Bleak outlook for sport sponsorships

Yesterday’s announcement by Absa that it has ended its R100 million-plus annual sponsorship of the Premiership football competition is an ominous harbinger of worse things to come … for sport in general. It would be easy – but would provide only a misleading comfort for players and fans – to put down Absa’s refusal to renew its sponsorship to the financial pressure across the economy because of the coronavirus.

Undoubtedly that played a major role in the decision of the bank, but its spokespeople were at pains to stress that the pandemic had come after a sustained global economic downturn and a general weakening of South Africa’s own financial situation.

In other words, the bank would probably have pulled the sponsorship anyway, even if there was no national disaster.

Absa’s frank admission about the difficult money crunch in which it finds itself is a sentiment which will be echoed in the boardrooms of some of the country’s blue-chip companies.

So, it looks unlikely that a white-knight funder could come galloping to the rescue of professional football, at least in the short term.

The Covid-19 pandemic, while it won’t actually reset the entire global economy, will cause many businesses to rethink the money they’re spending – and especially on marketing. Advertising rands are going to have to work much harder in the future and any sponsorships will have to prove, in real numbers, that they offer a decent return on investment for brands.

Although there are huge audiences for football in South Africa, the question is whether those fans actually support sponsor brands. Similar sorts of questions are going to be asked about all major sponsored sports, which will struggle to get money. Smaller sports risk being ignored entirely when cash is dished out.

Sporting contests in future may end up being all about money.