Sport Industry Group

25 Aug 2010

Justin Sampson, chief executive officer of sports marketing agency SAIL, explains why South Africa is suffering from a World Cup hangover following the successes of the summer.

South Africa recently hosted a hugely successful FIFA World Cup and while all South Africans are basking in their success, national flags are still flying high, although slightly withered; and everyone is trying to jump on the band wagon of national pride (with a number of initiatives recently launched), the hangover slowly seems to be setting in.

The cause of this? Well it can be attributed to a number of factors, from overspending on budgets to overpaying on rights fees due to the ‘artificial economy’ created by the FIFA World Cup.

There are also other factors like ticket prices going up in domestic football (making fans grumpy and therefore more selective on what games they attend), to what we now do to sustain the new stadiums and prevent  them from becoming ‘white elephants’.

The second half of 2010 will undoubtedly slow down as a result of the huge rights fees paid by sponsors ‘to play in the 2010 space’, as well as many budgets been overspent on leveraging around the FIFA World Cup.

However hopefully in 2011, the budgets committed will still remain in place, that is if the sponsorships have been able to measure some sort of ROI and seen the benefits of investing in sponsorships, to begin with.

Rights fees, particularly in football have gone up significantly in the last couple of years, with some people in the industry referring to it as the 2010 FIFA World Cup Tax.

There is talk in the industry that these fees now need to be renegotiated but I’m of the opinion that sponsors need to get used to these fees and rather focus on getting additional rights as opposed to ‘moaning’ about fees they have contractually committed to.

The biggest challenge going forward will undoubtedly be the sustainability of the new stadiums and how other sporting codes are engaged to make use of these stadiums

Government is currently engaging various stakeholders and hopefully they can come up with a solution soon, the signs are good with Soccer City being sold out this past weekend with the Springboks taking on the All Blacks.

However let’s not forget that a hangover is often a result of ‘over indulging’ and when all is said and done, I think the biggest reason for the hangover is not the consequences that we are now dealing with but rather the fact that we all miss those thirty wonderful days, were we all celebrated as one and hosted the world.