Sport is ‘make or break’ for many in the media industry. It is big business in media. It sells newspapers, advertising and sponsorships. Whichever way you look at it, sport is a powerful player in the media business.
According to the 2011 BMi Adult SportTrack™ report, sponsorship spend is over R4,3 billion a year. That, according to BMi-Sport Info’s David Sidenberg, is an average annual compound growth rate of 17,4%. Compare this to 1985 – pre-democracy, pre-South Africa re-entering the world’s sports stage – and sponsorship was worth R63 million.
“In addition, sponsors spent an additional R2.5 billion leveraging their rights. In total, just under R7 billion was invested on local sponsorship in 2011. The net result is that while sport sponsorships was 7,8% as big as ad spend in 1985, it has now increased to 15,8% as big in 2011,” says Sidenberg.
But, says Sidenberg, these numbers don’t just reflect good news. Sponsorship leverage budgets, already “retracting under tough global economic conditions”, can’t keep pace with the previous ‘2010’ pressures. “As a result – whereas historically South African sponsors have spent more than 80 cents on leverage for every one rand directly spent (inclusive of broadcast rights) to acquire the sponsorship property – in 2011 we saw this ratio drop again to under 60 cents to the rand. Since 2006 the leverage ratio has fallen more than 25%. The net result is that we are now left with some pretty expensive toys without any batteries to run them,” Sidenberg explains.
So which sports attract this kind of investment? Soccer, rugby and cricket account for 50% of the total market-spend, says Sidenberg. “So far, rugby has held up and renewed all the sponsors it lost, while cricket is still in the process of replacing Standard Bank and MTN – although SAB has expanded its sponsorship. (The added bad press around management bonuses has certainly made this proposition even more difficult for Cricket South Africa).”
But Sidenberg says that as long as there remains a “concentrated demand for just these two or three (sports) codes, and as long as there are companies that are prepared to pay nearly any cost to buy into certain properties ahead of their competitors, cries of an over-priced market for premium rights are likely to fall on deaf ears”.
In the meantime, sports channels such as SuperSport are enjoying big audiences – a captive market for sponsors and advertisers. “Marketers know the value of the SuperSport platform and its delivery against male audiences. Therefore the majority of the brands that support the SuperSport channels remain male-targeted fast moving consumer goods, car and tyre manufacturers, cellular and financial services. We do get support from brands that want to target females as well, but this is a small percentage of the overall revenues achieved,” says Fahmeeda Cassim-Surtee, sales director of DStv Media Sales.
She says that while SuperSport does experience an increase in female viewership during big events, such as last year’s Rugby World Cup, and the Soccer World Cup in 2010, the numbers revert back to their normal percentages after the games. “For the major sports – cricket, rugby and football – the profile is 70% male and 30% female. We do find spikes in female viewership, when there are world cups around major sports. For other sports like tennis, the gender split does change, to around 55% to 60% female,” she says.
“Brands want to be associated with the values that are associated with sport – team spirit, competitive edge. Clients are prepared to pay a premium for this type of brand association and many brands have had real successes in doing so,” says Cassim-Surtee.
Clinton van der Berg, communications manager for SuperSport and a former sports journalist, says rugby is “still a man’s game although we see tons of women at matches”. Van der Berg says this is due to the game having such tricky technical laws. “Things are changing, but not enough to have an impact yet.” Still, SuperSport launched a ‘Lady Rugga’ competition last year to find a woman to report at games. Elma Smit won it. “She knows her rugby,” says Van der Berg. “She takes a softer approach. Gives colour to the story, has a bit of a laugh. She’ll be back this year.”
Sidenberg’s view differs slightly. “What is often overlooked by sponsors and advertisers alike is that a sport like rugby for example is actually the number one spectator sport in South Africa amongst not only white males, but white females as well. Similarly amongst black adults, soccer is the clear first choice amongst both male and female spectators. Perhaps it would surprise you that there are actually more black males with an interest in rugby then white males, albeit off a much larger base. Women, for example, far prefer local rugby than say international clashes.”
But has pay television, with its 24-hour coverage, impacted on newspaper sales? “While it is likely to have had some impact, newspapers concerns reach far wider than just cable sports,” says Sidenberg. “According to Zenith Optimedia, globally newspapers have been losing share every year since 1987, when they accounted for 40,6% of expenditure. By 2009 that share had fallen to 23,0%, and is expected to fall further to 17,9% in 2013. The internet continues its steady rise, increasing its global market share from 13,1% in 2009 to 15,8% in 2011. By 2013 it is expected to account for 18,5% of total expenditure, surpassing newspapers for the first time.”
Bokkie Gerber, editor of Rapport, known as ‘the’ rugby paper, says the sport is still a huge driver for the title. In the weeks prior to talking to The Media, he led with Rassie Erasmus leaving the Stormers for a Springbok position, and then with the news that Heyneke Meyer would be the new Bok coach. “For us it’s not just about results, about winning or losing: it’s about the emotional drama that comes with rugby. It’s about the individuals playing the game,” he says. “For us, it’s also about who the Boks are playing. If it’s Scotland, it’s not so big unless something amazing happens, like Bakkies Botha getting flattened. But when it’s Australia, New Zealand or England, then we’re talking.”
He says advertising is often driven around big sporting events – although the 2010 FIFA World Cup wasn’t as big for them as they’d anticipated. “We see the car manufacturers, financial businesses, tyres wanting to be associated with sports pages. Also, when there’s a big event, some advertisers will pay a loading fee to be on the front page as they know we’ll have a sports story there,” Gerber says.
The profile of the powerful sports is changing. Van der Berg says the World Cup saw football take over from rugby for the first time. Sidenberg’s research bears this out.
“Clearly, as more and more companies looked for a way to benefit from the 2010 FIFA World Cup, many attempted to get a foothold in the market through football related sponsorships.
“This in turn rapidly drove up the market price for soccer properties – a phenomenon now simply referred to as the 2010 Tax,” he says. “In fact, from as early as 2007, sponsors of soccer spent in excess of R1-billion on acquiring their direct sponsorship rights (excluding leverage), representing more than 30% of total direct spend of the entire SA sponsorship market. Whereas the year-on-year spend on soccer increased by almost 60% in 2007, all other sports combined increased by less than 10%. Not surprisingly, over the past two to three years some of the other ‘big codes’ (rugby and cricket for example) have tried to play catch up.”
Well, there are no soccer, rugby or cricket world cups this year. Just what should we be looking out for to feed our sport-mad country’s appetite for games? Cassim-Surtee lists them: “The Euro 2012 in June, the Rugby Championships (previously the Tri-Nations), the T20 Cricket World Cup, and the Olympics.”