Durban was this week formally awarded the 2022 Commonwealth Games by the Commonwealth Games Federation (CGF). Although South Africa’s second city was the only bidder, following the withdrawal of Edmonton, in Canada, earlier this year, it still had to satisfy the CGF’s technical and financial criteria before being given the go-ahead. The Games will be the largest multi-sport event the country has staged and the first time a Commonwealth Games has taken place in Africa, making it a timely moment for Kelvin Watt, Executive Chairman of Repucom Africa, to assess South Africa’s current sporting landscape.
1) Multi-sport event ambitions
Durban has put together a compact Games venue plan, with the Moses Mabhida Stadium, built to host games during the FIFA 2010 World Cup, designated as the centrepiece for the ceremonies and athletics events. Bidding for the Commonwealth Games – an event which in 2014 featured just under 5,000 athletes competing in 18 sports – is widely seen as a precursor to a future Durban Olympic bid. “One thing the South African sports market really likes, from a fan and spectator perspective, and from a corporate perspective is holding global events,” says Watt. “There’s no doubt we have a hunger for those and it’s perhaps something that has held back our other day-to-day events. This is very much a step towards an Olympic bid, so it’s very important. They see it very much as a bid for Africa.”
As with all major sports events, Durban’s confirmation as host will trigger the creation of a comprehensive domestic sponsorship programme, and Watt believes it will be vital for the city to switch-on the country’s business community. “I think we’ll see a lot of government-aligned businesses, state enterprises, getting involved initially,” Watt suggests. “From an independent corporate perspective there’s a great deal of work to be done. Some are going to take some convincing to get behind this. Over and above that, I think there’s a great deal of work to be done both by the government and the city of Durban for citizens in terms of explaining that we should be hosting these Games and here’s the money we are spending to do so. I’m not sure they have that public buy-in right now.
“It’s very important for the South African government, the city and all stakeholders to measure the outcome of the Commonwealth Games and make sure we do the necessary research and analysis,” Watt adds, “to see what it’s value will be, how valuable it was, especially looking ahead to a potential Olympic bid.”
2) Five years on: the legacy question
The broad legacies of the 2010 FIFA World Cup has been much-debated, but Watt points to Durban’s Moses Mabhida Stadium, designed and built with its use as a potential multi-sport event venue firmly in mind, as an example of the “very positive” stadium and infrastructure developments in the country. “That side has certainly been positive,” he says, “although there are one or two of the smaller stadiums that are becoming a burden for certain cities.
“From an industry perspective,” he continues, “there is no doubt that on the research, insight and strategy side it’s left a very positive result – from a Repucom perspective, our part of the industry has grown far quicker post-2010 than it was pre-2010.
“The World Cup also brought a great deal of awareness for our big corporate players in terms of what they invested in and how they invested their money – and an awareness that big global events will come in and may overshadow their activities in the local market. That’s linked to us in the research business: people are far more aware about what they invest and how.”
Although he’s unsure as to whether it’s a direct World Cup legacy, Watt has also noticed a growing trend for major corporate players using South Africa as a gateway to the whole African continent over the past five years. “A lot of them are taking a head office role and managing sponsorships and doing work that has a continental focus, as opposed to a national, South African focus – you see it with the likes of Absa Bank and South African Breweries.”
3) The European football challenge
“We have a saying with pretty much every client – ‘the biggest competitor of South African cricket, or rugby, or football is the Barclays Premier League’. It really is significant. The global power of the Premier League is no secret, but Watt argues that the growth spurt in South African interest began with the FIFA World Cup. “It was then that the general South African public became far more aware of international football stars and players,” he explains. “For example, we’ve seen interest in Spain’s La Liga grow dramatically since 2010.” The Spanish victory on South African soil has resulted in newfound interest in the exploits of FC Barcelona and Real Madrid in particular, presenting a new challenge for the 16-team Premier Soccer League, South Africa’s top-level league which is two decades old next year.
“Pre-2010, if you asked football fans in South Africa for their favourite team, they’d say Kaizer Chiefs or Orlando Pirates, and now you’d get ‘Manchester United, Liverpool, Chelsea, Arsenal, FC Barcelona, Real Madrid. They also follow a Kaizer Chiefs, for example, but their first answer will be one of the top European teams – mostly Premier League, FC Barcelona and Real Madrid from La Liga and even a little for Bayern Munich. That’s been a significant change and we see that in all the research we do.”
4) Regional sponsorships: overpriced?
With several of Europe’s top football clubs adopting a regional sponsorship model, South Africa’s growing interest would seem to be an obvious target market. But while there are examples of clubs striking deals with local companies – Castle lager with FC Barcelona, and telecommunications firms Airtel with Arsenal and MTN with Manchester United over recent seasons – Watt believes clubs have “overpriced themselves” in South Africa. “There’s definitely interest, but currently it’s over-priced,” he confirms.
“I also think the clubs have packaged their offering poorly. One of the things they put their biggest value on its tickets to matches, but one of the big issues when they run consumer campaigns and prizes is the timing and the fact the winners often don’t qualify for visas to go to the UK. It’s a massive issue. They need to repackage their offerings so it’s valuable to the local guys, and also price it [more effectively] because there’s no doubt it’s been overpriced in this marketplace.”
5) The stadium attendance “crisis”
Asked what the biggest challenge facing the South African sports industry over the next 12 months, Watt doesn’t hesitate before he says: “It’s stadium attendance. It’s a crisis. You can’t run a successful sports business if you’ve not got people coming to your stadiums, buying your beer, eating your burgers, buying your merchandise – all these things. Fundamentally, it’s the one thing I think we have to fix in South Africa.
“Stadium-wise, weather-wise – all the things you need to hold a sporting event, we have. We could put on a World Cup of football, rugby or cricket tomorrow from a facilities perspective – we wouldn’t need to build a thing. In that respect, we’re in good shape, but it’s really about driving attendance and driving through the retail side of sport – food, merchandise etc. Until we get that right our sports industry will continue to struggle.”
Watt points to the quality and penetration of South Africa’s dominant sports broadcaster, SuperSport, as the major factor in the diminishing live attendances. “There are socio-economic reasons and things like transport or the stadium experience – issues uou would expect – but the major reason is that we have the best sports TV in the world.”
In particular, SuperSport’s decision to offer a discounted package, including its SuperSport 3 and SuperSport 4 services which focus on live European and domestic football, has broadened its viewership: there are over five million DSTV connected homes in South Africa, of which around three million have the Compact package giving access to SuperSport 3 and 4.
“That has fundamentally changed the sporting landscape of South Africa,” Watt says. “Predominantly black South African football fans are really spending a lot of time watching the Barclays Premier League, La Liga and also our local football. What it’s also done is hurt our stadium attendance. We have nine channels showing all the best sport in the world and that means that for the South African sports fan, at the price he is paying, it’s cheaper to stay at home as opposed to going to stadiums. That’s the challenge, whether we’re in the agency or the rights-owner space, we’re all facing.”