Beyond Football (1)

For many years, sports has continued to take the lion share of sponsorship spend across the globe. According to a report from the Asian Sponsorship News, the total spend on sponsorship in Asia for 2007 came to about $2.83b, a clear increase of 140.6%. The major contributor to the increase was the Olympic Games. If we take out the Olympics, we still have a spend of over $1.4b which is still a 24.6% increase on the previous year. While spend on Arts and Entertainment rose by 45%, spend on sports rose by over 100%. The composition of the heading, sports, is different from country to country. However, one universal principle is that the more diversified the sponsorship platforms are, the more developed the different platforms turn out to be.
In South Africa, the total spend on sports has grown from R1.4b in 2002 to R3b in 2007. This is minus the spending on leverage, which is about 80c to the Rand. If we include the spend on leverage, the 2002 figures will be around R2.7b while the 2007 figures will be about R5.5b. Of course, the 2008 and 2009 figures will be heavily spiked by FIFA 2010 World Cup spend.
In the South African market, football remains the first passion among the black audience. However, the sponsorship environment is not mono-cultural. There are several platforms that are attracting massive sponsorship funds and these are mainly football, cricket and rugby. Other sports like golf, swimming, hockey, boxing, also have their own niche.
Speaking about football, the International Federation of Football History and statistics, in their recent ratings, rated the Nigeria Premier League as the number 1 in Africa with Egypt remaining the greatest rival. Nigeria is rated ahead of Egypt, Angola, Algeria, Cameroon and Tunisia. The main reason for this rating is because of the three Nigerian clubs playing in the group phase of CAF competitions. The report states that the Nigerian league has the best chance of becoming the strongest African league in 2009. In commercial terms, the South African league and the Egyptian league have continued to command very high sponsorship patronage over the years. For instance, South Africa Breweries and ABSA signed a sponsorship deal worth over R500m or $70m over five years starting in 2007. SAB sponsors the national team and ABSA sponsors the Premier League. In addition to this, SuperSports weighed in by 2007 with R1.6b for the League ( that is about $228m) These deals shot the SA League into the seventh place in sponsorship funding all over the world. In the same country, the Nedbank Cup, an FA Cup-like competition, has been renewed for R400m ( $57m) over five years. Of course, the PSL is financially independent and strong, and is able to add value to the sponsors and bring the crowd into the stands.
This is different from the Nigerian case where recently, we read from the news that the NPL was broke. The NPL needs more sponsorship money beyond the likely total of N850m to N900m that is presently invested in the league. To bring in the money, there is a need for new thinking.
Beyond football, the South African lesson shows that each federation works actively, first to enhance the appeal of the game to the audience, boost the followership numbers and make its product more ‘sellable’. Rugby is one of the top three sports in South Africa. From 1994, the South Africa Rugby Football Union has worked hard to change the sport from the sport of the white South African minority to a sport for the nation. The success of the national team and the talismanic nature of Mandela and other key assets have been used effectively to expand the popularity of the game. As the game grows in popularity, the appeal to sponsors has also grown. The major sponsors in the sport include FNB, Vodacom, Sasol, Absa, etc. The growing Black middle class has started to embrace the game and with the introduction of black players, the game is beginning to garner some mass followership.
The same underlining principle applies to cricket. As a game that was reserved for the white population during the apartheid era, post 1994, the challenge for the game was to sell the game to the general populace. Cricket has gained immense followership and hence the different cricket properties have been very well patronised. The major sponsors of cricket in South Africa include Standard Bank, MTN, South Africa Breweries, Coca-Cola, etc. The three-year Standard Bank sponsorship that ended in the 2007/2008 season came to a total of R100m or $14m.
The story of golf is slightly different from the other top three sports because of its classic aspirational nature. However, with golf greats like Gary Player, Ernie Els and Retif Goosen, South Africa has used its weather, courses and the big names to expand the game. The South African formula has been used to mobilize its funds towards professional golf rather than amateur golf. Amateur golf already has its patrons; mostly the business people and investors in the hospitality industry. With the Sunshine Tour as the major tour in the South, the Federation ensures that the local professionals are busy all year round.
The Indian case is closer home because cricket is not a sport in India, it is a religion. Cricket is the football of India. The mass appeal of the game has presented an opportunity for different companies looking for a link to the mass market. Cricket, by nature, provides an opportunity for the administrators to create different events and sponsorship platforms, the most recent being the Indian Premier League.
The lesson from India is an example of how a dominant platform can be creatively used for commercial purposes. After the first season of the IPL, the second season was played in South Africa and the commercial proposition was still intact. The title right to the property was signed for five years by DLF, India’s biggest property development firm at the sum of $40m for five years. Other companies like Vodafone, TV Rights were sold before the kick-off date with Sony India buying global rights and other TV networks competing for the rights in different territories – One HD for Australia, Sky for New Zealand, Supersports for Nigeria and India, Arab Distribution TV for the Middle East, Willow TV for North America, GEO Super for Pakistan and Asian television Network for Canada.
Apart from Cricket, Hockey is actually the national sport in India, but it is not as popular as Cricket. India has done well in expanding cricket beyond the classic platform and also promoting other sports like Hockey, Tennis, Badminton, etc.
In conclusion, the lesson here is that different markets have developed their own models to build platforms for association. The more the credible platforms that are available, the more the depth for sponsorship, and the more the opportunities available in the market. The more the platforms, the more the different brands believe that they can flex their brand essence and,, therefore, the more they are willing to commit on a long term for sponsorships. Some markets have gone beyond the one ‘mass-market’ model to build different ‘mass markets’ and establishing different passion points for the different markets. They have then been able to create different islands for sponsorship spending. The South African model is one clear example. The other model is the Indian model, where the prominent platform has been used creatively to create depth and appeal. Cricket has been taken to a different level to provide non-conventional commercial platforms with this model. The sport is treated as a business and the best brains in the land have converged to implement an idea that was put together by an entrepreneur. However, as this platform is exploited, secondary platforms like Hockey are also exploited.
In the next series of this article, we will examine this issue from the point of view of the sports federations. After that, we will take a look at the perspective of the brand owners and managers. The final series will look at the non-sports platforms. Please join our discussion on our blog to discuss your perspective. Joins us at http://www.connectmarketingonline.com/blog/post.php?i=8