Premier Soccer League Commission: Further input

SPORT AND RECREATION PORTFOLIO COMMITTEE
20 November 2007
PREMIER SOCCER LEAGUE COMMISSION: FURTHER INPUT

Chairperson: Mr B Komphela (ANC)

Documents handed out:
Various minutes and letters presented by Mr Comitis (email [email protected])
Comitis letters to PSL CEO Oct/Nov 2007
Minutes of the BGM held on 11 November 2006

Audio recording of meeting

SUMMARY
Premier Soccer League Executive Committee member, Mr John Comitis, presented his side of the PSL commission saga. He sketched the background to the decision by the Premier Soccer League to award members of its negotiating team a 10% commission on the sponsorship given to the League by ABSA. He felt that commission had not been properly debated within the League structures. He said he could not stay silent while money meant for football went to the pockets of certain individuals. There was also uncertainty over the status of the contract awarded to Diversity Management, the PSL's marketing agents, which had been a part of the negotiations.

Dr Irvin Khoza, PSL Chairperson, presented the League’s point of view. He produced documentation which indicated that all Executive members of the League had been aware of the principle of granting the commission even though some of the details of the award still had to be finalised.

Mr Jomo Sono, Jomo Cosmos owner-coach, said he recognised the need to have outspoken people like Mr Comitis in any organisation. While he requested that he not go to the press again, he also expressed a wish that Mr Comitis not be victimised in future. He said that the focus should be on football and the national side. It was important that issues of money be resolved and put aside so that the administrators could get on with the job of running the sport.

The delegates were reminded of the provisions of the Sport and Recreation Amendment Act, which allowed for government intervention in the case of bad governance of any sporting federation. The Committee did not want to take sides, and was satisfied that both sides of the story had been heard. The debate ended with Komphela telling the soccer bosses that the Minister of Sport would intervene for the sake of the sport if they did sort out the matter and lay it to rest as soon as possible.
 
MINUTES
The Chairperson said that Parliament found itself in a very uncomfortable situation. They had thought the matter regarding the payment of commission on sponsorship deals to certain officials of the Premier Soccer League (PSL) was closed. The PSL had come to Parliament on 6 November to state its case. On the same day the Committee had received a letter from Mr John Comitis, Chief Executive Officer: Ajax and Premier Soccer League Executive Committee member who serves on the PSL's sponsorship committee. The Chairperson’s name had been used. Apparently a member of the Committee had spoken to Mr Comitis. If this were the case, then the Speaker of the National Assembly would take action, as the integrity of Parliament was at stake. However, authority over the PSL rested with the South African Football Association (SAFA). The Committee would never take sides, but it was a matter of national interest.

In 1993 the Pickard Commission had been appointed by President Mandela to inquire into the financial affairs of SAFA and the then National Soccer League (NSL), and other related matters. The Cabinet had instituted the commission, and the report was adopted by Parliament. President Mandela had asked the then Minister, Mr Steve Tshwete, to investigate why things were not happening in the leadership of the NSL.

He said that the ANC Members had held a study group on the current issue. General Bantu Holomisa (UDM) had raised some points, but the Committee’s policy would not be determined by the UDM.

The Chairperson said that if Mr Comitis wrote to the Chairperson, he would respond and refer it to the Committee. His concern had never being discussed at the Committee. He had sent an SMS to Dr Irvin Khoza (Chairperson, PSL) and to Mr Jomo Sono (owner of Jomo Cosmos FC). Neither had responded, but Mr Butityi Konki knew where the PSL AGM meeting was being held. Mr Komphela asked Mr Konki to deliver a message that the Committee had drafted a letter of concern over the matter. They had thought that the matter was already decided, but the Committee did not know that there were two sides to the story. He had not said that the meeting must be stopped. Mr Comitis had a right to correspond with Parliament in terms of Rule 138. The matter had been blown out of context.

Mr D Dikgacwi (ANC) pointed out that the presidential commission into SAFA and NSL affairs had in fact been instituted in 1996.

The Chairperson said that the Committee would hear what Mr Comitis had said. The delegation was attending in good faith. It was not its intention to ostracise others, and he would apologise if that was the case.

Mr John Comitis (Executive Member, PSL) thanked the Committee for the opportunity to follow-up on his letter. He wished to clear up any procedural misunderstandings. He accepted the apology, and said that he had not intended to challenge the integrity of Parliament. He confirmed there was another side to the story. He had not been given a chance to join the PSL delegation which had visited Parliament on 6 November. It was not an easy ride to face his colleagues as they differed on some matters.

He said this was not a personal attack, but his objections were based on principles and the PSL constitution. The financial position of the league had been improved by sponsorship deals with ABSA, SuperSport and Telkom. This was a job well done, and had been pioneered by the Chairperson backed by his Executive.

Mr Comitis sketched some background detail. He had been born in the Democratic Republic of the Congo and came to South Africa in 1974. In 1980 he had become a professional player. He had joined Witwatersrand University and later played for Cosmos before going to Europe for two seasons. He had returned to the country, playing for Hellenic and Cape Town Spurs. He had engaged in some business ventures in the fast food industry, and had eventually purchased Cape Town Spurs. This made him an administrator. One of his achievements was being part of the Ajax Academy which had been created in cooperation with the Dutch parent club. He had enjoyed some benefits. He had served on the PSL Executive, and was currently serving his third term.

He said that the television rights deal was a milestone achievement, but recently he had begun to feel troubled about what was unfolding. The PSL was administered by a Chairperson, Chief Executive Officer (CEO) and a Board of Governors. These were directors and representatives of clubs, and were not elected.

During 2001 there was a report that a resolution had been passed that persons raising sponsorships would receive 10% of the value as a commission. There was disagreement over this. His father, Mr M Comitis, had attended a Special Board of Governors meeting on 6 November 2001. In a sponsorship report, Dr Khoza had said that it was not easy to get sponsorship, however he had been able to negotiate a R30 million sponsorship from Vodacom. At this stage he was representing Orlando Pirates on the Board, and was not an elected member. The meeting had applauded Dr Khoza’s efforts, and had decided that he should be given a suitable gift. The normal commission of 10% was given, although this was not stipulated at the meeting. At that stage the PSL was technically bankrupt. Going into 2002 there had been negotiations with the South African Broadcasting Corporation (SABC) about television rights. He had been one of the Board members mandated to deal with the SABC.

Mr C Frolick (ANC) said that the Committee needed a copy of the presentation. It was difficult to follow a verbal argument. At the 6 November 2007meeting the PSL had given a written copy of their presentation. This made it easier for Members to see where the difficulties lay.

In rely to the Chairperson asking if there was a written presentation, Mr Comitis replied that he did not have a written presentation. He was addressing the Committee from his own notes.

The Chairperson said that the Committee would make a copy of his notes. The proceedings were also being recorded. He emphasised that presenters to the Committee normally presented in writing as well as verbally.

Dr Khoza said that the PSL had been invited to Parliament to talk about the PSL/ABSA sponsorship deal. Mr Comitis must start with his objections to this deal. It was important to him. He should be able to repeat what he had said and this could be compared to what Mr Comitis was saying. The Committee could then determine if Mr Khoza was out of order. The PSL was attending this meeting out of respect for Parliament. Mr Comitis had written an article in the Laduma magazine about all sorts of things. A member of the Portfolio Committee had spoken to Mr Comitis. Contrary things had been said.

The Chairperson heard what was being said. The Committee had deliberated before the meeting on how to deal with the matter. They felt the need to give Mr Comitis a hearing.

Dr Khoza emphasised that the issue was the PSL/ABSA deal.

The Chairperson said that the issue of the ABSA sponsorship had been raised. They would hear the facts tabled by Mr Comitis, then give Mr Khoza a chance to put the record straight. There would be a chance to finalise the matter. The background being sketched by Mr Comitis was not a big problem, but he requested him to move to specific objections. Then Dr Khoza would have the right to reply.

Dr Khoza said that the PSL was an organisation which needed respect. The crux of the matter was the ABSA matter.

The Chairperson emphasised that he would run the meeting. He told Mr Comitis that the matter was now in Parliament, and asked him to speak to his concerns. The PSL had been invited previously. None of the Members would be allowed to speak now, and the discussion would be only on those matters discussed by the Committee and the PSL at their earlier meeting.

Mr Comitis thanked the Chairperson for his protection. The background he was sketching was directly related to the ABSA commission. It was not quite the way it had been published. The commission stemmed from a process which should not have been allowed. There was a situation where hundreds of millions of Rand were leaving the PSL’s coffers rather than being used to benefit the game. Structure has been set up to allow this to happen. The ABSA deal was one example, but there were many others. They were all linked to this presentation.

He asked why the particular deal was being debated. The process was incorrect. It was founded on a decision by the Executive, but he had not been party to it. He could not see money going to individuals for no good reason. This tendency had started in 2001. The structure had been different then. Other deals had been negotiated, but no commission had been paid to those responsible. He had been involved with some sponsorships and had not expected to receive anything for it, nor had he.

Mr Comitis said that at the Biennial General Meeting (BGM) held on 11 November 2006 an option raised was to pay a 10% commission to internal members. The PSL had a contractual arrangement with a company called Diversity Management, led by Mr Peter Mancer. Sponsors wanted to invest their brands with the PSL, and amounts of money were set aside for marketing. The then PSL CEO, Mr Trevor Phillips, had made a presentation on value to brand. This included the design of new logos, and was a job well done. There was a loophole with Diversity Management sill being entitled to a 10% cut. He asked how this was possible.

Mr Comitis said that in October 2005 Diversity Management had being working with the PSL. They were earning approximately R400 000 per month to deliver a service. It was not clear what this was, and clarity had been requested. A special committee meeting had been held on 20 October 2005, attended by amongst others Mr Khoza, Mr Phillips and Mr Comitis. Mr Comitis had been concerned that Mr Mancer was not at the meeting, as he wished to understand what Diversity Management was doing. No budget had been served despite the season having started some three months previously. He had requested to see the financial statements, as contradictory statements had been made. There were tax imperatives to be considered. There was no explanation for start-up costs.

Mr Comitis said that he had raised a number of internal issues at that meeting. It had been said that Diversity Management had arranged the Mvela sponsorship. A request had been made that all such deals should come to the Executive. The Executive suggested that all its members should be part of the deal. The Chairperson said that the matter had been handled very shabbily. It was resolved that in future there would be policy guidelines on such transactions. Deals which committed the PSL should be presented to the Executive before hand. The CEO should sign all contracts. Commissions should be advised by clear guidelines. Mr Mancer would be asked to give an explanation regarding his costs, which still had not been done. The monthly fee had risen to R700 000 in the meantime.

A clear resolution had been taken to end the contract of Diversity Management at the end of December 2006. In March 2006 the matter had been on the agenda of the Finance Committee. A sub-committee had been set up to discuss the Diversity Management contract, and this had been done. The minutes of the Finance Committee meeting in September 2006 indicated that the contract issue still had to be finalised, and another meeting would be held. The sub-committee comprised four Executive members. They had deliberated on the future of the Diversity Management contract, and there was a lot of unhappiness over the 10% commission. There had been a debate about extending the contract, as it would expire halfway through the season, but on condition that no commission would be payable in the period of extension. All contracts were coming to an end.

Mr Comitis said that one of the sub-committee members, Mr L Prince, had sent a letter to the Executive. He had been approached by other Executive members about the extension, and felt the need to put his thoughts in writing. During the first half of 2006 he had been made aware of the expiry of the Diversity Marketing contract. In-house succession for their functions had not been achieved. A way forward had been suggested and was discussed. The sub-committee felt that the contract should be extended to the end of the season in progress, while others were given a chance to tender.

In the letter, Mr Prince said that it was the sub-committee fiduciary duty to ensure sound management of the process. If the extension was granted, the 10% clause would not apply. In September the Executive had met, and had been given information about the new sponsorship deal with Telkom. They had been asked to ratify the 10% commission in this case. There had been vociferous debate and members had been unhappy, but the provision was in the contract. It should have only been effective on the R25 million escalation. The four members of the sub-committee had sent the letter, and wanted it included in the Executive agenda. The commission had been agreed unanimously. This was not reflected at the BGM.

The Chairperson said that this was very important information. PSL could say that the commission was an in-house matter. Mr Comitis was saying that there was no agreement regarding compensation. The Committee would have to see the documentation. He allowed Mr Comitis another five minutes.

Mr Comitis said that the Executive had still not seen the contract. He therefore assumed there was no contract with Diversity Management. At a meeting on 21 September 2006 to decide contracts, only Executive members had been present and not Mr Mancer. The Chairperson, CEO and the Chairperson of the Finance Committee were present. There was no notice of the commission issue on the agenda of the BGM held on 11 November. There had been an Executive meeting an hour before the BGM was held. The minutes of the BGM had only been issued eleven months later, despite the constitution requiring this to be done within thirty days. The style of the minutes was extremely subjective. The issue of commissions had been discussed, and had been reported practically verbatim in the minutes. However, it had not been on the agenda and no motion was tabled. He understood that the matter had been referred back to the new Executive, and that a proposal to the Board of Governors had been made to reward the negotiating team. The Chairman of the Board had said that no Executive members would benefit. At that stage there was only one month left of the Diversity Management contract. On 14 December 2006 the Finance Committee agreed to recommend an extension of their contract to June 2007.

The Chairperson thanked Mr Comitis for his input. The Sport and Recreation Amendment Act had been signed into law the previous week, and should be read in line with the picture being sketched. He wanted to see what would happen if the Committee were to refer this situation to the National Assembly. There were issues of governance of sport which were linked to the governance of the country. He said that a member of the Committee had called Mr Comitis and spoke to him about the meeting in Parliament. He asked who it was. He reminded the meeting of the rules of Parliament. People misled Parliament, and there had been a case of it recently involving a rugby official. This could lead to an investigation by the Speaker, as it was a serious matter. It had to be made clear.

Mr Comitis said it was not a Member of Parliament that had called him, but Mr Sono. He had discussed the issues under discussion and who was attending. He had received two voice messages from a person identified as Kora (presumably Mr Dikgacwi) but had not spoken to him.

Dr Khoza said he had called Mr Comitis as soon as he became aware of the article, and asked him how he could believe hearsay. Mr Comitis should have spoken to the Chairperson first. Nothing new had been presented to Parliament.

Mr David Thidiela (Executive Member, PSL) said that he was surprised. He had an agreement with Mr Comitis not to harm the brand. Mr Comitis had said that he would not go to the press. Mr Thidiela had sent an SMS from the meeting.

Mr Comitis said that his phone records were available.

Mr Sono asked to speak.

The Chairperson said that he would be given a chance to speak later.

Dr Khoza said that the invitation to the PSL had been to brief Parliament on the deal with ABSA. The invitation was to him personally, but was also extended to any individual conversant with the ABSA deal. Mr Comitis was not part of this and was not requested to attend, while the Chairperson of the Financial Committee and Mr Mancer were. He had replied in writing. He had unavoidable commitments on the date requested, and an alternative date of 6 November 2007 was chosen. He wished to respond to Mr Comitis. He must set the record straight as they had been invited to this meeting.

He said that the PSL had held its Annual General Meeting (AGM) on 10 November. He had been called out of the meeting to take a telephone call. Mr Konki had met him and informed him that there was a protocol problem. The issue had arisen from Mr Comitis’s letter. He would not use an excuse at the AGM. One of the outstanding issues was the legal obligation surround the Diversity Management contract. Mr Comitis’s letter to the Committee had received attention. It was in the best interests of Parliament to hear both sides, and he had therefore requested that the entire Executive Committee attend the meeting. This was the case.

Dr Khoza said that he wished to reread the letter so that he was not talking off the cuff. He had asked the Executive if they agreed with the decision on the ABSA sponsorship, and they had all agreed although Mr Comitis disagreed on one issue. There had been a letter sent on 20 February about the breakdown of the sponsorship. He then read through various letters.

On 14 December 2006 ABSA had requested that the exclusive renewal period be extended to March 2007. The CEO replied the next day accepting this request. On 14 March 2007 ABSA had met with the PSL negotiating team, which consisted of CEO Mr Phillips and Mr Mancer. As broadcasting rights had not been settled a further extension was agreed until April. This was later extended to 15 June. During August ABSA had confirmed its intention to renew the sponsorship.

He said that on 30 August the PSL had received a legal opinion on the agreement with ABSA. This revolved mainly about the exclusivity aspects and ABSA’s rights of first refusal. On 5 September ABSA had made an offer of a sponsorship. A presentation was made to the joint Finance, Sponsorship and Marketing Committees on 24 September. The following day the PSL met with ABSA to confirm their acceptance. The public announcement was made on 26 September. On 27 September the full Executive Committee met and ratified the transaction with ABSA. On 30 September stories were published in the Sunday Times and City Press alleging that PSL officials had been bribed. The allegation attributed to the Minister of Finance was that R50 million had been paid to the negotiating team members.

Dr Khoza said that there had never been negotiations over private payments to PSL members. There was no mention of any such payments in the Heads of Agreement, or any other auxiliary announcement to this effect. There was no discussion of commissions.

An urgent meeting was called by ABSA on 1 October to discuss the allegations. On the same day, Dr Khoza had written to the Minister of Sport and Recreation. He wrote that the Minister of Finance had criticised the deal on the basis of the alleged commission being paid. On the same day ABSA had written a letter denying that there had been any discussion regarding the payment or promise of payment of commissions. The matter had never been discussed. No money had changed hands.

Dr Khoza said that the Minister of Sport and Recreation had replied on 4 October. He did not have any facts on the matter and could therefore not intervene. A meeting of the Board of Governors had been called to discuss the media outcry.

He referred back to the BGM in November 2006. The question of commissions had been debated. There was a situation where an outside body was allowed to negotiate sponsorships. There was a motion from the floor that a figure of 10% be accepted. The negotiation parties needed some reward. They could not start at a zero base. Mr Comitis had objected that the matter had not been discussed at the Executive. The mechanics of the commission were to be taken back to the Executive. The principle of commissions had been accepted. The only challenges to this had come from the media, and from Ajax Cape Town from July 2007. Mr Comitis had met with Mr Phillips on 19 January 2007, where a mechanism of shared income from sponsorships had been discussed.

Dr Khoza said that the Executive had agreed unanimously on a commission structure at a meeting on 24 January 2007. The commission would be 15% of the sponsorship value. Of this, 10% would go to the negotiating team; Executive members would receive 2% and the clubs 3%. Mr Comitis had submitted a reward scheme after this meeting. The increase from 10% to 15% was referred to Deloitte & Touche. The members of the negotiating team were Dr Khoza, Mr Phillips, Mr Kaizer Motaung, Ms M Madlala and Mr Mancer. The principle had been established.

He said that Deloitte & Touche could not continue due to conflict, and the matter had been referred back to the Board of Governors. Mr Motaung had spoken to Mr Comitis, the latter had indicated he would apologise. An apology had appeared on the Ajax Cape Town website on 7 November 2007. The situation was a mess because Mr Comitis had made sure that the CEO did as he wished. Four contracts had been signed without consultation. The issue of Diversity Management had been referred to the PSL’s lawyers. Mr G Allie had raised an objection, and it had been referred back to the Finance Committee to check on the facts.

The Chairperson said that if there were any legal matters involved the Committee must be kept informed. No court could rule over parliamentary matters. Constitutional protection and parliamentary privilege applied.

Dr Khoza said that the letter from Mr Comitis raised recommendations about the commission structure. The Executive felt there was no support for the letter. It was a delicate issue. A counter-proposal was being tabled. The matter was unresolved.

The Chairperson emphasized that he would not allow guests to exchange views across the floor. All statements must go through the chair.

Mr Comitis said he wished to place a few things on record. The procedure followed with the ABSA deal had not been incorrect. In reality there was no indication of a 10% commission. It did not matter if it was not included in the contract as the money was still being paid to the persons concerned. It was in the projected expenses. On legal advice on the proposal, he had tabled a legal withdrawal. This had not been mentioned by Dr Khoza. He asked why Mr Mancer had been included in the negotiations due to the impending end of his contract. The renewal of the contract had been made by the CEO in February, but had only been revealed in September.

The Chairperson said that it was not up to guests to ask questions like that. Only the Members of the Committee could ask such questions. They would listen to the presentation, assess the facts of the matter and then ask questions of clarity.

Mr Comitis said that R70 million was to be paid in commission. He opposed the 10% principle. New members of the Executive would be automatically in line.

The Chairperson said that Dr Khoza accepted the divergence of views within PSL management. He had even read out some of Mr Comitis’s letters. The principle of the commission payments had been agreed but not the modality.

Mr Comitis said the basis was a once-off payment based on the magnitude of the sponsorship. Two motions had been passed. One was for a straight 10%. The other was for a different modality which had then been passed.

The Chairperson said that he had been waiting for a recommendation from a meeting which had been chaired by Mr Sono. He had sent Mr Konki to report on the meeting. The integrity of the Committee had been placed under the spotlight. Matters should be left as they were.

Mr Thidiela said that Mr Comitis had asked Dr Khoza about the commission issue several times. The issue had been resolved by the Board of Governors. A commission had been appointed to determine how the R70 million was to be shared.

The Chairperson surmised that a committee was being set up to determine how the once-off amount was to be settled.

Mr Thidiela said that the matter had gone to the Board of Governors. Dr Khoza would have to seek legal opinion.

Ms Natasha Tshiclas (Executive Member, PSL) said that Dr Khoza had been invited to state the PSL’s case at Parliament. He had read the letter to the Board of Governors meeting. All of the members were aware of its contents. It was therefore incorrect to say that not everyone had been told. The Board had said that no individuals must approach the press without consulting the Executive and the Board. The Chairperson had asked Mr Comitis to abide by this, and he had agreed.

The Chairperson said that he had not given an instruction to stop the meeting chaired by Mr Sono, but the issue had been raised by Mr Comitis. He felt some discomfort, as he did not want to take sides. The Committee did not want a breakdown of the R70 million payment. However, it did recognise that there were two views. They would have to tread carefully.

Mr Sono said that he had been called by Mr Konki on the day of the meeting. The Chairperson had asked him to wait, and he had then been called into the Executive meeting. Mr Sono had then called Mr Konki. He said there were a lot of corporate journalists. Football was no longer important; it was now only money that was being discussed. This was what was happening to the national team, as they saw the officials fighting over money.

The Chairperson said that the Committee had interacted with the players’ union. Some players received as little as R1 000 per month. The question of minimum wages had to be addressed.

Mr Sono engaged in some banter about player payments. He hoped that the R70 million would be addressed and that they could then get on with the football. He felt that the 10% going to Mr Mancer was a problem. The main priorities should be to attract people back to the game and to get the national team winning. He asked if Mr Mancer had a contract. The PSL could not afford to retard football because of Mr Mancer. His cut of the deal must be discussed. Any organisation needed someone outspoken like Mr Comitis. He must not be victimised by them.

Ms Tshiclas asked to whom Mr Sono was referring.

The Chairperson called for decorum.

Mr Sono said that Mr Comitis must respect Dr Khoza’s authority and refrain from going to the press. Issues had to be resolved in the proper way. With the 2010 World Cup approaching, he wondered what the world would think of the current hullabaloo. He called on the PSL to share out the money and then get on with the job of administering football.

The Chairperson said that 90% of the issues were about football, and needed to be discussed inside football circles. The other 10% were policy issues and some direction was needed. Newspapers had their own view, and had written about Mr Dikgacwi. He was very offended by some of the remarks attributed to Dr Khoza. At no stage had the Committee cheered the decision to award the 10% commission. They had listened to the PSL, and it seemed that there was agreement. Parliament had launched the commission in 1996, and would never deviate from its position then. They were taking pains to improve the governance of sport. The Minister had explained why this was the case. They wanted to see football developed and prospering. More problems were being caused at present and the game was coming into disrepute. The Committee wanted to know how it could help and give guidance.

He said that there was a law to run sport. The Minister could intervene if there was disorder in any code. It was misleading to say that the Committee was doing nothing. The Committee could make decisions with far-reaching implications. The Committee would tell the Minister what needed to be done. All these matters had to be considered.

The Chairperson said that the PSL acknowledged that there were differing views. There must not be a complete collapse of order. Many people had made sacrifices in the interests of non-racial sport. The Committee would not let sport die. They would not tell any federation how to run its sport, but would intervene in questions of policy. This was the prerogative of government. They could ask Parliament to intervene. It was possible although they did not want to do it.

Matters were being placed into the public domain. The media must know that both sides had been heard. The Committee would help football to decide on certain matters. The concerns were now with the Committee. The UDM would not assist. It was up to the PSL now to go and build the game. Some things were making their work difficult. He hoped that there was no other third party. The matter was now concluded, and must be disposed of. He appreciated the attendance of the different parties.

As the ANC caucus was to be addressed by President Mbeki, there was no time for questions from the Members or for any other business.

The meeting was adjourned.