By Paul Nicholson
July 8 – CONCACAF have ended their representation agreement with embattled marketing agency Traffic Sports USA with immediate effect. The announcement was made on the opening day of the Gold Cup, an event that Traffic owned exclusive rights to and had sold all of the current sponsorships for.
The cancellation of the Traffic partnership will not affect the current Gold Cup or any on-going sponsorship agreements. All existing contracts are to be assigned to CONCACAF effective today.
Traffic are the Brazilian-owned sports marketing agency that was at the centre of the US Department of Justice allegations of bribery to obtain key representation contracts. Traffic’s Brazilian principal, Jose Hawilla, has pleaded guilty to US charges and has already agreed to pay a fine of $150 million.
Traffic Sports USA was funded by its Brazilian parent and had reneweed exclusive marketing rights to all CONCACAF’s events in April last year. Chief executive Aaron Davidson was arrested in Miami at the end of May but subsequently released on bail. He denies all charges against him.
Davidson had been leading the commercial marketing of the Gold Cup and the CONCACAF Champions League and had repackaged and rebranded the rights to make them more commercially attractive in the sponsorship marketplace, and the US in particular. Key to the strategy had been a switch from selling small sponsorship packages at last minute knock-down prices (a characteristic of the US sports sponsorship market), to selling more integrated, higher value, longer term sponsorships.
The strategy had not been an easy sell but sponsors were starting to recognise the repositioning of the CONCACAF brands and signs were that they were getting on board with the message. The biggest example of this was the Scotiabank deal, CONCACAF’s largest ever sponsorship.
However, with Traffic being at the centre of the corruption scandal, its ability to continue selling was severely hampered, if not non-existant. It is understood that Traffic was unable to fulfill on the contractual money guarantees that it had made to CONCACAF, forcing the bigger federations to have to step in to fund the confederation activities until funds could be released from sponsors.
CONCACAF will service the existing sponsorships through its in-house sales and marketing team. It is expected that CONCACAF will appoint a new marketing agency, a decision that will be taken by the confederation’s three-man ‘Special Committee’ made up of the presidents of the Canadian (Victor Montagliani), Mexican (Justino Compean) and US (Sunil Gulati) federations.
Soccer United Marketing (SUM), which already represents the MLS and US national federation, as well as the Mexican federation in the US, would be a favourite to pick up the business but this would immediately raise questions of a conflict of interest with its other rights representation. IMG is currently representing CONCACAF for international television rights (territories outside the member countries).
A CONCACAF statement said: “CONCACAF and Traffic Sports USA have decided to part ways and dissolve their commercial rights agreement. Nonetheless, CONCACAF remains committed to organizing and executing best-in-class competitions for our member associations, fans, players, coaches, and sponsors, including the 2015 CONCACAF Gold Cup.”
Traffic Sports USA rights included the next four editions of the biennial Gold Cup (2015, 2017, 2019, 2021), as well as the next seven seasons of the Scotiabank CONCACAF Champions League, through to the end of the 2021/22 season. All other confederation events including youth tournaments, Olympic qualifiers, Beach Soccer and Futsal came under the Traffic agreement.
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