Business of Sport

SA's immature sponsors market

2011-07-15 12:15
George Marx
Comment by George Marx

In the build-up to last summer’s FIFA World Cup, heads were turned in the South African sport industry with the promise of the untold riches that the tournament would bring. Brands, we were told, would be banging the door down of our national governing bodies and sports teams clamouring to get involved. The legacy would be both social and commercial.

Of course, it was never going to be that easy. The World Cup has come and gone and there is an argument to say that, without the impending excitement of the globe’s biggest sporting event, the South African sport market is actually worse off commercially than it was before.

There are numerous reasons as to why this is the case, the blame for many of which cannot be laid at the door of our sporting hierarchy – the global recession being the most obvious. However, despite these mitigating external circumstances, the World Cup provided a substantial lesson that from which we can learn.

In comparison with other markets internationally and many of the global brands activating around last summer’s World Cup, the approach of South African sport to sponsorship lacks maturity. Not enough is done to protect the interests of the brands who provide the much-needed cash injection without which our sports teams and governing bodies could simply not be able to operate at the highest level.

Sponsorship proposals are put out to market on the basis of the more the merrier – a ‘cash first, think later’ approach that does not lend itself to developing long-term relationships or providing bottom-line value to the brand concerned.

Taken at face value, the sales teams concerned have brought in the money so what is the problem? Then look at it from the sponsor’s viewpoint. Where is the exclusivity of the relationship? Where is the unique content around which they can build a tangible impact on the bottom line of their business?

Sport sponsorship does not work solely as a badging exercise for the brand concerned and yet sadly too many proposals offer little more than that. There is little doubt that the majority of brands who take up such offerings will withdraw from the market as hastily as they got in, their fingers burned and vowing never to consider sport as a useful marketing tool again.

Let us be clear about this. In order to perform and compete against the world’s elite, South African sport needs money. Sponsorship revenue is one of, if not the biggest, resource open to the industry in terms of meeting this need. And yet brands who invest are often treated like the poor relation in the deal with sporting organisations simply taking the money and running.

A more mature approach is required if the South African sport industry is to develop further. True, the commercial appeal of a sport is intrinsically linked to the on the field performance of the team or individual concerned but the impact of the natural up and down cycle of this element of things can be quantified if sponsorships are built to last.

Until we take the long-term approach to these relationships, South African sport will struggle to take the next step down the road, regardless of World Cups or major sporting events landing on our shores.

* The Business of Sport Column is produced in partnership with the Virgin Active Sport Industry Awards 2012. Now in their second year, the Awards have officially opened for entries; an annual opportunity for the rapidly evolving South African sports market to be recognised for its work. Click HERE for more details...or follow us on Twitter: @SportindustrySA

George Marx is the International Business Development Manager at the Sport Industry Group – the organisers of the Virgin Active Sport Industry Awards.

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