Bucs, Chiefs jerseys space for big bucks
Sports sponsorship spend in SA has grown from R63m in 1985 to its current level of just under R7bn last year, according to the recently published 2011 BMI Adult SportTrack report.
Daniel Mothowagae used this research to find out what it means for local clubs to carry company logos on their jerseys – and in some instances on their sleeves
Football, rugby and cricket – unsurprisingly – account for more than 50% of the total spend on sport sponsorship in South Africa. But football leads the pack.
“With a 33% market share, currently soccer receives more sponsorship funding than any other code in South Africa,” said research company BMI Sport Info’s head of strategic consulting, broadcast and rights structuring, David Sidenberg.
According to the ratings, Soweto giants Kaizer Chiefs and Orlando Pirates enjoy their higher sponsorship revenue because of their popularity.
The two clubs receive more television dates, which translate into more exposure for their sponsors, said Sidenberg.
South African football clubs and companies usually cite confidentiality as the reason not to reveal the value of deals they sign.
City Press has established, through various sources from club officials to role players in the corporate world, that PSL clubs’ title sponsorship varies between R500 000 and R100 million a season in the elite league.
This is what companies pay to have their logos emblazoned on the players’ shirts and on the sleeves, for “official suppliers”.
These figures exclude what some of the clubs receive from their technical suppliers (for things such as kit).
The R1 billion league
Pirates chairperson Irvin Khoza hinted during the renewal of Vodacom’s joint sponsorship of Bucs and Chiefs’ in May that the five-year contract was worth “around R1 billion”.
In essence, each club receives about R100 million a year, which is in the same bracket as some of the top deals in Europe (see graphic).
Pirates also have Carling Black Label as the “official beer supplier” and the beer’s logo appears on the sleeves of their shirts while a similar space on the Amakhosi jersey is occupied by insurance firm Hollard.
City Press learned through Total’s former sponsorship manager, Grant Nicholls, that the petroleum giant pumped R10 million into the Amakhosi kitty in a three-year deal between 1998 and 2000. The amounts have increased hugely since then.
The dominance of telecommunications and banks
The biggest shirt sponsor on the local front started in 2007 with a joint venture between Absa and Castle, which paid R500 million – each contributing R250 000 – to Safa over a five-year period for Bafana Bafana.
The banking firm became the league’s title sponsors in 2007 on a R500 million five-year landmark agreement.
Said Sidenberg: “Soccer, as the number one participation and spectator sport in South Africa, further offers a unique platform to reach the largest concentration of LSM 4-8 consumers, the so-called emerging market which is a highly sought-after growth target market for banks and cellphone companies.”
Vodacom has just increased their properties to three with the recent acquisition of PSL rookies Chippa United for a reported R500 000 one-season deal.
Their rival MTN backs four clubs in the premiership: Ajax Cape Town, Bloemfontein Celtic, Golden Arrows and Black Leopards.
Ryan Gould, MTN SA brand and communications general manager, said: “There are various factors which determine the sponsorship of a club and which speak to MTN’s business objectives.”
Gould refused to reveal the figures of their sponsorships and City Press could only establish via sources in the industry that Ajax were the highest paid of the four.
Vodacom head of sponsorship Fatima Hassim said: “Chiefs and Pirates are prominent soccer brands and their sponsorship values far exceed the likes of an entrant into the PSL.”
This was in reference to their new property, PSL rookies Chippa United.
Said Hassim: “The deal with Pirates and Chiefs has been extended beyond a shirt-branding agreement. We have teamed up with both teams to develop a complete range of connectivity products that they will be able to sell to their supporters.
“It is the realisation of this commercial value within the soccer support base that will yield significant financial rewards for both clubs. Our shirt sponsorship agreement is just a portion of the revenue that the teams will receive.
“Unfortunately, we will not disclose any financial numbers.”
Absa sponsorship manager Steward Masela said: “We view our sponsorship as marketing. Our involvement helps us to talk to our different clients through our properties and football is one of them.”
He also said the value of the current deal was confidential.
Some companies, though, have total control of a club.
Wits carry the Bidvest logo on their shirts, SuperSport have DStv and Platinum Stars have the Marang Hotel.
Mamelodi Sundowns’ shirts have the words Ubuntu-Botho S&E on the front, which is a Patrice Motsepe family business.
Bidvest Wits CEO Jose Ferreira said: “It is still sponsorship because it gives the brand an increased mileage thanks to television.”
Ferreira added that television remains the key component to bringing money into the game.
SuperSport CEO Happy Ntshingila said: “It is all about brand exposure and the big part of it is TV. Most of the local clubs appear on TV, and this extends to conferences and player appearances.
“A sponsorship is something that resonates with your brand.”
Clubs’ kit sponsorship deals also increase commercial revenue.
Clubs used to be known by the brand names of their chief sponsors in the 1990s: Chiefs were known as Iwisa Kaizer Chiefs, and there were Midas Jomo Cosmos, Spar AmaZulu and Total Witbank Black Aces to name just a few.
The Spar and Usuthu relationship continues today since their reunion in 2007 in a R20 million deal over three years. Their current contract, which City Press learnt was worth more than R30 million, expires this season.
AmaZulu spokesperson Philani Mabaso said: “It is in the region of that amount and it goes directly into the team. There are also brand benefits for the club’s supporters.”
Volkswagen and Moroka Swallows have forged a partnership that extends to the naming rights of the Dobsonville Stadium, which the German car maker revamped for R69 million.