SA Tourism’s soccer sponsorship plan with Spurs gets a red card

The deal would have cost £42.5-million (equal to US$51.8-million or ZAR910-million) and apparently given the tourism body a sponsorship package comprising kit branding, interview backdrop branding, match-day advertising, partnership announcements, training camps in South Africa, and free access to match tickets and stadium hospitality.

While some of the opposition within South Africa was driven by party politics, there have been assertions that the money could be better spent on improving local infrastructure and alleviating poverty, that too much of the tourism budget is being invested in a single project, and that Tottenham is not a particularly prominent or successful club.

Online debate among professional marketers has also questioned, among other things, whether too many eggs would be placed in one basket, and if there would be enough funding left over in the tourism marketing coffers to leverage the sponsorship deal to maximum effect. SA Tourism’s total budget – including for salaries and daily operating expenses – is in the region of $169-million (ZAR3-billion).

Additional funds must be spent to leverage a sponsorship

According to research by Nielsen Sports, on average, sponsorship spend is 15% of a total marketing budget. The additional marketing spend required to effectively leverage a sponsorship (referred to as the ‘activation ratio’) would likely be at least 1:1 and may go as high as 8:1, says a 2013 study published in the academic journal Sport Management Review.

Details of the proposed deal between SA Tourism and Spurs were leaked last week by local media. 

In the furore that followed, the tourism body called a press conference in which Themba Khumalo, its Acting CEO, told journalists: “The deal we are looking at has nothing to do with football. It’s got to do with accessing the aggregating audiences that football brings. When you do a deal at this scale it commands the attention of the world.”

He added: “This envisaged deal is not asking the fiscus to introduce new money into our budget.” 

Not all subsequent commentary was negative. Business journalist Bruce Whitfield, writing in the Financial Mail, observed that “R1bn spent on marketing South Africa as a tourism destination … might very well have a far greater and sustainable positive impact on the country as a whole” [than using the money to repair potholes or help upgrade the electricity infrastructure]. 

Whitfield added: “One of the quickest ways to create jobs and opportunity for people is to drive tourism.”

If the deal had gone ahead, South Africa would have joined African nations Rwanda and Mauritius in having sponsorship deals with English Premier League teams. Rwanda has an agreement with Arsenal and Mauritius has a contract with Liverpool. Rwanda also has a tie-in with the dominant French soccer club, Paris Saint Germain (PSG). 

Rwanda’s Official Tourism Partner contract with Arsenal is said to have boosted tourist arrivals by an additional 8%, while the country’s tourism body is on record as saying its three-year PSG deal helps to market Made in Rwanda products and to “convey Rwanda’s openness to welcome business partnerships from France and across the world”.