The IAAF has renegotiated parts of the controversial 10-year marketing and media rights partnership agreed by its former president Lamine Diack with Japanese marketing agency Dentsu.
The original deal, from 2020-29, was agreed by Diack in September 2014, shortly before he left the organisation. The former president acted unilaterally, and the deal was signed without an open tender process. The contract has been referenced in a French investigation into the organisation.
Now it has emerged the new leadership at the governing body, mandated by the IAAF Council, renegotiated the deal in 2018. The changes are thought to relate to the profit share mechanism, costs and the level of collaboration between the agency and the rights-holder in the contract. No further details of the renegotiation have come to light.
SportBusiness has seen a copy of the original 2020-29 contract signed by Diack and a written exchange between the IAAF’s lawyer, Régis Bergonzi, and Renaud Van Ruymbeke, the French judge investigating the former president. In the exchange, Bergonzi admits that the agreement included “unusual provisions” that were not standard market practice.
The lawyer complained that the lack of an audit right in the rights buyout deal prevented the IAAF from examining the way Dentsu shared profits with the governing body and assigned its rights. “The IAAF is not authorised to carry out an audit of Dentsu for any reason whatsoever, neither on the calculation and the payments of sums which are due to it, nor on the authorisation of its rights of ownership to its intellectual property,” he wrote.
Bergonzi suspected that the lack of an audit right, and the lack of clarity about the allocation of the rights, were being exploited by others to siphon profits away from the organisation.
“Dentsu has, on several occasions, assigned its rights to third parties,” he wrote. “This could mean that these corporate strata have in turn taken significant shares of the profits from the rights granted.”
Yesterday Reuters revealed French investigators signed a legal assistance request in May 2018 calling on Swiss authorities to raid Athletic Management Services (AMS), the Lucerne-based agency made up of International Sport and Leisure (ISL) alumni mandated by the IAAF to co-manage the federation’s marketing and media rights. The investigators wanted to question the agency’s executives and also seize contracts between Dentsu and AMS, and AMS and Pamodzi Consulting (PMD), the company run by the former president’s son Papa Massata Diack. Contracts pertaining to five sponsorship and broadcast deals are also reportedly of interest.
French investigators have not accused AMS, or Dentsu, of any wrongdoing but allege that AMS played a “central and essential role in the process” that diverted sponsorship and media funds to Papa Massata Diack the controversial son of Lamine Diack.
SportBusiness has gained a copy of the IAAF’s two 10-year marketing and media rights agreements with Dentsu from 2010-19 and 2020-29. To read our analysis of the deals, click here.