Rwanda in on Arsenal FC: Canny Investment or Government Support for Private Passion Point – INT

Home to 11.9 million people (2016) – and a country still dependent on 30-40% of its government funding from international aid – Rwanda’s government announced in May it’s £30 million ($39 million USD) three-year sponsorship deal with Arsenal Football Club. The sponsorship will see Arsenal’s kit feature a “Visit Rwanda” patch on the left sleeve, along with other Arsenal sponsorship assets, for the next three years.

While aid providers and human rights activists raised concerns about the investment, the Rwanda Development Board insists the deal with the football club will pay for itself through the promotion of increased tourism. While this may be true, the optics of a $13 million USD annual sponsorship investment with an English Premier League (EPL) football club for a country with over a third of its population living in poverty aren’t good.

A self-declared Arsenal supporter, Rwandan President Paul Kagame appears to have acted without the approval of Rwanda lawmakers in doing the deal, creating alarm – including from countries that provide Rwanda with aid. Understandably, there are concerns that the Rwandan president’s passion as an Arsenal supporter may have taken priority over addressing more pressing needs, including developing infrastructure, delivering better education, or extending electricity coverage, to name a few. While any wrongdoing by Kagame should be addressed, with the deal with Arsenal done the more pressing issue in Rwanda is convincing its aid funders that this could be good for the long term.

The move by Rwanda to sponsor Arsenal could have meaningful economic fallout for the country. De Telegraaf, the largest Dutch newspaper, reported that officials in the Netherlands are calling for a reevaluation of its financial aid to Rwanda. In the UK, politicians have called this deal “elitist” and questioned the transparency of the decision making as many in the Rwanda government “are learning this through foreign media”, while The Guardian referred to one of the primary sponsorship assets in the deal between Arsenal and Rwanda as the “shirts of shame”.

By reaching a global audience and placing its brand in front of the right high-end consumers and encouraging travel to the African nation, Rwanda’s economy could benefit. EPL (2017) reported 28% of its fanbase falls within an upper middle-class demographic with 66% of fans being over the age of 30. Rwanda has set an annual tourism revenue target of $800 million USD by 2024, up from $404 million USD in 2016. Kagame expects the sponsorship of Arsenal FC to support this aggressive growth target.

Arsenal provides the opportunity for Rwanda to reach a global audience. Arsenal’s Chief Commercial Officer Vinai Venkatesham noted: “The Arsenal shirt is seen 35 million times a day globally and we are one of the most viewed teams around the world”. According to Nielsen (2017), the EPL reaches a broadcast audience of over 3.2 billion in 188 countries each year.

Given Arsenal’s global reach and the assets included in the sponsorship, Rwanda Tourism has the opportunity to optimize its brand reputation. One area of the campaign’s focus might be debunking safety concerns in the country, a common barrier to travel to Rwanda for foreign tourists.

According to the Travel & Tourism Competitiveness Index (2017), of 136 economies Rwanda ranks 97th in global indicators measuring tourism marketing competitiveness, and 9th for safety and security. Belise Kariza, Chief Tourism Officer of the Rwanda Development Board, said it himself: “We are now the safest tourist destination in Africa, and yet western travelers still today perceive us as the media portrayed us 20 years ago”.

While being ranked 6th in effectiveness of marketing to tourists by the Travel & Tourism Competitiveness Index, a partnership with Arsenal Football Club could be the catalyst in changing global perception of Rwanda. Lumency estimates that global visibility from the sleeve patch and broadcast visible side-line signage exposure could be worth up to $12 million USD per year net of incremental earned media value. Extending this visibility via digital and social content on Arsenal’s channels, along with other activation that can elevate Rwanda with Arsenal fans, Rwandan tourism traffic and ROI on the deal with the football club could be delivered.

If a $30 million USD rights fee over three years can play a role in increasing tourism to Rwanda by 100% in six years, creating jobs and increasing foreign exchange by $400 million USD, we may look back and see the Arsenal deal as a canny move by President Kagame. If the investment fails to provide the promised ROI, the investment of millions of pounds by Rwanda to rights fee and activation costs, along with the risk of the loss of important international aid, could be a serious issue to an already struggling economy.

The Rwandan Government would be wise to get its international aid partners aligned to seeing the benefit of the sponsorship, something that should have been done before a deal with Arsenal was signed.

And what about the brand reputation risk for Arsenal? Charging a significant sponsorship rights fee to Rwanda, a developing country with fundamental gaps in its economic situation, could position the football club as opportunistic.

In 2006, Barcelona FC announced a global partnership with UNICEF that included a jersey sponsorship (that came with no rights fee attached) and an annual no-strings donation commitment from the club. The goodwill earned by Barcelona FC from its deal with UNICEF was significant.

Despite how the deal may have come to be, as the season got under way in August, the impact of the deal remains to be seen. The increased awareness for Rwanda as a tourist destination may help drive the aggressive growth in tourism revenue the Central/East Africa nation has set for itself. The spend may erode trust from Rwanda’s international aid providers, like Holland and the UK, to a point where the country receives less aid funding.

Bold and unproven, this may be one of those sponsorship deals that goes either really well for both parties, or really poorly. If it goes well, Arsenal and Rwandan President Kagame may wind up looking like visionaries. If it goes poorly in terms of benefit back to Rwanda, the nation may lose international aid and Arsenal may wind up looking as the football club that put revenue well ahead of social responsibility.

We’ll be watching this one with interest.

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Rwanda in on Arsenal FC: Canny Investment or Government Support for Private Passion Point – INT
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