The archrivals which have been established over eight decades now, have been membership-based playing soccer and to a lesser extent other games on amateur status. However, the two clubs embarked on semi and eventually progressed to full professional soccer of the modern era where players, coaches and members of the technical staff are paid remuneration packages.
Cost of running professional soccer has been escalating at an increasing pace based on the prevailing circumstances to meet season objectives.
Despite presence of corporate sponsorship that has been looking to gain mileage from the already established goodwill and fans base, still the two clubs are enduring poor management.
Club officials who are democratically elected have proved ineffective to install the brand of management that would please their fans and members across the country and beyond.
The clubs are running short of satisfaction to meet their targets as a result of various factors including poor management, incompetent squads as well as funding to some extent.
From rare obscurity, ‘investors’ have show interest to run the clubs in two business modes. One is renting and the other involves establishment of limited company where shares can be floated. Both are good initiatives provided a careful approach is taken towards meeting objectives.
However, formation of companies has two outcomes during operations as profit or losses might occur depending on how best or poor the firm is operated.
However, the bottom line here is the entire process towards formation of a company limited by shares or rental business.
The most conspicuous factor before moving to or making decision on the new business ventures is valuation of each of the club’s assets and liabilities.
How worth are these two clubs is the most important business factor than the rest. Assets include those fixed and current ones. Very obvious that each club has in possession of buildings and implied business goodwill which falls into the fixed assets category.
The bank accounts do have some cash but this is variable depending on the season.How worth are these buildings and the long-standing goodwill must be translated into financial terms to attain their monetary value.
Valuation consultants must be involved in establishing the actual value of the clubs’ assets as well as liabilities that includes debts and loans.
Despite strong temptations waged by businessmen who are vying to purchase shares from Simba Sports Club, asset and liability valuations must first be established before coming into conclusion of floating shares for company formation.
Decision to rent for Young Africans must also take into consideration of more than assets and liabilities, but the crucial factor here is the amount of revenue to be generated by the club in those ten years. How the club could gain and the prudence of maintaining the club assets must come into consideration.