offpitch | 2015-05-12
FC Barcelona wins case against MCM
MCM will have to cover the club’s legal expenses
This Tuesday, a judge in Barcelona dimissed a lawsuit against FC Barcelona for its supposed breach of contract with MCM.
Muro Cortina Modular Publicidad (MCM), a company that has a patent for the construction of LED walls on the facade of buildings and using them for commercial purposes, demanded FC Barcelona €100 million in compensation for the losses that the club had supposedly caused the company by failing to fulfil the contract.
The case stemmed from an agreement entered into by FC Barcelona and MCM for the purpose of building LED walls in La Masia’s facade and using these for advertisements. The company and the club were supposed to share the profits equally.
MCM took Barça to court claiming that the club had not allowed them to use the LED panels for publicity.
The trial was held at the start of March before Judge Antonio Morales in Barcelona.
In the final days of Joan Laporta’s presidency, the club decided to speed up the finishing touches for the new training center and the new La Masia building. MCM was hired to finalize both the plans for the building and the construction of the building itself.
In June 2010, Laporta and MCM signed a contract that granted MCM the rights to place and exploit LED panels on the outside of the new Masia for publicity purposes. The duration of the contract was for 25 years.
In December 2010, that contract was rescinded with the agreement of both parties and FC Barcelona’s president at the time, Sandro Rosell, signed a new one with Antonio García Valdecasas, owner of MCM. The reason offered for the new contract was “to make the contract comply with the club’s regulations [which state that no contract can be longer than five years] and mitigate the risk factor for MCM. The new contract was for five years with an option for two more,” Jordi Moix explained during his testimony. The FCB executive added: “The objective was to agree on the commercial relationship between the entities.”
After their installation, it was found out that some of the LED panels were faulty, and Moix claimed that “MCM is refusing, for more than 18 months, to take part in meetings to find technical solutions.”
“There have been no concrete proposals for the commercialization of those panels that were compatible with the club’s interest,” the executive added. “In no moment did the club put any obstacles in the way of MCM finalizing a contract with some publicity agency. A concrete offer never reached us. I can say for sure that none of our main sponsors (Nike, Mediapro etc) were interested in having ads [on the facade of La Masia],” Moix added.
Laurent Collete, FCB’s marketing director said that “MCM had no right to associate itself or use the club’s signs, symbols and the image of the players.” Collete also said that it is not within MCM’s right to claim that the contract is still active and that “a potential client would have to pay up to €2 million (VIP category) per year to place their ads on the façade.” He called this “an outrageous price in the current market.”
During his testimony, ex-president Sandro Rosell said that he didn’t negotiate the contract signed in December 2010 himself. “I signed it because our general director, marketing director and our lawyers told me that it was a better contract than the previous one.” He justified this by saying, “I have no idea about real estate marketing,” adding “I thought reducing the duration of the contract was a good idea.”
Rosell also said, “The responsibility of finding companies who wanted their ads on the panels was MCM’s. While I was president we got no interesting offers,” while also saying that the club’s main sponsors weren’t interested.
Javier Faus, the club’s economic vice president testified that “I thought it was strange that the contract was to last 25 years,” and for that reason, he said, when MCM argued that they could be affected by the reformulation of the contract, the club “studied a financial compensation” for them.
Faus said, “It’s absolutely impossible to sign contracts that allow others to use the club’s logos, signs or distinctive marks without charging for it.” In its complaint, MCM claimed that they didn’t have access to the club’s main sponsors, while Barça claims that some of the clients that the company wanted to sign produced a conflict of interest with the agreements that the club has.
Faus explained that he didn’t negotiate the deal, the club’s general director at the time, Antoni Rossich, did. Faus said he had asked Rossich to make sure to have a clause in the contract that the companies that had ads on the LED panels weren’t competitors of the club’s sponsors.
The vice president added that if in the end the contact is not beneficial, “the club will pay the €1.9 million cost of the facade.” The club has been setting aside 20 percent of this cost in each budget in case MCM hadn’t managed to recover the money they had invested through the exploitation of the panels.
He then gave an example of a situation in which there was a conflict of interests: MCM was proposing an agreement with Banco de Santander, “When one of our main sponsors is La Caixa.” In that sense, Faus said: “When I see our logo next to Banco Santander the alarms would go off and then I would forbid the association of the club’s brand,” which would go against the club’s agreements.
“They had some expectations and, in full crisis, the publicity market collapsed in dramatic fashion. I would have loved it if they had presented us with a €20 million agreement with some client, because half of those would be for Barça, but they never did. The contract is still active and they can still try,” Faus added.
Today, the judge ruled that FC Barcelona had not broken its contractual agreements severely so that the contract could be dissolved and MCM paid the damages they asked for.
MCM has already announced that they will file an appeal.
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