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The Ticket to Profit

Published 10 years ago
By Forbes Africa

Every time a football fan goes through the gate, Daki Nkanyane will make money. Nkanyane is the owner, founder and managing director of eQtickets, a firm he co-owns with ConvergeNet, a JSE-listed ICT group. eQtickets won the rights to design and distribute the tickets for AFCON.

“Over and above that, for every ticket sold we earn a percentage in commission. That is our core business,” says Nkanyane.

The Confederation of African Football (CAF) expects ticket sales to surpass previous tournaments. According to Nkanyane, CAF wants eQtickets to sell between half a million to 980,000 tickets.

“They are going to pay us a minimum of R15 million ($1.7 million) inclusive of all costs for designing the tickets, for all the various specifications around the ticket.

“Our responsibility is to ensure that tickets are sold, AFCON does the marketing. AFCON is generating income out of ticket sales and we are that conduit to ensure that they generate their income and then out of that we earn a commission,” says Nkanyane.

Previous tournaments have been dogged by poor attendance and low ticket sales but organizers hope it will be different this time around. The tournament is tipped to be a success as far as crowds and TV are concerned.

According to CAF, the previous tournament, which was co-hosted by Gabon and Equatorial Guinea, recorded an estimated 6.6 billion TV viewers with 87,072 hours of TV exposure. The tournament in South Africa is set to better that.

“We are quite confident that we will break new records for the coming edition in South Africa next year,” says CAF’s marketing and TV director, Amr Shaheen.

eQtickets is also set to make additional income on top of its guaranteed earnings.

“If half a million tickets are sold, we are looking at a total revenue of about R60 million ($6.9 million)… we get about 8.5% per ticket sold; out of the R60 million ($6.9 million) we will make about R8 million ($1 million) income… That’s why we also play a role in making sure that we market, we drive sales and promote the sales in the various environments—it’s in our interest,” says Nkanyane.

Other entrepreneurs will also benefit. eQtickets sub-contracted a South African company to produce its 200 kiosks, which were put in strategic locations around the country to sell tickets.

eQtickets has also secured the rights for  another soccer event  to be hosted by South Africa in 2014.

“We are going to sell for African Nations Championship (CHAN). We have been appointed for both tournaments… It’s a two-year agreement that we have,” he says.

According to Nkanyane, the AFCON tournament has provided his company with the opportunity to build its brand while ensuring the firm empowers South Africans through job creation.

“We have about 30 odd people in the office; with other people in the field… We are employing a lot of people to ensure that it complements the growth that the business is going through. As and when our projects grow, we will build capacity,” says Nkanyane.

More entrepreneurs are grabbing the opportunity to benefit from the soccer extravaganza. The 2010 FIFA World Cup was a gold mine for many businesses. Hotels, retailers and manufacturers, transport and car rental companies situated close to the host centers will profit.

According to Sipho Sithole, AFCON’s director of communications, the organizers signed a Local Procurement Accord with Proudly South African—a campaign launched in 2001 to promote homegrown products and services—which will benefit businesses. Several companies which won tenders to provide goods and services include event production companies VWV Productions and Black Star Communications. These providers are working to ensure a seamless and successful event.

Support from the government has been equally strong, with the Treasury availing R461 million ($53 million) for the tournament. Treasury officials and the Local Organizing Committee (LOC) are optimistic that the tourney will be successful and profitable, owing to the experience gained and existing infrastructure built for the 2010 FIFA World Cup.

Industry experts are, however, rather cautious. David Sidenberg, partner at BMI Sport Info, an independent sport and sponsorship research company, says it’s difficult to estimate the potential revenue at this time.

“Until the data on tickets sales, foreign visitors, TV rights and sponsorship deals are available, we won’t have a good idea of the economic impact of the tournament,” he says.

Although it will take a while to ascertain how much revenue will be made, the excitement from football fans across Africa is certainly increasing as the tournament draws closer.

If the messages on social media platforms are anything to go by, the much anticipated event is going to draw huge crowds. Thousands of fans managed to buy tickets within the first few weeks of ticket sales and comments on the AFCON 2013 Facebook page encapsulate the anticipation.

“And we are at the finals! Gonna make up for the world cup disappointment,” writes Thami Thanjekwayo.

“Got my tickets for match day one… now for Moses Mabhida and the final… making it happen,” writes Tshidiso LeChuba.

Twitter messages similarly demonstrate the excitement the event will bring, as fans welcome the LOC’s decision to allow the controversial vuvuzela in the stadiums.

“#ViVaVuvuzela this is our culture in football, can’t attend a soccer match with [out] my vuvuzela. It’s gonna be the same with #AFCON2013,” writes @Less57.

The tournament kicks off on January 19, with the host taking on the tournament’s surprise package: Cape Verde, which qualified at the expense of the much fancied Indomitable Lions of Cameroon at Soccer City Stadium.

Pressure is definitely on South Africa, which will be hosting its second continental soccer showcase, after it staged and won the tournament in 1996, when it beat Tunisia 2-0 in the final. With the passing of assistant coach Thomas Madigage barely three months before the tourney starts, the nation will hope that Bafana Bafana will give them something to smile about.

The tournament comes hardly a year after 2012 champions Zambia beat Côte d’Ivoire in a dramatic penalty shootout. Zambia will only hold the coveted gold-plated cup for one year. As of 2013, the tournament will be held in odd-numbered years so that it doesn’t clash with the FIFA World Cup.

The stakes are high—the winner of the tournament will be crowned the continental champion; receive R13 million ($1.5 million) prize money; earn bragging rights for two years and will qualify for the 2013 FIFA Confederations Cup in Brazil, as the representative from CAF.

South Africa will have to strengthen security, following the stoning of the Zambian team bus by two fans, aged 12 and 13, after a friendly match against Bafana Bafana at Soccer City, on November 14, in which South Africa lost 1-0. Goalkeeper Kennedy Mweene and midfielder Felix Katongo were injured. The South African Football Association (Safa) expressed deep regret over the incident.

Soccer fans will undoubtedly be treated to some mouthwatering action as they watch stars such as Mali’s Seydou Keita, Côte d’Ivoire’s Yaya Touré, Didier Drogba and Nigeria’s Victor Moses. With the record seven-time champions Egypt and four-time winners Cameroon missing out, the cup is up for grabs.

Four-time champions and four-time runners-up Ghana, who last won the cup in 1982, and two-time winners Nigeria, seek to make amends for previous disappointments. Teams such as Chipolopolo of Zambia and the Elephants of Côte d’Ivoire would want to continue to the further stages with their recent fine form. This tournament could be too close to call, as previous winners and unpredictable teams such as the Atlas Lions from Morocco, the Leopards of DRC and Tunisia’s Carthage Eagles could spring a surprise or two.

The continent is certainly poised for an unforgettable tournament and football fans are patiently waiting to “feel the beat at Africa’s feet”. As the tournament progresses, Nkanyane and various other entrepreneurs will be watching as the millions roll into the bank.

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Related Topics: #Confederation of African Football, #ConvergeNet, #Daki Nkanyane, #December 2012, #eQtickets, #football, #Tournament.