My thoughts on FMLLP

Column for Four-Four Two, March 2015.

FMLLP A STEP TOWARDS THE RIGHT DIRECTION

BELIEVE it or not, the total operating expenses to run Malaysian football is almost RM64 million, based solely on the FA of Malaysia’s income and expenditure statement for the year ended Dec 31, 2013.

FAM’s revenue comes from sponsorships and subsidies, ticket levies, sundry income and investments.

The biggest sponsor for the game in 2013 was Astro Arena Sdn Bhd, the nation’s first sports channel, with an annual sponsorship of RM30 million a year, followed by Telekom Malaysia (RM6.9 million), Felda (RM5 million), the Youth and Sports Ministry (RM4.5 million) and the National Sports Council (NSC) (RM1.6 million).

On top of these, FAM received subsidies, which can be deemed as tokens at best, from Asian Football Confederation (AFC), Asean Football Federation (AFF) and the Olympic Council of Malaysia (OCM).

FAM’s total sponsorship was RM48.2 million, with RM10 million deducted for the now defunct Malaysian Super League (MSL) Sdn Bhd, which served as FAM’s marketing arm from 2005 to 2012.

In running the various teams under FAM’s auspices – from the senior national team right down to the Under-13 squad, the governing body spent RM26,576,289 throughout 2013.

So when it was announced that FAM would be getting a guaranteed minimum amount of RM70 million a year in a deal with leading international media rights company, MP & Silva, beginning 2016, it shall be seen as a boon.

The partnership will oversee five properties owned by FAM – the Super League, the Premier League, the FA Cup, the Sultan Ahmad Shah Cup or Charity Shield and the Malaysia Cup –and together both parties have set up Football Malaysia Limited Liability Partnership (FMLLP) to manage the commercial and broadcasting rights for the M-League, with FAM affiliates having a stake in the entity.

The deal is expected to be worth around RM1.26bil to FAM to be spread over 15 years starting next year, which is a colossal figure and unprecedented in the domestic game.

The agreement covers domestic and international rights, including all media platforms and devices including terrestrial free-to-air television (FTA), satellite and cable television, Internet protocol television (IPTV), in-flight television, mobile internet, and video-on-demand rights.

The agency’s advisory role aims to develop and implement media distribution and commercial strategies in relation to sales of media rights in close collaboration with the FAM under their authority, in addition to production and technical services to develop offerings with high-production values.

FAM stand to benefit from 40 percent of the total revenue of FMLLP, while the affiliates will receive 30 percent of the funds. Development of referees and youth will be allotted 10 percent and the remaining 20 percent channelled towards running the league.

Interviewed by a small circle of journalists immediately after the MoU signing ceremony in the heart of Kuala Lumpur on January 23, Singapore-based MP & Silva managing director, Asia-Pacific, Beatrice Lee and Head of Acquisitions, Daniele Capelletti, were optimistic of delivering the goods.

“We have made an in-depth evaluation report and also studied the demographics of the M-League and we are confident of the product,” said Beatrice, a Malaysian.

Statistics suggest the media coverage of the M-League had increased tremendously throughout the four-year sponsorship by Astro.

The game enjoyed greater profile than ever before thanks to the live matches aired by Astro Arena with commentary in both Bahasa Malaysia and English, football-related TV shows and activities across all media platforms which amounted to an estimated media value of RM80 million.

Still the RM70 million figure a year is huge to the average Joe. The media remain skeptical of MP & Silva’s capacity to deliver. But for a key global player such as the agency, it is a nominal sum. For more than 20 years, Malaysian football was financed indirectly by smokers via tobacco giants.

Dunhill signed a three-year contract to finance the strictly amateur league in 1984, whereas their rivals Benson & Hedges opted to sponsor FAM’s marquee event, the Merdeka Tournament. The semi-pro league kicked off in 1989 with Dunhill inking a 10-year deal with FAM worth RM62 million.

From 1994 to 2002, FAM inked a deal worth RM35 million a year with Dunhill, before the Malaysian government issued a ban on tobacco sponsorship and advertising.

Telco giant Telekom Malaysia played their part from 2005 to 2011 before Astro brought the game to another level altogether by taking over the commercial rights of the game from FAM.

Now the ownership is back with FAM via FMLLP. Malaysian football is taking its baby steps into the world of privatisation, courtesy of the deal with MP & Silva.

Amateurish in approach and action, most of the game’s advocates in Malaysia may well be forced to raise their game. FMLLP may well hasten Malaysian football into the professional world. Finally.

Ends