Ethiopian sport associations have long been plagued by lack of finance. A dearth of funds means teams aren’t able to provide equipment for players or engage in tournaments that help develop crucial skills. While breweries have sponsored teams and clubs for years, now more companies are engaging in local sports. Abiy Wendifraw, EBR’s adjunct staff writer, delved into the topic deeper to learn more about this growing trend and the potential benefit it will bring to sports and businesses.
Many Ethiopians fondly remember the 2001 FIFA World Youth Championship in Argentina, the biggest football match the country’s national U-20 team faced. In particular, the incredible display against the Netherlands, which eventually resulted in a 3-2 defeat to the Dutch team, remains etched in the minds of many football fans.
However, in addition to the team’s performance, sport enthusiasts often recall one particular story: After the referee blew the final whistle, Netherlands’ attacking midfielder Rafael Van der Vaart, who later played for Real Madrid, approached Yordanos Abay, the striker from the Ethiopian team, to engage in a customary post-match jersey swap – a friendly gesture between rival teams. However, knowing the consequences of doing so, Yordanos refused to give away his jersey.
At that time, every member of the national team knew the Ethiopian Football Federation (EFF) had no extra jerseys to replace the ones used for post-match swapping. Anyone who violated this rule would pay a huge price – including potentially being kicked off the team.
This tale is among other EFF lore involving players and the scarcity of sports apparel. For example, another player who threw his shirt to the fans at the end of a match at Addis Ababa Stadium had to rush to Merkato, the open-air market in Addis Ababa, the next morning to find it. Five years ago, the women’s national team reportedly played wearing men’s jerseys fastened by staples to fit their bodies.
However, last month the EFF signed a new sponsorship deal, which may alleviate the short supply of sporting equipment they face. The Federation secured a four-year contract with Erreà, an Italian sports equipment supplying company. The agreement, which Federation officials recognise as a landmark for the country’s football programme, is expected to ease the prolonged problem associated with the national teams’ kit supply. Erreà will provide EUR90,000 worth of equipment (playing kits, boots, water bottles) to a number of local teams, including the Waliyas as well as the men’s and women’s U-17 and U-20 teams.
This latest deal highlights a growing trend in the country: Ethiopian football is witnessing increased involvement of corporate sponsorships, from the national teams to grassroots football clubs. Football sponsorship, which is still dominated by breweries, is now attracting new companies from other industries as well.
However, sponsorships aren’t necessarily club or team specific; they often include cups and tournaments. In August 2016, two separate youth competitions organised by Coca-Cola and Glorious took place in Bishoftu and Addis Ababa, respectively.
Copa Coca-Cola Ethiopia is part of the tournament underway in 60 countries worldwide, in which more than 1 million teens participate. Prior to the final phase of the competition in Bishoftu at the end of last month, 27,000 teenagers from 1,500 schools had begun the contest in 10 regions all over the country. Eventually, the top 85 players among the boys and girls are expected join the Ethiopian Youth Sport Academy and the Tirunesh Dibaba Training Centre in Assela, about 175 kilometres from Addis Ababa.
Glorious organised a summer youth tournament that took place at Abebe Bikila Stadium between 10 sub-cities. A total of 440 teenagers from various parts of Addis Ababa categorised in the U-17 and U-15 age category teams took part in the competition.
The company, which has been known for importing and retailing electronic equipment and home appliances for decades, helped the young players meet their peers, as well as coaches and people who work as scouts for football clubs in the capital. “We are pleased that 104 boys are being contacted by the people who want to take them to the next level,” said Munir Abdulhamid, the company’s marketing manager.
Now, relatively young businesses are also engaged in sport sponsorship. Tewodros Takele, 31, the owner of Go Teddy Sport, sponsored two sporting events this year alone. As the owner of a shop that supplies sports kit, shoes and other athletic materials, he partnered with the Ethiopian Sport Journalists Association to finance the Go Teddy Sport Futsal Championship, for which he supplied kits for every team representing all contestant media. Another competition, which was organised by the Addis Ababa Futsal Committee, is the other event in which Go Teddy Sport is involved. Tewodros estimates his expenses for the two events was around ETB200,000.
Experts argue that companies – both local and foreign – are wise to engage in sport sponsorship contracts. According to the International Advertising Association (IAA), “[t]he advantage of sports sponsorships, despite the economic downturn still strongly affecting the US and European markets, is that they are long-term investments.”
These established relationships are a “win-win situation” because sports teams gain “a direct financial input, as well as from the endorsement provided through the sponsoring brand, while the brand gets…exposure and an exclusive revenue-generating opportunity.” This, the IAA argues, is especially crucial in developing countries, where advertising markets are often less saturated because “[s]ponsorship acquisitions…help drive sales in their particular markets, be it global, niche, or local….”
While Federation and club officials wait for new mega companies to involve themselves in sponsorship deals, business experts advise the football industry to think about what the sport could offer in return, which may help convince new companies to participate. For instance, banks and financial institutions are still shy to pour their money into sponsorship.
Mensur Abdulkeni, a renowned football journalist who hosts the ‘Bisrat Sport’ radio show, says putting money in Ethiopian football industry for commercial reasons is unjustifiable: “If I were the CEO of a profit-oriented company, I would definitely suspend any money that goes to sport sponsorships. I don’t believe our football has the capability to compensate those who are investing their money.”
McKinsey and Company, a global consulting firm, follows Mensur’s line of argument. They say that often businesses engage in sponsorship deals without properly thinking about return on investments. To better reap the benefits of these deals, they suggest “advertisers must first articulate a clear sponsorship strategy—the overall objective of their portfolio, the target demographic, and which stages of the consumer decision journey (awareness, consideration, purchase, loyalty) sponsorships can support.” This includes regular assessment of a business’ advertising portfolio to “identify the sponsorships that [are] truly driving consumer willingness to consider the company’s products” and a commitment to improving a brand’s identity, since “[b]rand strength contributes 60 to 80Pct to overall sales, making this benefit critical for sustained, long-term sales growth.”
Beyond profit motives, corporate social responsibility seems to be a major reason why some companies engage in sport sponsorship. Tewodros admits he did not see significant sales increase in his shops after organising the tournament. However, he believes that contributing to sport development in any way will eventually boost the demand for his products.
Munir expresses a similar sentiment. “I can roughly estimate around 80Pct of the total amount we spent serves our social responsibility interest.”
Regardless of the impetus for engaging in sport sponsorships, the World Intellectual Property Office argues that regulation is important in sports sponsorships: “A national strategy that comprises the government and the private sector is necessary to facilitate the creation of an effective legal framework.” A sound regulatory infrastructure helps promote the ethical and fair execution of sponsorship deals. This is especially important in developing countries, which often engage in lucrative contracts with large international companies, and may not have strong laws to protect the interests of their sport teams or economies.
Still, international brand managers say that, at the end of the day, investing in sports in Africa is about long-term benefits and the desire to grow with a consumer base in emerging markets.
Herbert Nuwamanya, Country Sales and Marketing Manager of Coca-Cola Beverage Africa, says they have to promote their brand while developing new markets. “People say ‘OK, you are making money for your product. But at the end of the day, what do we get?’ We have to answer this,” he says. “Yes, there is the marketing aspect. But we could have sponsored, let us say, athletics. Ethiopia is known for athletics. That was a short-cut for marketing. We know soccer is very young here. So this is the best time to get in. It might take some years to develop. The benefit will come at that point.” EBR
4th Year • September 16 2016 – October 15 2016 • No. 43