ArthurTurner

Sponsors deserve returns

2009-10-20 13:00
Arthur Turner
Arthur Turner

Julius Malema’s continued attack on Nedbank through the media because they have decided to terminate their sponsorship arrangement with Athletics South Africa is bad news for South African sport. These irresponsible statements could easily lead to corporates not wanting to sponsor South African sport because of the consequences when they decide to terminate or not renew their sponsorships.

A sponsorship is a business transaction between sporting codes and a corporate, it is not a right. Business use sport as a medium to market their services and products through branding the intellectual properties of sporting bodies such as events, competitions, teams and stadiums.

Sponsorship falls into the “Below the line” advertising category and is measured on a regular basis. Based on my dealings with sponsors, they generally expect a return of at least a three Rand for every one Rand invested. If sponsors do not get a fair return on their investment they will either terminate or not renew their sponsorship. There is no emotion involved. Importantly, sponsors do not want to be associated with sports that are not well managed, so good corporate governance is important to them.

Malema has totally confused Nedbank’s commercial sponsorship with the Corporate Social Investment (CSI) grants that are used for the development of sport. The Nedbank sponsorship is aimed at the top level and they expect market exposure returns and good governance from ASA.

CSI is the responsibility of all South African businesses to help uplift previously disadvantaged communities because of our unique history. Part of the CSI strategy is to use a percentage of these funds to sponsor grass roots sport development projects like academies.

Sponsorship is determined by the marketing strategy of a business, and this can change over time. They may decide to use other mediums like TV, radio, print or online to advertise and thus no longer use a sponsorship as an advertising medium. There are many examples of this - Nissan, Benson & Hedges and Total to name but a few, who over the years, have decided to strategically exit sport sponsorship.

There is also the case where sponsorships become stale or too successful - like Gillette in the 1970’s. They sponsored the first ever limited overs competition in world cricket paying for it to be called the Gillette Cup. Eventually Gillette was being identified as a brand of cricket, rather than the actual product the company was marketing. So Gillette withdrew their sponsorship and exited cricket.

Sponsorship is the life line of all codes of sport, especially the smaller ones, who are unable to attract television rights revenue and income from crowd attendances. If Malema‘s promised revenge succeeds in damaging Nedbank then South African sport will struggle to attract sponsors in the future.

Sport in this country has for years enjoyed many loyal and rich sponsors that have helped make South African sport world class. They certainly do not deserve to be black mailed and threatened as is happening with Nedbank.

Arthur is a former cricket administrator and current player agent.

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