Suicidal embrace of foreign sports by Nigerian brands

By Kenneth Ezaga

For a good few years now Chivita, a major consumer beverage brand in Nigeria, has flaunted its big sponsorship deal with English Premier League (EPL) club Manchester United. As part of the deal, Chivita has tried to win over local consumers with an advertising campaign featuring players of the club.

So, not only does the brand pay a huge financial fee to the club annually – believed to be at least a million GBP – there is a major socio-cultural cost as well, one which today has sadly contributed to diminishing pride in, and love for, our country and our domestic sports, especially among the young.

To be fair, Chivita are not the only ones to have gone this route. It is incredulous that to sell their products to Nigerians in Nigeria, dozens of our local brands further weaken their key market by taking out millions of pounds from it to promote the English game to us. These brands have unwittingly helped to make the EPL our de facto local league, turning Nigerians into the largest block of EPL fans anywhere in the world outside England.

The economic penalty is staggering. By some estimates, Nigerians move well over N50 billion from our stricken economy into England annually to feed their EPL fetish. This is through media rights payments, EPL tourism, and sponsorship.

What our local brands must understand, but apparently don’t, is that the EPL has become their direct competitor. Nigeria EPL fans are their consumers. What they spend on the EPL comes from their disposable incomes. The more they pay for the EPL the less they have to spend on Chivita, and products or services of other EPL promoting brands like PZ Cusson, Airtel and Glo to name a few. Even our banks are in on it.

A May 2017 report by Daily Mail UK claimed that the sub-Saharan EPL broadcast rights for the 2016-2019 window cost the broadcaster (Supersport) £84 million (N40 billion). It is anyone’s guess how much Nigerians contribute to that, but many will tell you it is probably in the region of 40% or more. More worrying is that the report also claimed that the broadcaster had reached a new deal with the EPL to double that figure for the 2019-2022 window.

Supersport pays for this, and makes a profit too, by sucking the money from us through subscriptions and advertisements. Furthermore, thousands of Nigerians travel to the UK yearly to watch their preferred clubs play live. They spend on games, club merchandise, and other things – ultimately weakening business for the same Nigerian brands that promote the EPL to them, while strengthening their European competitors.

In the last 20 years, over a trillion naira has left our economy to enrich the British economy from just football alone. That’s money that never comes back. That money invested locally instead would have built a major industry and grown several times in value. However, while the gross value added impact of the EPL has grown from a mere £0.7 billion in 1998/99 to £7.2 billion by 2016/17 – an increase of over 800% in cash terms, at a compound average annual growth rate of 13 %, the Nigerian league in the same period has seen the almost complete erosion of its GVA.

Our brands must realize that it is not CSR to sponsor domestic sports. Sport is big business in the world today. By supporting domestic sports, especially the football league, they will be building economic value in their key market which then returns to them in enhanced sales and business performance.

Our domestic league, if successful, can become the largest entertainment enterprise in Africa. It would create over 200,000 direct and ancillary jobs, and given the popularity of Nigerian entertainment across Africa and with Africans in the diaspora, it would haul in billions in media rights annually. Almost every industry gets a piece of the pie – lawyers, doctors, media, TV production, construction, coaches, athletes, clubs, marketing and advertising, banks, you name it.

With weakening oil sales, it has become obvious that we need to build new industries. Sport represents a low hanging fruit with vast impact. Both the government – which stands to reap billions in taxes from the sport ecosystem, and the private sector, must collaborate to find a way to ensure the success of our football league and other sports.

Big business can no longer watch from afar and expect some federation officials to act exceptionally before their brands get involved. That, in a manner of speaking, is leaving the future health of society and their businesses in the hands of officials many consider incompetent and corrupt.

Business leaders must as a matter of urgency form a powerful lobby block and bring their influence to bear to ensure that only the right people run our sports. In the recent decade, that is what business in India has done. The Confederation of Indian Business has moved into Indian sports big time, even successfully demanding that sports infrastructure be granted industry status by government.

Today the Indian sports industry is witnessing what one CEO described as “unstoppable growth”. It is time big business in Nigeria rises to drive the sports industry for their own good. For now backing foreign sports is suicidal.

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Is a business of sports writer and CEO of Lagos-based Tennis Management Company Limited – promoters of the brand new Nigerian Tennis Majors