Sports bucks still abound
Billions spent on marketing
SPONSORS OF SPORTING EVENTS, teams and individuals continued to dig deep into their marketing budgets last year, despite the absence of major events. Total expenditure in SA on this form of marketing, including an almost equivalent outlay on “leveraging” the direct expenditure on rights, exceeded R4,8bn.
This was 18,5% higher than in 2005, but this year is likely to be one of abnormal growth, stimulated by the cricket and rugby world cups (not being held in SA) and the Pro20 Cricket World Cup (in SA). Another peak can be expected in 2010 when the Soccer World Cup, the biggest sporting event in the world, is held in this country.
“With companies wanting to be a more integral part of the World Cup, many are trying to get a foothold in the market by sponsoring teams,” says Johan Grobler of BMI Sport Info, which tracks the sponsorship market. “This has also resulted in highly inflated costs for all soccer properties, which will result in above-average growth over the next few years.”
Leveraging includes all the expenditure incurred to promote, advertise and stage the sponsorship events. It amounted to 84% of last year’s direct expenditure.
Sponsorship is surprisingly well developed in SA. Direct spend on rights and fees (R2,6bn last year) is equivalent to 13,9% of national advertising expenditure. The figure peaked at 15,2% in 2003, a year of several major events. The world average is only 8,6%.
Since 1985, expenditure on sponsorship has been growing faster than that on advertis- ing – except for last year.
According to the BMI Adult Sporttrack Report: “The next decade will witness the most significant changes in the way we consume sport since the emergence of mass audience television in the Fifties. The proliferation and fragmentation of media channels such as satellite and cable television, the Internet and mobile telephony have undermined the traditional free television model in every advanced economy.
“Undeniably, ensuring access to transmission rights, to premium content, to platforms and to distribution networks has recently become a core focus of attention for both regulation and competition law enforcement in the broadcasting sector.”
Convergence has sparked an increasing demand for platform neutrality, in which broadcast rights are sold in bundles that include TV, mobile phone and Internet.
“We are starting to see a further shift in how sports rights are delineated, with differentiators being set more around the content of the various packages of rights than the technology by which they are exploited,” says the report.
These issues have been relatively unexplored in SA, but this will change as it prepares to host the 2010 World Cup.