The big business of sport

[Image] The CEOs of the rugby, cricket and football associations (right to second left) sit together to discuss the sporting situation.

[Image] Former Local Organising Committee CEO Danny Jordaan, now the chairman of the 2010 Fifa World Cup Legacy Trust, said he would do it all again.
(Images: Janine Erasmus)

[Image] For national teams to succeed, the development of sport should start as early as possible.
(Image: Cricket South Africa)

Adam Fraser
Communications head, Sport Industry Group
+44 207 240 7700 or +44 7967 568 572

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Janine Erasmus

The inaugural Sport Industry Summit kicked off in Johannesburg on a high note, with the challenges ahead laid out, as well as some of the plans and possible solutions.

An initiative of Sport Industry Group South Africa, the summit was supported by big names, including Deloitte, Gallo Images, Tsogo Sun, Virgin Atlantic and Sports Illustrated, among others. The aim of the gathering was to address some of the challenges that lie ahead for all sports in South Africa, as well as for the companies who pour millions into sport as sponsors, to ensure that development continues, and to share best practice ideas through networking.

The one-day event, held on 25 October, was attended by a plethora of local sporting big-wigs, including John-Laffnie de Jager, captain of South Africa’s Davis Cup team; mountaineer Deshun Deysel; Graham Hill, national head coach of Swimming South Africa; Olympic gold medal swimmer Cameron van der Burgh; and 2010 Fifa World Cup Legacy Trust chairman Danny Jordaan.

International experts were also present, including Deanna Ford Castellini whose family owns the major league baseball team Cincinnati Reds, Mark Pannes, CEO of Italian football club AS Roma, and Philip Beard, the CEO of English professional football club Queens Park Rangers.

All agree that South Africa is currently one of the most exciting places in the world for sport, especially major events, and that the time is right to capitalise on the country’s accomplishments.

“South Africa is a leading sports market,” said Nick Keller, founder and CEO of the UK-based Sport Industry Group and Beyond Sport, an organisation that promotes sport development around the world. Archbishop Emeritus Desmond Tutu is its patron.

“Few countries have delivered top-class sports events so consistently as South Africa, going as far back as 1995,” he said, referring to the Rugby World Cup of that year, which was staged a mere year after South Africa’s transition to a democracy, and which was won by the home team, the Springboks.

“South Africa has become almost the go-to destination for sports around the world, and there is big money involved. In 1993 the total sponsorship market in South Africa was worth around R500-million (US$57-million) – by 2011 it has risen to just under R7-billion ($800-million).”

Keller said there was no doubt that the business side of sport was on the rise around the world.

“The challenges we see, such as politics in sports and corporate sponsors being asked to account for their money spending, are not exclusive to South Africa.”

Distinguished track record

Mark Holme of Deloitte said that the multinational got involved in the summit because of the enduring impact of sport.

“The first person in the new South Africa to realise the unifying potential of sport was former president Nelson Mandela. He supported the 1995 Rugby World Cup, which was then viewed as a symbol of what the Rainbow Nation could become.”

Since then the country has successfully hosted cricket and football world cups, as well as numerous other international and homegrown events. These have seen some of the biggest names in the business coming to our shores – and millions of tourists.

They include the 2009 and 2012 International Cricket Council (ICC) Champions Trophy and the 2007 World Twenty20 Championships; the 2010 BMX World Championships; the 2009 Fifa Confederations Cup; Red Bull Big Wave Africa from 1999 to 2008; the 1996 World Cup of Golf, and the biggest of them all, the 2010 Fifa World Cup – among many others.

Local events such as the annual Nedbank Golf Challenge; the Two Oceans Marathon; Cape Argus Pick n Pay cycle tour; the world-famous Comrades Marathon and the Unlimited Dusi Canoe Marathon have attracted sportsmen, their support staff and their fans from all over.

In 2013 South Africa will host the first of ten Tournaments of Hope, the second richest tournament in golf boasting a total purse of R74-million ($8.5 million).

“That’s why corporate South Africa has bought into sport,” said Holme, “because it unites people, and shows the world, and ourselves, just what we’re capable of.”

If we can deliver a world cup, he said, surely we can deliver textbooks too. If we can build world-class stadiums, we can build schools.

Looking to the future

The CEOs of South Africa’s three top sporting associations – cricket, rugby and football – came together to report on their respective sporting disciplines, and give a glimpse of their plans for the future.

Jacques Faul, acting CEO of Cricket South Africa (CSA), South African Rugby Union (Saru) CEO Jurie Roux, and Robin Petersen, the CEO of the South African Football Association (Safa) are rarely seen together in their professional capacities, but have come on board as founding supporters of the inaugural Sport Industry Summit.

Talking about the legacy of the 2010 Fifa World Cup and whether it could be sustained, Petersen said that there was no easy answer.

“We’ve made enormous gains on many fronts – a decade ago there was a serious lack of decent sports stadiums. Today we have our magnificent world cup stadiums as well as many upgraded training venues.”

But those football stadiums are not used as often as they should be, and many suggest that other sports be allowed to use the facilities. For instance, there is ongoing talk of the Western Province and Stormers provincial rugby teams and Ajax Cape Town football club, all based at Newlands in the southern suburbs, moving to the Cape Town Stadium, which was built at a cost of around R5-billion ($600-million).

“A partnership with rugby is the way to go for these stadiums,” said Petersen.

Roux added that such negotiations would not be the responsibility of the national governing bodies, but would take place at provincial level.

World Cup ambitions

According to Petersen, Safa is looking at new ways to fund development, so that the 330 local football associations, the 20 000 clubs and the three-million players in South Africa, as well as schools, will become a breeding ground for new talent.

A better management structure is also on the cards, including registration for every one of the three-million players, a record of all events at school, club and league levels and upwards, promotion and relegation rules, and a toolkit to help manage players, finances and administration.

“This will lead to a much better national team within 10 years – our vision is to be consistently amongst the top three in Africa and the top 20 in the world,” Petersen said, much like the cricket and rugby teams have managed to achieve, although he did concede that they have far fewer rivals for these positions.

Safa wants to get to where rugby is now, said Petersen, because success on that scale will do wonders for the nation that has made the sport the most popular in the country – but first it must invest in the base of the football pyramid.

Qualifying for the upcoming 2014 Fifa World Cup in Rio, said Petersen, will show that South Africa can do more than just host events.

“It’s going to be a tough road, but our new coach [Gordon Igesund] believes that we can win the event. If your coach believes, and gets the players to believe, then it’s possible.

“Our next challenge is the African Cup of Nations, Afcon – we’re hoping that it will ignite the passion that we saw in 2010. It also helps that Afcon is taking place in summer, as the cold 2010 winter did dampen some of the party atmosphere,” Petersen said.

At the top of their game

CSA, too, has the cricket world cup as top priority. “If you teach us how to win a world cup,” said Faul jokingly to Roux, “this summit will have been worth my while.”

Faul was referring to the fact that, while the Proteas national cricket team are unquestionably one of the best in the world and are the only team to simultaneously hold the number one spot in all three forms of the game, they have yet to win a major championship, including the world cup. The Springboks, on the other hand, are two-time world champions.

But international cricket has been very good for the organisation, and the country, said Faul. South Africans are not just dominating on the field and playing host to cricket fans around the world, but have secured top positions in the global cricket governing body. Former South African wicketkeeper Dave Richardson is the current ICC CEO – he succeeded another South African, Haroon Lorgat.

The success of local cricket has been marred by the recent scandals around misuse of funds in CSA administration, but Faul has promised that there will be changes to the management structure and that lessons learned from past mistakes will be well used.

South African rugby has also been the subject of much talk lately, notably on the Super Rugby front. The decision to remove the Lions from the three-nation tournament and give their place to the Southern Kings has sparked debate and outrage, but Roux is philosophical.

“It’s unfortunate that this decision favoured a franchise at the expense of another, but we look at it in a positive light – that we delivered on a proposal that we made.”

Roux conceded that this decision may prompt a change to the country’s international rugby outlook.

“We need to look further afield and explore the northern hemisphere as a potential partner in South African rugby,” he said, “but here the challenge is the calendar. As rugby is traditionally a winter game and cricket a summer game, our rugby season doesn’t coincide with the north.”

Another challenge, he said, was getting people to come to the games, because with so much sport to choose from on television, the stadiums are not as full as they once were.