1. The five-year agreement signed on February 3 with the Vodafone-led consortium is not worth $40m
2. The five-year deal is VAT inclusive. So the actual net amount received by Rugby House after VAT is paid to FIRCA is $40m minus 15 percent ($6m) or $34m
3. The five-year-deal is not even worth $34m because included in Vodafone’s contract is a clause that allows them to spend $2.5m per year (or $12.5m over five years) on their own Vodafone marketing and advertising spend, and put it against the sponsorship cost of the FRU. So each time Vodafone creates an print, TV, radio or billboard advert using a Fiji rugby reference, or produces and distributes a T-shirt branded with Fiji rugby, Vodafone claims the whole cost against the FRU’s sponsorship as marketing or ‘activation’ spend (including all costs of production). So $34m minus $2.5m per year for five years ($12.5m) is $21.5m
4. The five-year deal is not even worth $21.5m because it will certainly also include as much as possible, at least $500,000 per year, in Vodafone handsets, talk time and SMS usage. So $21.5m minus $.5m per year for five years is $19m
5. And the cash component of this deal is also beginning to look very suspicious. When the Vodafone consortium deal was originally announced on February 6, the FRU chairman Filimone Waqabaca confirmed it as $3.6m in cash. Multiplied over five years this would be worth $18m in total. But the Fiji Times reported on February 7 Waqabaca saying it was "about $3.6m in cash". The reason for the “about” was clear from the Fiji Sun of February 8, when Vodafone CEO Aslam Khan detailed how the annual $3.6m also included bonuses for the 7s team - $10,000 if they were beaten semifinalists in an IRB Sevens event, $15,000 if they were beaten finalists and $25,000 to be shared between the team if they won any of the nine tournaments. By that logic, the “about $3.6m in cash” is in fact a best-case scenario/maximum receivable amount, including up to $225,000 per year in 7s bonuses (9 x $25,000) which would only get paid out, to the FRU and from the FRU to the team, if the team won every single IRB 7s tournament …something which has never happened before. So the $3.6m in cash is more likely to be a base payment of $3.375m, or $16.875m.
Dear Mr Permanent Secretary Finance
$16.875m is not the same as $40m.
Signed
Fiji Leaks
2. The five-year deal is VAT inclusive. So the actual net amount received by Rugby House after VAT is paid to FIRCA is $40m minus 15 percent ($6m) or $34m
3. The five-year-deal is not even worth $34m because included in Vodafone’s contract is a clause that allows them to spend $2.5m per year (or $12.5m over five years) on their own Vodafone marketing and advertising spend, and put it against the sponsorship cost of the FRU. So each time Vodafone creates an print, TV, radio or billboard advert using a Fiji rugby reference, or produces and distributes a T-shirt branded with Fiji rugby, Vodafone claims the whole cost against the FRU’s sponsorship as marketing or ‘activation’ spend (including all costs of production). So $34m minus $2.5m per year for five years ($12.5m) is $21.5m
4. The five-year deal is not even worth $21.5m because it will certainly also include as much as possible, at least $500,000 per year, in Vodafone handsets, talk time and SMS usage. So $21.5m minus $.5m per year for five years is $19m
5. And the cash component of this deal is also beginning to look very suspicious. When the Vodafone consortium deal was originally announced on February 6, the FRU chairman Filimone Waqabaca confirmed it as $3.6m in cash. Multiplied over five years this would be worth $18m in total. But the Fiji Times reported on February 7 Waqabaca saying it was "about $3.6m in cash". The reason for the “about” was clear from the Fiji Sun of February 8, when Vodafone CEO Aslam Khan detailed how the annual $3.6m also included bonuses for the 7s team - $10,000 if they were beaten semifinalists in an IRB Sevens event, $15,000 if they were beaten finalists and $25,000 to be shared between the team if they won any of the nine tournaments. By that logic, the “about $3.6m in cash” is in fact a best-case scenario/maximum receivable amount, including up to $225,000 per year in 7s bonuses (9 x $25,000) which would only get paid out, to the FRU and from the FRU to the team, if the team won every single IRB 7s tournament …something which has never happened before. So the $3.6m in cash is more likely to be a base payment of $3.375m, or $16.875m.
Dear Mr Permanent Secretary Finance
$16.875m is not the same as $40m.
Signed
Fiji Leaks
