CAPE TOWN (Reuters) - African football’s ruling body has scrapped a $1 billion television and marketing rights deal with Lagardere Sports in the wake of separate judgments that it breached competition rules, but Lagardere said it would fight to enforce the contract.
The French-based company called the Confederation of African Football’s (CAF) move “unlawful, unreasonable and unjustified” and said it would defend its agreement with CAF that runs from 2017 to 2028.
It suggested that it may accept changes to the terms of the deal but that if all else fails it would seek compensation in cash.
CAF said it had no choice but to cancel the deal after two court judgments went against it.
A Cairo court ruled last November that the agreement breached “Egyptian competition rules because Lagardere was appointed as CAF’s exclusive agent for marketing and media rights for an uninterrupted 20-year period without any open tender,” CAF said in a statement on Friday.
The court fined CAF 100 million Egyptian pounds ($6.2 million).
The Competition Commission of the Common Market for Eastern and Southern Africa (CCC) had also found in 2017 that the agreement infringed competition regulations.
“Given the above developments, CAF had no choice but to terminate the agreement,” it said.
“Termination of the agreement is the legal consequence of the judgments of Egyptian courts and the recommendations and imminent decision of the CCC,” it said.
Arnaud Lagardere, managing partner at the French firm, said it would fight CAF’s move, accepting changes if necessary - or seeking cash compensation for the lost business.
“We have here a very, very strong case and we’ll do whatever it takes either to maintain the contract, deal with more changes or get a significant amount of cash,” he said in a statement to reporters on Friday.
“This is really unfair and even if I know that no one should be too candid or naïve in this business, I think we don’t deserve such a treatment.”
Lagardere Sports did not directly address the court or the CCC’s view that its agreement breached competition regulations.
Lagardere has been involved in television production of CAF events for almost two decades.
Broadcasters said planned coverage of next week’s Africa Cup of Nations qualifiers, which Lagardere was responsible for, had been cancelled. Such cancellations have occurred previously, although usually for logistical reasons.
($1 = 16.0900 Egyptian pounds)
Reporting by Mark Gleeson; Editing by Hugh Lawson