FEF wants $100m guarantee to cover GolTV legal action
The FEF, the Ecuadorian soccer federation, is requesting a guarantee of around $100 million from the company that wins the rights to the top-tier Serie A as a contingency to cover compensation for GolTV, whose previous contract has been declared void, if the Latin American cable and satellite broadcaster pursues a successful legal challenge.
The federation has reluctantly relaunched the bidding process for the rights, after two courts overturned the 10-year, $276-million deal with GolTV, the company headed up by Paco Casal, the renowned Uruguayan player agent.
GolTV is not expected to participate in the new invitation to tender, and Casal could appeal to the Court of Arbitration for Sport against the recent rulings.
The FEF has set the minimum bid for the rights at $25 million per year, with the fee to increase by 5 per cent annually, and with 50 per cent of the value of the deal to be paid at the time of signing, and the other half in nine equal instalments, to be paid until December of each year, in the first 10 days of each month, according to Ecuadorian newspaper El Comercio.
In addition, the federation has stipulated that it would receive 75 per cent of the surplus value of the final contract, to be distributed among the clubs.
This was also laid down in the agreement finalised with GolTV last June, which has been revoked in a Guayaquil judge’s ruling subsequently upheld by the Provincial Court of Guayas late last month.
FEF president Carlos Villacís has insisted that the resolution ordering a new tender was “unlawful and illegal.”
The rules for the new process, which were presented at a meeting of the FEF and Serie A and Serie B clubs on Wednesday, are also said to call for bank guarantees of more than $94 million as an indemnity for GolTV.
Nassib Neme, the president of Serie A outfit Emelec, told the El Universo newspaper: “The rules establish guarantees that provide for the secure collection of any legal contingency that may affect the economy of the Ecuadorian clubs and football.”
The publication also cited a clause in the invitation to tender document that reads: “This guarantee cannot be less than $100 million due to the fine established in the aforementioned contract (with GolTV) for damages and other items that may be determined by the Court of Arbitration for Sport (with headquarters in Lausanne, Switzerland), to which the aforementioned contract is subject.”
On GolTV’s stance, Neme said: “We have talked with them because until a few days ago they were the owners of the television rights, and we understand that they will not participate in the contest, which potentially increases the possibility that there is a lawsuit against the clubs and the Ecuadorian Football Federation.”
However, on the other hand, Jaime Estrada, the president of Serie B club Manta, has claimed that GolTV missed a deadline of 10 January to provide guarantees stipulated in its agreement, and that the FEF was therefore within its rights to terminate the contract unilaterally and without legal recourse.
The deal with GolTV was subject to criticism and legal challenges, notably from Abdalá Bucaram Pulley, a politician and former soccer player, because of an alleged lack of transparency and good business practice.
However, Villacís recently defended the process, saying that national football had been “revalued for the benefit of the clubs. It is good that there were offers that reached $30 million or $40 million per year. The achievement was that our championship was given a value that before was never thought or imagined.”
The suspension of the GolTV deal forced the FEF to take contingency measures for TV coverage of the top division at the start of the 2018 season, with some games shown by cable groups CNT and Asocope and on free-to-air channels including Teleamazonas and TVC.