challenges facing SA sports rights holders

29 May 2017

Sports sponsorship in South Africa remains a worthwhile yet turbulent world. The digital disruption has created many challenges for sporting bodies and their rights holders with immense pressure to attract more fans, effectively monetise the support base and show true ROI.  

According to IEG’s 32nd annual year-end industry review, global sponsorship spending is projected to rise 4.5% in 2017 to $62.8 billion from the $60.1 billion spent in 2016.

The value of rights sold in South Africa has been estimated to be approximately R5bn ($370m) annually across all sports. Lucrative eCommerce spend, which rights holders need to tap into, was valued at R9bn in South Africa in 2016. Forecasts predict local eCommerce to grow at a rate of 26% annually.

The potential is there for massive growth but there are three big obstacles facing SA sports rights holders today:

Good digital presence

Today’s playing field demands a good web presence and effective use of social media so that you can reach all your supporters, and add value to their overall experience.

Globally, sponsors are using high quality content marketing to tell stories that enhance fans’ passion for the sport they love. Brands are pushing it even further, using social influencers, live experiences, wearable tech, eSports, and fantasy leagues to engage with supporters. Fans demand content as much during game-day as off-field, and brands, properties and rights holders that can innovate within the space, within the right channels, will reap rewards.

“Many of our local sporting bodies have a poor or non‐existent online presence,” says Sportal’s co-founder, Jon Adams. “They are failing to capitalise on eCommerce and find social media a challenge, instead of the immense opportunity it is.

“Sponsors are demanding reach beyond fans at venues, and rights holders need to expand their inventory to accommodate this, especially with the growing cost of rights fees.”

The data revolution

The ability to access and analyse data is having a profound effect on sponsorship. It has changed the conversation from quantity to quality, and rights holders are under pressure to not show reach but rather, deep insights that highlight detailed information about online and real-world behaviour, ultimately driving actionable results.

Brands can now activate bespoke strategies that are targeted at relevant, segmented audiences. The fit between property and sponsor is better and ROI can be measured more effectively.

Sponsors and rights holders have just begun to scratch the surface of what data-enabled sponsorship offers. Globally, leading rights holders are investing in the expertise and technology to showcase the value of their properties, and are ultimately creating the next generation sponsorship partnerships.

“Having access to big data and knowing how to use it offers unparalleled digital marketing solutions to brands and rights holders,” says Sportal’s co-founder, Chris Heaton. “It is a vastly untapped and exceptional new playing field for all stakeholders.”

Effective rights management

In an environment worth billions of Rand under contract, rights holders are incentivised to manage rights and control costs. While pursuing all possible monetisation opportunities, they also need to identify and stifle any revenue leaks.

“Currently, SA rights holders spend a lot of time engaged in management tasks and often this is haphazard and costly,” continues Adams. “Sometimes there is a severe lack of rights management altogether, and if rights are not delivered, sponsors may cancel no matter whose fault it is.”

Real-time monitoring and reporting, targeted upselling of inventory, and rights best practice implementation via innovative rights management technology are just some of the ways that local rights holders can increase the value of their properties for sponsors. After all, spending more time managing rights, means less sales and service for the fans.

These problems are not unique to South Africa, the global sponsorship environment is evolving rapidly and brands and properties have to constantly adjust to new and better ways of doing things.

Even IEG’s 2017 industry review stated: “One factor that could prove to be a drag on spending is the lingering gap between sponsor expectations and properties’ ability to deliver when it comes to both personalised marketing opportunities based on audience data, and valuable digital content and platforms.”

Rights holders need to find a way to be pro-active and use global best practice to retain sponsors. Our local limitations of bandwidth, access to smart phones and mobile data costs also add to the difficulties. However, rights holders that embrace these challenges and work on getting up to global speed, will see the impact on their bottom line and not look back.

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