The South African sport fraternity this year suffered a series of blows — notably Bafana Bafana’s embarrassing defeat and early exit from the MTN African Cup of Nations in Egypt and the ousting of rugby union boss Brian van Rooyen amidst allegations of corporate mismanagement.
However, the state of sports in the country has not deterred major sponsors such as Vodacom and Standard Bank from continuing to pour money into the R3.5-billion a year sponsorship industry.
Vodacom chief communications officer Dot Field, whose company recently pulled out of sponsoring SA Boxing after a number of years, says the cellphone provider places a significant emphasis on the sponsorship of sport as a key marketing vehicle.
“As we all know South Africans are sports fanatics and the strategy of being ‘the network behind South African sport’ and ‘the greatest supporter of South African supporters’ has reaped huge dividends for us,” says Field.
“I cannot quantify our investment in sport for you suffice to say that there is a good balance between broadcast sponsorships, events and teams.”
She says the decision to discontinue sponsoring boxing was taken to streamline Vodacom’s profile in sport and concentrate on their primary investments, namely soccer and rugby.
Standard Bank caused a stir when it decided to withdraw its sponsorship of one-day international cricket, a day after the Proteas’ historic victory over the Aussies.
Director of sponsorship at Standard Bank, Marius Vorster, says sponsoring the multi-million event no longer falls in line with the bank’s sponsorship focus.
They have, however, renewed their sponsorship of the Proteas national cricket team pledging R125-million over three years. They’ve also injected R15-million into African soccer over the next three years and managed to secure the title of the official sponsor of the 2008 MTN Africa Cup of Nations to be held in Ghana.
James Monteith, director at BMI SponsorWatch, a sports research company, says sports sponsorship has continued to enjoy an annual growth of about 19.4% in the last 10 years.
He says soccer, cricket and rugby continue to dominate as the most popular and widely sponsored in the country despite some of the past appalling performances.
“This is because they appeal to a broader audience and generate the most television time,” says Monteith.
He says although there are attempts to promote other types of sports such as karate through initiatives like SABC 2’s Siyadlala, sponsors have been slow to respond. “There’s only so much airtime for sports and television channels have to choose the ones that will generate the most revenue.”
Even sponsorship for golf has been static, he says.
“There are about 120 different sports and yet only three (soccer, cricket and rugby) of those are major,” says Monteith. “With the others it’s like a chicken and egg scenario really. Without television, they will not get sponsors and without sponsors, there’s no TV.”
Television still continues to receive a sizeable portion of the sponsorship in the form of promotional airtime and programming. He says R1.884-billion of the R3.5-billion goes to direct sponsorship and the rest is spent on leveraging.
Johanie Swanepoel from the SABC’s sports sales and sponsorship department says soccer remains their biggest sponsorship draw card. “Soccer, that is your PSL (Premier Soccer League) and Bafana Bafana, is still our main draw card when it comes to sponsorship. You see it when we have those derbies like Chiefs and Pirates, those are very popular,” he says.
According to BMI, local sports sponsorship is expected to grow as South Africa heads towards 2010, the year in which it will host the biggest international sport event – the Soccer World Cup.
But will everyone be glued to their television sets?
Not really, believes SuperSport head of New Media, Ray Moore. Since early 2005 Vodacom has provided a mobile service, Vodafone Live, which enables sports fans to receive the latest information in sport updates and video clip footage via cellphone.
“This just goes to show that the future of sport broadcasting is being enhanced through new media technologies, and it is getting more mature and more exciting,” says Moore.
He says the inception of Vodacom Live last year has enabled SuperSport to deliver sports data such as news, results, logs, fixtures and 3G video clips to Vodacom network subscribers nationwide. And this video content covers numerous sports including Sanzar rugby, cricket, soccer, motor sports and the Tour de France.
MTN, another mobile cellular provider, has been able to strike a similar deal, partnering with Infront Sports & Media for the 2006 Soccer World Cup in Germany. The deal reportedly gives MTN the exclusive right to broadcast video material from each match to cellphones during the event.
An advantage SuperSport has, however, over its competitors – SABC and e.tv – is that it owns the rights to the sports content.
In addition to this advantage, it is also getting increased support from black viewers. SuperSport media manager, Sumaya Meeran, says they have noticed a significant increase in the black viewership of golf and cricket. It has gone up by 9% and 3.7% respectively over the last five years. Rugby is the third most popular.
The channel, which has a 20% black viewership, attributes the growth to the emerging affluent black middle class who can now afford to subscribe to the pay channel.
E.tv is not a major player in the sports broadcast market, instead concentrating only on two sports. E.tv channel director Bronwyn Keen-Young says e.tv sub-licences UEFA Champions League football from SuperSport and the immensely popular WWE Wrestling directly from the WWE Corporation.
“At the moment, most rights agreements relate only to broadcast rights – any rights to distribution in other media must be secured separately from the rights-holder,” she says, reluctant to disclose how much they part with to hold these rights.
Keen-Young says e.tv, which currently broadcasts soccer and wrestling only, has no plans to broadcast any other sport.
The rules and rights
Imtiaz Patel, the CEO of SuperSport South Africa, said he was happy with the sports broadcasting regulations as they stand now, but warned they were up for review in 2007.
Speaking at a recent SuperSport event, he said the regulations were reviewed every four years. “As you never know what the regulators think, there is some uncertainty.”
In 2003, the Independent Communications Authority of South Africa (Icasa) drew up a list of national sporting events that should be screened on free-to-air television. This can include delayed transmission where SuperSport has acquired the exclusive TV rights, but sells the events to SABC to broadcast once the live event is over.
Patel did not want Icasa to get ideas from the Australian regulatory environment which lists some 42 sports as “deemed to be of national significance”.
“The Australian government spends around $2-billion on sport, therefore feels it can regulate. But in reality, only approximately 20% of the regulated sport is actually shown by free-to-air channels,” Patel says.
“And as they are the only ones allowed to broadcast it, they pay peanuts for the rights to the Sporting Federation. So the federation loses out. It’s the most extreme regulated environment in the world.”
This is detrimental to Australian sports federations, as they make up to 70% of their income by selling the broadcasting rights to sports events.
Patel suggested South Africa was better off following the UK example, where they have a “balanced” regulatory environment made up of an A and a B tier.
A-list events, such as the Football World Cup and Wimbledon tennis finals, cannot be broadcast live on an exclusive basis unless the regulator has agreed. Permission is only given if the other broadcasters have also had a fair chance to acquire the rights.
Events on the B-list can be broadcast live and exclusively by pay-TV if there is secondary coverage by a free-to-air channel.