Kenyan sports teams to miss out on SportPesa's millions

Kenyan sporting teams are set to miss out on millions of shillings in terms of sponsorship deal after their chief sponsor cancelled all sponsorship contracts.

SportPesa, which is Kenya’s biggest betting firm and the chief sponsor of a number of teams in the country, made good their threat to withdraw its commitment to all local sponsorships after it lost a case challenging the implementation of the proposed 35-percent tax on betting and gaming income by the government.

SportPesa chief executive officer Ronald Karauri who announced the termination of the contracts said the sporting firm could no longer meet its sponsorship obligations due to the new hefty taxes.

“To end all speculation, we have effectively cancelled all sponsorships with Football Kenya Federation, Kenya Premier League, Kenya Rugby Union, Gor Mahia, AFC Leopards, Nakuru All Stars, Boxing Federation and the Super 8 grassroots tournament,” he said.

The withdrawal from sponsorship takes effect immediately, as clubs had already been issued with notices of intent to withdraw in June last year.

SportPesa spends slightly over a billion Kenyan shillings annually on its sporting commitments if you factor in the cost of other indirect costs like extra training camps, equipment, bonuses, tokens etc.

According to sources, the company's annual direct spending on local sponsorships is Ksh600 million ($6m).

Until 2nd January, Sportpesa was sponsoring Kenya’s top football clubs; Gor Mahia (Sh300 million over five years) and AFC Leopards (Sh225 million over five years).

Apart from team sponsorships, SportPesa has been catering for the bulk of the pay for newly hired Harambee Stars coach, Belgian Paul Put and Technical Director, Andreas Spiers from Germany which sources estimate to be about Sh120 million ($1.2m)

They are also shirt sponsors of the glob-trotting Kenya sevens rugby team and AFC Leopards and Gor Mahia who were enjoying a combined Sh100m ($1m) shirt sponsorship per year from SportPesa.

SportPesa are also the official sponsors of National Super League side Nakuru All Stars.

On August 2015, SportPesa entered into a four and a half year partnership to sponsor the Kenyan Premier League after East African Breweries failed to renew the previous three-year agreement.

“Contractually, KPL is not obligated to release the exact amount of the sponsorship deal but what I can assure you is that it is way better than what we were getting from Tusker. It is a good deal and we thank Sportpesa for coming on board. Partnerships like this make our dream a possible reality to making the KPL the best league in the continent,” KPL Chairman Ambrose Rachier explained during the .

Sport sources however estimated the deal to be between Sh350m and Sh400million until 2019.