DHL enters naming rights market with Cape Town Stadium deal

Logistics company DHL Express has formally sealed a multi-year naming rights partnership with Cape Town Stadium, which will see the South African venue change its name to DHL Stadium.

The newly refurbished 62,000 capacity stadium is the new home of United Rugby Championship team the Stormers and domestic club Western Province, who moved there earlier this year. DHL first signed on as title sponsor of the two teams in 2011 and is already the longest-standing title sponsor in Western Province’s history, while its contract with Cape Town Stadium marks its first move into stadium naming rights.

News of the deal had first been reported in November, while the DHL Stadium moniker had been used during the recent British & Irish Lions tour. However, due to COVID-19 an official announcement was never made, until now.

Hennie Heymans, CEO of DHL Express Sub-Saharan Africa, said: “DHL is the most international company in the world with a purpose of ‘Connecting People and Improving Lives’. It’s very important for us as a brand to make a difference in the local communities in which we operate and a partnership of this nature really solidifies our optimism and commitment that we have for South Africa.

“Despite the COVID-19 pandemic, we believe that sporting, entertainment and business events will continue to have a place in society. Our role as responsible corporate citizens will be to ensure that patrons experience world class events, with a strict health and safety approach. This partnership will help play our part in supporting a thriving South African economy, from both a sporting and business perspective.”

In March, Cape Town Stadium continued its mission to turn around its financial fortunes by unveiling a new hospitality offering. The Business Lounge at Cape Town Stadium is designed to be a shared-space hospitality experience, divided into three distinct offerings. These have been dubbed the “sports fanatics” section, the “business networker” section and the “family of fans” section.

In November 2019, it was announced that Western Province Rugby would move to Cape Town Stadium in 2021. The City of Cape Town’s Council approved a binding heads of agreement between the city, Cape Town Stadium and Western Province for the team to make the venue its home from February 1, 2021. The deal will potentially span the next 99 years.

In January 2020, it was revealed that Cape Town Stadium in 2019 cost R79.6m (£3.94m/€4.58m/$5.31m) to maintain, with the City of Cape Town doubling its contribution, as authorities stated they were confident that the venue could shed its ‘white elephant’ image thanks to the deal with Western Province Rugby.

The City of Cape Town took on management of the facility, developed at a cost of R4.4bn for South Africa’s staging of the 2010 FIFA World Cup, back in 2018 under the Cape Town Stadium banner. During the 2018-19 financial year, the City had to subsidise Cape Town Stadium with R55m. This figure increased to R59m during the 2019-20 financial year.

Ian Neilson, the City’s Mayoral Committee Member for Finance, said at the time that the latest figure would likely have been less if it were not for the impact of COVID-19. The Business Lounge venture, along with the Western Province and DHL deals, have also been accompanied by a project to install a number of executive suites at the stadium.

Speaking yesterday (Thursday), DHL Stadium CEO, Lesley de Reuck, admitted that the taxpayers’ contribution to maintain the venue rose during the 2020-21 financial year to R65m. “During the 2019-20 financial year a saving of 16.67% was achieved on the grant funding received from the City with Cape Town Stadium utilising R59.5m grant funding,” De Reuck said, according to the Cape Times newspaper.

“The stadium achieved R17m in income against a budget of R16.6m during the 2019-20 financial year. There was a loss of revenue in the amount of R18.5m due to the loss of hosting of events. During the 2020-21 financial year the City made a contribution of R65m. As a municipal entity, the stadium has to have a balanced budget and thus in order to make up for the shortfall of the revenue budget the expenditure budget had to be reduced by R18.5m.”

Commenting on the DHL deal, Neilson added: “When the City built such a world-class stadium as a host of the 2010 Soccer World Cup, we needed to make it happen for the economic opportunities and nation-building prestige that it would bring.

“However, we knew that after the event, we’d have to make it a financially sustainable landmark. Since then, we have been investigating ways to reduce the burden of carrying the operational costs of the stadium. This has led to a number of programmes aimed at enhancing the viability of the Cape Town Stadium.

“This has included the construction of hospitality suites, securing a primary anchor tenant, and most recently, a naming rights partner. Importantly, this stadium remains an inclusive, multipurpose sporting and events facility.”

Image: Prosthetic Head/CC BY-SA 4.0/Edited for size