The contract between the Argentine Football Association (AFA) and the federal government stated that the latter should pay the former $ 600 million for the rights granted, an amount that later became $ 825 million annually due to modifications. On finance, IVECO represents the only income from private advertising; the first year it left $7 million and the amount decreased during the following years. The National Audit Office estimated that the loss on advertising not sold is between $404 and $578 million. Football for Everyone: dynamics of the unthinkable.
The data comes from the work that the General Audit Office (AGN, for its acronym in Spanish) conducted between August 2009 and December 2012. On April 15th of this year, after an intense debate during the session of the College of Auditors, they filed the research, but an annex was published of the shorthand version of that day.
Back in August 2009, the National Government gave the news that the first division soccer tournament was going to be broadcasted on network television nationwide for free. Until then the only way watch the matches was by paying for it. But how much does it cost the current management Football for Everyone?
For starters, the State "was forced to pay the AFA 50% of the amount earned by the sale of the rights granted", leaving in the Cabinet the power to "sell through it or through third parties every AFA product and advertising broadcasts."
But in this agreement "a warranty clause that assured the Association a minimum annual income of $600 million was established." From the second year, that amount would be adjusted by an index called "Basic Reference Value."
Through an amendment to the original agreement, in December 2011, "an adjustment of $ 225 million became available" and determined that "in August of the following year a new method of adjustment would be established".
In November 2013 a second change in the agreement "extended the modality period of adjustment and compensation of the previous year."
According to a report by the auditors, "no technical or parameters were set to justify $600 million.”
End of Ad Slot
It is well known that from March 2010, the program failed to receive revenue from the sale of spaces to the private sector and only remained in force IVECO and static advertising in stadiums.
This decision was taken "without the issuance of an administrative act and without the necessary contractual agreement with the AFA."
Why "necessary?" Because the contract signed by the state and the Football Association is one of "associative" character. In this regard, auditors recommend "reformulating the contract to clarify whether associative or not with the aim of profiting from the sale of advertising space or incorporate an option clause which stipulates that it is the State that has the power to commercialize or not.”
In this regard, the AGN conducted a simulation exercise calculating the income they stopped receiving and the amount "ranges between $404 and $578 million for the audited period."
So here we know that the State should pay the AFA between $ 600 million and $ 825 million, the last amount for an amendment annexed in the contract- and that the National Audit Office estimated that the loss for advertising space not sold is between $404 and $578 million. But how much money comes from the only private advertiser?
Three agreements were signed by the Cabinet with IVECO to be the sponsor of the matches of first division in 2010, 2011 and 2012. In the three years "it was agreed as payment that the Government would choose brand new cars and trucks manufactured by the company." Yes, the pay was not provided in the Procurement Regime of Public Administration."
In 2010 "$7 million were established." The following year "the amount was $9 million, but this year it was decided that $4 million would be transferred directly to the AFA, so the state received $ 5 million." Finally, in 2012, "a $6 million price was set."
The audit team stated that "it does not understand why the second payment was agreed according to the AFA if they had given the National Government the broadcasting rights."
To this it is added that "over the years the state funds were a decrease of their income" in 2011 it was around 28% less than in 2010 and in 2012 suffered a decline of 14% from the first contract.
Therefore, the report concludes that "the contractual relationship with IVECO evolved to the detriment of the economic interests of the state but has taken action to reverse the transference."
About the Contract
The reasons given for the contract was "the need to implement a model that allows everyone in the country free of charge access to the televising of football matches" and finally, "the strengthening of clubs -4200 are grouped in AFA that allow them to improve their income, for which the parties stated the need to establish transparent mechanisms for administering and facilitating institutional controls.”
On this question, the auditors said they did not show, either before or after the signing of the contract, the technical documentation to substantiate the alleged crisis of the clubs or the "likelihood of millions of dollars" owed by them to the AFA.
The auditors added that the statement in the preamble to the agreement on the need for transparency in the finances of the AFA and the clubs and the administrative and financial reorganization, "did not have a similar reflection on the part of the legal instrument." This absence "does not allow the State to monitor the result of the actions of financial restructuring and administrative reorganization of the clubs."
Football, Dynamic of the Unthinkable
That’s how he published his paper in 1967 sports journalist Dante Panzeri. He died on April 14th 1978. He was an advocate for the players and enemy of the coaches. He was a whistleblower of football business and its leaders. 37 years and one day after his death, the AGN discussed the report on Football for Everyone.