It has been a week of high drama and headlines at South African Tourism (SAT) following leaked information about a controversial proposed multi-million rand deal with Tottenham Hotspur Football Club – a deal now shelved following public outcry.
Daily Maverick last week exposed how SAT proposed a three-year sponsorship deal with the English Premier League side worth £42.5 million (about R900m), starting at the beginning of the 2023/2024 season and ending at the end of the 2026/2027 season.
In exchange for the investment, SAT would receive kit branding, interview backdrop branding, match-day advertising, partnership announcements, training camps in South Africa, and free access to tickets and stadium hospitality.
The information which was leaked to the news site was greeted with derision by the public at a time when the nation is beset with seemingly insurmountable problems, not to mention lack of trust when it comes to how public money is spent.
It was further alleged that SAT’s interim chief financial officer, Johan van der Walt, had been linked to an agency identified in the controversial sponsorship proposal.
The publication reported that Van der Walt was a director of several companies linked to the WWP Group. This, even though SAT Chief Executive Themba Khumalo stated at a media briefing on 2 February that there was “no involvement of an agent or middleman in this proposed partnership”.
It has been a saga with many moving parts. Fingers have been pointed at Tourism Minister Lindiwe Sisulu, who denied knowledge of the deal and countered that it was a smear campaign. It has also placed Khumalo in the spotlight over his irascible handling of the matter.
On 7 February, the portfolio committee on tourism resolved that the deal was no longer on the cards.
However questions remain about what all the fuss was about and whether this deal had any merit to begin with. Some industry insiders say it all comes down to social context and how things are communicated. Most agree that the backlash was understandable considering what South Africans are experiencing.
Michael Goldman, a sports marketing expert and professor of sport management at San Francisco University, said the social context in which the proposed deal was being considered was deeply problematic considering the immense difficulties experienced by South Africans daily.
However, from a business point of view, R300m a year over three years was a “miniscule” amount of public expenditure relative to the trillions spent. It was also money that had been allocated to marketing South Africa internationally in order to attract foreign tourists.
“The potential returns in terms of media exposure and actual tourist spend would outpace the money spent. For every rand we spend marketing South Africa, we get at least R30 back in international money spent here. We need to spend money to make money. So, it was potentially a good deal and an affordable one, but the way in which people experience their lives and the substantial mistrust that has plagued South Africa made it a difficult proposal to consider.
“If we didn’t have a daily reminder of the failures of the state, we might be able to swallow this kind of thing more easily. Also, if the proposal wasn’t leaked but communicated in a different way, it may have played out differently. These are some of the lessons for the future.”
Neil Jankelowitz, the chief executive of MSC Sports, said he understood why the deal was so emotive and elicited such a level of uproar, given the context.
Though a sponsorship with the English Premier League was potentially an effective platform to market South Africa, reaching a massive global audience, it was vital that whatever money was going to be spent there needed to have a similar budget to leverage the sponsorship. “There’s no sense in buying a Porsche if you don’t have money to buy petrol,” he said. In other words, attract tourists, and make it worth their while to come here.
Steven Mervis, the head of strategy at MSC Sports, said, “From a public relations point of view, spending so much money on one very high-profile sponsorship was always going to be difficult for the South African public to accept. SA Tourism must have seen this backlash coming when the country’s socioeconomic and Gini co-efficient is considered.”
He said it was difficult to determine the impact (both positive and negative) of the deal from a sponsorship point of view.
“What struck me initially was how much we didn’t know about the sponsorship. Why has SA Tourism chosen this sponsorship? What audience data has it based it on? How does it fit into its wider plan? What has it spent its previous marketing budgets on?”
He said out of context, the deal sounded overpriced and concerning, but without full understanding of how SAT operates its international marketing and its objectives and targets for the next three years, it would be hard to determine the potential impact.
An interesting comparison had been made with the “Visit Rwanda” campaign, Mervis said, that country having a similar, multi-year partnership with Spurs’ closest rival, Arsenal.
“Some might think that the money spent by the central African country vindicates SA Tourism’s decision. But it’s important to understand the context. Following the genocide in Rwanda in 1994, the country needed to make tourists aware that visiting the landlocked nation was a viable and attractive option. This, however, isn’t the case with South Africa.
“Our country has long been famous as a top holiday destination, ranking in the top-25 most popular destinations in the world, according to the World Tourism Organisation, and the challenge isn’t awareness, it’s further down the sales funnel at consideration and conversion. As a nation, we need to keep convincing tourists to come here in spite of all the issues we have, not make them aware we exist. With a partnership that focuses so heavily on exposure, SA Tourism, in my opinion, has missed the mark.”
