Significant sponsorship news in Africa has seen SportPesa pull out of its various Kenyan sponsorship deals. This is a big blow for the countries sports industry due to their many sponsorship interests there. Although this is a step not taken lightly by SportPesa, it is one that seems likely be felt within Kenyan sport.
The decision to cancel all sponsorship deals in Kenya has been confirmed following the companies failed appeal against the 35% Kenyan government tax currently imposed on all gambling revenue in the country. SportPesa had been hoping that this appeal would be successful and lead to the 35% rate being lowered. As this did not happen, they felt they had little choice but to cut their costs in Kenya to protect their long-term business interests. Upon making the announcement recently, SportPesa CEO Ronaldo Karauri noted this move is expected to save them around Sh600 million annually.
This will send shockwaves through Kenyan sport where SportPesa previously had many sponsorship interests. They backed teams such as AFC Leopards, Nakuru All-Stars and Gor Mahia. In addition, they also sponsored the Kenyan Premier League and Football Kenya Federation as well as the Kenyan Boxing League. By pulling out of all these sponsorship deals to safeguard their future, they will be leaving a large gap in Kenyan sports that it is hoped will be filled quickly be someone else.
When you look at the amounts that SportPesa was paying out in sponsorship, finding another company or companies to step in might not be so easy. The deal with Gor Mahia, for example, was worth Sh200 million per year while AFC Leopards got Sh45 million per year. After you factor in the Sh450 million each season SportPesa paid to sponsor the KPL and the Sh600 million to the Kenyan Rugby League, it becomes apparent what a big player they were in Kenyan sports.
While the firm stance taken by the Kenyan government is clear, it is hoped that the effects it has caused will not come back to haunt them. Although SportPesa confirmed that all their partners had been given notice of their decision in advance, it might not be so simple for those involved to find another backer at the same level. It will certainly be a point of interest for observers in the region to see what move SportPesa makes next and how the teams affected manage to find further backing.