Corinthians demands explanations from FFU and Sports Media after Cade's precautionary decision

- By Henrique Pereira / Central do Timão Editorial

Corinthians sent an extrajudicial notification this Saturday to Futebol Forte União (FFU) and Sports Media, the company responsible for investments in the group, demonstrating concern about the current legal configuration of the league following a recent decision by the Administrative Council for Economic Defense (Cade).

The document, released by Meu Timão and signed by interim president Osmar Stabile, was motivated by a determination from Cade's General Superintendence released last Thursday. On a preliminary basis, the body determined that Sports Media should stop adopting measures that could make it difficult for clubs linked to the FFU to leave, establishing a daily fine of R$250,000 in case of non-compliance.

Photo: Reproduction/Corinthians

In the notification, Corinthians states that the decision, despite being provisional, raises "serious concerns" regarding the compliance of the FFU structure and its agreements with Brazilian competition law. The club cites, in particular, Law No. 12,529/2011, which organizes the Brazilian Competition Defense System and combats practices capable of restricting the free activity of economic agents, including the creation of artificial obstacles to the exit of participants from a given market.

The document also makes clear Corinthians' understanding that it is not possible to negotiate commercial rights in conjunction with an entity that may not be in full compliance with competition rules. According to the club, legal regularity in this aspect is an "indispensable condition" for maintaining its participation in collective negotiations.

For this reason, Timão requested formal clarifications from the FFU and Sports Media on what measures will be adopted to adapt the league structure to legal requirements and the determination issued by Cade. The club also emphasizes that it reserves the right to take any measures it deems necessary to protect its interests.

In the final part of the notification, Corinthians makes a point of highlighting that the sending of the document should not be interpreted as a gesture of confrontation, but rather as a "regular exercise of rights and duty of diligence", taking effect upon receipt by the notified parties.

Corinthians' move originates from a decision signed by Cade's general superintendent, Alexandre Barreto de Souza, and published last Thursday. The precautionary measure prevents the FFU from adopting practices that make it difficult for clubs to leave the association, responsible for negotiating and distributing broadcasting rights for the Brazilian Championship.

The action was proposed by the CSA, which argued to the antitrust body that the contract signed with Sports Media establishes mechanisms that, in practice, create barriers for the migration of clubs to other leagues or associations.

When analyzing the request, the case's rapporteur understood that there is no "competitive justification" for a league to prevent or make it difficult for its members to leave. The judge, however, considered that the possible dissolution does not exempt the clubs from previously assumed obligations, including the payment of fines or other contractual commitments.

Corinthians was not the only one to seek explanations. Botafogo, Cruzeiro, Goiás and Operário also sent extrajudicial notifications to the FFU with similar content, demanding changes to the clauses that deal with the departure of members. Clubs have set a deadline of ten working days for changes to be presented, otherwise they risk leaving the group.

Figueirense adopted an even more forceful measure and chose to take the discussion to the Judiciary through its own action.

In turn, the FFU understands that any measure based on Cade's decision is hasty at this time. The entity maintains that the injunction is provisional in nature and can still be reviewed by both the Cade Court and the regular courts.

Check the notification sent by Corinthians

"SPORT CLUB CORINTHIANS PAULISTA, through its President of the Board, hereby NOTIFIES the above entities to formally express their concern regarding CADE's decision reported on this date.

As widely reported, the General Superintendence of CADE imposed a preventive measure determining that the investor refrain from creating obstacles to the departure of clubs from Condomínio Forte União, subject to a daily fine of R$ 250,000.00 (two hundred and fifty thousand reais), due to competition concerns regarding the rules governing the arrangement.

Such a decision, although preliminary, raises serious concern in the Club regarding the compatibility of the FFU structure and the arrangements linked to it with competition protection legislation, in particular Law No. 12,529/2011.

In this vein, Corinthians expressly states that it cannot negotiate its rights together with an associative entity that does not fully comply with competition legislation. Full competitive regularity is, for the Club, an inescapable condition for negotiating its rights.

In view of this, the Club requires clarification on the measures that the FFU and the investor will adopt to adapt the structure to the requirements of antitrust legislation and to what CADE has determined, reserving the right to take any measures it deems appropriate to protect its interests.

This notification does not represent an act of hostility, but the regular exercise of rights and duty of care, taking effect upon receipt."

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Source: Timao Central