Speaker > Biography

Qondisa Ngwenya

President, Africa
Octagon Worldwide
Johannesburg

 

 

 

 

 

 

Published with permission from Street & Smith’s Sports Business Journal, Article “Emerging Industry Preps for World Cup” by Bruce Schoenfeld, published on February 12, 2007

In his 18-year career with IMG, British-born Jonathan Riley served as Monica Seles’ agent on the WTA Tour, produced soccer telecasts in China, and traveled the world in a wide range of other capacities. Now an executive for Octagon Worldwide, he oversees the content for the South African Broadcasting Co.’s telecasts of international cricket. Using local talent, but a broadcast philosophy imported from European and North American operations and his vast experience, Riley and his Octagon team have altered the face of South African sports television in a single year. “The look, the coverage, everything about it,” says Keletso Totlhanyo, a freelance director and producer employed by both SABC and Octagon. “We entertain and inform people, which is new.”

As a student activist at the University of Cape Town, Qondisa Ngwenya helped pressure the South African sports industry to take its first, fledgling steps toward racial equity. Now he sits at his desk in Octagon’s Johannesburg office, handling sponsorship deals with some of the country’s biggest companies and looking toward the 2010 FIFA World Cup from an enviable position. “Every World Cup sponsor will want someone on the ground here,” says Ngwenya, who is known around the industry by this first name (pronounced kon-DEE-za.). “And there aren’t many companies here with any World Cup experience.” He cocks his head and seems to consider the idea for a moment. “In fact, we’re the only one.”

Once a track coach, Chris Bruwer guided South Africa’s Elana Mayer to a silver medal at the 1992 Barcelona Olympics. As Octagon’s Cape Town-based group managing director, he heads the company’s 135-man effort to make South Africa sports marketing’s next frontier. A white South African who started working in athlete representation soon after the fall of apartheid, Bruwer may be better situated than anyone else to understand how far the country has come, both sociologically and economically — and where sports and sports marketing might be going. “South Africa is two worlds in one,” he says. “It has a first-world economy and a third-world economy. It depends on which world you live in as to how you’ll be exposed.”

By mining that first world of athlete representation, rugby, cricket, and other traditionally white sports, Octagon has gained a firm foothold in South Africa. It has established a $10 million business that ranks among the most profitable of any in the company’s 13-nation realm, and the most influential. “A lot of what happens around the world for us starts in South Africa,” says Neill Duffy, a South African who co-founded the marketing firm that became Octagon South Africa and served as Octagon’s Brussels-based head of European operations until a month ago. “It’s almost like an incubator.”

But it is access to that underdeveloped economy, which only lately has come to include such first-world standards as sponsorship deals for first-division soccer teams, that has the company enthralled. “With or without 2010, South Africa would be a priority for us,” says Rick Dudley, Octagon’s president and CEO. “It’s an important place to be in our global footprint. More than that, it’s a country and society that’s moving in the right direction.”

Taking baby steps

Octagon is not the only major marketer with a presence in the new South Africa. Local agencies such as Megapro Marketing, which started in 1985 doing hospitality and stadium signage, have carved out niches in the field. International firms are moving in. “Sports marketing here is catching on,” says Robyn Nuss, who runs IMG’s South African office. “There’s a growing understanding of different levels, that it isn’t just title sponsorship, but a whole hierarchy. And it isn’t just around the team, but individuals, stadium naming rights, all of that.”

That evolution, and South Africa’s mania for golf, an IMG stronghold, has put the country “on IMG’s radar” — for the second time, says Nuss. While still owned by Mark McCormack, IMG made a push in South Africa in the mid-1990s, but didn’t get a sufficient return on investment. Today, the company represents several top golfers and is active in golf-course management, with four either completed or in planning stages. It also had a five-year deal with the Natal-based Sharks rugby team that expired in 2006. Still, for all of Nuss’ optimism, IMG has all of four full-time employees in the Johannesburg office, and a single golf consultant in Cape Town.

To most outsiders, that level of commitment seems judicious, given the country’s potential risks and rewards. “There’s no question the World Cup will be a great catalyst to the development of the sports marketing industry in South Africa,” says Michael Payne, who formerly ran the IOC’s marketing efforts and now serves as an adviser to auto racing’s Formula One circuit. “But never in a million years will it come close to the potential development of China or India, for example. You can’t put them in the same league. I’d put Brazil there ahead of South Africa, too.”

FIFA takes an optimistic view of the future of the country. “I believe in the potential of South Africa,” says Markus Siegler, FIFA’s director of communications. “And if you believe in the potential of the country, the potential of sports marketing goes along with that.” But Siegler acknowledges that, post-2010, FIFA will shift its attention to South America, where the 2014 World Cup is likely to be held. And the international agencies and other organizations that set up shop in Johannesburg and Cape Town to take advantage of the monthlong extravaganza can similarly de-escalate.

Octagon’s commitment is deeper, and it is symbolized by Ngwenya. A black South African, he will take control of the company’s South African operations at the start of 2008, when Bruwer leaves the industry. On a Friday afternoon in December, he leans back in his chair in his office at Octagon House, the company’s Johannesberg headquarters. He has had a busy week. Earlier that morning, he had finalized the numbers of a soccer sponsorship deal between Standard Bank, South Africa’s biggest retail financial institution, and both the Kaizer Chiefs and Orlando Pirates, the country’s top two teams that play in the Premier Soccer League. Negotiations were continuing with the Castle Beer brand for its soccer sponsorship. His team also had finished a sponsorship strategy study commissioned by Sony South Africa, and was preparing a pitch to Sony for the 2010 World Cup.

Despite his youthful appearance — his hair bound up in mini-dreads — and a gentle manner, the 36-year-old Ngwenya sits at the nexus of the South African sports marketing industry. “It cannot be underestimated the connectivity he has with the serious people in the worlds of entertainment and sports and television here. No one has the relationships that Qondisa has,” says Riley, who is the company’s business director for television rights and sales. “When SABC is worried about their dealings with FIFA, they call Q; he’s almost like McCormack in that way. He has the respect of the entire business community.”

In some ways, Octagon’s investment in South Africa came about more by accident than any intelligent design. Octagon was formed by amalgamating what had been Advantage International with various acquisitions. One of them was Alan Pascoe International, a Cape Town-based marketing agency founded in 1995 by Duffy and Stewart Banner, in conjunction with the London-based Pascoe. Bruwer joined a few months later. “We started out representing athletes because that’s how we could get access to the marketplace,” Bruwer says.

The country was different then. Sport was still perceived, in any commercial sense, as something the white population did in the suburbs. The first nonwhite didn’t play rugby for South Africa until 1995. As late as a decade ago, soccer games were sparsely attended, and soccer teams had no sponsorship. “It has taken a while for soccer to become fully commercialized,” Bruwer says.

Only in the past two years has soccer passed rugby in sponsorship income, and that all happened on the backs of two teams, the Chiefs and Pirates. Now a third team, Mamelodi Sundowns, has joined them in the commercial elite. All have at least a dozen sponsors at various levels.

That still leaves the vast majority of the league far from maximized. Octagon works with eight clubs through its relationship with MTN, the leading mobile phone company in the country. But the two finalists in the recent Telkom Cup, Silver Stars and Ajax, have not a single sponsor between them, beyond a small supply deal for Ajax and Silver Stars’ loose association with the Royal Bafokeng tribe, which owns the rights to a platinum mine.

As a student at the mixed-race University of Cape Town in the late 1980s, Ngwenya played midfield on the soccer team and watched some of his teammates go professional. Gradually, his time and interest shifted toward student politics, and the inherent disparity between the races. Ngwenya saw sport as a microcosm of the entire racist society, and he sensed the power to influence people that it held.

With the first stirrings of political upheaval, he helped create the National Sports Council of the Western Cape, an umbrella body that attempted to amalgamate the white, black, and mixed-race athletes who previously had competed under the aegis of separate, segregated organizations. He served as the organization’s president, then relocated to Johannesburg to push the idea that South African sport also meant the townships, not merely the affluent suburbs. From 1994 through 1999, he worked as the national director of development for the NSC in Nelson Mandela’s government, reporting to the minister of sport.

Mandela, too, understood sport’s symbolic power. In 1995, as a way to help unify the country, he wore a South African rugby shirt before an international match, though the team had only one nonwhite player and the sport was still almost exclusively white. He also allowed the national team to keep the Springbok nickname and logo, which previously had been associated with racism. “White Afrikaners were using the Springbok as a symbol,” says Ngwenya. “Taking it away would have been a symbol of victory for black people. But to him, this wasn’t about conquest. His idea was that true victory lies in the democratization of this country. Now the Springbok belongs to everyone, not just whites.”

Having learned such marketing lessons on the political stage, Ngwenya turned to the private sector to apply them. In 2002, he joined Octagon. “Sport is about icons as brands, and the emotive power of those brands,” he says now. “It’s things that people cry for, and will even die for. This thing, supposedly a leisure item, has the possibility to define their lives.”

2010 and beyond

Whether Octagon’s South African strategy succeeds or fails may well depend on how smoothly Ngwenya can ride the wave of 2010, and how well he can position the company for the inevitable lull after the wave breaks. From taxi services to television producers, everyone with a financial interest in South Africa — and plenty of operators who don’t yet have one — are anticipating the World Cup. “There’s definitely a buzz,” says IMG’s Nuss. “Whether it’s a sustainable buzz remains to be seen.”

No company is better positioned to exploit it than Octagon. FIFA seems to understand. In 2006, it offered Octagon the unique opportunity to send a dozen of its South African team members to Germany. “To see how it all worked from the inside,” Ngwenya says. In mid-December, as part of its pitch for the World Cup business, Octagon brought a group of Sony representatives to a Kaizer Chiefs-Orlando Pirates match. The Chiefs scored in the game’s final seconds to tie. “The crowd stuck around for 20 minutes after the match, and it was just deafening,” says Dan Kustelski, Octagon’s American-born business director of the Johannesburg office. “The Sony people were in awe at the passion. They hadn’t seen that before.”

Still, Octagon learned a lesson during cricket’s World Cup, which South Africa staged in 2003. “We stopped doing everything else,” says Ngwenya. “We overcommitted. And then the event ended, and we looked around, and we had to scramble to pick up the pieces.” No matter how the state of marketing evolves between now and 2010, Ngwenya still perceives a paucity of categories with companies big enough to do sponsorship deals. “You can only represent so many blue-chip companies,” he says. “Our roster will be full.”

Accordingly, the company is looking to create its own events. Octagon is a partner in the Nelson Mandela Invitational, held in Kleinmond each November, and has landed a five-year sponsorship deal with Coca-Cola. “Our aim is to launch at least one property that we either own or control on an annual basis,” Bruwer says.

A full 70 percent of the South African office’s gross income is in television, Riley reports. Beyond the cricket telecasts, that includes educational programming, an Oprah-style talk show on teen issues, and animated characters in various guises. Acting as middlemen between the rights holders and foreign outlets, Octagon also distributes South African soccer and cricket worldwide using dual-satellite-feed technology.

Nobody questions that the sports marketing sector will ramp up for 2010. “The buildup to the World Cup, and what will be needed in terms of hospitality, operations, logistics and support may justify a business in itself,” says the longtime sports marketer Payne. But Ngwenya is counting on permanent growth. He compares South Africa to South Korea — not as a World Cup host in 2002, but where it was in 1988 when it staged the Summer Olympics.

“You saw a residual effect there with the improvement of the service industry, a raised marketing standard, all those aspects,” he says.

On the other hand, the emergence of an unstable political situation could easily send South Africa’s economy veering off in the direction of once-prosperous Nigeria, Liberia and Zimbabwe. So could a misreading of the costs and opportunities of 2010; already, Cape Town hotels have been criticized for price gouging.

Ngwenya doesn’t need to be reminded that his country is Octagon’s biggest gamble. He has worked enough with the outside world to know how far South Africa’s businesses have to go. But while waiting for an Octagon courtesy car to take him on a short drive — even the shortest walks in Johannesburg are perilous because of the high incidence of violent crime — he expresses the same faith that has sustained his rise for almost two decades. “I’m prepared for the various scenarios,” he says. “But I have confidence in my country.”