CAF Explains Termination Of $1 Billion Lagardere Contract

CAF Explains Termination Of $1 Billion Lagardere Contract

The Confederation of African Football have explained the cancellation of its $1 billion deal with Lagardere Sports in a statement, citing irregularities discovered before the agreement was reached.

In 2016, Lagardere signed a 12-year deal with the continent’s football authority as their exclusive agent for the sale of the rights, including broadcast rights, for its competitions, including the Africa Cup of Nations, the African Nations Championship and the Caf Champions League.

“In 2017, the Egyptian Competition Authority (ECA) found that the Agreement breached Egyptian competition rules because Lagardere was appointed as Caf’s exclusive agent for the marketing and media rights for an uninterrupted 20-year period without any open tender,” read a statement on Caf’s website, published on Friday.

“By the same decision, ECA declared the Agreement null and void and imposed a number of remedies on Caf. Those remedies included the obligation to immediately terminate the Agreement and suspend its effects within the Egyptian market.”

The ECC also imposed a fine of EGP 200 million on Caf and its former president, Issa Hayatou and former secretary-general, Hicham El Amrani, although Caf are due to share the liability for repaying these fines.

The statement also confirmed that the Competition Commission of the Common Market for Eastern and Southern Africa [the CCC] had recommended the termination of the deal, with a financial penalty on the football governing body.

On Tuesday, Caf reached a decision to cancel the deal that was expected to run through till 2028, prompting a response from Lagardere.

“At a meeting held [on Tuesday], the Confederation of African Football informed Lagardere Sports of its unilateral decision to cancel the agency agreement binding the two companies to 2028. The cancellation is to take effect immediately,” the agency’s statement read [as per Sport Business].

“Lagardere strongly contests this decision, which, in its view, is unlawful, unreasonable and unjustified. Lagardere maintains that there is no reason – including the ongoing investigation by the Comesa Competition Commission, which has yet to issue its decision – to cancel the agreement at this stage.

“Lagardere deeply regrets this situation and has asked the CAF to adopt a more reasonable position and honour its commitments.

“Caf has a responsibility to support Lagardere Sports in the ongoing proceedings before the CCC with a view to maintaining the agreement, adjusted, as necessary, following discussions with the authorities, in their common interest and in the interests of African football.

“Failing this, Lagardere will take any and all action to defend its interests and obtain compensation for any harm it may suffer.”

In its response to the statement, Caf defended its decision as a legal consequence of the various boards’ findings. They revealed that they had also extended an invitation to Lagardere in order to discuss the way forward, but that the media conglomerate are yet to take them up on their offer.

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COMMENTS

WORDPRESS: 7
  • Lord AMO 2 weeks ago

    Mago mago and wuru wuru

     
  • Dr. Drey 2 weeks ago

    $1bn pere, for 12 years, for CAF’s 3 biggest competitions….???

    Who are the dumb heads who agreed to this kind of peanut deal in the first instance….????

    Later some people will blame FIFA, the west, whites, slave trade, colonization etc for Africa’s continued backwardness even in the 21st century.

    The total value of broadcast rights for the EPl alone for 3 yrs is in the region of £9bn. But some incompetent officials sellout 3 of Africa’s biggest competitions over a 12yr period for just $1bn….without even a competitive bidding process..?!

    Oh Africa my Africa….!

     
    • mr Hush 2 weeks ago

      Can you blame them, when the place meant for technocrats have been taken over by career corrupt politicians that is what you get; a devalued deal that leads no where.
      Africans and the black race have always been led by leaders who don’t understand what leadership connotes. Leaders that are lost to their greed,they think the sand in their shoes is all there is,forgetting the beach is filled with sand.

      Firstly, all CAF competitions are ran like kindergarten cups;(including the Afcon). There is lack of transparency, misnagement,logistics failure and all these are bad for marketing.
      To get good value and sponsorship, CAF needs total overhauling in her marketing and branding department. They need total education on how to brand their competitions. 
      If you don’t know your worth, no one would sell it to you.
      Every man needs a little bit of pride or he would be played for the fool one time too many.
      I can go on and on,but I know I am just wasting spit,cause I know CAF, Africa, Blacks in general won’t change,at least not with our mentality and leadership. And it is a shame,to think,we got wise intellects with the right charisma and character that can do the business,but they are put under. What a shame!

       
  • Bomboy 2 weeks ago

    Please note that the $1bn is not for sponsorship. Read again:”…Lagardere signed a 12-year deal with the continent’s football authority as their exclusive AGENT for the sale of the rights…”

    They are agents (middle men) that help CAF to source for, and negotiate sponsorship rights. I think $1bn is not too small for that.

    I may be wrong though, but that is my understanding of the article.

     
    • Dr. Drey 2 weeks ago

      Oga sir…I stand to be corrected though, but it is an accepted principle by regulators globally and especially in the sporting industry, that entities OFTEN AND ALWAYS require EXCLUSIVITY to differentiate themselves from competitors as a basic business model, to recoup the investment they make into sports rights.

      The way it works most times, one entity wins the bid and then sublets or subcontracts these rights to others, based on some contracted agreements, as a way of recouping their HEAVY investments and also maximizing profits.

      So if only one entity, Lagardere, signed a 12-year deal with CAF as their EXCLUSIVE agent for the sale of the rights (ie ALL RIGHTS), INCLUDING broadcast rights, for its competitions, including the AFCON, CHAN and CAFCL…..without any bidding process…..and for how much….just $1bn……where broadcast rights alone for the EPL is hitting GBP9bn……aaaaahhhhhh, that will be the most monumental rip-off never heard before in history. Hayatou and all his gang and all those who entered into this kind of deal on behalf of Africa deserve to be hanged by their scrotum.

      I know I read books upside down sometimes, but I still stand to be corrected though…!

      Anyone with superior experience and expertise can pls dispel these hypotheses.

       
    • Mr Hush 2 weeks ago

      @Bomboy

      You are right.
      Lagardere is just a marketing agent for CAf media/broadcasting rights of CAF major competitions.

      And that is the anomaly.
      The price fee is a rip off.$1billion dollar is just too small for the length,size,and duration of the deal.
      Lagardere would be more beneficial.
      It is crazy to even think CAF would outsource all the rights of her major competitions to just one company. Especially,a less known name like Lagardere.
      From the standpoint,CAF competitions at just cutting their tooth in the branding aspect, it would be wiser to be transperent with such deal and spread the marketing of the rights to different entity to bring in much more revenue. You are not major like UEFA here, so you are testing the waters,at the same time growing your brand names,making more revenue in that sense. It is either that or you market your brand to the big name marketing agencies out there that would cough better deal than what lagardere has offered; surely there would be a better deal,if only CAF knows her worth and give a little bit of pride to herself rather than be as corrupt as they have always been.
      It is just a shame.

       
  • Bomboy 2 weeks ago

    Agreed. The process was not transparent, that alone should make one suspicious. If there was an open bid, CAF would definitely have earned more. Thanks Drey and Hush.