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Thursday, March 24, 2011

Why Iranian football clubs push for control of broadcast revenues

By James M. Dorsey

The National

The business of football, like many other things in revolutionary Iran, ticks to a clock of its own.

The top football teams pay government broadcasters for the privilege of having their matches aired. Advertising revenues are collected by municipal stadium owners. Income from ticket sales never leaves the coffers of the municipal stadium administrator.

As a result Iranian football clubs are strapped for cash and dependent on government handouts.
Club executives recently gathered to explore ways of gaining greater control of their finances.

One proposal by Ali Fathollahzadeh, a former president of Tehran's Esteghlal Cultural and Athletic Club, one of Iran and Asia's most popular and successful clubs, to challenge existing broadcasting arrangements by launching a privately owned football channel, offered the most far-reaching approach.

If licensed, Mr Fathollahzadeh's channel would become the first privately owned television channel in the Islamic republic's 32-year history.

The channel would offer Iranian clubs in the absence of radical structural reform a limited opportunity to loosen the government's grip on the game and counter Revolutionary Guard influence.

It would shift broadcast revenues that are now raked in by state-controlled television to the clubs and ensure they gain some degree of control of at least one of the three revenue streams alongside advertisement and ticket sales that should fall within their domain.

That would make them less dependent on government institutions and state-run companies that own the majority of the 18 teams in Iran's Premier League and allow them to invest more in improvement of their performance.

Iranian football's financial predicament is as much the result of lack of revenues as it is of widespread corruption.

"There is little monitoring of how this (government) money is spent," says Afshin Afshar, a prominent Iranian football blogger.

"Therefore, trying to create an estimated balance sheet for any of these clubs is an impossible task because there are no public records available. But if one adds up some of the reported salaries for the players, the estimated size of the spent cash will quickly make it clear that the problem may not be cash flow, but cash management or perhaps honest cash management."

To give his proposal wings, Mr Fathollahzadeh has to convince fellow football executive who are suspicious of his motives and overcome government reluctance to surrender control.

Iran's national broadcast agency, the main beneficiary of current arrangements for broadcasting football, has little incentive to kill the goose that lays its golden eggs.

It may however have little choice but to concede once Fifa, the world football body, and the Asian Football Confederation (AFC), headed by the Qatari national Mohammed bin Hammam, start pushing Iran's football federation for greater transparency and accountability.

Fifa and the AFC are expected to make their push later this year once Fifa has put its elections behind it in which Mr bin Hammam is likely to stand against the long-serving president Sepp Blatter.

Mr Fathollahzadeh's proposal anticipates the Fifa-AFC push and gives the international football bodies a potential monkey wrench with which they may be able to breach Iranian walls.
How high those walls are is likely to be determined by Mahmoud Ahmadinejad, the Iranian president, rather than the football association or the broadcast agency.

The question is whether Mr Ahmadinejad will decide to take a leaf out of the playbook of King Abdullah of Saudi Arabia who last month launched the kingdom's first dedicated sports channel as part of efforts to keep his discontented subjects off the streets.

An independent football channel may hit the pockets of Mr Ahmadinejad's cronies, but it could boost his efforts to curry popular favour by associating himself with Iranian football.
US embassy cables written in 2009 that have been disclosed by WikiLeaks describe how Mr Ahmadinejad repeatedly imposed his will on the Iranian football federation in a failed bid to ensure enhanced performance by the country's national football team.

The president justified his interference, saying "unfortunately, this sport has been afflicted with some very bad issues. I must intervene personally to push aside these destructive issues".
Mr Ahmadinejad is unlikely to tackle the most destructive issue affecting performance - political interference - but he could see political mileage in giving clubs a greater degree of financial independence so they are motivated and able to produce the kind of performance he hopes will rub off on him.

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