Sports Business

Majority of Kenyans keenly follow the European Leagues, mainly the English Premier League.  Across Europe, countries such as Germany, England and Spain have managed to turn their football leagues into a global phenomena. In Africa, countries like South Africa are reaping big in their sports industry. In Kenya, we have great talents in football, rugby and field related activities. If we build more capacity, sports can play a more leading role in contributing to development of the country. Sports industry is not only related to athletes in the filed but a whole lot more. For example, sports journalism, sports marketing, ticket sales, sponsorship, sports management are some of the aspects of the sporting industry. According to The Telegraph, the whole sports industry in UK supports over 450,000 jobs in and it is estimated that the industry is worth 20 billion Euros.

sports business 2

sports business

Many countries understand the impact of a vibrant sports industry.  Why would a club in Russia or China be willing to spend a lot of  of money to buy players such as Eto’o or  Jackson Martinez etc. Its because this brings more focus to their own industry and this partly fuels growth of their own sports industries. To show how the government is committed to enhancing sports development, President Xi Jinping of China visited Manchester city facilities to see ways to make sports a profitable and viable undertaking in China. It clear that sports development is an important tool to spur economic development through creation of jobs.  The sports industry can ease pressure on over-reliance of traditional industries such as manufacturing, processing, teaching for job creation and economic growth.  If we don’t do it, others will do it. Developed countries will continue poaching our athletes and building brands around them. Its time we took steps to changing this narrative. In the past we faced brain drain and now muscle drain is real.

As demonstrated by football success in England and Spain, investment in well funded sports academies is one the main important steps. But this will require funding and support in terms of people with skills to run such institutions. The important thing is to build our own sports industry based on sports talent available in the country. Lets look at rugby for example. Our national sevens team is only second best to South Africa in the continent and we have even beaten South Africa on a few occasions. Take note that the sevens team has achieved all this against a backdrop of many challenges: lack of adequate pay, poor training conditions as well as other issues with the unions.  Moreover, Kenyans are known to excel in track events and the potential to exploit these capabilities lies in the way we perceive sports in Kenya.

sports business 3

Since childhood we perceive work as something that is done from Monday to Friday between 8am and 5pm. Other activities done after that time are mainly perceived as recreational or entertainment. We have therefore failed to capture the potential that lies in exploiting other industries such as sports, entertainment and art as instruments for drive economic growth.  We have done little to create the necessary conditions that would make a young person study sports management as a career or even pursue sports as career. If we see sports as a business industry then we can slowly begin to transform the sector because currently, its a sleeping giant. The same report by The Telegraph indicates that in UK, there are more than 10,000 graduates with sports related degrees every year who get absorbed into sports related events or even other industries. Of course UK is far more developed but this shows the potential the industry has in Kenya given the great enthusiasm that is associated with sports in Kenya. There is scanty information about the worth of sports industry in Kenya further indicating the lack of real focus on this sector.

Supporting the sports industry does not entail buying athletes lunch and paying air tickets. This is just a knee-jerk reaction to a more complex issue. I have no problem with a politician or any other person rewarding our sporting heroes once they perform good. But a more solid way of supporting these athletes and the industry at large is needed. For example, during the recent state of the nation address by the President, there was no mention of the state of sports in the country. This is against the backdrop of looming failure to meet the anti doping rules, poor performance of Harambee stars as well other issues relating to payment of sports personalities. Actually, Kenya has missed the WADA (World Anti-doping Agency) deadline for setting up a new Anti-doping agency which expired on April 5th.  If WADA finds Kenya non-compliant, the country risks being banned from competing at the Olympics. The laxity by both the government and sports agencies is discouraging. The government and those involved clearly do not see sports as an investment that is worth being allocated resources.

My suggestion would be that the government focuses more on early sports development and not just at the national level. Building stadiums as promised by the government is good but also more capacity in terms of academies at the grass roots to spot and train talent is also necessary. Recently, there have been suggestions about changing the curriculum from 8-4-4 to a new system. A sneak peak into the new proposed system shows that it lays more emphasis on nurturing and training talent. If so, then this is a good step towards encouraging more people to participate in sports as a career and not just hobby. A long term thinking of turning sports into a viable industry is therefore the only long lasting solution that can enable more people to join the industry and stop the wasting of talents that is currently witnessed in this country.

I don’t know much about NFL but i know Beyonce performed during  The Halftime Show alongside Chris martin and Bruno Mars for Superbowl 50. The numbers from that whole sports event are just crazy.  For example, the amount of money spent on promotion, parties, ticket sales, team apparel, food and drinks is staggeringly high. According to Forbes, the average price for a 30 second ad is $5m and around  $50 million is spent on drinks. We can make our own version  here in Kenya depending on how we manage and organize our sports industry to be a high valuable undertaking for both corporate, members, community, the fans, sports management and sports personalities.

superbowl 50

source; Forbes

In Kenya the potential is there. For example, there was something in the news about building a F1 track in Machakos. In Mombasa beach soccer is largely untapped. In Iten there should be a whole industry built around that. How about Rugby and Football?. There was an effort for Kenya to host one of the world rugby sevens circuit. That would be great and we need to build more capacity form the grassroots in terms of education, training young talents, community development etc. This cycle can create an industry that does not only support the athletes but also other people who can be employed in various types of jobs within the industry.  Developed nations will continue to develop because they tap into new ways of ensuring sustained economic growth. We need to embrace this as a nation and reignite these industries in order to make their meaningful contribution to economic growth in Kenya.

 

 

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The Beginnings

It’s no secret that I am fascinated by entrepreneurship related stories. I think entrepreneurs are creators, people who bring ideas and concepts to life. Such stories and experiences leave me wondering what we could achieve as a country and continent if we embraced those perspectives. The ability to see opportunity where others do not see is not common and entrepreneurs have the ability to shape the way we live our lives much more than the politicians can, but that’s a story for another day. In the recent past, i have read about the founding of PayPal and how it came to be. Basically, it’s a story about Peter Thiel, Elon musk, Max Levchin among other guys who were instrumental in founding of PayPal. They later sold the company at $1.5 billion to eBay in 2002. These guys, both founders and early employees, have gone on to form many other tech based companies through networks and partnerships and they have helped form or been part of many other companies in Silicon Valley. The trio is famously known as the ‘PayPal Mafia’. Companies such as: Tesla, SpaceX, Linkedin, YouTube, Yelp, Palantir among others are closely related to the PayPal Mafia. This shows the power of networks and maintaining professional contacts. The case of PayPay is basically about success. This blog post is basically about ‘the beginnings’ and I curated a few other experiences about some of the experiences that  entrepreneurs and other personalities underwent as they began their journeys.

paypal-mafia

source; Google images

For example, did you know Elon Musk partnered with a friend in college and turned a fraternity house into a night club? These guys rented a 10 bedroom house and turned it into a part time club and made extra money on the side. Richard Branson, the Virgin Atlantic guy, began by starting a magazine. Branson interviewed people and featured them on the magazine. it became a success despite he and the team not having any experience in that kind of business.  The CEO of Goldman Sachs, Mr Lyod Blankfein used to sell sodas during matches. As people watched football (American Football) the guy sold sodas to people and he found a way of making some money on the side. Others like Hillary Clinton had a stint at selling fish in between studies at Yale.

Then there are others who had a lot of trouble and discouragement.  Jack Ma (ALibaba) on the other hand had interest in learning English and would guide tourists in his local area for 9 years in order to improve his English. The guy also failed university entrance exams three times. He later became a teacher. Ma went to US and heard about the internet the first time in 1994 and started a company to create websites for other Chinese companies because he realized internet had not yet picked up in China. Now the funny part is that when he first began the website building business, he invited people to his house to come and witness it. It took 3 hours to load half a page. Guys drank, played cards and watched TV as they waited for half a page to load. waah!

Apart from first business ventures, I also found out some interesting aspects of famous entrepreneurs in their respective fields. For example, Thomas Edison, the guy who developed the electric light bulb, was told by his teachers that ‘he was too stupid to learn anything’. (LOL).  How about this-Walt Disney was fired from a newspaper company the reason being ‘he was not creative enough’. JK Rowling (the person behind Harry Potter stories) was also fired from her job as a secretary because ‘ she spent a lot of time daydreaming’. Well, see where her daydreaming has taken her now. And Oprah Winfrey was first fired because ‘She was unfit for TV news and she was too emotional’. Jerry Seinfeld, an actor, did not actually know he was fired; the guy showed up and found his part of script for a read-through was missing, and this was in middle of shooting a movie. There are also other success and failure stories from African entrepreneurs that can serve as important lessons. The problem is that they are not amplified much and celebrated as it is in the case of entrepreneurs in the western world. We therefore need to do more especially in the mainstream platforms so show that indeed people can make it in Africa. For example, take the story of Anda Maqanda, South African electrical engineer who decided to start his own engineering company instead of looking for formal employment in 2008. However, he failed terribly at first and had to seek formal employment because things did not work out as planned. He re strategized and with the knowledge gained revamped the company in 2010 and now employees more than 150 people and has expanded to other cities including Nairobi. There are also very many others in Kenya and beyond that need to be shared more in order to resonate well with Kenyan and African entrepreneurs. 

I believe that it is not a must to fail in the first business in order to succeed. Neither is it a guarantee that when you fail in the first venture then you will succeed in your next. It depends on the lessons learnt. Everyone has their own story, but the bottom line is that we must all undergo through the learning curve. I have realized from these people that learning the lessons, being vulnerable are all part of the business. But as long as you keep an open mind; a mind-set wiling to learn and try new things, then success is not very far away.