Can You Invest In the Nigeria Professional Football League?

The regular season of the Nigerian Professional Football League ended on Sunday 26 May, the teams that made it to playoffs were determined and the 8 teams relegated were confirmed. It was an interesting season considering the temporary change in format to accommodate all 24 teams. For me, the highlight of the season was the Delta Force – Kada Stars deal and if there is anything learned from that deal, it is that the league is still in its formative years and there are opportunities to be explored.

Since the League Management Commission was established in 2014 to run the league, only two ownership transfers have happened – FC Ifeanyi Ubah’s acquisition of Gabros International FC and Delta Force’s acquisition of Kada Star’s spot in the league. These two events set two distinct precedents in the league. For FC Ifeanyi Ubah, it was a complete acquisition of an existing premier league club while the Delta Force-Kada City deal was a spot swap. Kada City is expected to participate in the Nigerian National League (NNL) in Delta Force’s stead.

These are two options for potential investors in the NPFL and there are more. Clause 5 of the most recent league regulations - NPFL Framework & Rules for 2016/17 – provide options for participation and investment. Some of these are obvious while some are not.

Options for cross-ownership

From Clause 5.10 of the regulations, a person is not allowed to hold/acquire “significant interest” in an NPFL while holding a significant interest in another NPFL club. You are not allowed to have a significant interest in 2 or more NPFL clubs. The regulation defines significant interest as 30% ownership or voting rights in a club. This means if you keep investment below 30% and don’t have voting rights in any of your preferred clubs, you can invest in more than one NPFL club. Alternatively, you can be a significant interest holder in a club have minority shareholding in other NPFL club.

Kunle Soname, owner of Remo Stars is rumoured to have stakes in Kada City. Investors can test the league with little investments and can spread the risk across several clubs in the NPFL, as there is no mention of any limitations to the number of clubs you can invest in.

Divestment of 50% equity of Government-owned clubs

According to Clause 5.3.4 of the regulations, one of the conditions of participating in the NPFL is that Government owned clubs and clubs owned by public institutions should relinquish 50% of their ownership of the club. Although this clause has not been implemented so far, it provides an array of options to choose from when implementation and divestment of these shares commence. Considering that there are about 20 government-owned clubs among the 24 clubs playing in the league and there are NPFL clubs in all geopolitical zones of the country, there are enough shares to go round.

Foreign Investment and Ownership

The Owners and Directors Test in Clause 6 of the regulations does not include nationality as one of the conditions to be met before holding or acquiring significant interest (or minority shares) in NPFL club, provided that the investor is not prohibited from entering Nigeria. Within the number of foreign investments in Nigeria, who knows, the NPFL might catch their interest.

City Football Group already has football clubs in 7 different countries across the globe and aims to have one football club in each continent. Nigeria and the NPFL could just be one of their target market and league in Africa.

As we have seen across professional football league worldwide especially in the English Premier League, club ownership usually stems from a deep passion for football, interest in particular clubs and revenue generating opportunities. One can only hope that passion and interest drive investment in clubs in the near future because as highlighted below, there are opportunities for involvement.