A lot has been said about DStv sponsoring the PSL flagship competition. The PSL is a fantastic organisation that has built an incredibly powerful set of assets and properties.
The sponsorship comes at a time when everywhere you look – both here and abroad – sponsors are pulling out as they come to terms with the devastating impact of the Covid-19 coronavirus pandemic.
To therefore have all your partners remain steadfast and even manage to get new ones is a sign of strength and the PSL must be applauded for that.
There is no doubt that sport will face a really tough time over the next few years.
In fact, Fifa president Gianni Infantino recently pronounced that world football will take a $14 billion (R231 billion) hit globally as a result of Covid-19.
That came just about the same time the European Clubs Association (ECA) president Andrea Agnelli announced that European clubs alone have a $4 billion hole they will need to fill over the next two years.
What this means is that football is going to battle to make up the impact of Covid-19.
This certainly is true for the PSL and its clubs. So as we analyse the decisions of the league we must be conscious of the unprecedented conditions under which the league operates.
All of that said, however, one must ponder the long-term consequences of this decision. It seems to me that governance will become far more important than it has ever been.
You now have a group whose subsidiary is the anchor broadcaster, an anchor sponsor and is participant and shareholder of the league through its club and thought its employee (Stan Matthews of SuperSport United) who also seats in the PSL’s all-powerful executive committee.
So you have a league sponsor and broadcaster that has a direct impact on how the league itself is run.
The next time the chairperson of the league needs to be replaced, ceteris paribus (other things being equal), you could well have a single group being a sponsor (DStv), a broadcaster (SuperSport) and competitor and shareholder (SuperSport United) and Matthews, who genuinely has as good a chance as anybody to be the leader of the league.
So this scenario presents several serious challenges.
Firstly, leadership and governance: There is no reason or any evidence to suggest any mischief of any kind on how this has panned out but some of us have always argued that the PSL needs a stronger separation between the ownership group and the day to day operational executive function.
Part of this is to free the organisation, to not only be independent, but to also look and feel independent from the influence of club officials. Imagine a scenario where the league has to deal with an issue that affects SuperSport United in this current scenario.
It just puts the league and its executives in a really difficult position.
The integrity and independence of the game
As the season starts, the league makes the fixtures and then goes into a scheduling process with broadcasters and the sponsors.
Imagine that for legitimate commercial, operational and consumer reasons, the DStv or SuperSport want a match schedule that has games on Monday and Thursday to the schedule that already has Tuesday, Wednesday and the weekend.
Considering the interest of the SABC that we know does weekend games, this suddenly looks like an anti-competitive move. Again there is no suggestion whatsoever that any of this will happen but it serves to illustrate what a tight rope the league and its partners have to navigate going forward.
The integrity and independence of the game is at the heart of its intrigues and interest.
Managing risk to the enterprise
Secondly, risk management: At the heart of the role of any director and key officers in any business is managing the risk to the enterprise. A couple of months ago I wrote on this platform about us coming to terms with the impact of the contribution of broadcast income as major to the league.
You simply have to look at the global sports rights and broadcast arrangements to realise that like everyone, broadcasters are hard hit by Covid-19 and are looking to reduce commitments and not paying. You now have the PSL who are at least 70% reliant on the MultiChoice group for its income.
It must keep the head honchos at the PSL headquarters in Parktown awake at night. The broadcasting landscape is one of the most disruption threatened industries. Anything that changes the fortunes of the MultiChoice group is fatal for the league.
It is possible, to have a truly independent league, where the ownership group provides oversight but the day to day responsibilities sit with an independent competent full-time executive team and not part-time club officials.
All the major leagues are run like this and the American sports with their commissioners, the PL in England, the Bundesliga in Germany and LaLiga in Spain, among others, have provided a blueprint on how to run a league that cannot be accused of being controlled by certain officials and whose governance structure cannot be questioned.
Gumede is a global sport business professional who has worked with, consults and advises local and global right holders and brands on sports marketing, economics and commercialisation. He runs a sport economics blog called Sport Boardroom