THE SUPPORTERS DIRECT STORY Brian Lomax and his friends started the Supporters Direct by taking the ownership of then troubled Northampton FC in 1992
TOP EXAMPLES Most of the world's most valuable clubs are owned by its fans. Eg: REAL MADRID (Spain), FC BARCELONA (Spain), BAYERN MUNICH (Germany), ATHLETIC BILBAO (Spain), BORUSSIA DORTMUND (Germany) and BOCA JUNIORS (Argentina). Most of the football clubs in Spain and Argentina are owned by the fans. It is mandatory in Germany that minimum 51% of the shares of a football club must be with fans. World's top Clubs with highest member owners are BAYERN MUNICH (Germany) - 2,47,000, SL BENTICA (Portugal) 2,24,000, FC BARCELONA (Spain) 1,77,000, REAL MADRID (Spain) 1,75,000 and SCHALKE 04 (Germany) 1,30,000. More than 200 cooperative football clubs are working in UK under the guidance of SUPPORTER DIRECT, which is founded by Brian Lomax to save the then sinking NORTHAMPTON FC in 1992. Supporters' clubs are emerging in England to challenge big clubs. FC UNITED OF MANCHESTER to challenge Manchester United and Manchester City. CITY OF LIVERPOOL FC is started to challenge Liverpool FC and Everton.
BENEFITS OF COOPERATIVE MODEL We are the owners Ownership of Fans It s my club Locally based Our money, our society Community Engagement Sustainable development We care our nature Unity is strength Improve bargaining We are equal One Member, One Vote Risk free We are safe
FANS OWNED COOPERATIVE FOOTBALL CLUB MODEL
BUSINESS Consumer Goods Financial Services Lifestyle
1) FOOTBALL BUSINESS Sponsorship Sports Agent Commission Transfer Fee Player Rentals Endorsement Fee Ticket Sales & Hospitality Sales Licensing Fee Franchisee Fee Sports infrastructure business Prize Money Television Rights
2) FMCG BUSINESS- FAMILY Category FLUIDS FOOD Products Drinking water Soda Fun Drinks Biscuits Candy
3) LIFESTYLE BUSINESS- LIFESTYLE Category FITNESS FASHION FRIENDS FANS FEELING FAME FUNDAMENTALS Products Sports Goods Apparels Gifts & stationary Kits, Souvenirs etc. Kitchen, bathroom, bedroom, footwear Personal, Office, car Kerala Heritage products
4) FINANCIAL SERVICES- MONEY Category Chitty Loan Products Vehicle loan for business Self-employment Business Loan * Nature of financial services will vary depending upon the cooperative laws of respective states and approval of registrar Gold Loan Loans for availing Special sports coaching Loans for buying expensive sports equipment Loan for medical treatment Loan for participating in competitions abroad EMERGENCY LOAN
SOCIAL WELFARE SCHEMES Scheme Football Academy Pension for Senior Athletes/ Disabled Athletes Medical Treatment for Athletes Support for participating in international tournaments Special Coaching Support
SWOT ANALYSIS Strength Well-built membership base & loyal football lovers Good reputation and a positive corporate image. Adequate space for future expansion of the Society s new business lines Accountability and transparency Education and trainings in business skills and entrepreneurship Opportunities Return of interest in football Unexploited market potential Diversified product/service mix Expansion of membership base geographically to expand business Presence of other institutions willing to work with KFDCSL Better relationship management with members and member organizations Absence of a strong sports brand Weaknesses Lack of adequate sports professionals such as sports managers and sports engineers Lack of competition Inactive members Lack of own football/sports infrastructure Threats Mind-set of government and sports administrators Climate and weather instability may affects sporting events in terms of attendance Inactive members
SUCCESS FACTORS
1. MAXIMIZE MEMBERSHIP FOR FANS Approximate Direct Fans Base created by membership AND FINANCE Member Type Number Fans per Total Fans Member Individual 300000 3 900000 Total 900000 Value Numbers Total Individuals 1000 3,00,000 30,00,00,000 Minors 500 1,50,000 7,50,00,000 Institutional 5000 3000 1,50,00,000 Supporter 2000 7500 1,50,00,000 Total Rs.45,00,00,000
Clubs with highest member owners Bayern Munich (Ger) 2,74,000 SL Bentica (Por) 2,24,000 FC Barcelona (Spa) 1,77,000 Real Madrid (Spa) 1,75,000 Schalke 04 (Ger) 1,30,000 Kerala Population Rank District Population 1 Malappuram 41,10,956 2 Thiruvananthapuram 33,07,284 3 Ernakulam 32,79,860 4 Thrissur 31,10,327 5 Kozhikode 30,89,543 6 Palakkad 28,10,892 7 Kollam 26,29,703 8 Kannur 25,25,637 9 Alappuzha 21,21,943 10 Kottayam 19,79,384 11 Kasaragod 13,02,600 12 Pathanamthitta 11,95,537 13 Idukki 11,07,453 14 Wayanad 8,16,558 33,387,677
2) BUSINESS BOOSTS FOOTBALL AND FOOTBALL BOOSTS BUSINESS Consumer Goods Financial Services Lifestyle
3) DIFFERENTIATED PRODUCT MIX FOR MINIMIZING BUSINESS RISK FL FAMILY FL Money FL LIFESTYLE FOOTBALL
4) 365 DAYS FOOTBALL ENGAGEMENT
5) STRENGTHEN COMPETITION In any business other than sports, you are hero if competition is zero. But in sports, you are zero if competition is zero. AND CO-OPERATION
6) MANY MANY BUSINESSES TO DO
STRATEGIES TO AVOID POTENTIAL PITFALLS
No Pitfall Strategy 1 Lack of clearly identified goals and objectives FOCFC has well defined goals and objectives with specific time frame. The goals will be defined on the basis of SMART concept and the adherence to it will be monitored regularly to avoid negative deviation 2 Inadequate Planning All employees, board of directors and committee members will be trained in planning and project management to ensure the desired outcome 3 Failure to use experienced advisors and consultants The board, employees and committees will blend experience, expertise and energy in perfect ratio to take the best 4 Lack of member leadership FOCFC helps its members to become leaders. It limits the number of years a member can be a director/chairman to help other potential members to get leadership roles. Various committees will be an added advantage for members to exhibit their leadership qualities 5 Lack of member commitment FOCFC ensures a healthy active member ratio for better prospects. Active members will only get right to vote and contest for boards and committees 6 Lack of competent management Experienced and qualified professionals from sports management, cooperation, sports engineering and other core areas will make our management competent to make FOCFC a great success 7 Failure to identify and minimize risk FOCFC plans a perfect product mix to minimize all kind of risks associated with football business and general business 8 Lack of adequate finance FOCFC sources finance from multiple channels such as share capital, deposits, sales revenue, endorsements etc.
STRATEGIC SPORTS BUSINESS RANKING (SSBR) Team Performance- 25% Based on match results, goal scored, goal difference, home & away match results, competitor ratings, fair play ratings etc Financial Performance- 25% Based on various financial ratios Fan base management- 15% Total fan base, home match spectators, social media mix and new fans base created. Facility created & managed- 15% New facility created for football business and the % of use of facilities created. User satisfaction ratings on facilities. Jobs created- 10% Total number of jobs available. Newly created jobs. Indirect jobs created and outsourced job activities Salary paid to players- 5% Compensation of players based on national mean football player salary. Maintenance of Healthy revenue and wage ratio. Innovation- 5% New practices which helps football to grow