Feb 2, 2023
Tottenham Hotspur In Talks With South Africa Over Sponsorship Deal
(Bloomberg) -- South Africa’s tourism agency gave preliminary approval to a sponsorship deal with English football club Tottenham Hotspur and government officials are being consulted on whether it should be finalized.
Discussions were ongoing when details were prematurely leaked to the media, according to Themba Khumalo, South African Tourism’s acting chief executive officer. The Daily Maverick news website said the agreement could be worth about 1 billion rand ($60 million).
“If we take the number that is being bandied out there of a 1 billion rand investment, you will get an expected return of 88 billion over the three-year period,” Khumalo said in an interview on Thursday. He declined to confirm whether that was indeed the amount under discussion, citing confidentiality agreements.
Tottenham Hotspur, whose star players include England captain Harry Kane and French world cup winner Hugo Lloris, declined to comment. The club has won the English FA CUP eight times.
Tourism generates about 3% of South Africa’s gross domestic product, down from 6.4% before the Covid-19 pandemic, and the government aims to grow the industry to shore up an economy that’s being battered by record power cuts. The tourism agency is seeking to tap the English team’s global fan base to help meet a target to more than treble visitor numbers to 21 million by 2030.
That strategy has also been adopted by Rwanda, which sponsors Arsenal, and Mauritius, which has a deal with Liverpool. Tottenham Hotspur doesn’t have a tourism partner, and it’s estimated that a tie-up could enable South Africa to be marketed to an audience of 661 million people, according to Khumalo.
Rwanda’s contract with Arsenal helped boost tourist arrivals by an additional 8%, according to Khumalo. The envisaged deal contains several additional elements, including funding for activities within South Africa, he said.
“If you get 1% of people to travel here, that gives you an additional 6 million travelers,” he told reporters in Johannesburg. “The deal that we are looking at has nothing to do with football, it’s got to do we accessing the aggregating audiences that football brings. When you do a deal at this scale it commands the attention of the world.”
The proposal to use taxpayer money to sponsor a foreign football team has been widely criticized by media houses and on social platforms, with many people arguing that the funds could be better spent tackling rampant poverty or the nation’s energy crisis.
“This envisaged deal is not asking the fiscus to introduce new money into our budget,” Khumalo said. “It makes sense commercially,” but no agreement has been signed, and it will be discussed further with the tourism minister and department, and the National Treasury, he said.
--With assistance from Amogelang Mbatha, Ray Ndlovu and Gordon Bell.
(Updates with Tottenham Hotspur’s record in fourth paragraph. An ealier version of this story corrects the club Rwanda sponsors.)
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