Tourism minister Lindiwe Sisulu is set to pull the plug on the R900m SA Tourism deal to sponsor English football side Tottenham Hotspur.
Sisulu is expected to announce her decision this morning, following long meetings with the board of SA Tourism that went on late into the evening yesterday.
An insider close to the minister said Sisulu had decided to pull the plug on the deal that had South Africans up in arms this week.
The Sunday Times understands that during yesterday's meeting, the board told Sisulu they had been misled by the SA Tourism management as both the acting CEO and the CFO did not divulge any conflict of interest involving the CFO who was reportedly linked to the agency involved in the deal.
"The board said the management lied to them," said the insider.
Sisulu’s spokesperson Steve Motale said: "The acting CEO [of SA Tourism Themba Khumalo] was not at the meeting today between the minister and the board where resolutions on the matter were taken. The minister will make a big announcement in this regard at a press conference tomorrow morning.”
In an interview with the Sunday Times yesterday morning, SA Tourism acting CEO Themba Khumalo insisted that the controversial sponsorship deal would continue as planned, despite the Presidency saying it was opposed to it.
Three board members resigned on Friday following the uproar over the proposed deal, which would have seen South Africa pay the team £42.5m (about R900m) for a three-year branding sponsorship, starting in July.
Khumalo said yesterday morning he had received no instruction to pull out of the deal.
“The CFO Nombulelo Guliwe resigned at the beginning of December. Her final day of service was January 31st. The CFO that was sitting in the meetings at the time in which the board was deliberating on this issue was Nombulile Guliwe and not Johan Van der Walt. Johan Van der Walt’s presence in the meeting was for the purposes of handover. The CFO was Nombulelo Guliwe, he [Van der Walt] had no voting power in that meeting,” Khumalo said.
Khumalo said Sisulu's meeting held late yesterday was not about the Spurs deal, but rather the replacement of board members.
“Once the board has passed a resolution, as management of the entity, we are bound by the resolution of the board. Until such time that there is a formal communication from the Presidency, via the minister [Lindiwe Sisulu] to our board instructing the board to change its resolution, I am bound by the resolutions of the board that has employed me."
On Friday, Khumalo, Sisulu and the board chair Aubrey Mhlongo were summoned by President Cyril Ramaphosa to discuss the Spurs deal, but the meeting was cancelled.
Khumalo said sentiments around the deal had initially been "red", but had since "moved towards the green".
These included views from respected people in the field of marketing and tourism, he said.
“Our analytics tell us that … there is no definitive position for or against [the deal]. We believe that there are only two stakeholders that will skew the decision. One is National Treasury because we are spending taxpayers' money. The second is the president, the employer of the minister and director-general."
He said the deal, which included South Africa branding on players' sleeves, was conceived 18 months ago, but SA Tourism had only been speaking to Spurs over the past three months.
Once the board has passed a resolution, as management of the entity, we are bound by the resolution of the board.
— SA Tourism acting CEO Themba Khumalo
Industry experts have lashed out at the move.
The Tourism Business Council of South Africa said the sponsorship was not the right move as the strategy to lure 21-million visitors by 2030 identified China and India as having better growth potential than the UK.
Former Tourism SA deputy chair Thebe Ikalafeng described the deal as “irrational, irresponsible and a vain, ill-advised investment”.
“There is only one thing South Africa will get out of this sponsorship — it will reaffirm that we are no longer a winning nation. Frankly, our house is not in order to receive visitors,” Ikalafeng said.
But Khumalo described Ikalafeng’s view as a “misjudgment", saying the deal was not about the team being sponsored or football, but about accessing audiences in the UK and other parts of the world that watch the English Premier League.
He said if the agency were to withdraw from the deal, it would not lose any money as the contract had not yet been signed.
The idea to sponsor Spurs came from a strategy within the agency, he said.
Spurs' executive director, South African-born Donna-Maria Cullen, had been involved in negotiations.
“She was able to bring a perspective to the deal about how to leverage other things in the deal as a South African who is on the board,” Khumalo said.
In the past few years, sponsoring football teams has become a popular option for developing nations, with Puerto Rico recently doing so with Spanish club FC Sevilla and Rwanda with Arsenal.
Khumalo said to get to 21-million visitors, South Afrcia needs to get an 18% compounded average growth.
“You cannot simply do what you were doing and expect that you are going to get to 21-million. Rwanda got 8% lift above their current growth path [from their deal with Arsenal] … Rwanda is a small country and does not have the tourism platforms that we have, but still got 8%. Can you imagine what South Africa can achieve?” he said.
SA Tourism projects that R88bn will come into the economy through this deal, based on the current average growth of the sector and money spent by visitors. About 530,000 British visitors come to South Africa every year.
Khumalo said in the middle of the Covid pandemic, SA Tourism contemplated having a similar deal with Leeds United but did not make the move because the agency was not sure if the club would survive relegation.
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