Nsejjere sports wear deals go sour

The US-based sports merchandise suppliers Nsejjere Sports and Casual Wear’s contract battle with Silver Strikers, Mighty Wanderers, Big Bullets and Escom United over the engagement of Kings Marketing Agency as distributors of their branded merchandise seems no where near an end.

Now, Nsejjere and the Nomads lie tangled in a fresh twist. The suppliers’ country director Jacob Chikoya and the teams’ officials confirmed the development during the week.

In the deal, Nsejjere supplied Bullets with 539 T-Shirts, 10 160 hats and 513 scarves. Mighty Wanderers were allocated 413 T-shirts, 834 hats and 569 scarves. Escom received 639 jerseys, 1 060 caps and 514 scarves whereas Silver got 500 T-Shirts, 999 hats and 600 scarves.

Nsejjere has been accusing Bullets, Wanderers and Escom of poor sales resulting from failure to market the merchandise and Wanderers have written the supplier, distancing themselves from the contract.

Deal fall-out

Now Nsejjere are threatening to meet the Nomads in court for pulling out of the contract, a development the team has since tackled with ease, saying the supplier executed an agreement with an entity called MTL Wanderers Football Club, which is no longer a going concern.

Whereas the clubs have it that the supplier breached an initial deal that ought to have let them market and distribute their replica merchandise, Nsejjere say they were moved into the idea following lessons from their contract with Silver Strikers.

Whereas Silver have managed to sell their consignment, Wanderers and Bullets are yet to make a headway and they have come under fire from various quarters for failing to market theirs.

Whereas Silver were allowed to market and distribute the merchandise, Nsejjere engaged Kings Marketing Agency to do the marketing and distribution of the products for the other clubs, an arrangement which irked both Wanders and Bullets who argue that it is not in line with the contract.

Breached of contract

Wanderers general secretary David Kanyenda, in a letter which Weekend Nation sourced, expressed the team’s stand: “We are repudiating the contract in its entirety and we have made that known to them. They breached the contract first by engaging third parties in the sale and distribution of the merchandise.

“The provision in the contract was that we would handle the sales. We were supposed to have custody of the merchandise, [but] instead they engaged a third party.”

Chikoya, however, said: “It seems they (Wanderers) do not understand the enormity of their actions.

“First and foremost, we will not rest until the absolute minimum annual retribution to Nsejjere Sports is met by the club (Wanderers FC).

“In this case, the club’s ‘binding obligation’ is 20 000 shirts ($200 000 annually plus adjustment for inflation) over the term of the contract. In other words, a total of $1 400 000 (about K350 000 000) over a seven-year contract plus the opportunity costs.”

But Kanyenda maintains Nsejjere will not score past the Nomads on this.

“Further, it appears the agreement was executed between yourself and an entity called MTL Wanderers Football Club, which is no longer a going concern to the best of our knowledge.

“Assuming we were wrong and indeed the agreement was duly executed, our position is as follows: Under special exemption clause, yourself were obliged in the addition to two free- customised uniforms annually to provide without a down payment; 500 T-shirts, 500 hats, 500 scarves and 500 flags, yet you failed,” Wanderers argue in a letter dated June 15 2012 to Nsejjere director Isaac Nsejjere.

Legal implications

But Nsejjere insists they are not in breach of the contract and have reacted by warning Wanderers of legal implications if they do not reconsider their decision.

“The problem is that Wanderers are reading the contract in parts, not as a whole. They are omitting some sections deliberately,” said Chikoya.

He said the fact that Nsejjere holds custody of the products does not imply lack of fulfilling the special exemption.

Nsejjere gave Wanderers up to June 22 to reconsider their position of pulling out of the deal or risk being dragged to court.

“Nsejjere will continue to hold custody of the branded products. If it accepts the club’s apology and reinstatement, which must be countersigned, then it will sell the products and share the revenue as stipulated in the contract,” Chikoya insisted.

He advised clubs to be vigilant in their marketing approach if they are to make the most of the deal.

Bullets, too, say they are not happy with the involvement of the third party, but unlike the Nomads, they are still negotiating with Nsejjere.

Negative effects

The People’s Team say Nsejjere’s idea of engaging an agent contravenes the initial contract and it also has negative effects on sales of the merchandise.

“It makes it difficult for us to do the marketing since the products are in the hands of a third party. We have a clubhouse and distributors who could have done the job efficiently,” said Bullets chairperson Malinda Chinyama.

But Chikoya said they decided to engage Kings Marketing Agency because they learnt lessons from the earlier arrangement with Silver Strikers which allegedly saw some agents employed by Silver failing to remit money realised from the sales to the club.

“Up to now, we are yet to get all the money that Silver owe us. They told us they had sold all the 500 replica shirts, but we are yet to get our dues. This forced us to use our own agents,” said Chikoya.

Silver chairperson Dr McDonald Mafuta-Mwale said it is true they had sold the first consignment of shirts and that they remitted some money to Nsejjere.

“It has been a year and we made over K3 million (about $12 000), but people entrusted with the sales of the products are yet to remit some money to us. We believe the deal has been worth it,” said Mafuta-Mwale.

He, however, said the future of the deal is uncertain until more negotiations are done.

“We cannot say at the moment that we are committing ourselves to the deal until some of the differences are sorted out by Nsejjere and Sulom,” said Mafuta-Mwale.

Escom officials could not be reached for comment on the issues.