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COVID-19: Shutdown of sports is crippling the world economy – Oma Akatugba

The halt on global sporting activities has impacted the world’s economy massively, as the sports sector and other sectors influenced by sports, account for a total of 2.98% (€300 billion) of the European Gross Value Added,

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Oma-Akatugba, COVID-19: Shutdown of sports is crippling the world economy – Oma Akatugba

As the spread of coronavirus accelerates around the world, the effects of measures taken to curb the pandemic have crippled activities of some businesses across the globe.

The need to lockdown and practise social distancing makes it difficult for certain businesses to thrive, especially those associated with sporting activities, where physical contact is difficult to avoid. Most sporting events have suffered major serbacks since the outbreak, as the organisers are counting their loses.

With the number of confirmed COVID-19 cases growing astronomically around the world and resumption of sporting activities, which is not near in sight, it is imperative to consider the effect of the pandemic on the industry, Nigerian sporting environment and ways to increase sports productivity locally.

In a tweet chat session organised by Nairametrics with Oma Akatugba, on Thursday, the renowned sports journalist shed light on the effect of the pandemic on the industry, both home and abroad, and possible areas Nigerians could venture into, in order to create wealth from sports.

READ MORE: Kobe Bryant: What Nigerian athletes, business owners must learn

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According to Oma, the halt on global sporting activities has impacted the world’s economy massively. He explained that the sports sector and other sectors influenced by sports, account for a total of 2.98% (€300 billion) of the European Gross Value Added, also contributing 2.12% to the total employment numbers in Europe, representing about 4.5 million employees.

But with the rise in COVID-19 cases around the world, most leagues have been suspended indefinitely, consequently affecting revenues generated from TV rights, jersey sales, ticket sales, and endorsements. This, according to him, has forced some athletes around the world to take pay cuts.

He spoke further on the effect of the outbreak on sports content creators like him.

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“All my interview appointments have been called off, major sporting events where I already got accredited were all postponed indefinitely. The last time I received a message from the sporting director of one of the Bundesliga clubs, he said they do not have any need now because of the pandemic, and cannot talk about the budget for players,” He said.

READ MORE: Is Nigeria’s appropriation bill a scam?

On the Nigeria Premier League, Oma believes that it has not been able to live up to expectations, despite having a handful of Nigerian born football stars making it in Europe and other parts of the world.

Oma said, “Honestly, Nigeria is not taking any strategic step to make sports an active economic driver, like other parts of the world.” He made comparisons with other parts of the world where sports business spins in large income. “In Germany, for example, 56,081 people were employed either directly or indirectly in the Bundesliga or Bundesliga 2 in the 2018/2019 season,” he added.

According to him, people who run sporting events in these places are not just passionate about the game, but businessmen and women that understand the dynamics of business and how to turn any activity into a big money-spinner.

Business opportunities in sports for Nigeria
It is important that Nigeria bolsters its sporting activities to increase its contribution to the country’s economic growth, and Akatugba advises on major steps to take in order to grab the opportunities that sporting activities present.

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READ MORE: 5 practical things small businesses can do during this pandemic lockdown

In his words, “the key steps to take is to read global trends in sports business as well as research on key events and happenings in the business globally while studying the Nigerian terrain, then find an area you can latch unto.”

He cited jersey making and kits-making as very good ventures in the sporting business. Till date, there is no company making the highly demanded fabrics for jerseys in Nigeria. Anyone can venture into this area of business.

Other areas filled with opportunities, as suggested by Oma, include merchandising, players management, sports marketing, or event creation and promotion.

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Sports

How Nike rejection birthed sportswear industry in Nigeria

To Udezue, sport is more about creating opportunities than just winning trophies.

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How Nike rejection birthed sportswear industry in Nigeria

For many years, Nigerian sports had to depend on foreign brands for all kinds of sporting and leisure wears. In doing this, Nigeria was also ceding to these countries the opportunities that came with the business of sports. None of these changed, until Africa for Africa (AFA) Sports started out in Nigeria years ago.

Recently on Nairametrics Business Half Hour show, Founder of Africa for Africa (AFA) Sports talked about how Nike’s rejection became the birth of an industry in Nigeria.

Ugo Udezue had come to Nigeria to establish the Continental Basketball League, (CBL) after spending 17 years with BDA Sports management in California. At this time, he saw sports as being “more about creating opportunities than just winning trophies”.

READ MORE: How the United States plans to control the African Development Bank

What he saw was the prospects of creating a whole economy built around the game – alternate relaxation options for workers who had spent long hours at work, and better opportunities for people to trade their wares and entertain guests during the games.

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A major kitting challenge came up for the CBL, as most of the foreign brands did not seem to cater for the African climate. The kits and balls being used had been designed by foreign brands using their weather condition and environment as the guiding factor. Because of this, they could not cater to the needs of the Nigerian basketball players.

“The balls were not designed to absorb sweat and so the players kept dropping the balls. Even the jerseys and shoes had clearly not been designed for the African weather since we did not play the game in air-conditioned courts,” he explained.

READ MORE: Is sports betting gradually making Nigerian youths lazy?

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When Udezue reached out to Nike to seek Apparel sponsorship for the CBL, he received the shocking news that “Africa was not in their plans at the time”.

This rejection, though a short term challenge, became the inspiration behind founding AFA Sports, done by Africans to cater to the sporting needs of Africans.

As you may well know, there were foreign companies sponsoring Nigerian teams at the time, making jerseys and other apparel. But because they were not producing these things locally, they were depriving the country of the opportunities and benefits which should have come with such ventures.

Gradually, Udezue and his team moved from the initial years of chaos and unprofitability, to growing AFA Sports into the biggest performing sports brand in Africa. The company’s products are now shipped to different countries.

In a couple of years, the dream started to materialise when AFA sports became the official apparel sponsor of the Nigerian National Basketball team D’Tigers during the Afro Basket 2017 competition. It was a major game-changer for sporting in Africa.

READ ALSO: Kobe Bryant: What Nigerian athletes, business owners must learn

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An industry waiting to explode

Manufacturing in Nigeria is often thought of along the lines or agricultural and industrial products, without much attention on the sporting and leisure industry. From jerseys to tracksuits, leisure wears, boots, balls, caps and others, there is a whole economy waiting to be explored.

“I saw sports as a way to create wealth. I realised that it was an opportunity to create jobs for Nigerians while meeting the need for football clothing, and for as long we keep sourcing these materials from the foreign brands, we will miss out on ways we could have used it to empower our economy,” Udezue said.

With these items produced locally at the factories and even exported to other countries, jobs are created for Nigerians. AFA sports, for instance, has three factories in Lagos state where it employs people to carry out its productions of sports and leisure wears.

READ MORE: COVID-19: Shutdown of sports is crippling the world economy – Oma Akatugba

Beyond saving Nigeria the cost implications of importing such products, the products are now being exported to other African countries bringing in some foreign exchange for Nigeria.

As Nigeria moves towards self-sufficiency, there is the need to pay attention to the sports economy and its attendant benefits. Much more than sponsorships, hosting games in local economy can turn the fortunes of small business owners in the locality, given them a wider market and increased income.

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Sports

Top earning Nigerian footballers in Europe

Nigerian footballers are back in top clubs and earning competitive wages in European football.

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Top earning Nigerian footballers in Europe

Nigeria has produced some of the biggest and most talented footballers to ever played the game in Europe. Expectedly, this has come with immense wealth for these football stars, amounting from mouth-watering sign-on fees to handsome weekly wages.

Beginning in the 90s, football has been a path to riches for poor Nigerian boys like never before. Nigerian footballers like Nwankwo Kanu, Jay Jay Okocha, Finidi George, and a number of others left the Nigerian league for top European teams, where they went on to achieve greatness and immense wealth.

READ ALSO: Ajax FC’s shares fall by 21% after Champions League defeat

After a decline in football development in Nigeria, Nigerian footballers are back in top clubs and earning competitive wages in European football. This new crop of Nigerian-born football stars is generally perceived as a win for Nigeria, because not only are these footballers indirectly representing the country, they are also earning fat salaries that are almost similar to what top South American and European football talents earn. Needless to mention that a significant portion of these salaries earned by Nigerian football stars ends up being remitted back home ever so often. And this contributes towards stimulating the Nigerian economy.

That said, let us now focus on some of Nigeria’s highest-earning footballers.

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READ ALSO: Valuing Manchester United

The highest-earning Nigerian footballers are:

1. Odion Ighalo (Manchester United): £125K a week

Recently, Ighalo transferred to Manchester United on loan from the Chinese Super League side Shangai Shenshua, becoming the first-ever Nigerian to play for Manchester United. Since his transfer, he has become a fan favorite with the EPL side, netting a total of 5 goals in 17 games for Manchester United so far. His weekly wages of £125K make him the highest-earning Nigerian footballer in Europe.

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READ MORE: Ighalo to earn N1.4 billion in six months at Manchester United 

2. Victor Osimhen (Napoli): £96K a week

Just last month, the 21-year-old Nigerian football star, Victor Osimhen transferred to the Italian Serie-A side, Napoli. This is one of the most expensive African footballer transfers in European football.

Football Transfer news analyst, Fabrizio Romano announced that Osimhen would join Napoli from Lille, for the tune of €50 million+ add-ons to Lille, and he would sign a contract with the Naples side. This would keep him in Italy until 2025.

Osimhen is also expected to earn €5 million Euros a year (an average of £96K per week) in wages, image rights and bonuses which would make him the second highest-earning Nigerian footballer in Europe. This is a deserved fee for him after scoring 13 goals in 27 league games for Lille in the 2019/20 season.

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READ MORE: Barcelona overtakes Real Madrid on biggest earners’ list 

 

3. Wilfred Ndidi  (Leicester City): £75K a week

The 23-year-old defensive midfielder joined the EPL side for a £17 million deal from Belgian club Genk and has become one of the most solid and well known defensive midfielders in European Football.

He has represented the Super eagles 36 times and may top the list one day as he attracts interest from bigger clubs in Europe.

4. Victor Moses ( Chelsea): £75K a week

Currently on loan from Chelsea at Inter Milan, the 29-year-old shares a spot with Wilfred Ndidi. He joined Chelsea in 2012 after he was signed from Wigan Atheltic. He is one of the few Nigerian footballers to win both the Premier League and a European title.

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5. Kelechi Iheanacho (Leicester City): £60K a week

The FIFA Under-17 World Cup winner with Nigeria comes in 4th. He also won the FIFA Under-17 World Cup Golden Ball, which attracted the attention of Manchester City.

He made his league debut for Manchester City in the 2015-16 season and was sold 2 years later for £25 million to Leicester City. This made him the most expensive transfer of a Nigerian Footballer then, a record that was broken two years later by Alex Iwobi’s fee during his transfer to Everton.

 

6. Alex Iwobi (Everton): £50K a week

24-year-old Alex Iwobi comes in 5th place. He is a cousin to one of Nigeria’s greatest players of all time, Jay Jay Okocha. Iwobi started his career with Arsenal, making his league debut in the 2015/16 season. He played a total of 100 league games for Arsenal and helped the North London club secure the 2017 FA Cup trophy.

In 2019, he was sold to Everton in a five-year deal worth up to £34 million, signing a £50K a week deal with the Northern English club.

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Business

Chelsea Football Club owner sells gold mining stake for $1.4 billion

This could see the club have more funds for player transfers

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The owner of Chelsea Football club and other investors have agreed to sell 40% of a stake in Russian gold mining firm

Roman Abramovich, the billionaire owner of Chelsea Football club and other investors have agreed to sell 40% of a stake in Russian gold mining firm, Highland Gold Mining for $1.4 billion to Fortiana Holdings Ltd.

It was also reported that Fortiana would offer the other existing shareholders of the firm the same offer of $3.94 per share at a 3.8% premium of the shareprice.

READ ALSO: Ighalo to earn N1.4 billion in six months at Manchester United 

Backstory: This comes at a period of rallying gold prices as Nairametrics reported earlier that gold prices surged over $1,800 per ounce for the first time since 2011, as the year to date inflows into bullion-backed exchange-traded funds (ETF) have topped the record full-year total, which was set in 2009.

Gold prices also set a record of $2000 per ounce before dropping to just above $1900 earlier this week

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The gold rally has made gold mining firms attractive for further M&A activity, as Fortiana Holdings, owned by Russian businessman, Vladislav Sviblov looks to enter fully into space with other firms eyeing up smaller gold mergers around the world.

READ ALSO: Nigerian entrepreneur becomes first African woman to own a European club

Highland Mining directors have been urged by Citigroup to accept the offer as Fortiana says the deal would be financed through a loan from VTB Bank. Highland Mining firm as also risen with the gold rally as the stock price is up 47% year to date.

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What this means: With the gold rally and economic uncertainty due to the global depressions caused by the pandemic, more gold mining firms are expected to be scooped up in M&A deals. For Chelsea fans, this could see the club having more funds for player transfers especially for a goalkeeper, as UEFA relaxed FFP regulations for clubs to afford players during the pandemic. Chelsea bought winger  Ziyech from Ajax for a €40 million fee and also bought German Striker, Timow Werner for a €53 million fee from RB Leipzig.

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