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John Smit . Picture: JACKIE CLAUSEN

Sharks converge


Using sponsorships to drive value

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FM Edition:

When Absa pulled out of their Springbok sponsorship last November, it seemed no-one wanted to touch the Boks with a bargepole.

The termination letter to SA Rugby CEO Jurie Roux from Barclays Africa was dated Friday 13 — never a good omen. The move was prompted by, among many things, SA Rugby’s seeming lack of transformation. It left the organisation so vulnerable that it looked as if the Boks would go into the June tests against Ireland without a sponsor’s logo on their chests.

It seemed crazy that one of the biggest brands in SA sport couldn’t attract a title sponsor. While new Springbok coach Allister Coetzee was figuring out which players to select, SA Rugby’s new commercial chief Tsholo Kubheka and Megapro had sleepless nights trying to secure a new sponsor. But in stepped Blue Label Telecoms, with a unique sponsorship model dubbed in the streets as "pay-as-you-go".

When the Levy brothers, Mark and Brett, of Blue Label said "I do" to SA Rugby, it wasn’t the long-term commitment we are used to in sponsorship deals. Initially they joined for the three weeks the Boks faced Ireland before extending to the end of the year.

The deal let a new genie out of the bottle that sports franchises may never be able to put back. It showed that sponsors could come in for a short period and get their money’s worth. The sports entity, presumably, then has the option of hiking the price for those three weeks.

But does everyone win?

"I didn’t think Blue Label ever dreamt of being the main sponsor on the Springbok shirt because it is an amazing thing," says Blue Label Telecoms joint CEO Mark Levy.

"Life is a little bit about timing. SA Rugby were looking for a sponsor and Blue Label were always looking at doing stuff in the market.

"I would ascribe it to timing being good, the deals being fair and working out what more we could do in the long run.

"So we’ll take a bite of the apple, see if it works. The bite in June turned out far greater than we expected. Somehow rugby has a different affinity and support base in this country to any other sporting code. Rugby is like the gold of the Olympics. I’m not relegating other sporting codes but just being on the Bok jersey brings a different aura.

"It’s really catapulted our brand a lot more.

"You think you’re relatively well known but [once you sponsor the Springboks] you’re now in the mainstream. You’re putting your brand out there with the best."

Levy believes, because of how tough the economy is at the moment, sports sponsorship is moving in a direction where it will offer both parties instant, well-calculated, gratification.

"I don’t think the model’s been defined yet," he says.

"I think we will see some sort of change in the way sponsorships happen in the future. Maybe they won’t be five-year agreements but will be in shorter spurts. Maybe there’ll be sharing in revenues, barter deals and stuff where there are long-term revenue drivers for everyone — not just a one-hit wonder.

"The traditional ways of people throwing money at sponsorships are changing and it’s getting harder and harder to put money in and wait for something to happen."

Blue Label, whose technological operations have largely been in the background, had their coming-out party when they first sponsored the Proteas T20 cricket side. But they showed they meant business by acquiring Rob Fleming from SAB – one of SA’s most influential sports marketing strategists.

They wanted to get in on a sphere of society that had no political or religious affiliations — something neutral. Sport offered that. But rugby is a minefield of political innuendo and the Boks stir emotions.

Says Levy: "Transformation wasn’t a negotiation topic. I’m not sure the whole world sees it the same way certain sponsors do. For me, transformation is a process. Rugby’s done an okay job. Is it the best or the worst job? The answer to that question is subjective."

"Pay-as-you-go" sponsorships may work for smaller federations, who can only cash in during mega events. Swimming and rowing, for instance, brought in medals at the London and Rio Games. They may benefit from getting sponsors as and when they compete.