The intention of Alhaji Aliko Dangote, Africa’s richest man to acquire majority share in the Arsenal Football Club of England has stirred up controversy among soccer fans in Nigeria, with many urging the business mogul to start from home.

Aliko Dangote’s name made unfamiliar news headline in early May when he openly confessed his strong desire to buy Arsenal, one of the most lucrative football clubs in the United Kingdom.

“I still hope, one day at the right price, that I will buy the team. I might buy it, not at a ridiculous price but a price that the owners won’t want to resist. I know my strategy,” said 58 year-old Dangote. It was a strong statement that sent tremor across the globe. With his status as Africa’s richest business man, with eyes on expanding his business empire beyond the shores of Nigeria, the statement sent a strong signal.

Dangote, a staunch Arsenal fan is reportedly worth $15.7 billion. Even though his first attempt to buy into the club currently co-owned by Stan Kroenke and Alisher Usmanov in 2010 was subtly rebuffed, the industrialist has remained unperturbed. And he was reported to have vowed to take his “own business to a certain level” before launching another audacious bid to acquire the London club.

If Mr. Dangote’s latest ‘Buying- Arsenal’ aspiration eventually succeeds, he would become the first African to own a professional club in the UK and automatically joins the legion of foreign business tycoons bankrolling clubs in the English Premiership League. Such opportunity to buy a lucrative club like Arsenal and be counted alongside billionaires like Russia’s Roman Abramovich (Chelsea), the UAE mogul and deputy Prime Minister, Sheikh Mansour bin Zayed al Nahyan (Manchester City), the Glaziers Family (Manchester United), among others would be too tempting for Dangote to ignore.

Many analysts seem agree that it would be a technically savvy investment that could turn out another cash-cow for Dangote. “Certainly, it will be a good buy for him as Arsenal is one of the most valuable sports (football) football enterprises  in the world valued at a over 1.3 billion dollars. And it is equally one of the highest revenue-generating football clubs in all of Europe at the moment,” declares Chidi Lawrence, a sport analyst.

Critical reactions and suggestions

Expectedly, the news of Dangote’s Arsenal purchase ambition did not please many Nigerians and has earned the mogul a swelling crowd of critics. To many angry commentators, Dangote’s decision to ferry large chunk of the wealth he made in Nigeria to the UK in the name of buying a lucrative Arsenal FC without buying any club locally places a big question marks on his business ethics.

“Dangote should respect the popular adage: ‘Charity begins at home’ by investing a substantial part of his wealth in investments that would help harness abundant talents this country has that are wasting away. And founding a football club locally is a good step,” argues Mrs. Pamela Ukabi, a business analyst.

Toyin Ibitoye, frontline sports journalist agrees that Dangote should look inwards in his investment plans so as to help develop Nigeria’s domestic league to grow to the level where the English Premier League is at the moment rather than bankrolling Arsenal. “What we have lacked in Nigeria is a proper business structure and business plan for our clubs. And if a man of Aliko’s calibre is interested in setting a structure in place for Nigerian football, that could just be the turnaround that we’ve been waiting for,” Ibitoye said.

Ruby Igwe, daughter of the late Amaka Igwe, in an open letter to Aliko Dangote over the Arsenal purchase matter also drew attention of the billionaire investor to the ripple effects  buying a club in Nigeria would have rather than in the UK. “If you invest in the football in Nigeria, maybe my mates will make good money playing for Nigeria’s local and national teams. Maybe we will know more Nigerian players by name and not because of what non-national club they play for.”

She went further: “Maybe the clothing and manufacturing industries will be revived by making jerseys and other memorabilia. Maybe students can find modes of expression and survival in sports in general, instead of trying to conform to what they are not.”

Fu’ad Lawal, a football analyst adds that a Dangote Football Club in a city like Lagos would definitely be a cash-cow. “Imagine Dangote takes just a little of his almost 20 billion dollar fortune and invests it in Stationary Stores Football Club (SSFC). He doesn’t even have to build stadiums. Lagos has enough of that. Imagine what a massive rebranding will have on a Lagos team. Imagine the competition a big name like Dangote will jump-start in the Nigerian league. More private investors will seek to invest.”

“Dangote will not only kicks-tart a revolution in the local league but he will create jobs, enrich Nigerian families and have his name boldly written in the halls of Nigerian sports history, ” Mr. Lawal argues.

But a former Eko United Football manager and ex-international, Adegoke Adelabu insists that Dangote shouldn’t invest his money in funding a local football club based on sentiments as the domestic league is not suitable for such investment yet. “How do you expect a businessman, who knows what he is doing, to invest in our league? Dangote is a Nigerian and it is expected that he can turn around the face of Nigerian football for good, but we need to put certain things in place for our league to attract big money spenders,” he argues.

Not an easy Route

Whether Dangote eventually decides to fund a local football club before realizing his dreams of acquiring Arsenal or not, pundits have already declared that owning and managing a football club in England is not as easy as the Africa’s richest man thinks. Analysts say running a football club in the UK as a foreigner is a different kettle of fish from what Dangote is used to in Nigeria and parts of Africa where he has recently set up companies.

According to James Ucha, a financial expert, the regulatory environment where Dangote made his wealth is quite different from the UK he is aspiring to acquire a majority stake in a football club. New UEFA Club Licensing and Financial Fair Play Regulations already in place require clubs to balance their income and expenses, and Mr. Ucha believes Dangote cannot operate under such rules.

“Apart from doling out over a billion pounds to buy stake in Arsenal, can Dangote stand the due-diligence and other stringent rules and regulations governing football clubs in the UK?, ” he queried.

“The premiership is well organised and transparent for businessman like Dangote who is already used to business model of favouritism to make headway. The wage structure and welfare policy of footballers and other staffers are too large for his kind of business model,” Ucha adds.

Etcetera, a singer and football analyst also argues that owning an Arsenal FC would be a hard nut for Dangote to crack and that it may lead to his bankruptcy. “Dangote has most of his wealth in shares and physical assets and the football business requires liquid cash to sustain. No serious private equity firm would get involved with a football club. They are not proper businesses,” he claims.

“Too much politics, too many egos. And there’s no proper exit route – the history of football clubs on the stock market is chequered, to say the least. They are rich men’s toys, great for entertaining your mates, and that’s about it. I don’t think Dangote can afford such an expensive toy,” Etcetera cautioned.

According to reports, despite the added incentives of lucrative TV and other commercial revenues, not as many billionaires who have invested in football enterprises in the UK have succeeded in reaping fantastic returns as Dangote’s investments have delivered so far. And Dangaote would have as many investors in UK clubs as possible to seek briefs from before taking his final decision on Arsenal project.

Simon Jordan was valued to be worth £75m when he signed a £10m cheque in 2000 to take control of South London football club, Crystal Palace, against warning from many around him. But the deal that made him the youngest football club chairman at the age of 32, and owner of Crystal Palace was too tempting to resist. But ten years later, Palace had problems due to insolvency and Jordan’s personal mobile tech wealth was swept off by the burst.

When the Glazer Family arrived Manchester to purchase the prestigious Manchester United early in 2000, the investment decision was largely based on the perceived lucrative value of its global brand. The American investors thought they were acquiring a money-spinning machine or cash-cow to milk at will. And with eyes on the ball (profits), the Glazers systematically increased their stake in the Old Trafford club from 3.17 percent to 98 percent, in an investment estimated at £800 million.

They came with a trick that ensured that the cost of buying the club was loaded on to the club itself, with the revenues it generates used to pay the debt and interest that the Glazers undertook to buy the club. The calculation that the club will essentially pay for itself, leaving the American owners with a multi-billion pound asset and money-spinning enterprise is yet to materialise, leaving the Glazers mired in debt.

Even Roman Abramovich, the Russian oil billionaire owner of Chelsea is not spared off the financial miseries synonymous with investing in a football club in England. Despite, masterminding transformation of Chelsea to title winning club, amazing UEFA Champions League and Europa League trophies, three premier league titles, two FA Cups, League Cups etc., Abramovich has reportedly written off more than one billion pounds he ploughed into the club since acquiring it in 2003. Sheikh Mansour, the Abu Dhabi billionaire has equally spent close to one billion pounds in Manchester City since 2008 without taking home profits yet.

The Qatar Investment Authority, the country’s sovereign wealth fund bought Paris St Germain (PSG)) in a deal worth over $500 million and set off rebuilding the League 1 outfit. No tangible returns have been realized from the investment so far, leaving the question: Can Dangote write off such huge amount of money without expecting instant returns on his investment? The answer is in the womb of time.

writes Olisemeka Obeche


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