By Yomi Kazeem, CEO Croyance
VENTURES AFRICA – The biggest African football tournament has come and gone. The stadiums have emptied out, the fans have made their way back to their home nations and the flags, face-paint brushes as well as other memorabilia have been stored away- lying in wait to be utilised once again in two years at Morrocco 2015. For the bean-counters at CAF and the Local Organizing Committee in South Africa, there is more to all the glamour and exertions on the pitch. To them, one question matters the most: Was the AFCON 2013 a financially successful event?
Confederation of African Football made the defining decision to move the AFCON to odd numbered years for many reasons. One of those may have included optimizing TV rights acquisition purchases as in odd years, the AFCON will not have to compete with arguably bigger football spectacles; the World Cup, the Olympics and the Euros which take place later in the year and will more often than not take a slice of broadcasters’ TV rights budgets. Instead, the only competition held in the same year as the AFCON will be the less heralded Confederations Cup and the Copa America. In the coming years, the financial wisdom of this move will be better debated but given as Nigerian broadcasters could not afford the rights to broadcast in Nigeria given what they termed ‘exorbitant prices’ of TV rights, it appears CAF’s masterstroke is already paying dividends. Also, having announced viewership figures of the AFCON 2012 as 6.6 billion cumulative viewers, the CAF can do no wrong. The ‘sell-to-the-highest-bidder-game’ will be an enjoyable one.
Away from TV rights, another major revenue stream of the AFCON for CAF is the jostle for brand association and equity. In the 2013 edition, Pepsi, Adidas, Standard Bank, Samsung and Puma all continued with existing contracts of partnership running through 2016 (Samsung’s deal runs until 2015). In some cases, these deals are not strictly tied to AFCOn but extend to all CAF championships in some cases. However, new sponsors came aboard the CAF/AFCON event for 2013. Nissan, IFD-Kapital and Nasuba Express enjoyed their first years of AFCON partnership nonetheless, the cherry on the cake was telecommunications firm Orange who emerged as new title sponsors of the tournament, signing a deal that runs through 2016.
With Orange operating in several participating countries, such as third place winners Mali, pre-tournament favourites Ivory Coast, Tunisia, Morrocco, Mali and the Democratic Repblic of Congo, the telecommunications giants enjoyed a strategic position which they have since leveraged on with the development of ‘Orange Villages’ , a football centre for fans to enjoy viewership on giant screens, across major cities where the network operates. The Orange Football Fan Club, a mobile platform which gives news and updates on African and European football, has also seen its figures rise to two million users since its launch. All of these ensured that CAF registered a pass-mark in the sponsorship column of their ledgers.
From all indications, CAF had a financially viable tournament but the host nations’ affairs also matter. For South Africa, hosting the World Cup two years earlier ensured that the cost implications of hosting Africa were significantly slashed as all the major expenses had been taken care of two years earlier albeit at an astronomical price (the cost of hosting the World Cup in 2010 was put at about $1.5 billion). At the end of the 2010 World Cup, South Africa had ten stadiums (five were newly constructed while the other five were renovated and enlarged) with a crowd capacity that ranged between 40,000 to 64,000. Herein, lies the first problem. The ABSA Premiership in South Africa averaged about 8000 spectators per game two years ago. What this means is the South Africa, post-World Cup, were saddled with huge edifices that they struggled to fill and the AFCON 2013 attendances, with the exception of the opening ceremony, the games featuring the host nation and the final match, were no different. As far as ticket sales go, it is hard to see South Africa making a fortune.
The real carrot for host nations is the implications of the tournament on their economies. Sadly, the economic effects of sporting events reach their zenith during and shortly after the event is concluded. It is hardly ever long-lasting. The Olympics and World Cup are not exclusive of this feature especially where host nations spend a bulk of cost of new constructions. For South Africa, the AFCON will, at best, have lit an ephemeral fire in the belly of its economy through the main revenue source of host nations: tourism. Many football fans travelled to South Africa for the tournament to support their teams and many more may decide to go in the coming months, having been endeared to the nation via television broadcasts, but the real catch is that the impact on the tourism sector will not be anywhere stellar as South Africa currently enjoys sky-high ratings as a premium tourism destination on the African continent. Simply put, even if AFCON 2013 did not happen, South Africa was still going to be a tourist hotbed.
For the African continent as a whole, the AFCON represents a big chance of player sales which sees funds flow into the various football systems in the individual countries in the case of African based players. For these players, the lure of European football is overwhelming and their sales generate a nice slice of the jackpot as in terms of revenue, the European football market is estimated to be valued at an astonishing £14 billion ($22 billion). For the African based players and their football clubs, this is a win-win scenario.
Same cannot be said of the CAF-host nation relationship which is not as symbiotic as is acclaimed to be. In essence, the football governing body CAF may have reaped bountiful financial rewards from AFCON by way of sponsorship deals and TV rights while, in comparison, the host nation South Africa will only have seen its streets light up, decibel levels rise and its general mood lifted but little else.