Is the sudden sale of Bidvest Wits status a sign of much deeper issues with the health of our professional clubs?


By Sgwili Gumede

A couple of months I gave an overview of the state of South African football to a foreign
entity wanting to learn more about SA sports. Part of the conversation migrated to what
teams may be a possible take-over target I can tell that Bidvest Wits didn’t even feature in
that category of teams. So how did we miss this?

Well, the truth is I have no idea how this came about. I am not privy to the circumstances
behind this but it got me thinking. This week in a conversation with a group of football
journalists I was also asked about the profitability of PSL professional football. Again this got
me thinking if Bidvest Wits a team that has some of the best footballers and the nations top
back 4, national champions barely 4 years ago could suddenly be sold presumably because
the numbers were no longer adding up, what does that say about the rest of the clubs in
the bottom half of the league.

That football is indeed a tough business at the best of times is a fact, according to the UEFA
Club Report 2018 was only the second consecutive year that the European clubs, the most
lucrative of markets showed, an aggregate profit. If you look at the middle to low-income
European football market which is closer to where South Africa is commercially, less than
half (only 46%) of the clubs show a profit. In South Africa, I expect that not even a handful
of clubs make a profit. The biggest driver of the move towards profitability in Europe was
the implementation of Financial Fair Play (FFP) Regulations. This was implemented as part of
UEFA’S attempt to protect football from its reckless football clubs. The FFP rules essentially
seek to enforce a prudent financial management discipline that ensures clubs to live within
their means especially those with deep-pocketed owners.

I am surprised that FIFA has not followed suit and adopted that so it's implemented across
the world. I think it’s a fantastic idea that all responsible football leagues, federation and
club must adopt. Had it not been for FFP football in Europe may well have sunk deeper and
deeper into the financial mess. At some point, the aggregate European football losses was
nearly 10% of its revenues at €1.6B. Why you may be wondering wonder am I rambling on
about European regulation instead of addressing the issue at hand. Well, part of any
federation and league’s responsibility is ensuring that the integrity of the game is preserved.
Doing so requires a good review of the financial position of the league and its clubs, It is in
both SAFA and PSL’s interest to accelerate to full implementation of club licensing which
should include submission of audited financial statements and annual financial warranties
and guarantees.

This is one of the ways of managing and the risks the league may be facing. I am not sure
how much of this is already in place. But this last sale for me is perhaps the strongest sign
for football leaders that a much more robust licensing program is perhaps now overdue. It
cannot be an acceptable situation that the league will start a season every year with fingers
crossed that all its clubs will finish the league program without going into administration
and throwing the enter system into a tailspin. Some of the measures that must be
considered is salary caps as part of a broader FFP-type program. This is not so much about

setting the upper limit of what players can earn but rather setting % of your revenues you
can pay in salaries. It is a widely use program not just in football but across sport to enforce
financial prudence and prevent reckless trading that could cause rea harm to the league.
That said the sale of statuses and sports teams is as old as organized sport. It’s all legitimate
and within leagues transfer of clubs provisions. Globally there is new money for all sorts of
reason from pure investment, to political capital, social and cultural reasons. The clubs are
privately owned and these tend to be private commercial transactions. That said football
leagues must approve these and cannot claim to be powerless on this. Anything that may
come across as making light of a time-honored value of merit and merit only being the
determinant of your sports status must be managed and carefully dealt with. No league or
federation should accept that at any time the integrity of its season and the game as
May be changed by some non-football decisions that it has little or no control of. While
they cannot stop some of these they can influence how they are done and on what
conditions they are implemented.

Twitter Handle: 
@SgwiliG

Article Tags

Bidvest Wits

PSL

FFP-type program

South African football

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