Coca-Cola East and Central Africa has announced it is withdrawing from the historic, multi-million shilling naming rights deal with Sports Stadia Management Board for the Nyayo National Stadium in Kenya's capital Nairobi.
At a press conference on Thursday, Alex Maditsi, the Coca-Cola country manager, Kenya, said the insistence by the government for the stadium to revert to its old name was not tenable with the terms of the contract.
“The proposition put forward to us by the Minister for Sports and SSMB – to co-brand the stadium with its current and former names – is against the spirit of granting exclusive naming rights to a sponsor. We are therefore unable to perform our obligations under the contract,” Maditsi said during a press conference.
The government had proposed the stadium revert to Nyayo National Stadium with an addition of Coca-Cola Sports Centre on the names. The government’s action to return the name of Nyayo to the stadium ends a short-lived partnership that had been hailed as a ground-breaking development in sports sponsorship and private-public partnership in the country.
Coca-Cola won the naming rights to the Nyayo National Stadium following a tender advertisement and subsequently signed a three-year, $1.5 million (about Sh117 million) contract on February 4.
The giant beverage company named the stadium Coca-Cola Stadium and soon after began sprucing up the facility with the ultimate aim of turning it into a world class venue.
It was hailed as an historical deal that was happening in Kenya for the first time and in line with global trends where the legitimate owner of a sports facility gives up the rights to name the facility to an independent sponsoring institution (usually a corporate body or brand) at an agreed fee and for an agreed period of time.
The media and the public quickly picked up the name with many affectionately calling it the “Brrrrr stadium” after the current slogan for the company’s flagship product, Coca-Cola soda. But trouble soon surfaced when Sports Minister Hellen Sambili in April said the deal was improperly done and the name Nyayo could not be dropped because it was part of the country’s legacy.
On May 6, Francis Muthaura, the Permanent Secretary to the Cabinet and Head of the Public service wrote to Sambili directing that the stadium revert to the original name of Nyayo Stadium. The Sports ministry and SSMB frantically attempted to renegotiate the contract with Coca-Cola to incorporate both the names, Coca-Cola and Nyayo.
“Co-branding Coca-Cola and Nyayo would not be feasible because, although both brands are strong on their own right, they represent diverse propositions. For this reason. Coca-Cola and SSMB have disagreed on a point of principle,” Norah Odwesso, Coca-Cola’s Public Affairs and Communications director, said.