SportPesa beats a retreat

24 February 2020

SportPesa’s sudden withdrawal from a string of sponsorships at a time of rumbling discontent over gambling’s commercial ties with football has prompted some to question their long-term viability, but in the absence of concrete legislative intervention, don’t expect the allure to fade any time soon, writes Scott Longley

SportPesa’s apparent retreat from high-profile sponsorship is as sudden as its arrival on the scene just four years ago when it first popped up at Hull City.

The news this week that the Kenyan-headquartered operator’s shirt deal at Everton was being terminated at the end of the season and that the short-lived sponsorship of the Racing Point Formula 1 team was also at an end looked like a terminal point had been reached.

This is despite the postings on Instagram purporting to show a potential link-up between SportPesa and Aston Villa - the veracity of the posting is yet to be proven and, for now, to use an airport analogy we can assume that Sportpesa is in the baggage hall rather than the line to transfer flights.

In the case of the Everton deal, it might have been thought something was up when in its last match against Crystal Palace the name SportPesa had been replaced by the logo of Everton’s local community outreach programme though a club spokesperson insisted this was a coincidence.

Still, the wording of the press release from the club did suggest an abrupt change of heart had occurred with the club stating it had terminated the contract after a “comprehensive review” of the club’s commercial strategy.

The sense of events moving at speed was heightened when it emerged on the same day that SportPesa was no longer associated with the Racing Point F1 team. SportPesa issued a statement on that deal saying it had only ever been a one-year agreement despite the press release from last year suggesting it was a two-year deal.

All this after the news just the week before that the Football Association of Ireland had also brought to an end its link-up with SportPesa due to “shifting priorities,” while betting partnerships with Arsenal and Southampton would also appear to have come to an end.

Local difficulties
The sponsorship upheavals come on top of the serious problems SportPesa has encountered in its primary market of Kenya where it has been forced to exit following a long-running tax dispute with the government.

The company did not have its licence renewed all throughout last year. Although the current chief executive Ronald Karauri took to social media recently to claim a licence application was still pending, there are doubts among industry insiders that it will be granted.

Harry Lang, marketing expert with Brand Architects, says what appears to be an indecorous retreat from some big-ticket sponsorships will be damaging for SportPesa.

“At the very least, this reflects badly on them – successful sponsorships are long term relationships, so by enforcing a break-up and walking away it doesn’t look good in terms of either brand reputation or integrity,” he says.

Whether this will have any effect on the rest of the market for sport sponsorships and betting and gaming entities is more open to question, however. Sources point out that given the relatively small size of the Kenyan betting market in terms of gross gaming revenues, the amounts that SportPesa was outlaying on sports deals appeared out of proportion.

“When the Everton deal was first done, it was ridiculous in terms of the money,” suggested one industry figure who preferred to remain anonymous. “It was way above what anyone was expecting.”

Sources suggest the Everton deal was worth between £4.5m/£5m a season. In comparison, deals at clubs such as Crystal Palace and the like are thought to be worth somewhere between £2.5m/£3m.

Then there was the deal with F1 team Racing Point. That was rumoured at the time of the announcement to be worth between $10m-$12m a year. “The F1 deal - how did it ever make sense to sponsor a sport which isn’t high-profile and where not every race is even broadcast on TV in Kenya?” asked one rival operator in Africa.

Lessons learned?
Does Sportpesa’s retreat from the front line have any wider implications for the viability of sports team sponsorship?

Certainly, the coincidence of the Everton news with the ongoing rumblings of political discontent in the UK and other European markets regarding shirt sponsorships in football might seem to raise some questions about its viability long-term.

Yet, the reality (at least until there is any concrete legislative intervention) is that we are likely to continue to see deals in the years to come because the marketing potential of hooking a gambling brand to a sporting powerhouse such as the English Premier League or  Formula 1 team is just too alluring to turn down.

As Lang says, even the tightening regulatory situation in the UK is unlikely to have an effect.

“To coin a phrase appropriate for the topic, the goalposts are continually moving whether from a regulatory or a public-perception standpoint,” he says. “The UK remains a multi-billion-pound gaming market and until that changes, betting companies will still treat it as high priority – they’ll just need to learn to be more fluid in how they promote themselves.”

Scott Longley has been a jounalist since the early 2000s, covering personal finance, sport and gambling. He has worked for a number of publications including Investment Week, Bloomberg Money, Football First., eGaming Review and Gambling Compliance. Scot now runs his own editorial consultancy, Clear Concise Media, and writes for a number of online and print titles.