Malaysian Football League sues TM for a breach of sponsorship contract

Following the recent news that the Malaysian Football League (MFL) terminated its sponsorship ties with Telekom Malaysia (TM), the former is filing a suit against TM for a breach of sponsorship contract. According to MFL, the telecommunications company failed to make payments for sponsorship and broadcasting rights for 2019. In a press statement, the football league said that this move was taken to protect the interests of the teams competing in the Malaysian League.

TM had earlier published a statement saying it was no longer the League of Malaysia sponsors beginning in 2019 and also denied that it failed to implement what was contained in the contract. Both parties failed to reach a mutual agreement on the commercial basis, the statement added.

The duration of the sponsorship contract signed by MFL and TM is for a period of eight years from January 2018 to 2025, with unifi as the title sponsor for Liga Super, Piala Malaysia and co-sponsor for Piala FA until 2025. With the sponsorship, the league became known as “unifi Liga Super Malaysia” and the cup is named “unifi Piala Malaysia”. The contract marked TM’s continued support towards local football development and uplifting the standards of sports in the country.

However, MFL said that TM proposed new terms including changes to the agreed terms and mutually agreed upon. Among the new terms, TM included a change contrary to previous agreement and will make the agreement between MFL and TM "unstable and unfair".

"Therefore, it is unlikely that we can agree with it as it is seen as a way for TM to free itself from its obligations under the agreed and signed terms. The process has taken a long time and the MFL has tried its best to assist in finding a middle ground in this matter, including willing to amend some of the terms agreed upon and signed to assist TM," MFL said in a statement.

The football league also said that TM had then refused to conduct any negotiations to find a solution and did not want to spend more time discussing this issue when invited by the MFL despite the contrary representation of TM's management when it was presented to the MFL leadership.
It should be noted that the MFL has never stressed the agreed terms of change and the unacceptable changes are new changes or conditions that TM has stressed.

"Hence, we have to take legal action against TM to protect the rights of the teams in the League of Malaysia and to safeguard the interests of national football. The amount demanded by us under TM under a joint sponsorship contract exceeds RM400 million and the summons has also been submitted to TM's solicitors. As this matter has been referred to the legal process, we will not give any further comments on this matter and submit this dispute to be decided in court," MFL said.

In an earlier statement, MFL chief DYAM chairman Tunku Ismail Ibni Sultan Ibrahim, CEO Kevin Ramalingam is holding official talks with interested parties on becoming a new sponsor immediately. A+M has reached out to TM for comment.

Earlier this month, AirAsia scored an agreement with the MFL to become the exclusive official airline for the 2019-2020 league season. As part of the partnership, AirAsia will support MFL teams playing in the Piala Malaysia, Liga Super, Liga Premier and Piala FA tournaments with discounted fares for them to fly with the airline to games across Malaysia and the region.

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(Photo courtesy: 123RF)