South African Premier Soccer League (PSL) has been dealt a heavy blow after banking group Absa allegedly took a decision to end its half a billion rand sponsorship.
South Africa’s third-biggest bank has been pumping R100-million into the PSL per year since signing an initial R500-million sponsorship deal in 2007. The deal was renewed again in August 2017.
But now a lack of economic growth and budgetary constrains have forced the bank to not go ahead with the sponsorship. The decision, which is likely to have far-reaching effect on the financial books of the money-spinning PSL, was allegedly taken after a series of meetings by board members last year.
The PSL, which has 16 teams, uses the funds to pay grants for first division teams and those canvassing in the top-flight category.
Two sources familiar with the bank’s affairs confirmed that Absa would be ending its marriage with the PSL due to budgetary constraints.
The mole, who did not want be named for fear of victimisation, said the bank was also on the verge of retrenching employees due to tough trading conditions.
“It was then concluded in one of those meetings that it would not make commercial sense to retrench so many employees and continue to invest so many millions in the PSL or soccer,” said the deep throat.
The deep throat also said the bank would allow the current contract to lapse in 2022, adding the PSL had been made aware of the decision and was now looking for potential sponsors.
The sponsorship is mainly used for club incentives like monthly grants to the PSL teams to the tune of R2.5-million a month. The league winners, who pocket R15-million and runners up (R7.5-million), also get paid from the Absa sponsorship.
“The withdrawal will be a big deal for the league. The reason it’s not being announced until a replacement is found is because it will unleash uncertainty among fans and the club,” said the source.
PSL spokesman Luxolo September said he did not know what Sunday World was talking about.
Absa spokesperson Gugulethu Maqetuka said: “Regarding your questions on the PSL and our other sponsorships, our sponsorship agreements and discussions with partners are confidential and we do not discuss them in public.
“The PSL has been a partner of ours for the past 13 years and should there be material changes to our relationship both parties will make a joint announcement at the appropriate time. This also applies to all our partners where we have sponsorship agreements”.
Maqetuka further denied that any jobs at the banking group were on the line.