SportPesa’s Sponsorship Withdrawal – Biggest Gamble

2018 Cometh……

2017 has been one momentous year for the country. Even in the world of sport, it has been a well mix in the basket. Talking of baskets, tongues are wagging about the biggest sponsors of sport in Kenya – SportPesa – who are thinking of pulling back their bountiful offering, effectively reducing its involvement in sports in Kenya. What does this portend for sports in 2018?

We got the world...(image courtesy of SportPesa)
We got the world…(image courtesy of SportPesa)

A few posts ago, we predicted the impact of sports betting companies on our sports scene. A casual look at Kenyan sport in the last 3 years has seen a major impact both directly and indirectly on how we consume and interact with sport.
A PwC report on Kenya Entertainment and Media 2013-17 , revenues from sports betting were projected to rise from US$ 11.7 million (2012) to $17.3 million (2017).
As of writing this post, there are about 25 sports betting (and gambling )companies registered in Kenya. The biggest and easily recognisable is SportPesa – operating BCLB (Betting Control & Licensing Board) license no. 673 through Pevans EA Ltd.

Conservative estimates of sports betting and its impact to the economy are at between KES 635-700 million p.a. This is mainly in sports sponsorship, direct spending in improving sports facilities and teams, as well as employment. Add another KES. 2.4 billion in media spend (various media research reports in 2017) – from digital, print, radio and TV – as well as daily spends and we’re talking of billions of shillings!

The synergy enjoyed by both betting and telecoms companies have seen the mobile money in Kenya grow to daily transactions worth KES 18.4 billion! A good fraction of the monies are from your common man on the street, to the discerning campus student and many in blue-collar jobs who review their odds every other morning to make the winnings.

SportPesa Success

Back to SportPesa, the upsurge of sports betting in Kenya can be attributed to its adeptness and adaptability to their audience. As aptly summarised by BetMoran on the post titled ‘ Why SportPesa is very successful‘ the main points include;

  • Consumer spend – 50,000 users spending an average of KES. 500 = KES 25 million per month;
  • High and engaged web audience – an average of 16-18 million users every month (if using Google AdSense-this is another revenue stream);
  • Consumer education – when launching in 2014 just in time for the World Cup, SportPesa has continually educated its target audience on its various betting platforms and options;
  • Mobile technology – as noted above, riding the wave of over 25 million unique mobile phone connections, SportPesa was able to ride the wave of mobile money and making it integral in its platforms;
  • Media spend and engagement- as of Aug 2017, SportPesa was the biggest ad spending firm in media in Kenya rivalling telecoms and FMCGs such as Safaricom, Coca-Cola and P&G that have traditionally been high spenders in these.
  • Timing – launching in time for the 2014 World Cup, the brand was able to take advantage of the biggest sports extravaganza in the world. Pray they’re already looking forward to the 2018 one…

Enter GoK’s hand

In May/June 2017, the Treasury CS tabled proposals to tax sports betting firms in Kenya as high as +50% of the daily collections. While it is not our forte in matters taxation, with the numbers mentioned above, it would be foolhardy to assume this would not attract the Treasury technocrats. Given its agenda to invest in infrastructure including the now-on-then-off stadia development, the GoK has had a tough year in looking to bridge the budget deficit.

Sports betting firms did what is becoming our typical litigious selves in Kenya and took to court to stop the tax measures. The case to nullify the tax measures was dismissed last week, effectively attracting a 35% tax cap on the gross earnings of the sports betting firms effective January 2019.

As of close of 2017, the tax percentages were as follows;

  • 5% of lottery sales;
  • 7.5% for betting firms and bookmakers;
  • 12% for casino gambling and
  • 15% for raffles.
  • Additional taxes include 30% corporate tax and 25% of their total sales dedicated to social causes, including sports activities.

SportPesa is currently involved in major sporting disciplines including;

a) Football – FKF, Premier League, Super 8 , Gor Mahia FC, AFC Leopards FC and Nakuru All Stars FC

b) Rugby – through KRU, National 7s team and Kenya Harlequins;

c) Boxing – Boxing Association of Kenya and boxer Fatima Zarika;

d) Rallying – by sponsoring Leonardo Varese.

Other sponsorship includes shirt sponsoring Everton FC; sports partnership with Arsenal FC, Southampton FC and Hull City as well as La Liga in Spain.

All these associations are likely to be affected in one way or the other once the firm confirms its future role in sponsoring sports in Kenya and overseas too.

Having started expanding its geographical reach in the region to both Uganda and Tanzania, the main market still remains the local scene. The firm’s perceived close links within the GoK will also be exploring ways of either reducing the burden of taxation or enjoying tax holidays for a little longer than the prescribed date.

Way Out?

  1. National Sports Lottery – the establishment of this lottery is long overdue. The GoK through the Ministry of Culture and Sports ought to have fast-tracked this in the last 3 years. Among the many options would be to push for all betting and gambling companies to remit part of their monthly revenues to this common Fund. The monies raised would be apportioned to the sports associations proportionate to the scope of the sport and planned activities for the year. This has worked successfully in countries such as the UK.
  2. Commensurate Social Responsibility – in South Africa, betting and gambling companies have to engage a fair amount of their revenues to corporate social responsibility. While it may not be a sustainable business model for sports business, it is a means to the end of sports development in parts of the world as this.
  3. Lobbying – while we are not privy to what may have happened along the corridors of Parliament and the delays in confirmation of respective committees, it would serve them well to lobby the legislators to reduce the impact of the taxation on their revenues. Alternatively they can give their options of tax regime or tax holiday for those setting up to their 2nd or 3rd year upon which the applicable tax kicks in.

As of 1st January 2018, SportPesa had sought to appeal the ruling in the courts seeking to overturn the ruling. In the meantime, all local sponsorship stands suspended.

To managing the taxman and his demands, a lot still needs to be done to reach a consensus. For the sports organisations likely to be affected, a common ground on appealing to those in Government can be pursued.

It remains to be seen how the biggest gamble will finally play out in 2018.

 

And1 Kenya Tour – Did it Live Up to the Hype?

Saturday 11th June and some of us sporting buffs in the country had one too many sporting events to attend but one that stood out for us was the and1 SpriteBall Kenya Tour which was ostensibly sponsored by Coca-Cola’s Sprite brand. Read on for a quick recount of events happening on the day;
a) Ticketing and Gate Management – an online process through www.tixpress.com was activated a few days to the event to enable advance booking to the event. It was a smart move but that’s where it ends. On arrival at the venue, no communication was made on how one was to confirm having made this advance booking. Being tossed around and having a bit of a miff with security personnel who were equally irritating made for poor gate management. No clear cut distinction too was made on the VIP booking (costing KShs.500) or regular ones (at KShs.200).

b) Security – Given that Kenya Basketball Federation Premier League games were still on, though scheduled for early starts; the organisers had to wait till 4.30p.m. to secure the venue ( managed by Sports Stadia Management Board AND NOT KBF as most people think…). There was a bomb sweep ( yeah we had Americans in the building) and this caused more inconveniences to sporting fans who had streamed in as early as 12 noon. Luckily the crowd was well-mannered and no scenes of commotion was seen thus far. There were 2 courts, the handball court (outdoor) which had screens and a basketball hoop which later served as the scene for the BlakeGriffin – Dunk-over-a-Car (The Chevrolet was donated by GM).
Here’s the Dunk thanks to *mastabonk;



The other court was the Nyayo Gym proper (indoor) where the exhibition game between and1 players and Kenya-Select and much of the action was to take place.
However on allowing the crowd into the courts, there were serious security lapses. First the crowd was too big for the Nyayo Gym allowing people to sit right next to the playing court a few inches off. There were people hanging around the back of each hoop and this was also of concern given the players’ getting their game on and the adrenalin kicking as the game went on. No serious injuries occurred (thankfully).
This easy access of the crowd though meant security personnel had problems trying to control the fans once the action started. Over-excited fans, groupies and some wannabe-photographers were all over the court each time a player from either and1 or Kenya select made a great play. At half-time it took more than 10 min to clear the court. By the end of the game when one of the Kenya-Select point guards outplayed an and1 guard, the crowd went berserk and even by the final buzzer fans were either throwing empty plastic soda bottles or running into the court like headless chicken.

c) Venue– as earlier reported, the venue(s) for the games were the handball and basketball courts both of which are managed by the SSMB. With the clouds hanging heavily before the start of the games, most of the people in the crowd didn’t take much chances and ended up in the Gym.
The lighting was good save for the fact that there were no effects thus making some boring ambience. 2 large screens had been positioned opposite each other; at the VIP side and directly opposite it. This was showing the action outside (at the handball court) and also running promotional ads for the DJ Unit and Sprite’s too.
The ancient scoreboard that has been at the Gym since 1987 was our source of information as the game progressed but since KBF or SSMB have never found it urgent to bring it down and modernise the whole thing, most people were agonised trying to see the scores.( The timer on the board usually has a problem differentiating between 3 & 8 min and this had the game’s MC in problems each time the clock was running out).
More cause for embarrassment was to come once the skies opened up and the rains pounded Nairobi, the roof at Nyayo Gym started leaking and the game had to be stopped as the MC saved the situation placing his treasured white towel on the court. 

d) Sponsors Overload – it was a great job for Coca-Cola through Sprite to agree to sponsor the event. In fact the original and1live Tour was not even supposed to head to East Africa but guess some strings were pulled and we got our share of the action. With every ticket purchase came 2 free half-litre sodas or 2 Dasani water 300 ml bottles, fair enough! But these bottles turned out to be anathema once the crowd got excited. Enough litter made its way onto the court causing much eyesore to the game.
There were banners too pronouncing the sponsor’s cause , all good but methinks its time too that Kenyan companies started investing in digital platforms for the ads. More screens and the lighting in the court would have longer lasting impression than the now usual and ugly banners which are overdone.
We’re also wondering if this association with the Kenyan basketball game will continue or shall it be a once-hot-now-cold relationship with KBF? True there is lots of ground to be covered by the authorities but you can cut them some slack for now…

e) And1 v/s Kenya Select :- once the exhibition game started, the and1 team seemed to be taking off with the game only for the Kenyan players to start settling in and making impressive plays and almost answering their critics with 3-pointers and alley-ups just like the best of them. The only problem is that much of the game now turned to more of showmanship and no better structured moves. Not that much of the crowd cared anyway, some of us love a more competitive game even if its streetball.
Without a doubt, Kenyans can make the cut for some of the best teams but we do not have the structures to nurture this talent and channel it to the more lucrative leagues in Europe and America. One of the and1 players was originally from Uganda and we also know of Hasheem Thabeet playing in the NBA, how come Kenya can’t afford a player even in the college basketball teams? Over to you KBF!

Well, when all is said and done, it was a nice break from the lacklustre games that occasion the KBF Premier League. KBF should take up this chance and spice up things for fans to come back week-on-week. Some fan was heard saying that if KBF officials cannot handle the game then they should leave it to such organisers and corporate firms to make it happen. It is true that KBF has not made any commercial sense to most corporate firms, well this can be a start.
(Sports) event organisers also take note, NEVER ask a crowd to show up at a certain time only for your arrangements NOT to be up and running. Luck was on your side that this was a manageable crowd and there were no reported scenes of violence or otherwise. Other sporting disciplines will not be so patient. Also if you have to host a foreign team, all those security checks can be done well in advance and you shall save us all the hussle.

{Thanks for Twitpics to @kenyanpoet & @itsbuddhablaze, we shall be posting the images up soon}

IN OTHER NEWS:
NBA Playoffs ended early this morning or late evening depending on which time-zone you live in. Dallas Mavericks ended up scorching Miami Heat 4-2 in a best of 7 series and denying the fancied Big 3 of Lebron James, Dwayne Wade and Chris Bosh their first ever championship rings. However this accorded Dirk Nowitzki, Jason Kidd and Peta Stojakovic their first rings each of these long-time playing stars.

And1 Streetball in Nairobi 11th June 2011 – Where will you be?

The buzz has been coming and its great from where we stand. And1 Streetball will be landing on this side of the continent, thanks in part to the main sponsors Coca-Cola EA through their flagship brand Sprite.
This version of the game though is more exciting and skills-oriented. It is meant to literally take basketball to the streets and achieve greater appreciation of what can be an intense and energy-driven game.

And1 -image courtesy of www.jucyafrica.com

This maybe the shot that the Kenyan basketball game needs after tottering to the brink of obscurity. Save for the occasional play-offs spike and the regional challenge, most of the games are poorly attended and lack the spark. The college league which had also become a crowd-puller has also staggered to more of a routine and formality more than a skills-hunt for local clubs.
Kenya Basketball Federation which has endorsed this trip, we hope you shall be able to pick the shells and throw the challenge to the major corporates and supporting parties and maybe you can lure the fans back into the gymnasiums and basketball courts.
Here are the other sources reporting on the And1 Streetball Kenyan trip; AllOneBasketballSchool, IzVipi.com and MichezoAfrika

11th June people mark your calendar !

SIDENOTE:
Wonder what happened to the 3-on-3 Weekend Challenge which was a major crowd puller in Nairobi in the 1990s and early 2000s. The then entreprenuer one Patrick Musimba  (of Musimba Investments) seems to have moved to bigger things in golf and telecommunications. We do hope KBF officials can have a session with him, he had some great stuff going. Where are all you sports entrepreneurs? (OK, that’s after KBF sorting out the lacklustre performance and see the sense in commercialising the game).

Football Kenya Elections in October …..Lord redeem us from the Circus !

An announcement coming from the Kenyan football authorities notes that we have an active month in September with branch elections and the culmination being elections of ‘new’ officials in October. From behind the scenes, there is bound to be some interesting times on the game which is slowly making it back on our main menu of sports offering if the KPL games are anything to go by.

Our prayer is that we shall see some fresh faces and ‘clean hands’ if we hope for the game to move to the next level. Given the shenanigans associated with the game, no suprises if all sorts of vested interests start sprouting out of the woodwork. We all remember the 1990s when one Maina Kariuki – he of the Coca-Cola Africa fame who gave one of the best presentations of a contesting official in the Kenyan sports scene only to sink into the mire of Kenyan football.
His reign characterised some of the lows that the game would have and we all know what the story has been with the current officials. The positives have been cultivated by SuperSport who invested in developing the game and we hope they shall insist on some better management coming through especially if our national team is to hope to feature in continental and the 2014 World Cup.
We also hope FIFA’s ‘briefcase officials’ shall not show their hand in these elections. They have been part of the problem insisting on non-interference even when the game seems headed for the dogs from the Government. They have not helped much even when their own FIFA Goal Project seems to be a non-starter locally.
Remember we have a new Minister for Youth & Sports in one Paul Otuoma and surely hope he gives us one memorable thing if he is to make his mark in this under-rated but full of potential Ministry. Let’s hope to get some semblance of order and may the best win! More info on this announcement here.

Sprite Slam Tour : Basketball in Kenya at Crossroads

After milking the best attention (and revenues of course), Coca-Cola Kenya shall once again engage in another of their brands this time taking a sport which is not enjoying the best of times – Basketball.

While its peers in football, rugby and athletics seem to be attracting monies and the cherry chips of the corporate world, basketball has become a pedestrian sport at its best. A visit to the games at the Nyayo Gymnasium (which has since been closed to pave way for African Athletics Championships happening July 28-August 1, why they need to close the gym you wonder !) ends up being a real ‘labour of love’.

The flavour of the game seen in other leagues such as would compare with the Angolan or West African ones or semi-professional European or basketball premiere league of the NBA has since been lost. Even the annual 3-on-3 tournaments which used to attract sizeable crowds have since disappeared as the interested parties sought solace in other sports.
From our insider on the game, there are some developments in the works which  may curtail this but till then, Coca-Cola shall be holding forte with its 2nd consecutive tournament in the SpriteSlam tournament. The first round shall be at the Jomo Kenyatta Grounds in Kisumu 31st July-1st August with the final leg culminating in a basketball tournament at the Railways Grounds on Haile Selassie Avenue in Nairobi.

Let’s hope there shall be synergies drawn by both Kenya Basketball Federation and its corporate sponsors this one being Sprite – Coca-Cola Kenya.  
(Image courtesy of Nation Media Group. www.nationmedia.com)

Basketball Briefs:

After creating a buzz with his free agency, Lebron James fell for Miami and its beautiful weather (maybe) deciding to play for the Heat in the NBA. While it seems like the best thing for the Miami franchise, I’m reminded of the fact that most of the greats from MJ, Magic Johnson, Larry Bird and most of the legends defied their commercial interests to stick with one team(franchise) for the longest time. Not being a naysayer but I don’t see King James earning any championship ring soon. See some insights on his move here.

Coke makes a detour into Basketball (or is it coming back home?)

After enjoying a 10-year hiatus, the Spriteball is back ! This time the round of events being sponsored by Coke once again to the tune of KShs. 40 m, will seek to scout for basketballers to attend ‘ Basketball With Border’s camp in South Africa.
With Coca-Cola regional office trying to save face after the embarrassing stadium saga that caused quite a ruckus, they have decided to take a slight turn into a dying sport.

Logo courtesy of Coca-Cola
This time, there seems to be some seriousness more than just the usual fun for the participating teams. According to media reports, Coke has partnered with Miles & Associates International(MAI) to have mini-camps in four towns in the country before finishing off at Nairobi.
The flagship brand for this promotion, Sprite had last year tried a similar concept with the HomeBoyz Events organisers which didn’t quite catch on as the previous Spriteball event held in 1999. See previous post here.
The monies invested will be used to develop basketball courts and will involve the renovation of the Railways Club which hosts the Nairobi Basketball Association games as well as a training ground for quite a number of teams including the ladies national team.
One may hope this can awaken the Kenya Basketball Federation officials to commercialise the game. I have said it over and over that these guys need look at what potential the game has and run away it.

Spriteball in Ghana
As for Spriteball, who will be the next Kingsley Makokha or Sidney Wafula ?

A Rose by any other Name….


UPDATE:Thanks to the short-sighted nature of our politicals, Coca-Cola has cancelled the KSh.117m deal with the SSMB. After what the Coca-Cola Country Manager, Alex Maditsi said is ‘untenable‘ referring to the Minister’s demand that the name be changed to Nyayo Coca-Cola Stadium. Don’t we love shooting ourselves in the foot all the time? And we thought we were heading somewhere lest we miss the 2010 bus? A fellow Minister said it on Wednesday that we’re not doing enough to attract business relating to the World Cup.Lost, truly despicable !For those in the know, we had one of the ground-breaking moments to applaud the Sports Stadia Management Board pulling through a deal, having one of the biggest local stadiums named. This went on well and even as the stadium hosted the national team in a qualifier in March, we were still smiling with glee at the prospects this had on the sporting world. But no sooner had the ink dried on paper than some Government operatives started throwing tantrums about this and that – not being ‘consulted’ the other being the name change…of course this is what they bought RIGHTS , duh? Now I have never had serious reservations with the Minister in charge of sports (some of my kin think she’s always quick to jump into some glory which may not even have been associated with the Ministry’s efforts or none therein). But getting messages from sporting enthusiasts about the insistence on the name “Nyayo” sticking to the stadium that is now Coca-Cola Stadium, I begun having my misgivings about the whole thing. If you don’t know sports business, please Ms Minister stick to the welcoming delegations and the visits to the Hill accompanying departing teams. You can also enjoy  a game or two of rugby in your many overseas trips as well as visit the major capitals of the world as a Kenyan is bound to win a marathon, road-race or athletic meet in any of those. Please keep out of the business side of things, you’ve proved to be just like other Government operatives of which I have little respect for as many of the Kenyans can attest to right now.   SIDENOTE:The Sports Stadia Management Board was supposed to get its new head a few months back but the first appointee lost his life on a road accident while the current ‘appointee’ – (who incidentally served as an educationist in the national union…’****!!!??P????P)Two wrongs do not make a right (as cliché as it may sound)…follow the due process Ms Minister ! Tragedy, real tragedy……

Post-Analysis: Kenya vs Tunisia

Didn’t I say so ? Didn’t I tell you we would not survive the Carthage Eagles? Our enthusiasm at times gets over us and we expect miracles…well none came this time !
You can’t hobble together a team in less than a month and break it right in the middle and expect it to perform. You don’t start engaging in petty exchanges with the predecessor for some obvious reasons and still say you have a national team.
Well now we know what we have and what to expect. It’s the Nigerian Eagles we’ll be facing come June. I’ll still not expect anything miraculous with the fixture and we should start working towards saving face depending on the goals we can soak in.
OK, there are some things Mr. Hey did manage to instill and I’d commend. The Kenyan Press has been notorious for trying to extract stories where there are none and basically have no sense of order and decorum. They were shown why it’s called residential training. We also had an official announcement for the first 11 televised on the station with the rights ( which is also another plus).
Going forward, we must win ALL our home games if we expect to even come close to qualifying for the Cup of Nations. Given we’re facing the Nigerians next should be a good thing since the 2 biggest hurdles will be behind us( can we draw in Lagos? sic)
We can invite 2 or visit a West African nation such as the Ghanaians or Cameroonians and play at least 2 friendlies in such conditions if we’re to expect any form of preparations for the team.
We can also ask the Government and FKL (which seems to have won the day) to work with the local teams to ensure the clubs release the players in good time and don’t pull such moves as what Mathare United did.
We also need to get a Press or PR person for the team. Patrick Naggi seems to be handling a bit too much and at times can rub off guys. There are enough guys who can muster some decent lines for that purpose…ask me I can give you a few names

Additional Info:
There was some serious branding of the field early in the day. Pepsi-Cola,though a low key player in the Kenyan market decided to throw a spanner in the works by putting up its side-boards…in the Coca-Cola Stadium which looks hideous in the red colours they are painting…
Security was not at its best and were it not for some Government busy bodies, we could have had a rampage after the game. I managed to catch the fans walk 3kms back to town and some caused a ruckus along the busy Uhuru Highway.
The seats used should be thrown in some disposal bags. Why can’t we just fix semi-permanent seats? Sports Stadia Management Board’s Sam Mwai are you listening ?

Football : Can we really play in the World Cup?

Harambee Stars Allan Wanga goes for the ball- Image courtesy of Getty Images

Over the last few weeks has seen a flurry of activities as Kenya prepares for its onslaught proper for the 2010 World Cup. What with the PM himself playing a leading role; fund-raising efforts underway-with a website and sms solution to boot;an expatriate for a coach and all the hullabaloo that’s expected to accompany this.
But the skeptic in me is still not convinced about the preparations ( we could even afford to lose the uniform 4 days before the actual tie…truly Kenyan !) and could be up for some beatings.
First up, we host Tunisia coming Saturday at the Coca-Cola National Stadium ( they are repainting it some really screaming colours….will cover that soon!). So far the tickets are out and all you patriotic brothers can get a feel of the live action.
Me, I’ll be still scouring at the legal implications against Football Kenya and the missing link between our local game and the international outings.
I’ll not humour myself thinking that we can beat the Carthage Eagles from Tunisia…

Nyayo Stadium gets new name

Finally some good news comes through…after some great work by Sam Mwai and his team at Sports Stadia Management Board, one of Nairobi’s premier sports grounds will now operate under the name- Coca-Cola National Stadium.
The grounds which have a football pitch, basketball court/gymnasium, handball pitch, swimming pool and volleyball courts will need the estimated US$ 1.5 million (approx.KShs.117 million) which Coca-Cola has signed to acquire the rights over the next 3 years. The courts especially, badly need some refurbishment from the torn turfs to the poor lighting and scoreboards’ installation.
I pay great respects to Sam and the rest of team for seemingly making headways in the midst of troubled waters in sports management. They have managed to put up with some abysmal and incompetent sports officials likes of which manage football. I guess the attendance of important fora like the recent Soccerex exhibition in South Africa may be bearing fruit.
I also hope you keep the focus right through into the World Cup next year. Who knows you could be rewarded with some top international teams paying a visit to your stadia for preparations for the 2010 WC.