Football: Chinese firm could take €902m contract off French group
The African Football Confederation (CAF) has terminated its media and marketing rights contract with the French company, Lagardère Sports and Entertainment. There are unconfirmed rumours that Infront Company, which is owned by the Chinese firm Dalian Wanda, is the favourite to win the game. The French, however, do not see it that way.
Lagardère Sports and Entertainment has discovered that the African Football Confederation decided to unilaterally terminate the contract that had bound the two parties since 2017, and which was due to end in 2028.
The break-up announcement came at the end of the day on Tuesday 5 November, much to Lagardère’s surprise.
- The company’s share price fell by 5.68% to €19.28 the next day.
The agreement, worth €902m, was for the commercialisation of media and marketing rights for CAF tournaments, including the African Cup of Nations (CAN), the African Championship of Nations (CHAN), the Champions League, and the Confederation Cup.
Ahmad had campaigned for more than two years for the termination of the contract, which was signed by Issa Hayatou, the former president of CAF.
During his campaign to succeed the Cameroonian, Ahmad repeatedly stated, “this agreement was not good for African football and that it should be reviewed”.
After his election in March 2017, he continued this line of attack.
A source close to the case, speaking under conditions of anonymity said:
- “Ahmad was influenced by the Egyptians, who [have strong influence in] the CAF, even if it is a little less so at the moment, because they wanted the CAF to break the contract with Lagardère, and sign one with Presentations Sports, an Egyptian production company. But since the contract is valid, Ahmad maintained it, because he also understood that this Egyptian group was not in a position to do what Lagardère is doing, which is able, thanks to its resources, to broadcast matches even from the most improbable places in Africa.”
Lagardère could take legal action
Lagardère Sports and Entertainment reacted quickly, stating in a press release on 5 November, “Lagardère challenges CAF’s unilateral decision to immediately terminate its agency contract with Lagardère Sports which it considers illegal, abusive and unfounded”..
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The French group invited the body to return to a “reasonable position”, and to honour its commitments but left little doubt that it would not bow down to CAF.
The release went on to say, “Lagardère would take any action to defend its rights and obtain full compensation for the damage it would suffer”, clearly suggesting that legal action is currently under serious consideration.
When contacted, Lagardère refused any further comment.
- “We will add nothing more than what was said in the press release,” the press service said.
- On the CAF side, Ahmad directed Jeune Afrique to Mouad Hajji, CAF Secretary General. Despite many attempts, the SG did not respond.
Another source said, “CAF is, even if the term is a bit strong, in a way under FIFA’s control, since its Secretary General, the Senegalese Fatma Samoura, has been conducting an audit at CAF for three months.”
The source went on to point out FIFA President Gianni Infantino has very good relations with China. “This country, already very present in Africa, wants to strengthen its influence there, through football, which is very popular on the continent,” said the source.
According to our information, the Wanda Group, FIFA’s partner since March 2016 and until 2030, is the favoured organisation.
- The Chinese conglomerate, formed in 1988 in Dalian (the headquarters were transferred to Beijing in 2009) is particularly active in the hotel, cinema, and tourism sectors.
- But it has diversified its activities, investing in particular, in sport.
Infront Sports and Media: French creation, Asian destiny
An example of Wanda’s sport aquisitions: Infront Sports and Media.
The company was created in 2003 by Franco-Swiss businessman Robert Louis-Dreyfus, former president of the Olympique de Marseille and former owner of Adidas. It was acquired in February 2015 by Wanda Group for €1.05 billion.
Infront Sports and Media, currently headed by Philippe Blatter, the nephew of Sepp Blatter, the former president of FIFA (1998-2015), specializes in the distribution of media rights, TV production, and marketing.
- In Asia, it manages the media rights for the FIFA World Cups.
Fight is on
CAF’s battle with Lagardère is likely to be a fierce one, especially because, as one of our sources pointed out, “the contract is rock solid”.
According to media reports, Lagardère’s 12-year contract stipulates any disputes with CAF, will be decided under Swiss law in the International Chamber of Commerce in Geneva, Switzerland.
This article first appeared in Jeune Afrique