Run on numbers: Who is King? Cash or customer?

Corrie Kruger

The registered trademark of Nielsen Sports is “Audience Is Everything”, they certainly have a point.

1. Nielsen Sports is the global leader in sponsorship analytics and fan intelligence. They provide brands and rights holders the knowledge to identify and connect with the audiences that matter most to them. Nielsen Sports supports commercial growth through expertise in fan behaviour, media consumption and engagement habits. They monitor 15,000 teams, leagues and events crossing over 150,000 brands while tracking over 170,000 sponsorship deals. Their data contextualizes the value of sports partnerships, helping brands and sports properties predict the future value of media assets and marketing investment Return on Investment (ROI.)

According to The Nielsen Company (US), for the sports industry, the return of fans at live events midway through 2021 was cheered by all, yet life has evolved too much during the pandemic for the sports industry to simply snap back to a mirror image of its pre-COVID self. The persistence of the pandemic, combined with societal shifts in an increasingly digitized world, illuminate one constant that the sports industry needs to remain focused on to ensure sustainability and future growth: the consumer.

The tried and tested model of fandom has been challenged. As a result, fans have developed digital communities to drive connection with each other, their favourite athletes, and their favourite teams. Fandom has shifted from large audiences physically together to more remote yet more engaged behaviour. While ticket sales dipped, fans found new ways to build community: chatting, sharing, betting, and co-watching.

2. The Advertising Evolution.

Print media is taking a big hit, but new opportunities arise.

3. The digital era is well entrenched.

As of 2024, global digital advertising spending accounts for 68.9% of the overall expenditure on media ads. This includes advertising on internet-connected devices such as computers, mobile devices, and smart devices, covering everything from email marketing to video content and search engine results. The rise in internet penetration rates and demand for online content has contributed to this significant shift toward digital advertising. The global digital advertising market in 2024 is valued at $667.6 billion—68.9% of the overall expenditure on media ads. This refers to advertising on internet-connected devices such as computers, mobile devices, and smart devices. Media ads include everything from email marketing and video content to search engine results, and more.

4. The global picture

The global sports sponsorship market exceeded 100 billion US dollars as of 2023 and is projected to nearly double by 2030. North America, home to major leagues like the NFL and NBA, plays a significant role in sports sponsorships. For instance, the NFL’s sponsorship revenue reached almost 1.9 billion US dollars in 2022. Additionally, sports sponsorships saw a 107% increase in spending globally in early 2021, driving a 10% lift in purchase intent among fans

5. Sports sponsorship and ad spend in South Africa.

The Premier Soccer League has announced an R900 million new sponsorship deal with the Betway Group for the Premiership after having been sponsored for four seasons by DSTV. It is well known that for some time MultiChoice has had financial problems. The company continues to lose subscribers and money on its DStv platform (a big driver of its revenue), especially in South Africa. This increasingly threatens MultiChoice’s solvency and calls into question its ability to operate without a financial bailout from Canal+, France’s broadcasting conglomerate.

According to Jean Villers of Nielsen Sport South Africa, “the brand/sponsor view on the factors they regard as ‘most important’ when evaluating/reviewing the performance of their existing sponsorship properties, are as follows:

• sales impact

• brand impact metrics

• brand exposure

• direct revenue

• brand advocacy”

According to Nielsen, over 450 brands allocated spend to broadcaster SuperSport’s channels in 2022 alone, with that cumulative spend totalling approximately R2.4-billion, in terms of media-rated ad spend off rate card – an example and reminder of the commercial value of sport in South Africa. The company covers the following data. ‘Sports Fan Demographics’; ‘Consumption of Products & Services’; ‘Interest Levels and Fan Size’; ‘Sports Participation’; ‘Awareness & Interest in Sports Events & Competitions’; ‘Team Support’; ‘Brand Association’; ‘Consumption of Sports’; ‘TV Viewership’; ‘TV Media Spend’; and ‘Local and Global Sponsorship Deals’.

In South Africa, several major companies invest significantly in sports advertising and sponsorships. Here are some notable ones:

SABMiller: Known for its beer brands, SABMiller has a long history of sponsoring South African sports events and teams. Currently the Currie Cup is named the Carling Black Label competition.

Coca-Cola: As a global beverage giant, Coca-Cola has been a consistent sponsor of various sports initiatives in South Africa. Most notably schools’ rugby and the Comrades marathon over many years.

Castle Lager: This beer brand has also been involved in sports sponsorships, particularly in cricket and rugby.

Unilever: Unilever, a consumer goods company, has supported sports events and athletes in South Africa.

Toyota: The automotive company Toyota has been associated with sports sponsorships, including rugby and motorsport. The loyalty showed by Toyota to stick with their sponsorship of the Toyota Cheetahs rugby franchise is noteworthy. This must be seen in the light that they no longer play in major leagues as in the past such as the Super Sixteen championship, and did not qualify for the URC championship.

The Ackerley Sports Group revealed that they were in negotiations with the South African Rugby Union over a lucrative sponsorship deal, worth a reported £60 million.

Stadiums are also subject to naming rights in sponsorship deals. Iconic stadia like Ellis Park are now known as Emirates Ellis Park. So, too is the Shark Tank known as the Jonsson Kings Park Stadium. The Free State stadium is currently known as the Toyota Stadium for sponsorship reasons, and was formerly known as Vodacom Park.

Vodacom and MTN as well as Cell C and Telkom are well known companies that sponsor sports teams and events.

The Banks not to be outdone are also active in their support. Sports benefiting from them are athletics, Nedbank is well known for their golf support, FNB for soccer and the Soweto stadium is known as the FNB Stadium, Absa for rugby and the Cape Epic Cycle tour. Investec has flown its flag in international sporting events. According to Capitec “Capitec offers sports scholarships to bright, motivated learners across South Africa. “Applicants must be Black South African citizens as defined by the B-BBEE Act.” In a country fighting to get away from race-based decisions, this approach may not sit well with a lot of people and not only those that are excluded as all athletes strive to be selected on a merit-based system.

Not to be outdone by the private sector, the SA Tourism Department announced that it would become an official sleeve sponsor of the Premier League side Tottenham Hotspur. This caused a huge uproar in the country. The (now aborted) deal was worth £42.5 million (around R900 000 000. (What co-incidence is that the two soccer deals are of a similar magnitude.)

Sport is big in our country. It has brought us together in the past and now as the 2024 Olympics kicks off we are once again united in wishing our sports people of all races and genders well. The only colour that matters is the colour of the medal.

* Kruger is an independent analyst.

** The views expressed herein are not necessarily those of Personal Finance or Independent Newspapers.

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