CSA still scoring among ‘Small Seven’

Financial Mail

TELFORD VICE, Cape Town

THE morning of November 9, 2011 was not like any before it at Newlands in Cape Town. To the west, Table Mountain brooded, flat, fat and phat, like it had done for eons. Nearer that boundary, trains clung to the tracks and their usual schedule as they clickety-clacked past in a blur. To the east, verdant leafiness softened the sterility of the surrounding suburb.

The southern end of the ground bulged with bumptiousness. There, Western Province Cricket Club members were pavilioned in splendour that would later lull them to sleep. The President’s Suite was strewn with anyone and everyone who knew how to tell a cover drive from an overdraft. Private boxes were alive with the smell of sunscreen.

Along the northern boundary opposite, the hoi polloi ruled. Reporters shambled into the pressbox contemplating a day of dodgy wifi connections, mystery meals and, after stumps, the least drinkable beer imaginable - all delivered free of charge but not received free of complaint. Television types did whatever it is television types do and dare to call work. Work was what happened in a shed downstairs, where the groundstaff kept the equipment they needed to get the pitch and the outfield into the best shape possible.

We did, after all, have a Test match on our hands on November 9, 2011: South Africa versus Australia.

Then we saw it; the thing that was not wrong but, in this most conservative of games where change is a four-letter word, unimaginably other and therefore impossible to accept.

There, painted on the outfield between the stumps and the boundary at both the southern and northern ends of the field, was an unfamiliar logo.

“Sunfoil,” it proclaimed in loud, proud colours. What the hell was Sunfoil and what was it doing on the fairest cricket ground in all the world?

Cooking oil is just not cricket. But the sport’s sponsorship landscape had undergone a teutonic shift because of a scandal over bonuses paid to Cricket South Africa (CSA) staff without being properly reported in terms of governance procedures. Cricket’s bread was no longer buttered. Instead, oil had been poured on fire.

In the bigger scheme of things, R4.7-million - the bonus lump sum, R1.8-million of it stuffed into the bank account of former CSA chief executive Gerald Majola - is not a lot of money. But that was the black magic number that cost the organisation so many millions more in lost sponsorship. How much it cost CSA in reputational terms is immeasurable.

On November 9, 2011, Majola had been suspended for nearly eight months but he would not be fired for almost another year. Exactly eight months previously, in his report based on an investigation into the bonus scandal, retired High Court judge Chris Nicholson found Majola had violated the Companies’ Act at least four times. Nicholson painted a picture of a dysfunctional organisation top heavy with too many suits doing too little work, and recommended it be restructured.

So, for Sunfoil - who until then had supported development and junior cricket at nothing more prominent than provincial level - to put their logo where their mouths were and publicly support South African cricket in what was then its darkest hour took balls.

“I know about the issues at CSA, but we should separate the cricketing issues from the CSA issues,” Shoaib Moosa, the sales and marketing director of the Willowton Group - Sunfoil’s parent company - said a few weeks later. “We can’t, but we should try to. In any event, my attitude is that any publicity is good publicity.

“The awareness it’s brought to our brand has been unbelievable. You would have had no idea two months ago who Sunfoil were. Now you do.”

Sunfoil is now part of the furniture of Test cricket in South Africa. Their name is attached to all test series in the country as well as the franchise first-class competition.

On June 7, 2012, CSA announced a six-year deal with Momentum as the title sponsor for all one-day cricket played in South Africa.

“We needed something more than just putting money into ads, because when you advertise you only get that value,” Momentum brand head Danie van den Bergh said.

Had the decision paid off?

“In the first year, we projected that we would get a maximum of R150-million worth of value. We got over R200-million. Last year, we projected R250-million. We got the equivalent of over R500-million in advertising value.”

For Van den Bergh, Momentum’s relationship with cricket goes beyond the conventional model of companies throwing money at a sport in the hope of gaining exposure.

“We believed we could be part of a partnership, not a sponsorship,” Van den Bergh said. “If you have a long-term vision of what you want to achieve and you want to leave a legacy that does something more for the country than just being a business in the country, we thought a six-year deal would give us that.

“If you do a three-year deal nobody takes you seriously if you want to do things that have a long-term effect. Now, when I talk to cricket people, they take me seriously.”

Just as seriously, Momentum believe South Africa “can consistently be one of the best performing teams in the world: we believe they can win the 2015 World Cup”.

Considering the low ebb cricket had reached when Momentum came on board, how much concern was there within the company that the right thing was being done?

“From a sponsorship aspect in terms of getting value, there wasn’t much to be done to convince people,” Van den Bergh said “From a risk perspective in terms of what was going on, yes, there were questions.

“But we addressed them jointly with CSA and we felt safe that, being a partner, we have enough insight that we will know when something will go wrong.

“The administration of cricket is very good at this stage. We have an amazing working relationship. I don’t yell behind their backs if they do something wrong - I tell them. They do the same with me.”

Majola was replaced in an acting capacity by Jacques Faul, who was instrumental in the Momentum deal, and then by Nassei Appiah, CSA’s chief financial officer. On July 20, 2013, CSA announced that Haroon Lorgat, a former partner at Ernst and Young and previously the chief executive of the International Cricket Council (ICC), had been appointed their chief executive.

That angered the Board of Control for Cricket in India, the game’s financial heavyweights, which had a stormy relationship with Lorgat when, as an important figure in the ICC, he had tried to curb their bullying.

As punishment, India shortened their tour to South Africa last summer, taking some R319-million out of CSA’s coffers. Lorgat’s appointment also probably cost CSA when the boards of India, England and Australia took financial control of the international game last year. Instead of being part of what has come to be called the ‘Big Three’, South Africa will have to be content with being lumped into the ‘Small Seven’ - who are dependent on the ‘Big Three’ for lucrative tours to and from their countries.

What did Momentum make of South African cricket’s shares having fallen?

“We’re not particularly concerned because since the noise, we haven’t seen anything negative,” Van den Bergh said. “I trust the management in cricket to look after us and them. They have to - if they’re dead, the sponsorship is dead.”

Castle Lager, meanwhile, have strengthened their bond with cricket, which is now in its third decade, to include the naming rights to the South African one-day team.

The independent view is that CSA have righted their once listing ship, which is now sailing into weather better than has been forecast.

“My sense is that the commercial team at CSA have more than fully recovered after the repetitional crises related to the bonus scandal,” said Michael Goldman, a sport marketing and development expert who lectures at the University of San Francisco and the Gordon Institute of Business Science.

“This is evident in the acquisition and retention of a full hierarchy of sponsors, many at more competitive market-clearing fees than during the previous difficult period. Additionally, I am hearing interesting ideas about improving the sponsorship hierarchy structure to enhance the value accruing to both CSA and its commercial partners.”

Goldman also saw the bright side to the Big Three takeover.

“The expected realignment of power, governance and economic returns in cricket internationally has the potential to benefit CSA, if their current fan and viewer acquisition and retention strategies prove to be successful. The realignment recognises the importance of the business of cricket, not just the on-field performance in cricket.

“If CSA is unable to continue to increase stadium spectator numbers and broadcast viewer ratings, then it would follow that their fair share of the economic returns of commercialising the game may decrease accordingly. Local sponsorship and broadcast rights, as well as on-field performance related cash prizes will thus become more important.”

All good. But Newlands will never be the same.