Things fall apart

The romance between Globacom, the telecommunications company, the Nigerian Football Federation (NFF) and the Nigeria Premier League (NPL) has soured. Glo sponsors the national football teams and the premier league.

And it appears that the telecommunications firm has badly managed its relationship with the two football authorities but don't expect them to admit it. While it seeks to operate from a position of strength in its relationship with the premier league, it is almost begging to be considered as a sponsor by the football federation.

We have to admit that Glo has become a multi-national firm and as is well documented with such firms, they are not averse to throwing their weight around. In this column, the NFF has been criticized over corporate governance challenges and the way it goes about borrowing.

They may be spendthrifts but Glo is operating as if the contracts it signed do not exist.

Controversy began two months ago over the N30 million that was paid to the chairman of Nigeria Premier League, Oyuki Obaseki, by Nigeria Football Federation which was expended for running the secretariat. NPL's scribe, Al-Hassan Yakmut, had said that "it took Globacom three months to bring the sponsorship fee and for three months, every week, we were spending like N3.5million; the board permitted the chairman to source for funds to run the league pending when the money comes."

While Yakmut was then discreet and courteous in accusing Glo of being negligent in its responsibilities, the gloves are now off. Last week, Yakmut disclosed that the telecommunications firm wants to withdraw from sponsorship of the Nigerian league, citing ‘lack of value in investment.'

The contract

Glo's current contract, which commenced during the 2006 football season at a total cost, including value in kind, of N787,350 000, has now risen to N1 bilion for the current season. Of that sum, N922,383 000 is due in cash but the NPL claims that they are yet to receive a kobo, nearly six months since the payment was due.

Yakmut explained that a meeting penultimate Monday in Lagos ended in a stalemate when Glo offered to pay just N250 million of the N922 million due for the season."They made a proposal that they wanted to pull out, and they would pro rata the cost of the league so far and pay us N250 million," Yakmut said. "But we rejected that outright, as that was not what is contained in the contract. There is a clear procedure stated in the contract for withdrawal and they have not followed that process. In the end, the meeting finally ended in a stalemate."

According to the NPL scribe, Glo has been in breach of the contract since June. "The contract states that the fee must be paid two months before the start of the season. It is now December, and they have still not paid." Yakmut also stated that Glo had informed the NPL of their intention not to renew their sponsorship of the project, which the body has accepted, but said pulling out midway is unacceptable, and the NPL would be taking the matter to arbitration.

Arbitration

NPL's account,which is yet to be controverted, calls to mind a billion pound gorilla throwing its might recklessly around. If there have been breaches, and there must be since NPL is not capable of living on the narrow and straight path, why not go for arbitration. Instead, Glo decides to declare NPL's failure to provide leverage commensurate with its huge investment as ‘force majeure.' It may well be, but it is not for Glo to be judge and jury.

It is said in law that those who come to equity must do so with clean hands. So, NPL was being paid N25m for a league academy which has not been put in place three years after the initial contract and N50 million for monthly and end of season awards -which have not yet seen the light of the day?

If braggadocio is what Glo's is using in dealing with NPL, it is being dealt with the same way by NFF. Desirous of continuing its sponsorship of the national football teams, Glo is being told, no dice. So, when the five year contract expired on December 8, 2009, NFF wasted no time in writing a ‘love letter' to the firm for being ‘‘ your partner in this laudable venture of advancing the cause of the game of football in Nigeria." Following Nigeria's qualification for South Africa 2010, the NFF wasted no time in re-branding the value of the Super Eagles to one billion naira.

Negotiations

At negotiations between the two parties, Glo upped what it would pay from N150m to N165m while NFF wanted N1 billion. "They had a right of first refusal in the contract, and we offered the property to them at N1 billion. They came back to us with N165 million, that is a 10 percent increase on the former contract," according to Idris Adama, NFF's Head of Marketing.

Yet, how can Glo offer only N15 million increase over its previous contract? What has been the annual rate of inflation for the past five years? On the other hand, apart from qualifying for South Africa, what other achievement has NFF recorded to justify the quantum leap in evaluation.

It appears the NFF has other suitors which explain why one of their officials dismissed Glo as history. NFF could afford to be brash because Glo has behaved like a sole proprietor owing here and there and trying to intimidate those it owe to silence.

Late November, Adama had announced that Globacom is owing the football body about N150 million. He explained that the telecommunications outfit had defaulted on their payment for almost a year. ‘‘The NFF board will meet on Tuesday to decide on the sponsorship fate of Globacom as they have deliberately refused to pay their annual rights fee for the past one year. The action has put the federation in very bad financial position since the beginning of 2009," Adama noted.

Glo's response

Glo's response was gung-ho. An official of the company, Modele Sarafa-Yusuf, labeled NFF as liars. "Globacom is the single highest financial corporate supporter of football at all levels in Nigeria since 2003 with over N6 billion committed to the development of the national teams and the Nigeria Premier League. We, therefore, find the recent statement from an NFF official to be in bad taste and a calculated falsehood aimed at diminishing our years of investment in football."

She claimed that Globacom had, through a letter dated May 8, 2009, paid N80 million to the Federation, representing over 50 per cent of the total sponsorship fee. Not to be cowed, the football federation shot back. "The truth is that Globacom has not paid for its right fee of sponsorship of the national teams this year. The agreement that was signed with Globacom says they can pay the amount of N150 million in two installments, in the months of February and September, not at any time of their choice within a calendar year.

"The N80 million that was referred to in their statement was originally meant for sponsorship of the Nigeria Women's League. That is the truth. We have not formally received any amount from them for the national teams," stated NFF's Musbau Kayode. Since the riposte, Glo has failed to come out with a defense.

So why is it difficult for Glo to understand the terms and conditions of the contracts it willingly entered into? Is it behaving as a behemoth which can ride roughshod over other parties?

Rafiu Ladipo, President General of Nigeria Football Supporters Club (NFSC), probably missed the point with his intervention in the dispute. He noted that despite the billions of naira spent on Nigerian football yearly, there is hardly any profit for the communication company to show for its investment. Is Glo sponsoring the events to get profit or as part of corporate social responsibility. "They are expected to get something back in return in terms of mileage from both the NFF and NPL but if that is not forthcoming, they have every reason to back out. So if they are agitating that certain clauses in the contracts have not been met, they must be listened to.

"These organisations which collect so much money from Globacom should also have the courtesy of making sure that such terms of agreement are met. Apart from benefits on the pages of newspaper, what does Globacom get from its sponsorship of Nigerian football? Apart from reports in the press, that Globacom has given so much to NFF and NPL, what does the company get? We know what other companies get in terms of publicity not only on paper".

Crawling before Globacom

This suggests that Nigerian football bodies must crawl before Glo to show appreciation. However critics ask: what does Barclays Bank get in specific terms by sponsoring the English premier league other than goodwill? And what mileage does Glo get by sponsoring NFSC?

The organization gets an annual sponsorship fee that rose to N30m in 2009 from N10m in 2004-2005. Also, what mileage does Glo get by sponsoring the annual CAF awards?

The supporters club president argued that despite its huge investment in Nigerian football, Globacom has not been benefitting from the much publicized tax rebate for companies that invest in Nigerian sports. But sources say this can not be blamed on the two football authorities, rather blame should go the Presidency that has refused to play ball. Will Glo continue its arm-twisting, or will it follow due process? Only time will tell.