CADE signs agreement with Libra and FFU after gun jumping

On 11 February, the Administrative Council for Economic Defense (CADE) signed an agreement with Liga do Futebol Brasileiro (LIBRA) and the Brazilian football clubs Flamengo, Palmeiras, Santos, São Paulo, and Grêmio, due to gun jumping, as a partnership agreement.

The antitrust authority also signed an agreement with Futebol Forte União do Futebol Brasileiro (FFU).

Since 2023, the Office of the Superintendent General at CADE (SG) has investigated complaints against the negotiation of commercial and broadcasting rights for national championships through associations of the football leagues. The SG concluded that there was evidence of gun jumping, stating that LFU and LIBRA carry out joint management of assets, such as broadcasting rights, and constitute joint ventures, which requires a mandatory notification.

In the LIBRA case, Commissioner Victor Oliveira Fernandes identified the practice of gun jumping, and the company committed to pay an amount of BRL 559,267.26 to the Fund for De Facto Joint Rights (FDD). In the LFU case, there was no financial contribution in the agreement, since the gun jumping was not identified. The parties involved did not meet the turnover criteria for a mandatory reporting.

Both agreements also made future commitments with the leagues, to notify and inform CADE on future changes regarding the negotiation of commercial, and broadcasting rights for a period of three years.

When the rapporteur rebuild the sequence of events, he noticed that there were several opportunities of communication with the agency, from the establishment of the associations in 2022 until the signature of the contracts of investment and admission of new clubs, which were not used. Given the economic dimension of the arrangement, the rapporteur also observed that a more proactive attitude in search for the authority’s guidance was expected.

According to the agreement, LIBRA and LFU have to notify CADE on the full extent of the consummated transactions within 60 days. After these notifications, the Brazilian antitrust agency will address the merits of the operations. On this stage, the competition concerns raised after these arrangements, the alleged efficiencies by the parties, and the eventual need of structural and behavioural remedies that ensure the competition adjustment to competition models will be reviewed.

Access the cases below.

Liga Forte União Case no.: 08700.005511/2023-37

Libra Case no.: 08700.007461/2023-22