Hoang Anh Gia Lai - VPF conflict: What is the reason?

But because this is an unprecedented conflict, no one can guarantee that there will not be more problems arising in the future, especially after Mr. Duc announced that he would sue VPF in court and petition the management agencies about the "exclusive" clause.

Furthermore, this conflict has only been temporarily settled by written exchanges in the form of notices, not by detailed provisions with strict legality. This leads to the possibility of intentional or unintentional violations in the process of implementing the rights of each side's sponsors. V-League, although taking place as planned, has not been completely satisfactory.

The conflict originated from last season, when Hoang Anh Gia Lai was sponsored by an energy drink brand, and the V-League side was also sponsored by a brand in the same industry. At the beginning of this season, Hoang Anh Gia Lai continued to sign a contract with an energy drink product but of a different brand, and they took the initiative to sign the contract in the understanding of "first come, first served". The negotiation time was in December 2022 and the contract was signed on January 15, 2023. After learning about the information through the media, on January 18, VPF announced that in the new season regulations approved by 14 clubs, including Hoang Anh Gia Lai, there was a regulation on the exclusive industry of "energy drinks". VPF requested that HAGL not violate this. According to VPF, this was also made clear at the Professional Football Conference on December 26 and was confirmed in writing on January 5.

HAGL players wear shirts with the same brand of sponsor as the V-League sponsor. Photo: HAGL FC

It was not until January 28 that the two sides sat down to discuss a solution. Two days later, VPF still issued a conclusion notice, requiring Hoang Anh Gia Lai to comply with the spirit of the document dated January 18. And on February 1, Hoang Anh Gia Lai said that it had negotiated with the sponsor to come up with a solution of not using the phrase "energy drink" on the advertising media they themselves created. In response, VPF issued a document of approval, but still emphasized that "Hoang Anh Gia Lai must comply with the regulations in the tournament's charter". Just when it seemed that everything was over, a day later, Mr. Duc announced that he would sue VPF in court.

The key to the dispute and the source of this conflict lies in the two words "exclusive", although in principle, no document expresses this, instead it is the phrase "not in the same industry" to avoid violating the Competition Law. In terms of wording, although they have similar understandings, in a specific aspect, "exclusive" is completely different from "not in the same industry". For example, there is absolutely no unit that exclusively sponsors the national team or V-League, but to ensure the interests of businesses, there will be a commitment that other sponsors will be "not in the same industry". In theory, such a regulation is beneficial to Vietnamese football, because it is impossible for two brands in the same industry to sponsor the same entity. Thus, the "not in the same industry" clause is both suitable for commerce and helps increase sponsorship value. This is also the way that VPF and Hoang Anh Gia Lai apply to resolve the conflict. Accordingly, Hoang Anh Gia Lai still advertises the team's sponsorship brand, but is not allowed to use the product category identifier "energy drink".

The "not in the same industry" rule has existed since the beginning of the V-League, not now. In the first two V-League seasons, 2001 and 2002, Strata Sports Marketing Company took on the entire cost of organizing the V-League and the National Cup after paying the VFF 2 million USD under a three-year contract. That was the first and only time there was the concept of "exclusivity", because all the billboards as well as the shirts of the clubs were only for the sponsors mobilized by Strata Company. But after only two seasons, Strata could not handle the finances. The VFF decided to allow the clubs to exploit their own advertising, but they could not be in the "same industry" as the main sponsor. That was also when the Professional Football Regulations were born, which included the rule: Even if the sponsor is not known yet, the VFF must announce the exclusive industry at least two months before the tournament so that the clubs can avoid it.

The story has always been like this. V-League organizers will be given priority in industry negotiations and are responsible for informing the clubs in advance. Neither side used the sensitive word "exclusive", because in reality, in the years when Eximbank sponsored V-League, the clubs were still allowed to advertise the bank on their shirts when it was the brand that owned the team such as SHB Da Nang, Kienlongbank Kien Giang or Navibank Saigon. This detail shows that, whether it is "exclusive" or "not in the same industry", the basis for consideration is still the tournament's regulations and the timing factor.

This is the key point leading to the conflict between Hoang Anh Gia Lai and VPF this time. When Hoang Anh Gia Lai negotiated a new sponsor - in early December, VPF had not yet announced the tournament's regulations. Although Sam Ngoc Linh's contract with V-League was signed for three seasons starting from 2022, no one can guarantee that this sponsor will continue in the 2023 season, because in the history of V-League, there are precedents of tournament sponsors dropping out, such as Kinh Do in 2005 (signed for three years but only implemented for one), Masan in 2019 (five years, implemented for one), LS (three years, implemented for two). That means if VPF does not announce the exclusive product line early, Hoang Anh Gia Lai is allowed to negotiate with anyone. Meanwhile, VPF said that they announced the exclusive product line at the Vietnam Professional Football Conference at the end of December - two months before the V-League opened. The question is whether that Conference is considered an official announcement or not?

Here, the "not in the same industry" clause is not unusual in business activities and contract negotiations, because it depends on the will and circumstances of the parties. It is not a mandatory clause, nor does it violate the Competition Law if considered in the specific context of the case between Hoang Anh Gia Lai and VPF. Although they are two independent legal entities, Hoang Anh Gia Lai is a shareholder and a member with obligations and rights towards VPF, not competing with each other. Moreover, VPF is a special company, their revenue sources, in theory, all return to serve the V-League and contribute to Vietnamese football. Hoang Anh Gia Lai indirectly benefits, so it is somewhat forced to say that VPF put forth an exclusive clause to "suppress" it.

Hoang Anh Gia Laiis one of the teams that have been present in the first seasons of the V-League so far. Mr. Duc is one of the founders of VPF Company. Thus, the relationship between them is also a "historical legacy", similar to the "not in the same industry" clause. Therefore, instead of creating conflicts and confrontations, it is best to work together to resolve the current bottleneck, because after all, everyone has a part of the responsibility in this matter./.