CAF clarifies termination of $1 billion contract

The Confederation of African Football (Caf) said its $1 billion deal with Lagardere Sports was cancelled due to 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 marketing and media rights for its competitions, including the Africa Cup of Nations, the African Nations Championship and the Caf Champions League.

After several investigations, the agreement was found to be illegal, with Caf subjected to varying punishments from the Egyptian Competition Authority (ECA), the Economic Courts of Cairo (ECC), the Competition Commission of the Common Market for Eastern and Southern Africa (CCC).

The ECA declared the agreement null and void, and ordered the termination of the deal and its effect in Egypt, while the ECC imposed a fine of EGP 200 million on Caf and its former president, Issa Hayatou and former secretary-general, Hicham El Amrani.

The CCC, on his part, also recommended 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 but Lagardere condemned it as a unilateral act.

“At a meeting held today, the Confederation of African Football informed Lagardère 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.

“Lagardere strongly contests this decision, which, in its view, is unlawful, unreasonable and unjustified. Lagardère 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.

“The Caf has a responsibility to support Lagardère 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, Lagardère 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 and also revealed their invitation to Lagardere for both parties to deliberate on the next action for the fulfilment of their obligations, but they are yet to get a response from the media agency.