Super League clubs have urged Sulom and FAM to renegotiate the TNM sponsorship deal to have a devaluation clause to facilitate the increase of the sponsorship when the kwacha falls.
Teams feel the K65 million (about $1.6m) annual sponsorship, which was unveiled last year, is on the lower side considering the current economic climate following the depreciation of the kwacha.
When TNM announced the new package on May 22 last year, the kwacha was trading at K265 against a dollar meaning the sponsorship was at $245 283.
As of Friday, one dollar was equivalent to K400 which translates $245 283 to K98 million, the amount the sponsorship for this season should have been if the devaluation clause was in the contract.
However, the league is slated to kick off this month end at the same K65 million which at the current money value is K33 million or 50 percent less than the actual sponsorship deal as announced in May last year.
Clubs which attended a stakeholders meeting with Sulom and FAM on Monday feel this is a raw deal, hence the need to review the deal before the season starts.
“Delegates, however, expressed worry over the economic woes the country is going through including devaluation of the kwacha. They indicated that with the fall in the value of the currency, the purchasing power of the money has therefore gone down.
“To this effect, they requested FAM and Sulom to approach TNM and renegotiate the league’s sponsorship package. They pleaded with TNM to offer a listening ear as they have done before. Delegates requested Sulom and FAM to come back with a reply from TNM before the kickoff of the season,” reads the minutes sourced byNation on Sunday.
Mighty Wanderers general secretary David Kanyenda, who attended the meeting, confirmed the clubs’ concern.
“We play 28 games in about eight months and we spend about K30 million plus yet at the end of the day the champions take home is K9 million (about $22 500).
“If TNM cannot increase the funding then Sulom may negotiate to incorporate co-sponsors. That is why last year we complained that teams were not involved in negotiating the deal,” said Kanyenda.
Big Bullets general secretary Higger Mkandawire also said it is a loss to be participating in a league whose sponsorship is now halfed due to devaluation.
“It is simple mathematics, the sponsorship is down by half. The league should be rewarding to the teams and most importantly to the players. Sulom should go back to TNM and present our case so that the deal becomes a win-win situation,” said Mkandawire.
Need for review the package
Azam Tigers general secretary Geoffrey Kachale suggested the need to review the package every season.
“As it stands in the [current] contract, the league will remain at K65 million (about $162 500) every season up to 2017. The kwacha will continue depreciating, so the sponsorship will be going down every year in value terms until we start operating on minus zero if things do not change,” said Kachale.
Sulom general secretary Williams Banda, who also attended the meeting, could not be reached, but president Innocent Bottomani said they will consider the teams’ grievances.
“I was not at the meeting, but once I am briefed we will look at the way forward. We understand the teams’ concerns, they are genuine.
“But we have to consider a number of issues like TNM as a company are also affected by the tough economic situations.
“They also buy uniforms, balls and a lot of merchandise and it already means they will buy at higher price this year which will make the sponsorship shoot from K65 million. We will present the clubs’ concerns to the sponsors,” he said.
TNM’s sponsorship and public relations and sponsorship manager Wilma Chalulu had not responded to our questionaire at the time of going to press, but during the prize presentation ceremony held in Lilongwe last month, the company’s chief commercial officer Charles Kamoto claimed that they pumped in more than K65 million official sponsorship in the just ended season.
“The sponsorship is pegged at K65 million a season, but the rising cost of goods and services made us spend more than that to ensure that quality and standards of the league were not compromised,” said Kamoto.