League forced to engage lawyers on clubs funds

The standoff between StarTimes and Fufa Super League Limited (FSLL), the entity that entered the contract with the broadcast sponsors on behalf of Uganda Premier League (UPL), could be headed for arbitration.
This follows a disagreement between the involved parties on how much of the 25 per cent of the final quarter should be disbursed by the broadcast sponsors and title holders.

Background
StarTimes and the league are into the third of their 10-year contract, and of the $680m (Shs2.3bn) due in the 2019/20 season, they disbursed 75 per cent of that. The broadcasters are, however, reluctant to release the final quarter citing the final five matches that were not played after Fufa evoked article 18 of the competition rules, which addresses force majeure, to end the season.

The said article states that in times of calamity, in this case Covid-19, the team topping standings after 75 per cent of matches have been played will be declared champions and the season closed. “So according to us,” UPL CEO Bernard Bainamani explained at a Fufa-organised stakeholders breakfast meeting in Kampala this week, “The league concluded officially on May 20 and it was done within the football regulations.

“After that, we communicated to StarTimes citing the relevant football regulations (article 18) and relevant provisions (clause 3.8.7 on force majeure) in the contract between FSLL and the broadcaster.” A follow-up meeting involving the parties was held on June 25 and in the said meet, UPL made their case to get their full remaining 25 per cent disbursement.

Fufa even offered StarTimes the 2020 Super 8 and select matches in the Fufa Drum as a way of making up for their losses so that they could stick to the full 25 per cent release but that did not yield. Both parties ended up agreeing to 15 per cent, considering both had suffered losses. But there was a problem. Each party had picked a different interpretation.

UPL understood the 15 per cent to be off the annual disbursement, while StarTimes interpreted it to being off the remaining 25 per cent. Deadlock!

Subsequent deliberations saw StarTimes suggest that if it was to be off the annual, then they would be willing to release only eight per cent.

At the normal 25 per cent, each club would receive the usual Shs19m, at a compromised 15 per cent each would get Shs11m, and at StarTimes suggested eight per cent, each club would get only Shs6m, and the UPL Secretariat Shs11m.

Legal interpretation
The league lawyer, Alex Luganda, appreciated that the involved parties were engaging, but advised his clients to refer to the contract at every level of their deliberations.

“Whatever figure you agree on, which is not 25 per cent, can only be a figure for settlement, and not grounded in the contract,” he said, before cautioning against going to court in the contract’s current state.

“Should your amicable settlement fail,” added Luganda, “Laws of England will apply. FSLL and Fufa have to exploit the amendment clause within the contract to re-negotiate within the applicable law and the dispute resolution venues.
“In its current state, if you are to pursue it in court only laws of England will apply, and arbitration pushes you to Arbitration in Singapore, where laws that side apply.

“That would be more expensive than the what you want to recover. So to get out of this with our business partners, we might have to re-discuss the dispute resolution. It’s good for both parties.
“We have arbitration centres in Kampala, Nairobi and Kigali.”

Going forward
Fufa president Moses Magogo argues that while StarTimes’ suggested eight per cent mathematically passes if you consider it’s that amount of games played at the time the season was ended, the value was not just matches being broadcast.
“It also includes the commercial value. How much is the title naming rights, how much is media? Those didn’t stop,” said Magogo.

“I also would suggest that we make a proposal to our sponsors of an entire discussion going forward, where by we must also get a solution to matches that are not televised. We need to take all matches to the fans via television.”

According to StarTimes head of branding and marketing Isma Lule, “We are waiting for FSLL and UPL to get back to us. The last time we talked they had gone back to clubs to give them our stand on the eight per cent off the annual total disbursement.” The league legal team was given at least a month to sort this out with the sponsors and hopefully all will be good in time for league resumption.

STARTIMES YEARLY DISBURSEMENTS TO UPL AND THE BIG LEAGUE

2018/19 – 2021/22: $680,000 (Shs2.38bn) per season

2022/23 – 2025/26: $730,000 (Shs2.55bn) per season

2026/27 – 2027/28: $800,000 (Shs2.8bn) per season