The Economic Tsunami is at Hand

As global attention is fixed on the increasing and frightening death toll of COVID-19, many might be caught out by the economic tsunami it would unleash which would devastate the global economy and reduce the standard of living across all nations. Unfortunately, there is nothing we can do about it. And it's going to stem from the aggregation of all the individual and business decisions we have taken in the last four months and the ones that would be taken in the next four months.
When the pandemic started in China and spread like a wild harmattan fire throughout the globe, government officials were faced with the choice of either taking a stand for health or the economy. It was a choice between the devil and the deep blue sea. Political leaders worldwide largely chose the deep blue sea and stood for health. Businesses were shuttered and movements were clamp down upon. That stand for health is what is going to unleash the devil of an economic tsunami that might put the great depression of 1930s in the shades.
Now let me break it down in simple economic terms. Businesses are economic agents, shutting them down precludes them from producing goods or services, which means they are not generating revenue. But many of them would still incur cost: rent payment for their offices, loan obligations with the attendant interest rate payment, workers’ salaries. If they have to survive, they would have to reduce cost, one of which is laying off workers which is already happening and would continue into the unforeseeable future. Now millions of businesses sacking workers at about the same time would greatly reduce the disposable income available to families for spending.
Still, because businesses were closed they also did not spend, a necessary economic activity critical to the health of the economy. This means for the period they were closed they did not buy office papers, ink for printers, toilet papers, and the raw materials or inputs that are specific for the running of that particular business. Now millions of businesses shutting down at the same time means that the economy is being deprived of spending activities critical to his health.
The flip side of the coin is that Individuals are also economic agents and when we stayed at home, we didn't drive our cars as we would, we didn't patronize cinemas, go to restaurants for dinners, or go to sporting arenas for games, which represent great losses to the GDP. The multiplied effect of all the aforementioned would no doubt keel over the global economy into a terrible recession with the attendant millions of job losses and fall in standard of living. But the bad news does not even end there. When the lockdown, which might span several months, eventually tappers off, our attitude would have been conditioned and it wouldn’t be business as usual. For instance, people would be hesitant to go to sporting arenas or cinemas for fear of catching the virus. Airlines won’t be able to carry full capacity as they would be forced to practice social distancing. Business models that thrive on customers congregating in a space will suffer greatly such as musical concerts, sporting events in stadiums, hotel and restaurant business, party planners, transportation etc. Many sectors of the economy will feel the pain and may be unable to crawl back to their pre- COVID-19 height and revenue in many years to come.
Already the pandemic has pinched the oil sector as crude oil price has crashed spectacularly, even falling below one dollar per barrel at a point. While many found this phenomenon strange, it was just simply the law of supply and demand taking effect. When supply vastly outstrips demand prices tumble like a pack of cards. The global lockdown undoubtedly crippled transportation, an economic activity that gulps up most of the oil demand. At the other end of the spectrum, oil producing nations kept the rigs rolling pumping more oil, flying in the face of a collapse in demand. Oil buyers who had used up all their excess storage capacity had nowhere to keep the oil that was being shipped out by producing nations. Hence even if the oil were free, buyers could still not take it as there was nowhere to store them.
Expectedly, the collapse in the price of crude oil threw the budget of many oil producing countries into a quicksand, forcing some to seek external loans from multilateral institutions. Such loans inevitably come with the attendant stringent conditionalities one of which is the devaluation of a country’s currency. This condition would clearly lead to inflation or even stagflation in the import dependent oil producing economies.
It should also be expected that when businesses open fully, most if not all would scale back on their investment plans. For instance, cement companies who had plans to open a new factory before the pandemic would shelve such plans. Banks that had penciled down opening of new branches before the pandemic would pike out of it. Thus we would have a scenario were businesses are spending less, households are also spending less; while at the other end of the spectrum export of goods are declining because import dependent countries cannot afford them as their currency have been devalued: A perfect storm that would tank global demand and also devastate the global economy.
But it could still get worse. Historians would warn that the probability of a global war inevitably lurks whenever there is a global economic down turn. Already some countries have silently mooted the idea of meting some sort of punishment or demanding compensation from China. That certainly won’t go down well with the Asian tiger who has the world’s largest army. Hence the troubles we are experiencing now might be a tea party compared to what’s in the dark horizon.

Friendship Is Nurtured Over A Bottle Of ''33'' Export Larger Beer

It's a hot Friday evening in Garin Sarki, a rustic backwater district in Lau Taraba State. The end of another arduous working week. A boring weekend beacons unlike my beloved Lagos city.

Outside is a mosaic of green and brown. The heavens look like it would once again weep. Every day has recently brought a different variety of a cat and dog rain. Whoever is in charge of the weather up there seems to have a damp sense of humour.

I drive down the narrow untarred road heading for my friend's house. The heavens open, drumming furiously on my car roof. Water from the rain snake through the damaged glasses into my rickety car. My dress soon becomes soaked as my spirit becomes cold . The bumpiness of the road adds a edgy tinge to my damp mood.

I inch the car exasperatedly along the water logged road. The drive is frustratingly slow and my car is quickly nursing a pool. I am tempted to curse but I restrain myself, consoled only by the prospect of seeing my friend Hassan who would make all the troubles worth it.

I arrive at Hassan's house twenty minutes later than I should have. I find him drenched in the rain, erect as a ram rod, waiting for me. On his face is his customary sunny smile, that has weathered all storms and could light up a dark auditorium. My damp mood is evaporated by the warmth in his smile.

Hassan is the only friend I have in Lau. His friendship has been a gift that keeps giving relentlessly. I stare into his brown welcoming eyes remembering how our friendship started.

It was on a scorching Sunday afternoon, a year ago after my move from Lagos. I was in the local market seeking to buy beer, a request that had all the traders in a frenzy of confusion. Hassan politely pulled me aside and told me that the largely agrarian sellers did not have such consumables in their wares. Hassan however told me that he could meet my need.

Later that evening, he brought me to his compound. And under a baobab tree he offered me a bottle of ''33'' Export Larger beer while the weaver birds sang above blissfully. He told me he had requested it from his elder brother, a high ranking military officer.

We sat on a wooden bench and drank the beer together, sowing the seed of a beautiful friendship. As the days passed by, our friendship grew stronger forged over more bottles of ''33'' Export Larger beer. Hassan later ensured that I never had to buy any local food stuff again, providing me with produce from his farms, while I ensured he never had to buy manufactured goods again.

We have only ever had a fight once, a misunderstanding that cropped up due to the death of a local dog I bought that died in Hassan's custody. But it was resolved while we shared a bottle of ''33'' Export Larger beer. Our friendship thereafter became stronger. The beer has indeed been the anchor of our bond and a nullifier of tribalism.

I open the door of my car and walk over to Hassan and embrace him under the heavy rain. We walk into his house and both change our wet dresses. We are served a hot meal of eba with vegetable soup garnished with local bush meat.

After the meal Hassan walks into his room and brings out a bottle of ''33'' Export Larger beer. The bottle seem to shine in his hands like a precious jewel. He tells me he had earlier collected it from his brother. He opens it and pours the content into two cups. I take a sip, my face bursting with a smile as I slowly savour the richness and smoothness of the beer.

I look at my friend, and wish that our friendship lasts forever. It seems as if my wish would be granted as long as there is a bottle of ''33'' Export Larger beer available.

Football: The Money Beast With The Feet of Clay

Top football clubs in Europe are earning record revenue but there are reasons to worry

“Money, money, money, always sunny, in a rich man’s world”.

>
These immortal words of the singing group Abba could aptly apply to the world of elite club football in Europe nowadays.


It’s quite easy to forget that Europe’s economic applecart is almost losing its wheels if one entered the world of elite club football, which continues to look sunny. Never mind that the unemployment rate is doing a double digit at 11.1 percent, with Greece and Spain teetering at the extreme end of the spectrum notching 25.6 and 22.5 per cent respectively.

Such gloomy statistics have not in any way thrown any damper on the beautiful game as stadiums, in the just concluded season, especially during UEFA matches were packed full. Real Madrid’s cashiers should now be heaving a sigh of relief, after coping with an average attendance of 70,000 every match day. These just shows that live matches are one of the few things people are willing to pay premium price for irrespective of the economic outlook.

Television networks were also willing to pay an arm and a leg to acquire such rights to broadcast these matches, fattening the coffers of clubs. No wonder the English premiership, despite the backdrop of economic uncertainties hovering over Europe, was able to increase its domestic TV rights by 70 percent. It secured a record breaking deal of € 7.1 billion to run from 2016 to 2019. Whereas in the past when match day represented about a third of club’s revenue, such has fallen to about 20 per cent as TV income continues to increase.

Still, lucrative sponsorship deals with top companies are now common grist to the mills of elite clubs, as the likes of United, Manchester City and Paris Saint Germain, PSG, Madrid have pulled in hundreds of millions through such. Not forgetting that they also make truck load of money through merchandising of products.

It’s indeed money in the bank for top clubs as revenues have been improving year after year. The top 20 clubs according to Deloitte had a combined revenue of €6.2 billion in the 2014 ended season, a rise of 14 percent from the previous year, with Real Madrid and Manchester United earning over €500 million.

Many clubs have also embarked on stadium expansion, while the likes of Arsenal have moved completely to new and bigger stadium, lining their revenue base.

It’s very much a tea party in the world of elite club football as money continues to pour into their coffers from Match day tickets, TV broadcasting revenue and merchandising, proving that football is recession proof.
And the good news is that fans appetite for the beautiful game is insatiable, as they drown their present economic reality in two hours of escapism that not even ecstasy drugs or alcohol can match.

So what could possible go wrong? Well, a couple.

Even though revenues of top clubs have been rising in the last decade, football is up a gum tree due to spiraling cost. Clubs have now found themselves in the unpalatable situation where they have to pay a king’s ransom to attract a good player and, as a necessity, most also defray exorbitant weekly wages to keep ‘em happy.

In the early 2000s it was an aberration for players to collect €115, 000 per week, which Zinedine Zidane, then the best player at that time earned, after his record breaking transfer of € 54 million from Juve to Madrid. Now a day’s even defenders, the lowest in the money chain collect more than that, while clubs continue to break transfer records just to bring in top players. Gareth Bale for instance was signed for €100 million and earns about €358,000 a week and he is not even the highest paid footballer.

These rising cost of buying players and defraying their wages has made deep in roads into clubs revenue. Little wonder the share of revenue that goes to players’ wages in the premiership has risen from 44 percent in the 1990s to over 75 percent today, with other leagues faring no better.

It is therefore not surprising that many of the top clubs are drowning in debts. A case in point is United, whose unparralled genius of generating income through sponsorship and merchandising is matched by its debt size of €474 million. Many other top clubs are just marginally better.

There however seems to be no end in sight as the top clubs are in the rat race to sign the best players creating a catch 22 situation where cost and wages of players will continue to rise, thus eating up more and more of their revenues.

The present silver lining is that live football is still a type of Griffen good, which does not respond rationally to economic realities, evidenced by clubs’ rising revenue at a time when Europe’s economy is slowing down and companies are shedding jobs.

Even this silver bullet will lose its potency if the costs of attracting and paying players wages continue on the current rising trajectory, as it appears it would with UEFA recently relaxing its Financial Fair Play, FFP, rules. The regulation, tailored to address cost problems, a monster that was unleashed when petrol dollar sugar daddies started snapping up clubs like candy bars, was resisted by football hierarchy.

It’s however not too late for football clubs to cut the Gordian knot of spiraling cost. One way is to introduce caps on player’s wages just like in the NFL. But these would involve all stakeholders coming together, putting aside selfish individual interests for the good of the game. Is there the will power to do so?

Brinkmanship: The Bane of the Beautiful Game of Football

The game of football has indeed burnt its bridges. And it happened when unprecedented money,from TV revenues and merchandising, poured into the sports. While this has been grist to the mills of the sports and all stakeholders, it however tipped the balance of power between clubs and players to favour the latter.Unlike in the past when the distinction between players and field athletes was negligible, footballers are now superstar millionaires, who now have an armada of handlers like lawyers, publicists, advisers, stylists, tax consultants, personal assistants, financial consultants, agents and sometimes even therapists. Confined to history, is the period when footballers were only coached on field and attracted little spotlight , nowadays they are also coached off it basking in a bubble of limelight. Players are not only told what to say, where to visit, which dresses they should wear, but are whisked off to magazine set for photo-shoots, meetings with executives of fortune 500 companies, introduced to circles of models, pop stars and Hollywood royalties. Their lives on and off the field are stage managed, sometimes to the detriment of the clubs their primary employers. This was exactly what Sir Alex Ferguson’s feared as he tried to rein in David Beckham when he was on his cusp of becoming football’s first golden boy. When the legendary coach realized he couldn’t clip Beckham’s wing, who was already associated with popstardom, he was sold off to Real Madrid.

But there is certainly no peril in footballers dating models, going for photo shoots or even spotting the latest hairstyle,however the danger occurs when their handlers stage manage them into forcing the club’s hand to offering them better deals. Sadly the dangerous seed of this precedence has long been sown and only God knows what monster tree it would grow into in the future. In the present era of media blitz and social media craze, football handlers know that everything their star players do is news, which they of course use to manipulate clubs. Remember when Cristiano Ronaldo famously claimed he was sad, after failing to celebrate despite scoring two goals in the win against Granada in 2012.It became news sending jitters down the spines of Real Madrid’s hierarchy, who then did not see any reason to offer the Portuguese a better deal than the £10 million a year he was netting. His handlers also followed this up by telling the Portuguese to reminisce about his old Club, a sort of ‘come and get me plea’ raising the possibility that he might return to Manchester United. This ante was upped, when leaks filtered to the press that Ronaldo who was pictured shopping for boxes or whatever, was about to sell his House in Madrid. The media went on a speculative rampage about his imminent departure. But at the end of the day, Ronaldo under the tutelage of his handlers was able to get a better contract from Madrid using both the media and Manchester united as pawns-£15million a year after tax.

In recent time, Danny Alves also adopted the same tactics to ruthless success. The Brazilian and his handlers, when it became clear that Barcelona was not disposed to offering the type of contract expected, put word out that the defender was keen on leaving the Blaugrana. Rather than denying such rumours, the Brazilian added fuel to it by publicly flirting with the idea of signing for other clubs. This piqued the attention of both the media and several clubs including Paris Saint Germain, PSG and United. Expectedly, the strong display of interest by these clubs to sign the Brazilian forced the hand of the Catalonian club to offering the Brazilian a better deal. Again another player got a better contract using the media and other clubs as pawns. Now, Sergio Ramos and his camps have also ripped a page off Alves copybook after contract disagreement with his present club Madrid. It started first when news broke that Ramos had been offered as a secret election weapon to one of the presidential candidates of Madrid’s bitter rival, Barcelona. When Madrid did not budge, news filtered out again that the defender might be interested in signing for Man U, seemingly another ploy to force the hand of his club, a situation presently unfurling in the media.

Then there are also the forgotten cases of Rooney who got Man U over a barrel by using Chelsea to extract a better contract, and John Terry employing Manchester City’s interest in him in forcing a better deal from Chelsea, amongst many. Sadly all these cases of brinkmanship leave a sour taste in the mouths of clubs, many of whom are neck deep in debts. It is a known fact that prices and wages in football are spiraling out of control as footballers are sold for astronomical amounts, while they also earn wages disproportionate to what the general populace could ever make. Brinkmanship is however going to make this trend worse, forcing clubs to pay beyond their means to keep players from being prised away either by local or continental rivals. If this practice is not curtailed, then the financial future of many clubs could be bleak, including the ones at the top of the money chain.

Is Falcao what Chelsea needs

As Ramadel Falcao ended his third match for Colombia at the Copa America without registering a goal, many at the Chelsea hierarchy including fans should be a tad worried. With the Colombian loan transfer to Stamford Bridge seemingly cast in stone, facilitated by his powerful super-agent Jorge Mendes, his form at the South American football tournament might just be a straw in the wind. While the Colombian undoubtedly was one of the world’s best central striker at his prime, he seems to have skated past that, a signpost that was evident at Copa America for all to see. This truth was driven home more painfully during Colombia’s third game against Peru. At a time when his country was tied goalless with the later, and where frantically searching for a goal to ensure their qualification to the next round, El Tigre was hauled off by his coach at the 66 minute. The match eventually ended goalless, with Columbia qualifying by the skin of its teeth. But such speaks volume, one of which is that Falcao cannot be counted upon when the going gets tough. This also throws up the question of what Chelsea, particularly Jose Mourinho, his label mate- as they share the same agent- see in him. The Portuguese tactician, while recently speaking to Direc Tv Sports expressed his interest in bringing the striker to Stamford Bridge. “It really hurts me that people in England believe that Falcao is the guy they saw at Manchester United. He’s a player I know, one that I have followed since Atletico Madrid and if I can help Falcao arrive at his level I will do it,”he said.

Mourinho, clearly passionate about Falcao, was wise to gloss over El Tigre’s performance at United, because it was dreadful. A return of 4 goals in 17 appearances, hardly justifies £265,000 weekly wage. Little wonder United opted out from making his loan deal from Monaco permanent, which was as much an economic sense as football. Not deterred by these, the Portuguese believes he has the magic potion to restore Falcao back to his Olympian height. Indeed at his best, the Columbian was a beast plowing 62 goals in 69 appearances for Athletico Madrid, and 68 in 83 appearances for Porto, almost averaging a goal a game. It was this red hot form that seduced the principality club to fork out £52,000,000 for the Columbian without wincing. Even at Monaco, he was off to a flying start scoring 11 goals in 19 appearances before his injury, a tear in his anterior cruciate ligament, ACL, put an end to the momentum, sideling him for almost a year. Since coming back from the ACL injury, Falcao has been a shadow of his former self evidenced by a drastic drop in his goal rate; notching 6 goals in 29 league appearances for both Monaco and United. His short per game also fell from 3.6 in the three seasons before his injury to 1.5 last season. Chelsea undoubtedly is in need of at least an additional striker to augment the two it has. Most top clubs have three or four at their disposal, which prevents a situation where they cannot field any striker, in the event of two or three incurring injury at the same time. Even so, the Blues would be chancing its arm by signing the Colombian, not just because of the hefty wage he would collect, but also because he has been injury prone since tearing his ACL. Having three injury prone striker makes no sense irrespective of whether the Colombian rediscovers his form or not. Chances are however high that the Colombian might turn out to be another

Fernando Torres, a striker whose career was on a knife edge before the Blues signed him from Liverpool for a club record of £ 50 million. Torres ended up scoring 46 goals in 117 appearances for Chelsea a far cry from his heady days at Liverpool when he banged in 81 goals in 126 appearances. Never mind that the Special one’s attempt to coax back the Spaniard’s old form was like drawing blood out of stone. If history is a guide, then Chelsea could have another Torres in the Colombian, the only difference being that the latter would be on a loan deal. But what good would such be to the reigning English champion.

Benzema and Rihanna: Union of Pop Stardom and Football Royalty

The Union of pop stardom and footall royalty might be afoot. And the wannabe inductees into this exclusive higher echelon club are pop princess Rihanna and Real Madrid galactico footballer Karim Benzema. Both stars have recently been spending some of their hard earned spare time together, fanning the rumour mills that love is in the air for the pair. Last week, both stars were seen together drinking and cuddling at a Fatty Wap concert in Hollywood, before retiring to a night club. This was also followed by a lunch later in the week. These frequent sightings have led to the belief that the stars are dating, though both sides have neither confirmed nor denied such. However this wouldn’t be the first time a pop princess is swept off her feet by a footballer.

Remember Gerard Pique, the Barcelona defender who dribbled his way into the heart of the Colombian bomb shell Shakira. The “Hips Don’t Lie” singer and the footballer have been partners for about four years with two children. Then there is Manchester United Keeper David De Gea who is dating Edurne Garcia 29, a Spanish pop star. But the gold standard of the union between a pop star and a footballer is no doubt David Beckham, former Madrid and United midfielder and former Spice girl member Posh,

The married couple have four children. Would Rihanna and Benzema follow the path of the Beckhams? While it seems unlikely, only time will tell.

Can this Treble-winning Barca still Improve

How do you improve a side that has just won a treble and has arguably the best forward line in history? Some would say do nothing. Why tinker with a winning side that has a devastating attacking trio in the form of Lionel Messi, Luis Suarez and Neymar, players that can individually conjure goals out of thin air. It’s not trite to conclude that many teams would be content having just one of them. Just ask Liverpool, a team that imploded after selling Suarez to Barcelona. But Barcelona is no Liverpool. And that is why, despite having the most devastating strike force supported by a midfield that can hold its own against any in the world, and a defence that blurs the line between attackers and defenders, the Blaugrana believes it can still gild its lily. Hence it has turned its attention to Italy, batting its eyelashes furiously at one certain French midfielder Paul Pogba. Barcelona director, Ariedo Braida, who was in Italy on club business, last week, was not subtle when he openly courted Pogba. The former Rossoneri chief, now in charge of scouting international transfers for the Nou Camp was effusive about Pogba’s talent. He certainly knows that the French man is no pig in a poke acquisition. “Pogba is an interesting player with great qualities and would be useful for any team. It’s only natural that everyone wants him. I hope he can play for Barcelona. If he were to choose a new destination, I think Barca represent an extraordinary club and project. I'll advise a lad like him to choose Barca,” he told Gazzetta TV. Braida added his voice to that of many, pushing for the French man to ply his trade at Nou Camp. But the question remains: does Barca’s midfield marshalled by the supremely gifted Spaniard, Andres Iniesta, really need Pogba. Not forgetting that even Barca’s front trio of Messi, Suarez and Neymar, are playmakers and strikers bolted into one body. Won’t Barca be barking up the wrong tree by acquiring Pogba? Pogba is undeniably a great talent, technically gifted and could play either has a central holding or left attacking midfielder. In Juventus, he has played in both position but was deployed more as a left attacking midfielder last season, notching 10 goals and 6 assists in 36 appearances. The French man, who left the Theater of dreams for the old Lady has a combination of trickery and athleticism, sprays good passes and is an aerial threat inside the box. These qualities have made him the world’s most sought after midfielder. However if he were to ply his trade at Noun Camp he would either compete with Sergio Busquets for the holding role, or Iniesta, for the left attacking role. As a holding midfielder, Busquets, a World and European cup winner, still has more discipline at shielding his defence

than Pobga, while he also has a better pass rate than the French. The Juve midfilder, according to whoscored.com has a pass success percentage of 83.9 per cent, which is inferior to Busquets’ 91.8 per cent, while his Aerials won of 1.6, falls short of the Spaniards 1.7. In the attacking department, the French man notched up more goals and assist than any of the Blaugrana’s regular midfielders. Iniesta, in 35 appearances had 3 goals and 6 assist, Ivan Rakitic, in 44 appearances racked up 8 goals and 8 assist, while Busquets, a defensive midfielder, in 43 appearances had one goal and 2 assists. But one should not impute much importance to these statistics due to Barcelona’s style of play, in which its attackers are also playmakers; hence they lift the creative burden from their midfielders. This is why last season Messi had 23 assists, Suarez 17 and Neymar 9- we are discounting goals since the trio are attackers. If Barca however decides to field Pogba as a left attacking midfielder, a role nailed down by Iniesta, it means it would either have to bench the Spaniard which is unthinkable or shift him to the right thus displacing Rakitic, hence, Pogba, Busquets and Iniesta. As good as this formation may appear on paper it holds no aces over the Blaugrana’s standard formation of Iniesta, Busquets and Rakitic. But beyond that, Pogba’s addition to Barca, which would no doubt cost the club an arm and a leg, may mean that some regulars will cool their heels on the bench, a breeder of discontent. Never mind that Barca, currently facing a transfer ban, would only be able to bring the French man in January when the season is half way, thus disrupting whatever rhythm the club might have achieved. Even though the addition of Pogba may indeed be the icing on the cake for Barca, larding the midfield with a different dimension, chances are high that the French man may just be that extra cook that spoils the broth. It’s a gamble that is indeed there for Barca’s taking.