- Winnie Chan is one of the executives leading the Malaysian Football League’s recovery from a tough 2019
- The league’s two biggest commercial partners backed out of their deals last year, leaving clubs with revenue shortfalls
- Deals last month with Telekom Malaysia, CIMB and Shopee mark a turn in the league’s fortunes
The Malaysian Football League is attempting to bounce back from a commercial annus horribilis in 2019. Two long-term media rights and sponsorship deals collapsed, leaving the league unable to make scheduled revenue distributions to clubs.
Last month, there was positive news, with the agreement of a new, three-year media rights and sponsorship deal with Telekom Malaysia, one of the partners the league broke up with last year. Sponsorship deals starting in the 2020 season have also been agreed with bank CIMB and online retailer Shopee.
The league’s income from the new deals will be lower than the heady valuations achieved – although not always paid – in recent cycles, as reported by SportBusiness Media last week. But the Telekom Malaysia deal in particular is considered a big step forward. It mends the league’s relationship with one of Malaysia’s most important media platforms and sports sponsors, and delivers respectable revenue despite a relative lack of competition in the media rights market.
Having secure new commercial partners on board is particularly important this year, as the league pushes its clubs to privatise – most are at least partly state-funded at present.
One of the executives leading the MFL’s recovery this season is Winnie Chan, its chief commercial officer. She spoke to SportBusiness about the challenges the league has faced, and the action it is taking to overcome them. Among the challenges – weaning Malaysia’s passionate fanbase off a diet of free streams, and getting clubs to comply with a new ‘economic control programme’, modelled on LaLiga’s.
Like so many other sports organisations, the MFL has been hit by the coronavirus, with play suspended until further notice. But once the game resumes, there is reason to hope that the league is on a steadier commercial footing than it has been for some years.
It’s been a tough couple of cycles for the Malaysian Football League’s commercial rights sales. How positive a development is the new TM deal?
It’s positive because we’ve got Telekom Malaysia involved both as a broadcast platform as well as a sponsor. It is a good deal in the sense that fans can watch on both pay-TV and on OTT…Also in the fact that TM’s mobile, broadband and TV businesses will activate their sponsorships in ways that will enhance fans’ experiences, on and off match days.
For example, for the first match of the season, TM ran a contest for its customers in which the winners joined social media influencers on a special bus ride to the stadium. It was the first game at [leading club] Johor Darul Ta’zim’s new stadium. We also gave them a tour around the stadium. It was a ‘money can’t buy’ experience.
Last year, TM walked out on its previous deal. What happened between now and then to persuade them to come back?
I think it’s safe to say we learned a lot from what happened. Both parties decided to relook at the situation and make football the centre of their attention. We decided to put the past behind us, learn from the mistakes, and move on from there. We took a little longer to negotiate the best deal for both parties and we arrived at a mutually agreed situation.
When our new president came in [Datuk Hamidin Mohd Amin], he looked at what had been done before and how to improve on that. He already had a relationship with TM via [his role as president of the] Football Association of Malaysia. He thought there was something we could do, so he talked to them. The attitude was: ‘The past is the past, it was led by different people. Now we’ve got new leaders so let’s see if there’s anything we can do to solve this’.
Football is really important [to TM]. They’ve been a great supporter of Malaysian football on the national team level. They have been a sponsor of Manchester United for 10 years. And they’ve been a sponsor of Malaysian leagues for years. So it makes sense for them to come back and continue their support for Malaysian football, bringing football back to the fans.
What sort of market were you facing as you sought to sell the rights?
As with many other countries, it’s slim pickings at present. We’ve got FTA, we’ve got pay-TV, we’ve got some OTT players as well. But unfortunately most broadcasters expect Malaysian sports to be free. That is the immediate expectation. But it cannot be free, because the teams have to pay their players and staff.
So we held out. We said there needs to be some kind of rights fee for the broadcast. TM came to the table…TM is the one that offered the best deal out of everyone. We are grateful to have a partner who understands the real value of the Malaysian league, and that the rights fee paid will help the participating clubs financially.
There has been some negative reaction from fans to the fact that MFL matches are now mostly on pay-television – last year, OTT platform iflix offered free streams on mobile devices. What is your response to this?
We’re moving towards changing consumer behaviours. Yes, some matches will be free, but some you need to pay for.
We work with free-to-air television so that we have one or two games per week that are free for fans to watch.
But salaries need to be paid, players need to be paid. To make sure that Malaysian football and the Malaysian league is sustainable, something has to be paid.
TM pays MFL for the rights and is not a small sum. They also have to make money. And it cannot only be from advertising revenue. There has to be some sort of subscription revenue as well.
Iflix has been offering free OTT broadcasts for the last two years. And, you know, every time I did some research and looked on their Facebook page, if there was something not right with the feed, even the tiniest little thing – that may not have been iflix’s fault, it could have been that the fan was sitting in a corner somewhere where his bandwidth is slow and it buffers – the things that they comment and write are really awful!
So, I would say, ‘Malaysian fans, yes, you feel that football is your life. But do please put things in perspective. If all you do is criticise and be unnecessarily negative about what the MFL, our partners and sponsors, and the teams are trying to do for the league and the fans, then sooner or later no sponsors or broadcasters will want to invest in football. And when there is no investment in football, there won’t be any more leagues, there won’t be any teams, and there won’t be any more football in Malaysia.
Sure, the power belongs in the fans’ hands, and I know that. Without fans we don’t have football. But, again, I would say, ‘Guys, if you love your club, put your money where your mouth is. Stop buying fake jerseys. Stop buying fake merchandise. Start buying passes to watch matches, and start supporting your team with non-illegal streams…If you keep using illegal streams, we won’t have money to pay the clubs and they won’t exist.
So MFL is very supportive of our broadcasters. TM wants to charge per view. It is an exercise – let’s see how the fans react. So far, with single match passes at MYR3 dollars (€0.62/$0.67), a lot of people are paying and it seems a doable price. Maybe later TM will change the pricing strategy. But let’s see.
What lessons did you learn from the collapse of the previous deals?
When we signed with TM, we reduced their rights and benefits proportionate to the amount they are paying. We opened those rights and benefits up to other brands. It means there is more opportunity for brands to come in with sponsorship dollars and build a happy and sustainable partnership with us.
When we relied on TM and iflix – all our eggs were in two baskets. The moment the deals went south, the MFL and the clubs suffered a lot. The clubs thought we had the money and continued spending, but it really wasn’t their fault.
Now, we’ve changed that. We have three competition title sponsors – CIMB for Liga Super, Shopee for the FA Cup and TM for Piala Malaysia (the Malaysia Cup). We’re basically making sure that we don’t make the same mistake, putting too many eggs in too few baskets.
You are steering the clubs towards a more responsible approach to their businesses – tell us about that.
The clubs need to think about running themselves like a business, rather than like an association. So running within their means, based on the Economic Control Programme that we introduced this year.
We look at submissions from the teams of their projected income from sponsors, ticket sales, etc., versus how much money they intend to spend on players and other costs of operation. And we say that 70 per cent of their projected revenue and capital contribution will be allowed to be used to buy players. The ECP doesn’t allow clubs to go over that limit. There are also percentages for how much can be spent on youth development and other operational costs such as staff salaries.
It’s very similar to Spain’s LaLiga. We have a partnership with LaLiga and we went to meet them about a study in early 2018. They showed us that, when they implemented their ECP six years ago, they had more cases of players not being paid than we had in Malaysia! But within five years, they went from around 90 cases of players not being paid to zero cases.
In a nutshell, the ECP makes sure that football clubs are run like businesses. You have a forecast, and you have your budget, and that’s all you can spend.
Last year, clubs were impacted quite badly – they thought they had money to spend. Now, because of the ECP, they need to manage their spend better – we are monitoring it and there’s a system in place.