Yesterday’s conclusion of the Tour Down Under in Adelaide was a triumph not only for the winner, German rider Andre Greipel, but also for South Australian Premier Mike Rann and the first-time commercial sponsor of the Tour, South Australian-based energy company Santos.
In late August 2009 Santos announced that it would become the “naming rights” sponsor for the Tour through to 2013. In doing so it took some very inconvenient financial and political heat off Rann leading up to the South Australian election in March this year.
Quite a few people in South Australia were curious about several aspects of the Santos deal. More than passing strange was the absence of a money figure — usually big corporate sponsors are keen to get the biggest bang for their buck from such an important statement.
A little history of Santos and its relations various South Australian governments is relevant to this most recent arrangement.
In the late ’70s Santos was a mid-sized gas company conservatively run by old-school directors who suddenly had to face the aggressive Alan Bond, who had, as the Adelaide-based Independent reported last year:
“… a prescient eye for a bargain, [and] had snapped up 37% of Santos from the Burmah Oil Company of the UK.
Bond drove the conservative, slow-moving Adelaide directors of Santos spare.”
In 1979 the Corcoran state government legislated a 15% cap on share ownership that was specifically targeted at Bondy, who subsequently sold down his 37% in Santos at a tidy profit.
Santos’ “protected species” status wore very thin over time and for some years Santos management had been lobbying fiercely for its protected species status to be repealed.
In this it was successful, and in mid-October 2007 it entered into a “Deed of Undertaking” with Rann that was subsequently reflected in legislation introduced into the South Australian parliament.
The three important elements of the legislation and the Deed that it is based on are:
- guarantees that effectively 90% of the current South Australia-based roles stay here;
- a $100 million legally enforceable compensation mechanism should there be a significant reduction in corporate presence; and
- a Social Responsibility and Community Benefits fund of some $60 million over 10 years to be applied to a range of sponsorships … indigenous programs and educational scholarships.
It is this last element — the Social Responsibility and Community Benefits fund (the CBF) worth $60 million — that is of immediate relevance.
The categories of organisations and projects to which that money will be donated or used for sponsorship in South Australia are contained in clause 4.3(b) of the Deed, which contains several of the usual philanthropic categories — science, health, environment, youth, etc — but makes no mention of sporting events or carnivals, though it does contain the catch-all category of “other community benefits”.
Clause 4.3(c) contains the kind of get-out conditions that every good lawyer would seek to include in such a Deed in order to give Santos a degree of flexibility in how it disburses CBF funds:
“The specific … categories of organisations and projects in South Australia to which the Company [Santos] provides benefits may change over time …”
Importantly, clause 4.3(c) contain further guidance as to how proposals under the CBF will be assessed against Santos’ “standard philanthropic assessment and performance management criteria”.
On Crikey’s reading of the Deed, Santos has agreed that it will donate $60 million over 10 years to organisations and projects that have at least some connection to philanthropic principles.
Philanthropy has many definitions — and I don’t have my Shorter Oxford dictionary to hand so cannot give a definitive meaning here — but for mine the guiding principle of philanthropic giving is that it be money, goods or value given, usually from a private or commercial source, to a project or organisation that will advance the public good.
Back to Santos and its sponsorship of the Tour through to 2013.
On its face — and for the last week and more all over the streets of South Australia, the nation’s television screens and newspapers and in all of the Tour’s publicity material — the sponsorship by Santos of the Tour appears to be nothing more than a straight-out commercial sponsorship. Just the same as the Kia motor vehicles naming-rights sponsorship of the Australian Open tennis and dozens of similar commercial sponsorship arrangements made by big corporates each year.
Crikey asked Santos, and Rann’s office, for more details about the “philanthropic” nature of Santos’ sponsorship of the Tour. We’ve heard nought from Rann’s office.
To Santos’ credit, it provided a lengthy response from Matthew Doman, its manager of corporate communications.
From Santos’ answers to Crikey’s questions — though not stated explicitly — it is apparent that the source of the TDU sponsorship money is the CBF.
But, citing that old and increasing unconvincing saw that the details of the sponsorship are “commercial in confidence”, Santos declined to produce further details about how much it is giving to the Rann government’s Events SA to cover the costs of staging and publicising the Tour.
Santos also neglected to provide details of it’s “standard philanthropic assessment” policy or of its apparent failure to advise Rann — through the annual reporting requirement that it advise Rann of future proposed expenditure contained in clause 4.4 of the Deed — of its proposed expenditure on sponsorship of the Tour through to 2013.
There have been various accounts buzzing around Adelaide of the actual amount that Santos is spending on the Tour over the next four years, from a low of about $4 million up to $15 million.
Right now nobody, let alone those organisations that might want a slice of the Santos “philanthropic” pie over the next few years, knows just how much money is left on the plate.
And right now it seems that the meaning of “philanthropic”, in South Australia corporate and government circles at least, is a work in progress.