South African banking group Absa will end its title sponsorship of the country’s top-flight Premier Soccer League (PSL) when its contract expires at the end of the current season.
The South African subsidiary of Barclays bank has had a 16-year relationship with football in the country, of which 13 have been as title sponsor of the ‘Absa Premiership’ from 2007 onwards.
According to reports, the most recent three-year agreement between Absa and the PSL, from 2017-18 to 2019-20, was worth between R100m (€5.2m/$5.9m) and R140m per season – the biggest deal in South African sport on an annualised basis.
Daniel Mminele, chief executive of Absa Group said the banking group is “exploring alternative options to continue our relationship with the PSL.”
The decision follows the move by banking sector rival Standard Bank to stand down from its headline sponsorship of Cricket South Africa at the end of its contract in April.
SportBusiness understands the Standard Bank deal was worth between R70m and R75m per year, from 2016 to 2020.
The bank’s decision not to renew was made in December 2019 and based on the reputational damage caused by the alleged misconduct of the then CSA chief executive Thabang Moroe across areas such as player and media relations, and financial affairs.
South Africa’s banking sector is highly concentrated around the five largest banks: Standard Bank, First Rand, Absa, Nedbank and Investec.
The sector in South Africa faces ‘significant downside risks’ from the Covid-19 pandemic, according to a report by the ratings agency Fitch Ratings, in April 2020.
However, one sports marketer in the country told SportBusiness the decisions not to renew were based more on ‘circumstantial’ factors than broader banking sector trends.
The other major headline property in South African sport – the main shirt sponsorship of the Springboks national rugby union team – is held by mobile phone operator MTN in a three-year deal, reportedly worth between R40m and R50m a year, from 2017-18 to 2019-20.
In November, it was reported that MTN was in talks to renew with the world champions, but nothing has been announced since.
The three major sports in South Africa – football, cricket and rugby union – have all been suspended because of the Covid-19 pandemic.
Last weekend, Sports, Arts and Culture Minister Nathi Mthethwa announced that contact sports could resume training under strict measures. All professional teams were given 14 days to submit proposals to explain how they will ensure the safety of players and officials when they return.