Tourism-Spurs deal: English Premier League guarantees massive exposure but not necessarily good returns

5 Feb 2023

South Africans do not trust the government and its agencies to act responsibly with public funds after years of grift. Which is why, even if the Tourism SA and Tottenham Hotspur deal has some value, it shouldn’t go ahead at this time.

There are two irrefutable truths in global sport — football at the top end is expensive, and at the same time, football is the most popular sport on the planet.

Which makes it the perfect Petri dish for hubris and avarice to spawn in. Throw in a country that spends billions on projects that all too often wither on the vine while a few cadres get rich, and it’s no wonder there was a huge outcry this week when Daily Maverick revealed another potentially wasteful and possibly corrupt business deal.

SA Tourism, the government’s marketing arm, was (and still is, apparently) set to spend £42.5-million, or close to R1-billion, to buy space on north London-based Premier League club Tottenham Hotspur’s jersey.

A logo on the sleeves of Spurs jerseys worn by the likes of global stars Harry Kane and Son Heung-min could carry the slogan “Visit South Africa”. Or at least, some derivative of this mundane phrase that yet another mouth in the food chain of rapaciousness will come up with for a large fee.

There are many issues both bad and, well, not so bad, with this proposed deal, which make it worth interrogating with what information we can glean.

Massive exposure

Let’s, for a moment, take the proposed deal at face value. Let’s bury the well-founded cynicism South Africans have been conditioned to expect through painful experience and assume there are no backhanders or other unethical and illegal elements in the Spurs proposal, and ask: Why is it necessary? Why spend one-third of the department’s budget on a single deal?

Why Spurs, why the English Premier League (EPL) and why football, especially a team from Britain? This is, after all, a club that hasn’t won the league since 1961, last won the FA Cup in 1991 and whose last major trophy was the 2008 League Cup.

The short answer is: “exposure”.

The one product; the one place where a single sponsorship deal can cover a large portion of the globe, is football, and specifically the EPL. It reaches more than four billion people through TV annually, with Spurs being watched by 1.3 million people per game.

The EPL is now the richest and most-watched league in the world. At the end of last season (2021/22) the EPL paid out £2.536-billion (R53-billion) in broadcast rights fees to the 20 clubs in the league. Spurs received £146-million (R3.05-billion).

“Research from a company called SPORT+MARKT has found that the Premier League boasts an annual TV audience of 4.7 billion,” says a report in sportingindex.com.

“The consultancy firm found that games are viewed in 643 million homes around the world, along with a host of bars and restaurants. More than 1.4 billion people around the world identify as fans of a particular Premier League club, according to SPORT+MARKT research.

“China has the most Premier League followers, with 300 million. India is next at 147 million, while there is an audience of 290 million people across Africa.”

This does slightly debunk the theory that a sponsorship of this nature is only appealing to a British market. The EPL is a global product with a global audience and fan base.

For SA Tourism though, the interest lies in the number of eyeballs on Spurs games. The EPL’s last published viewership figures relating to the 2018/19 season said: “Cumulative audiences for live Premier League programming rose 11 percent to 1.35 billion.

“As Manchester City and Liverpool contested a thrilling title race, a cumulative global audience of 3.2 billion for all programming watched the action between August 2018 and May 2019, an increase of 6 percent on the previous season.

“These figures are only for standard in-home viewing and exclude out-of-home and mobile device viewing.

“The Premier League was shown in a total of 188 of the world’s 193 countries recognised by the United Nations. There were 262,102 hours of Premier League coverage broadcast around the world last season, reaching 1.03 billion homes for all broadcast types. The household reach for live coverage only was 978 million homes.”

Theoretically, it could be seen as a smart move. Selling South Africa to a massive global audience with a literal one-size-fits-all-sleeves approach might have some merit.

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Will there be a return on investment?

But — there’s always a “but” — is the price fair and will the returns be worth it? Would the exposure necessarily translate to visits to South Africa? There is no sure way of knowing.

“If those figures of close to R1-billion are correct, then it’s way overpriced,” an industry insider who has worked on EPL sponsorship deals of this nature before, told Daily Maverick.

“That price should be front-of-shirt with several other activations added on. How are they ‘sweating’ that deal for the price? Because your name on the sleeve and on the perimeter LED board is not enough to justify it.”

There is no exact science of predicting if the deal will add value, despite what SA Tourism claims. Yes, there is information about the sport and the territories it taps into, but whether fans will ultimately associate visiting South Africa with the EPL, is unknown at this stage.

Other insiders in the industry have told Daily Maverick that the only way to be accurate is to measure the outcome through surveys every six, nine and 12 months.

These are done either through social and electronic media or in-field surveys where Spurs, and football fans in general, would be asked about their connection to the “Visit SA” campaign and whether it had raised their awareness of the country.

SA Tourism, through its acting CEO, Themba Khumalo, believes it will. Khumalo angrily addressed the media last week, defending why this is a great deal, without really proving it. It was a glib connection of dots that did not add up.

He was angry that the story, broken by Daily Maverick’s Rebecca Davis, was in the public domain, yet he claimed to be happy to share information with the media and therefore the public.

The same media and public who had not heard a word about the possible deal until a whistleblower allowed Daily Maverick to bring the public’s attention to it. If you want to connect the dots, those are pretty good ones to join.

“This is the doorway for us to be able to access the followers of Premier League football in the UK,” Khumalo said.

“We also looked at the audience footprint for the Premier League and the team we are engaging with. The biggest audience is in the UK, which is our biggest international travel market to South Africa.

“The second biggest audience is in the US, which is our fastest growing international arrivals market, and the rest is Europe and Asia. Because the games are played throughout the year, it gives us a presence on TV throughout the year and gives us marketing platforms throughout the year.

“We can change our creative and message, make it seasonal and based on what we are selling on the supply side within South Africa. This is about the economic impact of tourism. It has nothing to do with football.”

What’s in it for Spurs?

Although Spurs are a super-rich club, and although some critics claim they should not be doing business with a country that supports Russia, for one thing, these are not issues that concern the business of football.

Spurs need to monetise every aspect of their club because the more they earn, the more they spend. Their recently completed Tottenham Hotspur Stadium left the club £637-million in debt to banks.

The loan arrangements were restructured in 2019 with “roughly £525-million of the debt converted into a bond scheme, with staggered maturities of between 15 and 30 years”, according to The Guardian.

A rudimentary calculation means that they only need two deals similar to the proposed SA Tourism deal, which at its current price would be worth £420-million over 30 years (to 2053), to fund their stadium repayments. Which is why the source of the income is secondary to finance needs.

Spurs are currently the 10th most valuable club in the world, according to Forbes’ recently released richest clubs list, at $2.35-billion (R40-billion).

The bulk of their value is derived from a $1.215-billion (R20.8-billion) broadcasting rights disbursement via the EPL (current and future) and another $741-million (R12.68-billion) from commercial deals such as the one SA Tourism is busy negotiating. These are all multiyear deals.

But Spurs have an annual wage bill of £110-million (R2.23-billion), according to Spotsrec, and other massive overheads. Premier League survival is vital for the club to exist.

In the crazy world of professional football, winning doesn’t matter as much as participating. Just being in the EPL guarantees clubs between £100-£150-million in broadcast rights fees annually, depending on their log position and how many of their live matches are televised.

Despite this deluge of income, the price of buying players, paying wages, funding academies, catering, paying coaches, executives, consultants and other staff, and of course stadium upkeep is stratospheric.

Which is why EPL clubs celebrate coming fourth in the league as if they’ve won a title. It guarantees entry into the following season’s Champions League, which is another tournament awash with money.

In return, billions of people tune in to watch these teams play. From Micronesia to Mexico and everywhere in between, people declare their allegiance to a distant club — in this case English — with which they have no immediate connection.

It’s more than conclusive evidence of football’s popularity. It’s a triumph of marketing and public relations. Something SA Tourism has clearly bought into. But at what cost? DM

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South Africa

Massive exposure

Will there be a return on investment?

What’s in it for Spurs?