The Competition Commission of the Common Market for Eastern and Southern Africa (Comesa) has identified a “number of concerns” amid an ongoing probe into the commercial partnership between the Confederation of African Football and the Lagardère Sports agency.
The Commission moved to provide an update following the launch of its investigation on February 13, saying it has reached an “advanced stage” in its assessment of the agreement.
The contract between Caf and Lagardère Sports has come under scrutiny in recent months. The continental governing body’s new president, Ahmad, has said he will review the terms of the long-term deal.
Rights to Caf events over 12 years, from 2017 to 2028, were awarded to the Sportfive agency in 2015. As with previous Caf deals, no formal tender was issued for the rights and all negotiations took place in private. The Sportfive brand has since been phased out, with Lagardère’s sports-rights agencies falling under the Lagardère Sports brand.
In a statement, the Comesa Commission said: “Following consultations with various stakeholders and football administrators at national level, the Commission’s assessment has identified a number of concerns arising from clauses contained in those agreements, which could affect competition in the relevant markets for all 19 member states of Comesa.
“It is recalled that Article 16 of the Comesa Competition Regulations… prohibits all agreements between undertakings which may affect trade between member states and have as their object or effect the restriction, prevention or distortion of competition in the common market.”
In relation to agreements relating to the award of commercial rights, the Commission said key concerns identified by stakeholders are the duration of the exclusive agreements entered into by Caf and Lagardère Sports, along with the inclusion of first right of refusal clauses.
In relation to agreements concerning the award of media and marketing rights, the Commission observed that agreements entered into by Caf with various broadcasters and sponsors similarly covered long periods of time, up to eight years in some instances, and contained right of first refusal clauses, adding this could affect the ability of other players to compete for the rights.
In relation to agreements relating to the award of media rights, stakeholders interviewed by the Commission raised concerns that the media rights for Caf competitions were offered as one package, which made the package too expensive and resulted in a number of broadcasters not being able to broadcast the tournaments.
The Commission said it was further concerned by the general lack of tender procedures within the Caf organisation in the award of the various rights.
The Comesa body added: “Where the Commission has identified competition concerns, it can recommend to the Board of Commissioners, which is the decision-making body of the Commission, to make the necessary orders to remedy the situation.
“The Commission has traditionally favoured a consultative approach with parties in remedying a competition harm in order to minimise disruptions to the market. In this regard, on 20th October 2017, the Commission held a meeting with the president of Caf, Mr. Ahmad, and their legal representatives, where the above matters, among others, were discussed.
“In accordance with the principles of natural justice, the Commission has made available to Caf a report setting out the key offending clauses which were identified during the course of the investigation, together with proposed remedies to address the competition harm, in order to allow Caf to submit its views.”