According to the financial statement reported in last weekend’s Annual General Meeting, Yanga's performance saw surplus rise by 142% from 52m/- to 126m/-. In February, Simba SC posted a surplus of 5m/-.
The two clubs financial reports indicate rapid improvement of their fiscal health however they are still far from self sustainability as a business entity.
They continue to heavily rely on well wishers for funding.
Well wishers provided 1.7bn/- of funding to Yanga which approximates to 27% of the club revenues.
It is interesting to note, well wishers account the highest percentage of revenues (27%), sponsorship comes second at 25%.
In the case of Simba, they reported the Chairman of the Board of Directors, Mohamed Dewji, donated 2.2bn/- in the club’s coffers.
The amount does not include the various amounts he paid in players’ wages.
It is widely accepted most football clubs are never in profit, always making a loss.
If you were a bank you wouldn’t lend money to them because so many appear to have lost control of their costs, are overpaying wages and are reliant on the largesse of a wealthy owner to bail out the business with non-repayable loans
It is good to note the two traditional giants are still attracting well wishers.
These donors, both corporate foundation and individual, really want to see the impact of their contributions. If they are not satisfied they normally withdraw.
Simba and Yanga have never been shy of wealthy suitors but they well know the withdrawal period is always a very painful period for the club.
They know that, if Dewji or GSM Group turns off the tap, they would not be able to maintain the current wage bill.
For example, Yanga were left suffering after Yusuph Manji withdrew his support four seasons ago, leaving them with no place to run to for help.
The club was forced to depend on fans, members, and other well-wishers to honour matches and settle players' allowances at times.
Things only changed when GSM Group came on board last year.
Simba SC also went through lean years when they had no big donor to bail them out. And so the focus remains on Dewji and GSM Group.
How long will they keep the policy of subsidy if the transformation process drags for a much longer time.
The only way out is through becoming self sustainable which is impossible until when the transformation process is complete for both clubs.
Football clubs generate revenue from three main sources, match day, broadcasting and commercial, the latter of which covers a myriad of activities.
Both Yanga and Simba have made significant steps in increasing the commercial revenues.
Commercial provides the dominant revenue stream. In 2020, commercial revenues accounted for 25 per cent of total revenue.
Match day comes second. Yanga match day income (gate collections) increased by 59% from 722m/- to 1.15bn/-.
Tanzania was one of the very few countries that allowed spectators in stadiums as the world grappled with Covid-19.
Match day revenue dwarfs the broadcasting revenue for Yanga showing how important fans are to the club’s coffers.
Broadcasting income contributes 14 per cent of the total revenue. This is expected to rise with the newly signed television deal expected next season.
As things stand, there is clear progress for Simba and Yanga financial health.
However the club officials can't rest on their laurels but continue to work hard for more sponsors but more important is to ensure the transformation process is completed as quickly as possible.