Super League of Malawi (Sulom) claims TNM owes them K90 million 2017 season sponsorship for the flagship league despite the agreement between the two sides expiring on April 12 2017.
Sulom general secretary Williams Banda said the contract between the two sides stipulates that the renewal negotiations commence at least a year before the current one expires.
TNM and Sulom first signed an agreement running from 2006 to 2009. The contract was then extended in 2009 for three years up to 2012.
In 2012, TNM extended the contract for another five years up to 2017.
The contract signing ceremony was held in Blantyre on May 22 2012, but according to Banda the actual agreement was signed on April 12 2017.
He said: “At the time of renewing the five-year contract in 2012, we had one year left just like in 2009. It is actually in the contract that renewal should be done at least one year before the expiry of current one. In this case TNM still has one more season to sponsor, then they can pull out if they want.”
The agreement which we have seen, indeed demands that TNM and Sulom start negotiations on contract renewal at least 12 months before the expiry of the agreement.
The agreement’s clause 2.0 on duration states: “This agreement shall be effective for duration of five years commencing from the date of its execution by both parties. Provided always that TNM shall have the first pre-emptive option to sponsor the league during the subsisting term. Provided always that TNM shall give Sulom a written notice on TNM’s decision to extend [or otherwise] not later than one year prior to the expiration of the initial term.”
When contacted TNM senior manager for public relations Akossa Mphepo said they would not comment on the matter anymore.
“We are not making any comments outside of the statements at this moment. It [press statement] contains all necessary information,” she said.
Meanwhile, Sulom was meeting in Lilongwe last night to discuss the TNM decision.
“The meeting will discuss the next course of action following TNM’s decision,” said Banda.
“But we are consulting our legal advisor on the matter because even if it is contract termination TNM has not give 30-day notice as stipulated in the agreement.”
But in the statement, TNM does not mention about any obligation as regards the one year notice.
The statement signed by the company’s chief executive officer Douglas Stevenson reads: “Following the meeting on Monday, March 20th where Sulom and FAM was to get clarity on the ruling by CFTC on the future of the contract with TNM, CFTC has broadly maintained its ruling and therefore, TNM has made the decision to fully withdraw from the sponsorship of Super League and let others potential sponsors take part in the continued development of the sport in Malawi.”
Commenting on the development lawyer David Kanyenda advised that rather than pull out sponsorship, TNM should fight CFTC ruling in court.
“I have seen the sponsorship agreement and, therefore, it’s difficult to comment on the legal implications. Suffice it to say, that ordinarily a contract contains a termination clause which enables any party to discharge themselves from performing its obligations. I would like to assume that TNM are acting in exercise of such contractual rights. I wish TNM had litigated the matter in a court of law so that all soccer stakeholders gain clarity on this novel development,” he said.
However, a marketer who has worked with both Sulom and FAM described TNM’s decision as ‘chickening’.
He said: “A brand characteristic is only known in adversity. When competition hosts up, it tells you if you are strong or not. As a brand, TNM should have manoeuvred competitor aggressiveness and not quitting. Consumers always want to associate themselves with aggressive brands. But TNM are positioning as a cry-baby, yet clubs and supporters have always hinted a change in the contract.”