The success of African athletes across multiple sports in the last decade has shone a spotlight on the potential of the continent for excellence. The commercial case is also clear.
Africa is set for a sporting boom in the next decade that can be a significant driver of economic growth and social change, with many involved in sports from outside the continent starting to realize it as fertile ground for opportunities.
With a young and increasingly connected population, Africa is currently underutilized in the global sports market according to several experts, but that may be about to change.
The continent achieved an annual growth in the sports business of 2.8% in the last three-five years, but this is ex- pected to accelerate to 8% in the next three to five, with only the Middle East (13.5%) and North America (9.5%) having better prospects, according to PricewaterhouseC- oopers’ most recent Global Sports Survey.
Ricardo Bernard is partner at American law firm Aker- man LLP and has advised on numerous deals in Africa’s sports industry, including Omega Sports Holding’s recent investments in an NBA Africa franchise and Racing Club d’Abidjan, a football club in Côte d’Ivoire.
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“There has been a boom of sports as an asset class in Africa,” Bernard tells FORBES AFRICA. “And I think- that is going to continue across multiple sports and across multiple verticals.
“Whether that’s rugby in South Africa and Kenya, foot- ball in West Africa or even motorsports, there is going to be an incredible demand. But also, for real estate investors, there’s going to be an opportunity to provide the assets to allow those teams and sports to flourish.”
Investment in sports teams globally is on the up, but if stakeholders want to acquire a football club in England or Spain, or a rugby team in France, the figures to do so can be eye-watering.
Bernard believes Africa can provide investment in professional sports franchises for a fraction of the cost, but which can create attractive returns.
“A lot of that money is now searching for assets in Africa,” he says. “This has been helped tremendously by the NBA starting its Basketball Africa League.
“If we look into the future over the next five to 10 years, there’s a question as to what is going to be the return opportunity? I think some of that is going to be in football because there is a proven model of training and developing players and selling them to larger leagues (for profit).
“So, in some cases, you don’t need the team that you’re purchasing to have success insofar as that team is devel- oping players who are desired by larger clubs.
“What I’ve seen in the last five years is that there’s been an emphasis on professionalizing the teams that are already in existence, in the sense that this team exists, but what’s the business model for growth? What’s the business model for developing players? What’s the business model for commercializing what you have?”
Bernard adds the success of African athletes across multiple sports in the last decade has also shone a spotlight on the potential of the continent for excellence.
“There are sports assets that are undervalued and underdeveloped. So, the outsized returns that people are seeking become a bit more real, where they can see that if they invest a little bit in player development and infrastructure development, they can start really moving forward the asset that they are purchasing.
“There is also the success of the African athlete that has shone a light on sports in Africa a lot more than perhaps it did 10 years ago.”
Bernard adds that there remain some hurdles for acquiring sports franchises on the continent, many of which are not owned by individuals.
“Football or basketball teams are often owned by the municipality, or run as a social organization for police- men, firemen, and so on,” he says. “And so how do you privatize an institution like that, which is not privately owned in a way that they are in the U.S.?
“The commercial case is clear in most instances, but what isn’t clear is the regulatory issues that may surround privatizing some of those sports assets.”
Tony Simpson, Sports and Entertainment Lead at management consulting firm Oliver Wyman and Paul Calvey, who leads the company’s South African office, recently authored a report that suggests Africans will invest more of their own money in sports in the coming years.
“Africa is also one of the world’s fastest-growing regions in terms of economics and urbanization,” they said. “Sports spending is linked to macroeconomic development stages, and so we anticipate that the amount of disposable income spent on sports will accelerate, resulting in sports spending growing faster than incomes.
“There is a lot of room for growth too. Our data estimates that the current sports market in Africa is worth more than $12 billion but could reach over $20 billion by 2035.”
Masai Ujiri, a former NBA champion and current president of the Toronto Raptors basketball team, is already investing in Africa through his non-profit Giants of Africa foundation.
“Sports is the next big thing in Africa,” he said. “We should be supporting teams in Africa, that should be our vision.”
He recently suggested sport is the best vehicle for creating jobs and improving the lives of young people on the continent, and has backed an urban development project in Kigali, Rwanda, that is billed as a “social, cultural and sports hub”. “This project shows that sports can act as a catalyst for neighborhoods and for nations – jobs, businesses, and whole economies can benefit from the presence of these spaces,” Ujiri said.
In southern Africa, COSAFA is an example of an organization that has seen rapid growth in its tournaments through the funding of FIFA and the Confederation of African Football (CAF), as well as strong governance and the embracing of technology and innovation.
A decade ago, the organization was unable to host tournaments due to a lack of funding, but through grants, the increase in sponsorship and strategic partnerships, in 2024, the plan is to host a minimum of eight across the region from Under-15 level up to the senior age group, for both men and women.
“Our success has been built on the development of the right infrastructure within the organization and using our funding as efficiently and effectively as possible,” says COSAFA Executive Director Sue Destombes.
“We cannot host tournaments without our commercial partners but they see a tangible return on their investment, whether it be corporate sponsors or host cities. Through our innovation in the media space, we are able to deliver our tournaments to a global audience, and this makes them more attractive to current and potential partners.” The message from everyone, inside and outside the continent, is that African sport is open for business, and braced for a boom.
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