In a landmark ruling that will have a huge impact on the Super League of Malawi’s future, Competition and Fair Trading Commission (CFTC) has ordered TNM to remove from the Super League sponsorship contract clauses that restrict the Super League of Malawi (Sulom) and clubs from entering into agreements with the mobile company’s competitors.
The order comes after year-long investigations on the league sponsors following complaints that they are engaged in restrictive business practices contrary to Competition and Fair Trading Act.
According to the contract between the two parties, TNM has naming, promotion and advertising rights.
The agreement also restricts Sulom from getting sponsorship, promotional, advertising or similar rights to other persons, firm, company, corporation or body involved or concerned in products and services related or similar to TNM’s.
In a letter to TNM, signed by CFTC executive director Charlotte Wezi Malonda, which Nation on Sunday has seen, the commission says clauses in the Super League sponsorship agreement have negative effect on the development of football in Malawi.
“At its 47th meeting, held on February 3 2017, the CFTC considered the case and made a determination in reference to the Competition and Fair Trading Act. In its determination, the commission established that the sponsorship agreement that TNM signed with Sulom had some clauses that were restrictive and potentially prevented Sulom and football teams participating in the Super League from accessing sponsorship from TNM’s competitors.
“The commission found that while the sponsorship agreement fore-closed football sponsorship as an advertisement platform for TNM competitors, its effect would not likely result in substantial lessening competition in the telecommunication market.
However, the sponsorship agreement was found to likely have negative effect on the development of football in Malawi.
CFTC has also ordered that when renewing the sponsorship, TNM should submit the agreement to the commission for assessment.
“The commission, therefore, orders that: TNM should follow international best practice in this sponsorship of the Super League of Malawi. In this regard, in the event that the two parties agree to renew the sponsorship, the agreement should be submitted to the CFTC for assessment of compliance with the Competition and Fair Trade Act,” reads the letter.
“The Sports Council of Malawi should consider developing guidelines for sports sponsorship, particularly football, taking into consideration best practices from other jurisdictions to prevent sponsors from taking advantage of the weak bargaining power of sponsorship recipient.”
TNM’s five-year contract expires at the end of the 2017 season and the mobile company already pleged another 10 years of sponsorship.
When contacted for comment, TNM senior manager responsible for public relations Akossa Mphepo said they would wait for the full report which Competition and Fair Trading Commission is expected to submit to them within eight days.
“The commission’s determination full report is to be out eight days from issue of this letter as you can see,” she said.
But clubs have since welcomed the determination saying it would free them from the bondage that prevented them from entering into deals with potential sponsors.
“I think this has come at an opportune time when Sulom will be negotiating the renewal of the contract.
This will help them bargain for changes to the agreement. I also support the involvement of the Malawi National Council of Sports in sponsorship negotiations. It
seems Sports Council went into a slumber and never bothered to check what was happening, yet they get a share from gate collections,” said Silver Strikers general secretary Thabo Chakaka- Nyirenda.
Sulom general secretary Williams Banda said they would comment after getting the full report.
“CFTC should highlight the articles that are not fair first. We will wait for the report. For ease of reference and also how to rephrase them,” he said.