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Football looks to be more profitable

Update: February, 14/2012 - 09:46

by Hoai Nam

The Viet Nam Football Federation (VFF) decided to move the national premier football championship closer to a fully professional regime by setting up the Viet Nam Professional Football JSC (VPF) last year.

The decision by the country's governing body to transform the two major domestic championships into profitable businesses, 11 years after they were formed, marks a milestone in Viet Nam's footballing history.

The company has start-up capital of over VND30 billion (US$1.4 million), 64.4 per cent of which comes from the 14 Super-League and 10 V-League clubs, and 45.6 per cent from the VFF.

The VPF's creation resulted from an initiative by a group of club chairmen who hope to promote and improve the quality of domestic football.

In a meeting last year, the chairmen complained about the poor management of domestic football over the past decade that has left the country struggling to compete against regional and continental rivals.

Nguyen Duc Kien, chairman of the Ha Noi FC, broke out in the meeting last December, saying the football championships should be managed as a profit-making business.

He is the forerunner of the idea with the announcement that the VPF would help teams earn at least VND40 billion ($2 million) from annual advertising, TV broadcasting rights, ticket sales and transfers.

"I'm sure the VPF will help channel the football championships into a professional system. Footballers will work harder to command higher wages, and clubs will earn more money from their shares in the VPF," Kien explained.

"We (VPF's executive members) are businessmen, so we understand how to handle our investments. The VPF will be under the best possible management."

Kien, who is also chairman of the Ha Noi-based Asian Commercial Bank and a shareholder in HCM City's Eximbank, said it was time for the national football championships to become a money-spinner.

In the first meeting in December, VPF shareholders voted for a chairman, nine executive board members, a general director and a supervisory board.

"The VPF will be a well-organised company, and power will be balanced among each team. VPF shareholders will have the power to dismiss the director if they believe that bad management has led to poor quality football," Kien added.

During December's meeting, VFF vice chairman Pham Ngoc Vien was appointed general director.

Vien, who designed Viet Nam's professional football system in 2001, said they had lacked the conditions to form a profitable system over the past decade.

"In developed countries, football is actually a profitable trade, but the national championships in Viet Nam have yet to achieve this, even though they have created considerable revenue," Vien said.

"The main source of money comes from sponsorship, while teams also profit from ticket and shirt sales, transfers and TV broadcasting rights."

Hai Phong made VND15 billion ($680,000) from ticket sales last year with an average attendance of 30,000, but the northern port team earned only VND150 million ($6,800) from TV broadcasting rights.

"We made only $5,000 from broadcasting rights last year and ticket sales were low, but our minimum annual investment is $2 million. Our major source of income was from sponsors and advertising in our stadium," said Ha Noi T&T Chairman Nguyen Quoc Hoi.

"The team is used as a marketing tool by the T&T Group, who are involved in the real estate and banking sectors. They cover our main costs," he said.

Slow change

Although the 14 Super-League teams are all run as businesses, none of them can stand on their own feet.

Last year, several teams had to convert to a business model on paper in order to avoid relegation under VFF rules.

In a meeting last year, the VFF said that all teams from the Super-League and V-League would be required to operate at a profit by 2013, supported by an audited balance-sheet.

It means that the VFF will also provide strict rules related to player transfers, club finances and training programmes to assist football development towards 2015.

The governing body will also require footballers to have legal agents from this year, while foreign players would need a FIFA-accredited agent to protect them from risk.

In past years, Vietnamese clubs often recruited both foreign and local players through unofficial agents or illegal contacts, creating havoc on the transfer market.

Some agents slapped inflated price tags on local players, sometimes up to $700,000, to try and tempt foreign clubs, even though their players were yet to be granted international player status.

Former national strikers Le Huynh Duc (now coach of Da Nang) and Le Cong Vinh of Ha Noi FC are the only Vietnamese footballers to play for foreign teams, joining China's Lifan in 1995 and Portugal's Leixoes in 2009, respectively.

American-Vietnamese Mae Mua, granted a FIFA Player Agent Licence in 2006, said that at least 20 unofficial agents had been plying their trade in Viet Nam.

Right way

The establishment of the VPF will map out a way for the domestic championships to approach a more professional status in the near future.

"We will allow each team two years to adapt. Clubs must find ways to survive. They will have to secure long-term sponsorship deals and make shrewd business decisions," VPF general director Vien said.

"Strict financial constraints will put pressure on the teams, but it should encourage them to find different sources of income.

"Teams will have to raise funds to build their own training centres and stadiums, so its good they can make money from the sale of skilful players and other activities."

Vien also recognised that as businesses, teams would also need to sign the best players to improve their performances in both domestic and continental competitions.

The top players will attract fans to the games and command higher fees for TV broadcasting rights.

It's the way the top teams around the world operate, but it's only just beginning in Viet Nam.

Slow, stable moves will help the country's football grow stronger in the future. — VNS

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