eBusiness Weekly
Kudzanai Sharara
Last month there was furore in the local sporting fraternity after ZIFA allegedly demanded its share from the money that 2016 Premier Soccer League Champions CAPS United earned from its successful foray into the 2017 CAF Champions League.
Questions were raised on why ZIFA was looking at benefiting from the earnings the team had made, given that local teams are struggling to stay afloat financially.
Player unrest has been the order of the day at most premier league teams with players boycotting training due to delays and non-payment of salaries.
The question though is why local sport teams are failing to meet their financial needs, most importantly not being able to pay their players’ wages and salaries, let alone winning bonuses.
Or rather, why are local teams failing to generate income, which can sustain their day- to-day operations. In a world where some players are now worth millions of dollars — Philippe Coutinho was bought for £142 million, why are local sports teams still struggling financially?
All this in a world where the inexorable rise of sponsorship revenues for rights holders continues unabated. Global estimates place revenues from sports sponsorship rising to beyond $45 billion. The least that local clubs should be able to do is to generate enough to sustain their operations.
That, however, has not been the case. What has been lacking, we would like to believe, is the inability by local sport stakeholders to introduce economics to their business operations.
If one is to look all over the world, it’s hard to miss the influence of economics. The influence of economics in sport is evident from the way players are signed and how much they are paid.
Clubs such as Real Madrid, do not only look at players who can do the business in the field of play, but in paying huge amounts, they also consider how much they can earn in merchandise sales related to the particular player.
Shirt sales, image rights, merchandise opportunities are also factored into the deal. We have also seen the presence of sponsorship in the brand names on players’ uniforms, the ever-changing banners in the background, not to mention the advertising spots during, before and after the game. There are so many opportunities that sponsors would want to partner with clubs.
We have, however, not seen this in our local sport. What has been lacking to some extent has been statistics in terms of the numbers that are involved in sports, from player statistics to fans statistics.
This is not about throwing figures out there like when they say Dynamos has 7 million supporters, but actually coming up with real and verified numbers. It’s not about reading in the back pages of newspapers that such and such a player is in excellent form, but actually coming up with statistics that show what sort of an impact the player is having in the field of play.
In the EPL, they can tell how many interceptions a player would have made in a game and these statistics are then used to seek sponsorship or endorsements.
Companies that offer security services might want to engage that player as their brand ambassador. Corporates partner sport teams because of certain traits exhibited by the team, but such traits have to be gathered scientifically and not just perceived.
Strategies that involve the participation of fans have also been used successfully. The Carling Black Label Cup, in South Africa, is one good example where the corporate world partners with football teams Kaizer Chiefs and Orlando Pirates in marketing their products and the game of football.
Deloitte has also been doing some work on how data can help drive sports sponsorship and fan engagement. Here we will share some ideas from Deloitte that demonstrate the link between ticket and sponsorship revenue.
The ideas are meant to drive live game engagement and attendance and enhancing sponsor opportunities.
One of the ideas shared by Deloitte is where sports teams could tie in concession promotions by having one stadium bay face off against another in a hot-dog-eating contest based on the number of hot-dogs purchased by fans sitting in that particular bay, with the winners receiving certain prices.
In-game features that engage specific fans or fan groups could create a more engaging experience for the fans involved and deliver greater entertainment value to those in attendance.Sport sponsorship no longer means simply attaching a corporate name to a stadium. Rather, it has become a triangle of association between the team, the sponsor, and the passionate fan.
Access to richer data will enable more focused sponsor targeting and authentic engagement that will spill outside of the stadium and in the process generate income for the club and its players.
The growth in sports economics is likely to continue, as the data gets better and teams compete for a strategic edge. The sooner local clubs realise that sports is now more than a game, the better.
