Competitions and Fair Trading Commission (CFTC) says the contract which Super League of Malawi (Sulom) signed with mobile service provider TNM Limited to sponsor Super League is bad for the development of football in the country.
In a statement released on Wednesday, the commission said the deal between the two sides would not likely result in substantial lessening of competition in the telecommunication market.
According to CFTC, TNM and Sulom contract restricts any competitor from sponsoring, promoting, advertising or have similar associated with the sponsorship.
The commission noted that exclusive rights are embodied in various clauses of the sponsorship agreement including:
Clause 10.1:No other person, firm, company, corporation or other body involved or concerned in the operation, sale or distribution of products and services related or similar to TNM’ products and services, shall be allowed to sponsor, promote, advertise or have similar rights associated with the sponsorship.
Clause10.2: Prevent and discourage fans, club members, attendees and spectators at all Super League matches from displaying banners, placards, or other materials bearing the trademark, name or identifier of competitors of TNM.
Clause 10.3: Ensure that where matches are held in a stadium or arena where the advertising and promotional materials of competitors are on display, to have such competitors advertising and promotional material covered and/or concealed for the entire duration of the match.
Clause 10.5: That no competitor products such as airtime of other competitor products are sold at match venues. Prohibit any person vending wares in and around the stadia from wearing competitor bibs, T-shirts or any advertising apparel.
The commission says the contract conditions imposed by TNM were too restrictive.
The remarks follows TNM’s decision to suspend Super League sponsorship followed CFTC’s investigations against the company’s alleged anti-competitive business practice in the said contract exhibited a departure from international best practices.
The commission then gave an example of English Premier League, Football Leagues in South Africa and Zimbabwe where competitors co-exist in the same league whether through sponsorship of a specific component or through team sponsorship.
“The commission found that the restrictions on access to football sponsorship that the agreement imposes on football teams and overarching nature of the restrictions would likely have negative effects on football development in Malawi.
“The commission then has ordered TNM Limited to follow international best practices in its sponsorship of the Super League.
“In the event that the two parties agree to renew the sponsorship, the commission has advised TNM and Sulom to submit the agreement to CFTC for assessment compliance with Competition and Fair Trading Act,” reads part of the statement.
CFTC has further advised the Sports Council of Malawi to consider developing guidelines for sports sponsorship in order to prevent sponsors from taking advantage of the weak bargaining power of sponsorship recipient
Meanwhile, Football Association of Malawi (FAM) is set to engage both parties into talks this week.
The 2017 season was scheduled to kickoff on 8th April but with TNM suspending its funding, Sulom had no choice but to shift the kickoff date to a later date.