Football Business : Commercial partner of AFC ‘renegotiating’ the media & sponsorship rights contract

The deal between the Asian Football Confederation (AFC) and commercial partners Football Marketing Asia (FMA) was hailed as the landmark deal for the Asian football. But now the $2.4Billion dollar is up for renegotiation according to a report.

According to a report by SportsBusiness – both the parties are currently discussing the matter and is expected to involve a reduction in FMA’s financial commitments to AFC.
The report says that neither the AFC or FMA has confirmed that they are renegotiating the contract.

In a statement to SportBusiness, the AFC said, “Every world class organisation is in constant dialogue with its commercial agents at present to assess the impact of Covid-19 – the AFC is among those as we look to protect our position and that of our Member Associations.” It added, “any discussions with stakeholders are both commercially sensitive and confidential”. FMA reportedly declined to comment.

Football Business : Why AFC Commercial partners want to renegotiate the contract ?

On the face of it agency has always sounded confident of recouping rights values they have pledged to AFC. But in reality according to the rights experts FMA has a difficult proposition in hand. In the ever changing scenarios of sports rights business and now amid Covid-19 slowdown, it will be difficult for the commercial partner to recover their monies.

‘In 2018 when FMA outbid other global agencies for 2021-28 rights cycle, the scenarios were different and now they are different, it will be difficult for them even to recover 70% of what they have pledged”, one Industry expert told InsideSports.

The World Sport Group agency, which was acquired by Lagardère Sports in 2008, had managed the rights since 1993 in successive deals renewed without the rights going to market. The sales process for the 2021-28 rights attracted strong bids from the biggest rights agencies, including IMG, MP & Silva, Infront, Mediapro, and a joint bid by incumbent Lagardère Sports along with Dentsu and Perform.

FMA’s high valuation of the rights was largely predicated on the belief it could secure massive rights revenue increases from China. The Chinese media-rights market, however, even prior to the pandemic was on course for correcting after several years of overspending by leading players. And now with Covid-19 it will see substantial corrections in coming times.

Elsewhere in Asia, FMA’s media-rights sales effort has been undermined by a downturn that predates Covid-19. Premium rights-holders including the English Premier League and Uefa have suffered sharply falling prices for their properties in a trend that’s expected to continue in upcoming sales cycles.

All this put together, according to the report by Sports Business claims FMA has initiated renegotiations with AFC.

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