The deafeningly loud cheer from thousand of fans by the side of the pitch with the fans unblinkingly gazing at the TV screen, this shows the growth and changes in Thai football industry in less than ten years time. Positioning Magazine made an estimate of the number of fan wactching Thai Premiere Leauge in 2009 at around 1.5 million. Also, there was a phenomenon when hundred thousands of fan showed up to welcome Thai national football team after they have won the AFF Suzuki cup. Numbers of like on Facebook page of 20 football teams which competed in TPL in 2014 are around 3 million. This enormous amount of followers has special significance in business aspect because loyal fans are loyal customers. Football is a full-service business with interesing amount of money in circulation.

Battle of sponsors for advertisement with the popular football teams

According to a study of Rangsan Thanaphonphan, awarded for outsanding researcher in the field of Economics, football is an example of converting popularity in one culture into profitable commodity in another. It is involved in a number of industries; media, beverage, clothing, etc. Also, entertainment industry is also a great area for capitalist. This concept is also shown in the work of Supoj Phaiboonputtipong, a graduate student of Bangkok University, who studied about the influences of sport sponsorship of Thailand Premiere Leagues audiece in Bangkok and perimeter area. The focus was on the influence on brand recognition or brand awareness through advertisement in a direct and indirect method. It was found that sport event is a great opportunity for the private sector to conduct business. A  case example is from a sport event which shifted sponsor form Sponsor drink which spends over 175 million baht to a main supporter like Toyota Thailand Co,Ltd who offers 200 million baht for the last  three years (2013-2015). Many capitalists are expected to make an offer after the contract is ended this year. There is a tendency that the sponsorship will grow at 20-30% by this year as a result to the growth in football fan base. TPL has completed transformed the sponsorship business from the sponsor seeking problem during 2004-2009 to the hugely profitable business affair having massive amount of money in circulation.

Questions about transparency in TPL after the flow of investment

The intesnse marketing extending fan base leads to the popularity of Thailand Premier League Company Limited or TPLC among the capitalist. The question is where this huge amount of money leading Thai football industry.

Sombat Sawangkawat, a highly experienced news reporter working in this field for over 22 years, talked about this controversial issue and saw a serious problem in organizational structure in Thai football industry leading to overlapping and inefficient management.

The origin of ‘Thai League’ goes back to 1996 when FAT tried to enhance football matches system in Thailand and upgrade it to the professional football. It organized highest football league and was involved by 10 football clubs (now changed to 12 clubs) until the drastic change in 2007. The provincial league was cancelled forcing the top four clubs to join Thai Premiere League. Therefore, the tolal number of clubs in TPL is 16. The last three clubs in TPL final rank have to join Division 1 league and the top three clubs of Division 1 League will compete in Thai Premiere League instead.

TPL or Thailand Premier League Company Limited is the result of the notion of  Asian Football Confederation (AFC) in 2009 which aims for highly professional football club in Asian league. Match organizing system was created alongside the professionalism leading to the founding of Thailand Premier League Company Limited. Football clubs are also expected to register as a corporate.

Even though, TPL has a quality of ‘private company’ with the management system of public company but the stakeholders’ structure (data retrieved from www.thaipremierleague.co.th) is quite unusual. 27,500 stakes or 55% of all stakes (total of 50,000) belongs to the head of FAT, committee of FAT and person assigned by FAT. However, the number of stakeholders must exceed 5 people.

It was once reported that the structure of stakeholders in TPL does not conform to the rule of private company. Worawee Makudee, the head of FAT and the biggest stakeholder, along with Dr. Ong-ard Gorsinkha, president of TPL, has previously worked as a secretary of FAT, therefore, the operation system of TPL and FAT is not completely separated from each other. Both organizations lack full independence or FAT can be said to have control over TPL.

“If we take a look in the structures of the two leading football league, the two organization is inseparable unlike Premiere League of England. Even though, football association of England is the biggest stakeholder in Premiere League but Premiere League is run as a private company and is genuinely independent from the association. Football association might has power to object some critical issues but they do not have a right to interfere other specific matter in aspects of commercial profit regulation and condition. FAT is far from that point and still has a critical role over TPL. It’s not wrong to say that TPL has a overlapping organizational structure problem”.

Sombat, also discussed about the revenue from granting live broadcasting rights and other benefit growing every year. If TPL has freedom to negotiate with the sponsor regarding live broadcasting rights granting, we might be able to see a rapid development from TPI.

Considering the structures with representative from Sports Authority of Thailand as a quarter of all committee, the management seems to be inefficient being controlled by the centralized authority. They have influence on the regulation. FAT and Sports Authority has half of the power in this organizational structure as indicated. 

data retrieved from www.thaipremierleague.co.th

Management Structure of Thailand Premier League Company Limited

“ The inevitable part of the structure is about the fair interest allocation. So it might not be fair to discourage participation of competing football team in decision-making” said Sombat.

“The next challenge is to meet AFC standard. Partial referee’s decision is another result of flimsy structure. A controversial case is about the position of Siam Sport Syndicate Public Company Limited as a committee in charge of allocating profit in TPL, meanwhile, they also hold stakes in SCG Muangthong United club. Even though, they have a right to do as such, it leads to several problems. They were criticized by other clubs about the suspicious decision of the referees and their freedom of expression. The errors made by referee might arise from his personal reason but it can lead to profound distrust and conflicts among the fans that do not accept the referee’s judgment. If TPL could not overcome the problem of referees’ judgment standard, it might cause them more problems in the long term”.

Moreover, according to the manangement structure, there is four representatives from Sports Authority of Thailand, FAT and independent experts (one of them must be  the president of the company). However, there is only two representatives from TPL which is quite inadequate.

Where 300 million baht has gone is an unanswered question.

Warong Thiuthas, a former player in Sea Game Team 1, said that football teams in TPL has not benefited from the substantial revenue collected by TPL. The handsomely increasing profit from granting live broadcasting rights to True Visions Company Limited for the year 2014 to 2016 is at 1,800 million baht (average of 600 million per year). The head of FAT claimed to allocate profit to every league from TPL to Yamaha League in the total of 500 million baht. The question remains; ‘where 300 million baht has gone’, ‘what has it been spent on’ and ‘is there any transparency in the profit allocation’. The balance sheet was once revealed and it was found that the reported revenue does not go with the handsome profit made by TPLC. 18 million baht was reported as revenue and 1.9 million as profit.

He also said that the finance managment severely lacks transparency and the information about the management has not been shown to the public. The managemnet under specific groups discourage correlation between football team  which is a true contributor to the league with the profit made. “Do not forget why TPL can sell advertisement and broadcasting rights, if not because of the loyal fan base following the performance of ech football team”.

Looking from this perpective, it raised a question about the allocation of the huge profit made by TPL, they provide 20 million for each team which is very little considering the average monthly expense of over 2 million. This money is insufficient to manage to last a whole season. If the minimum salary of player is 40,000 and one team needs around 35 player for one season. It would cost them 1.4 million, not to mention costs for pitch maintenance, player bonus, salary for coachs, nurses, etc. When the profit is made by the creation of football team, therefore, the appropriate amount should be allocated to support football team. Then they will be able to develop. Government can also promote Thai football industry by supporting small teams which has a few sponsor. The government might introduce tax deduction measure for sponsor of small team. This is all for the sustainable development of Thai football industry. More teams will be given opportunity to flourish and generate greater revenue. When equally skilled teams compete with each other, more people will be attracted to watch. The fascination of football lies in the unpredictability during the 90 minutes and the unexpected win-lose chance. Every fan roots for their favorite team to come out on top. The most important part is that all fan are willing to support their beloved team and always feel proud of the team achievements.

“Football fan are ready to declare their favorite team and more than proud when they win. For example, if Chonburi football club wins today, there will be a lot of fans wearing the club t-shirt tomorrow.  In this aspect of championship, fan base, souvenir, ticket business and football team are inseparable said Warong.

Concerns over bubble crisis in Thailand league business

Former national football player showed his opinion regarding structure problem in Thai football industry. “If you want to see development in Thai football industry, football team must be strong. TPL must allocate the profit fairly because in the past many football teams had to struggle on their own and find their own way out. Many teams went into deficit as a result the poor structure of TPL”.

It is noticed that running football team needs money; to hire coach, Thai players, foreign player and many more. There is a tendency of team spending more and more to build reputation and to hold the championship. This circumstance might bring bubble crisis to Thai football industry and in fact, this problem has been started already due to the vast amount of money spent by each club. It makes the prices of player higher than their quality. They are willing to play for the team which pays more.

“The problem is that the club does not have the ability to develop their youth team and they have to buy player form other teams or import foreign player. When the revenue exceeds their expenses, the team has to slip into deficits. Even though, the revenue from selling entrance tickets of every team last year is over 160 million baht and 73 million from selling sourvenir and it showed the great dedication of Thai fans. However, not every team was achieving popularity, it was only growing among teams which have a great management of social network. They can reach and communicate with more fans, for example, Buriram United , SCG Muangthong, Chonburi FC has greater opportunity than any other team and has more opportunity to earn revenue as well. The popularity could attract sponsor and generate massive sale of sourvenir, ticket, food and beverages in the stadium. Recently, Chonburi was able to sell 600 home shirts in one day at the opening of 2015  season priced at 1,090 baht each. So, they has made 654,000 baht in total. Meanwhile, the reported profit of the year 2013 made by Buriram United was 405 million baht. On the other hand, the average team having much lower budget has a small chance to win. They certainly cannot attract sponsor as the mentioned teams. Consequently, team with poor sense of business has a tendency to lose in a battle with the rich teams because they have less capital to buy good players. It leads them to lower division and can be taken over easily. In the worst case, they can just disappear. This is one more challenge and it is to help these teams to overcome their problems for the stronger Thai football industry”.

Advice to expand fan base into neighboring countries

In the regard of the future in Thai football leauge, Warong thinks that we should expand fan base out of the typical thai fans. The case example was drawn from the success of England Premiere League. It is the result of providing service industry leading them to expand fan base around the world. This model can be a lesson to TPL to develop the product. They could start by expanding to the market within the region like Laos or Vietnam.

“In terms of marketing, it can be remunerative just to build brand awareness more or less. The possible project in the future is to enter tournaments in neighbouring countries. This strategy can expand fan base and boosing money in this business in order to foster development of more teams” he concluded.

Whether Thai football industry will be developed as expected and who can outlast the era of ‘Thai Football Fever’ is going to be evident in the near future.

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