Home Editor's Picks HOW LAGARDERE SPORTS BRIBED ITS WAY OUT OF A LUCRATIVE CAF CONTRACT

HOW LAGARDERE SPORTS BRIBED ITS WAY OUT OF A LUCRATIVE CAF CONTRACT

by admin

In our earlier articles, we have called the imminent departure of Lagadere Sports & Entertainment agency from CAF, quite correctly.

Surely the signs have been there from the moment that FIFA lied to the World that the only way to save African football from itself was by taking it over and micromanaging it, because honestly, that’s what you would do with a hapless African organization whose leadership have their heads so far up their back-sides that they are unable to make rational decisions on behalf of the organization that they were elected to do precisely that for.

It was very important too, for FIFA to push through and sell false narrative that the Lagadere contract was poorly negotiated from the beginning (by the Hayatou administration) and therefore bad for African football, in order to try and obfuscate the fact that CAF President Ahmad Ahmad and his Finance Committee Chairman and Morocco FA President Fouzi Lekjaa had made a huge dent into the over $150 million left behind by Issa Hayatou at the time of his departure in March 2017.

This narrative has been in the off-ing for quite some time now, and is used liberally to justify the dwindling financial fortunes at CAF including the shocking 2019 $6million deficit announced nonchalantly by Lekjaa during the Ordinary General Assembly of CAF in Cairo in July.

CAF revenues lie squarely in the hands of Lagadere Sports & Entertainment who have an exclusive 12-year agreement with CAF commencing 2016 and expected to run all the way to 2028.

The contract sets out consideration to CAF at the rate of $ 1 Billion (a billion dollars) over the term of the contract with the additional option of a revenue share on the “profits” generated by the contract.

Lagadere Sports & Entertainment also makes money from a standard commission agreed with CAF on the contract,  likely a commission too on the onward selling the broadcast and commercial rights to all the CAF events and further by working as the chief agency for the partners that come on board.

Agreeably, there may have been a case for the renegotiation of the “consideration clauses” of the CAF – Lagadere contract, to expand the revenue base and more specifically to align the contract with the newest political decisions taken by the CAF Exco and Congress in 2017.

These decisions, hurriedly shoved down the throats of CAF members, included the expansion of the flagship CAF event – the Africa Cup of Nations (AFCON) – from a 16 team to a 24-team football showcase overnight.

Similar expansion was accorded to the CAF continental showpieces, the CAF Champions League and Confederations Cup.

The organization of these football showpieces meant a commensurate increase in organizational budgets and elsewhere, extreme infrastructural pressure on the countries that wish to host the tournament, especially the AFCON.

Currently, none of the next 3 designated hosts for the next three (3) AFCONs namely Cameroon, Ivory Coast and Guinea (2021, 2023 and 2025 respectively) are remotely anywhere near ready with the required infrastructure to host the expanded AFCON.

We understand that at the CAF Exco meeting in Morocco 2017 that approved these radical proposals, no one thought it prudent to place the financial projections for the expected impact of the expansions to the members, who themselves became caught up in the political excitement of the time (especially the overthrow of Issa Hayatou in March 2017) and thus approved the changes.

This has become a defining component of the Ahmad era, where no one seems to bother crunching the numbers before taking outlandish political decisions.

For instance, the same CAF Exco approved a further subvention of $100,000 for each of the 54 FAs on the continent where $20,000 was to be paid as a bribe to each of the FA Presidents and sent to each of their individual bank accounts.

In the fullness of time, we have come to discover that these $20,000 bribes were meant to specifically buy the silence of African FA Presidents, when issues to do with the spending of CAF money would come up in the future.

FA Presidents were then ALL stuffed into the various standing committees of CAF in order to earn more allowances and bonuses, and further entrench them in the massive complicity and cover-up concocted by Ahmad and Lekjaa.

It was the reason why there wasn’t a pip when Lekjaa confidently urinated on the CAF statutes by presenting the accounts at the General Assembly in July via a PowerPoint presentation, and neglected to circulate audited draft accounts to members at least 30 days before the General Assembly as stipulated in the CAF statutes.

To understand Lagadere Sports and Entertainment, you would need to go back to the 2003 death of its founder Jean-Luc Lagardère and the succession of his son and current Chairman Arnaud Lagardère who transformed part of the business by refocusing it into media and entertainment.

Jean-Luc Lagadere, the Patriarch of the Lagadere family.

A holder of a higher degree (Master) in economics from Paris Dauphine University, Arnaud Lagardère joined the Lagardère Group in 1986.

Today, Lagardère Group is driven primarily by publishing and sports media. In the Sports media realm, Arnaud brought together various separate agencies (Sportfive, World Sport Group, IEC in Sports, Sports Marketing and Management and Lagardère Unlimited Inc.) under one banner in 2015.

Lagardère Sports and Entertainment (LSE) deal in six business activities: content production and broadcast rights management, marketing rights and associated products, event production and management, talent representation, venue management and consulting, and management of sports academies and front-ranking sports clubs.

LSE owns the various rights to the WTA Finals and operates the Casino de Paris.

Current Chairman and owner, media mogul Arnaud Lagadere.

Among notable clients are the International Olympic Committee, Asian Football Confederation (AFC), Confédération Africaine de Football (CAF), Commonwealth Games, over 70 European football clubs, over 50 golf players (including Phil Mickelson) and over 50 tennis players (including Caroline Wozniacki).

Why then would an organization of this massive stature adopt such a blasé attitude in its dealings with the CAF leaders and the organization?

How have its CEO ‎Ugo Valensi (who took over from Andrew Goergiou in June this year) and Africa head Idriss Akki handled the political transition and addressed the concerns raised by CAF about an ill-negotiated contract that commenced in 2016 and expected to run all the way to 2028.

LSE CEO Ugo Valensi, on whose watch they have lost the CAF contract.

There was an initial meeting held in Paris on 25th July 2018 between CAF and LSE to discuss the pertinent issue of this contract with a view to making various amendments to it.

In a letter written to Africa head of LSE Idriss Akki by CAF on 5th October 2018, he was requested to facilitate a meeting between the two parties on the 1st and 2nd November 2018 to firm up on the initial discussions regarding the contract.

LSE Africa CEO Idriss Akki.

The letter indicated that the CAF party would be led by 2nd VP Constant Omari and include 3rd VP Fouzi Lekjaa along with Egypt FAs Hany Abu Rida. These 3 members of the CAF Exco would be accompanied by secretariat employees Amr Fahmy (SG), Achta Mahamatt Saleh (Director of Legal) and Abdel Bah (Director of Marketing and TV).

CAF flagged some of the issues it wanted to discuss and finalize at this meeting to include (but not limited to)

  • The reduction on the duration of the contract
  • Reacquisition of the terrestrial TV rights for Sub-Saharan Africa
  • Increase in the minimum guarantee ($1billion) due to expansion of competitions
  • Exploitation of digital and new media
  • A new CAF website
  • A bank guarantee by LSE to cover the new minimum guarantee
  • Review the agency commission paid to LSE
  • To agree on the terrestrial TV rights for North Africa.

Clearly a lot of ground had been covered in the July meeting between CAF and LSE and the proposed 2nd meeting would concretize the various elements into something that both parties could sign off on.

What baffles many observers is the fact that this 2nd meeting never took place and these discussion were never raised again.

We have asked here often, why elected leaders of CAF allowed for these critical discussions to dissipate, knowing how badly CAF needed the cash injection due to the political decisions made without reference to budgets.

The next thing we all saw was LSE Africa boss Idriss Akki hobnobbing with Ahmad, Hany Abo Rida and new CAF SG Mouad Hajji at the Umrah during Ramadhan in Saudi Arabia.

Akki appears to have adopted the very short-term strategy of appeasement of successive CAF leaders to maintain the status quo. He did it with Issa Hayatou, who apparently enjoyed adequate autonomy to run CAF as he pleased and we see him attempt to do the same with Ahmad, who now firmly a marionette of FIFA President Infantino.

The infamous Umrah photo with Ahmad, Abo Rida, Akki and Mouad Hajji in Saudi Arabia.

What we find most worrying is that Idriss Akki, a Moroccan National may have been lulled into a false sense of security by his countrymen Fouzi Lekjaa and SG Mouad Hajji that they had everything under control,  which could not have been further from the truth.

The only explanation that makes sense now is that LSE may have compromised the trio of Constant Omari, Fouzi Lekjaa and Hany Abo Rida to ease the pressure on the renegotiation. The three subsequently went dead quiet and hardly brought up the issue again in public, nor was the matter discussed at the Exco meetings thereafter.

Trio Of Thieves: Constant Omari, Fouzi Lekjaa and Hany Abourida were brined by Idriss Akki to ease pressure on restructuring of the Lagardere contract.

Ahmad threw Idriss Akki and LSE squarely under the bus two weeks ago, when CAF wrote to LSE informing them of the unilateral termination of the CAF-LSE commercial agreement.

On 5th November 2019, LSE sent out a press communique contesting the unilateral decision by CAF to terminate their commercial agreement. LSE considered this move by CAF to be illegal, abusive and unjust, and went on to invite CAF to reconsider their decision and allow for an amicable resolution to their impasse.

The latter part of the statement was ominous in that, LSE promised to do everything in its power to protect its rights and if unable to retain these rights, would seek to get the fullest compensation allowable from CAF.

On 8th November 2019, CAF hit back with a statement of their own in response to the one by LSE.

CAF gave a long-winded story about how the Egyptian Competition Authority had found that the agreement breached anti-competition rules in Egypt for having been granted to LSE for a 20-year period without an open tender, thereby rendering the agreement void.

Issa Hayatou and his SG Hicham El Amrani.

Further, CAF attempted to say, that the Economic Court of Cairo had found the former President of CAF Issa HAYATOU and SG Hicham El Amrani, who both signed the agreement, guilty of anti-competitive and fraudulent conduct, thereby imposing a fine of Egyptian Pounds 500 million (later reduced to EGP 200 Million).

The fines bound CAF, which has always been domiciled in Egypt, to being jointly liable with the two gentlemen.

According to CAF, the coup de grâce was the ruling of the competition commission of COMESA, which found that the agreement infringed on their competition rules.

All these rulings were based on the appeals for arbitration by Egyptian media company – Presentation Sports – which had lost out to LSE during the bidding for the 12-year cycle in 2016.

Presentation Sports had apparently made CAF an offer for a minimum guaranteed sum of $1.2 Billion but it was rebuffed in favor of the lower offer by LSE. Rumors were rife that the reason could only have been that Hayatou’s son was the CEO of LSE subsidiary Sport Five and thus nepotism played a crucial part in the decision to award LSE the contract.

Aggrieved party; Presentation Sports of Egypt who filed the suits against CAF.

FIFA (now disguised as CAF) therefore claim that they felt that they had no option but to terminate the agreement.

Obviously this will raise very many legal questions about jurisdiction and conflict resolution mechanisms agreed upon by the parties within the contract.

It will be impossible to compel LSE to be bound by Egyptian law now for the convenience of losing out on the contract, nor to seek resolution anywhere else rather than as set out in the agreement.

We insist that the writing had been on the wall all along and the fact that Idriss Akki did not see the impending scenario, makes him a very poor judge of character.

Immediately this information found its way out, pushback commenced. Pan African PayTv broadcaster Supersport immediately withdrew from televising both the on-going AFCON 2021 Qualifiers but also the Under-23 AFCON cum Olympic qualifiers currently taking place in Egypt.

Supersport reach covers the entire Sub-Saharan Africa, while the North African territory is served by Qatari behemoth BeIN sports.

Cynics believe that Supersport wish to use this opportunity to get out of a low-value contract and negotiate a much lower one, in which case both CAF and FIFA would have shot themselves in the foot.

Other pundits believe that a play is being made here to have Chinese Wanda Group or Dalian Wanda, waltz in and take over the entire contract, including paying off LSE so as to pave way for more proactive outfit.

Dalian Wanda Group expected to make a play for the Lagadere contract with CAF.

This 2nd course of action, if true, has the hallmarks of Infantinos’ attempted foray in selling off FIFA rights and historical archives to Japanese fund SoftBank, in whose belly lies the Saudi Sovereign fund.

We saw the shrewd maneuver in August when FIFA SG Fatma Samoura took over at CAF as General Delegate, and her first order of business was to have the hapless African FA Presidents sign over all their broadcast and commercial rights to the World Cup qualifiers until 2023, to FIFA which they did within 7 days.

In the meantime, FIFA continues to delay the commencement of the CAS arbitration in the case filed by Liberian Musa Hassan Bility, and behind the scenes make critical moves that would be very hard to reverse even if Bility ultimately wins the arbitration.

The beauty of this hostile takeover is that whenever and whichever way the dust finally settles, no one will be where they were when it all began, and certainly not many of them will be where they imagine they would be…

 

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