INSIDE SUPERSPORT’S REST OF AFRICA SPORT REVENUE EMPIRE AND ITS 2024 SPORTS BETTING GAMBLE

On January 5, 2024, Supersport made a groundbreaking announcement, revealing its strategic partnership with Kingmakers, a leading sports betting and digital entertainment company, in the launch of SuperSportBet. This betting platform aims to transform the sports betting experience for enthusiasts across South Africa. Notably, Supersport holds a 49% stake in Kingmakers. The beginning of this partnership was hinted at in the 2023 financial year report by MultiChoice. The report not only outlined the financial overview of SuperSport, including revenue streams and investments, but also shed light on MultiChoice's investment in Kingmakers and the subsequent returns.

GENERAL OVERVIEW OF SUPERSPORT

In its broader scope, SuperSport continued to enhance its world-class sports lineup, securing multi-year extensions for rights to major sporting events, such as the English Premier League, Cricket South Africa, SA Rugby, Formula 1, LIV Golf Tour, WWE, and Cricket World Cups.?

SUPERSPORT SCHOOLS

The group intensified its investment in SuperSport Schools, culminating in the launch of a dedicated school sports television channel (216) in February 2023. Anticipated to break even in FY24, SuperSport Schools garnered substantial interest from advertisers due to its soaring viewership.

A pivotal move for SuperSport in the school sports domain occurred in April 2021, marked by the acquisition of a majority stake in School Sport Live, subsequently rebranded as SuperSport Schools. This strategic investment aimed at tapping into a younger demographic through streaming platforms, aligning with the evolving preferences of the target audience, with SuperSport saying the following:

“We are trying to speak to a younger market and they are at different platforms, hence why streaming now makes sense,” he says. “Because, for a 16 or 18-year-old student, it’s easier for us to reach them on a streaming platform than through a traditional DStv channel.”

“We’ve captured the ‘older’ market – they understand our product,” he continues. “But the younger guys don’t and that’s why it’s not sitting behind a paywall. So, it’s also about us investing in the future, from an audience point of view, and streamlining our communication and interaction with a younger market. It’s not behind a paywall and we’re saying they can share it as much as they want.”

Since the inception of this investment, SuperSport Schools has witnessed remarkable growth, with over 275,000 app downloads and 18 million cumulative video views by 2022. In Q1 of 2023, the platform achieved a milestone with the launch of the SuperSport Schools linear channel, Channel 216, accessible across all DSTV bouquets. The cumulative unique audience for March surpassed expectations, reaching 7,343,889.

Registering a 36% increase in Q1 2023, the SuperSport Schools App boasted 375,337 users by the end of March, breaking records with 72,265 new registered users in that month alone. Further, social media presence experienced substantial growth, with Facebook, Twitter, Instagram, YouTube, and TikTok followers showing impressive percentage increases in the following ways:

• Facebook followers were up 130%
• Twitter followers up 147%
• Instagram followers up 151%
• YouTube subscribers up 7%
• TikTok followers up 143% (Q1 of 2023)

It is no surprise why Supersport looks to break-even on its investment in 2024.

South Africa Cricket

An additional investment initiative marked a significant milestone with the launch of the inaugural SA20 cricket competition in January and February 2023, drawing substantial crowds back to cricket stadiums nationwide. The month-long competition witnessed the sale of over 350,000 tickets, surpassing expectations. Television viewership, a crucial metric, demonstrated a remarkable 33% improvement over the 2022 IPL. SuperSport, recognizing the potential, invested in a 30% stake in the SA20 business, a move that quickly translated into positive cash flows within its maiden season.

The economic impact of the 33-match competition was underscored by a commissioned Economic Impact Assessment (EIA). This comprehensive assessment illuminated the positive repercussions on key economic indicators, showcasing noteworthy figures:

Direct Expenditure: R1.4 billion (about $75M+) injected into the South African economy.

Employment Opportunities: An impressive creation of 8,223 annualized job opportunities.

Contribution to GDP: A substantial boost of R4.1 billion (about $220M+) to South Africa's Gross Domestic Product.

Household Income Impact: R958 million (about $51M+) contributed to enhancing household income.

These figures not only signify the tangible success of the SA20 cricket competition but also underscore its broader economic contributions to South Africa.

Supersport Bet

In 2023, SuperSport strategically expanded its ownership in Kingmakers, acquiring an additional 29% to supplement the existing 20%, making their total stake 49% and this valued Kingmakers at $1 billion. This $282 million acquisition in June 2021 showcased the company's commitment to the Nigerian market, where Kingmakers operates. Notably, the revenue generated from this stake, standing at ZAR4.6 billion ($247 million), surpassed the entire revenue from SuperSport's technology segment, which includes the DStv App and Showmax services.

Despite initial attempts by Kingmakers to extend its operations to Ghana, Ethiopia, and Kenya, challenges in contextualizing their business solution led to the closure of operations in these countries, as evident in the cancellation of major football league sponsorship deals in these countries.

Data reveals South Africa's dominance in the African gambling market, contributing 40-50% of the continent's gambling revenue, reaching R34.43 billion ($1.8 billion) in gross gambling revenue in 2022—a 48% increase from 2021. Notably, almost half of South Africans placed sports bets within the year, reflecting a growing market.

Capitalizing on these trends and the increasing mobile penetration across Africa, SuperSport, in collaboration with Kingmakers, launched its betting platform called SuperSportbet in January. This strategic move aligned with SuperSport's notable presence in South African sports, sponsoring the football league and owning a football team.

SuperSport further tested its betting strategy with the introduction of the Supersport Superpicks platform, allowing bettors to play games for free and win real money. The platform, featuring games like Predictor and Fantasy, has garnered over 750,000 active users in Nigeria.

The launch of the Supersportbet platform witnessed high-profile announcements, including former football captains Jimmy Tau and Phumudzo Manenzhe as brand ambassadors. Additionally, the unveiling of "The Playbook," a new show offering in-depth sports insights and analysis, accompanied SuperSportbet's partnerships with South African Football League giants, Kaizer Chiefs and Orlando Pirates.

SuperSport's strategic moves in ownership expansion, betting platform launch, and key partnerships signify a robust business strategy, leveraging data-driven insights and market trends for sustainable growth in the African sports and gambling industry.

CONCLUSION

The strategic moves made by SuperSport, operating under the Multichoice group, are intricately guided by data analytics, all in pursuit of cultivating a fresh audience base and expanding their revenue streams. The investment in the Schools Live project, specifically tailored to appeal to a demographic keen on consuming content through Over-the-Top platforms on their mobile devices, has yielded substantial year-on-year growth across social media platforms. Though the exact monetary value of this investment remains undisclosed, the considerable nature of the venture, focusing on streaming infrastructure, suggests a significant financial commitment.

Remarkably, the project has garnered substantial sponsorship, positioning SuperSport on a trajectory to break-even on its investment by 2024. This underscores a robust demand for brand connections within this specific age range. The lessons drawn from this initiative are particularly pertinent for industries, such as esports and gaming, seeking to tap into a similar nexus with their target audience.

The SuperSportbet initiative aligns seamlessly with global practices, mirroring the recent 10-year, $1.5 billion licensing deal between ESPN and PENN Entertainment to launch the ESPN bet platform . SuperSport, leveraging extensive data analytics and its profound market expertise in South Africa, stands to establish itself as a betting giant in South Africa and ultimately give Kingmakers its first long-term expansion outside Nigeria.