Canada Soccer told to stop selling Davies jerseys amid federation’s fight with players

In late August, as Gatorade put the finishing touches on a new ad to celebrate the Canadian men’s national team’s unlikely qualification for the World Cup in Qatar, a proposed commercial spot for the energy drink was sent for approval to Nick Huoseh, an agent who represents star player Alphonso Davies.

While the spot was to feature four players – Davies, a national team teammate, and two players from the Canadian women’s national team – Huoseh rejected the spot, advising Canada Soccer chief marketing officer Sandra Gage that no company other than ones Davies has personal deals with has permission to use his image in any advertising.

On Sept. 28, Huoseh went further. He advised Fanatics, the largest online seller of licensed sports merchandise, that it no longer had permission to sell Davies’ jersey on either its own website or Canada Soccer’s website, which it operates, because the federation has not negotiated for the right to market the 21-year-old Davies’ likeness and image.

Huoseh said he has told Canada Soccer that Davies deserves a portion of the profits of his jersey sales.

“National team players have never received royalties from jersey sales, and they should,” Huoseh said in an interview with TSN. “We only want what’s fair and they absolutely can and should do this.”

While he is negotiating on behalf of Davies alone, Huoseh said he and Davies both support the Canadian Men’s National Soccer Team Players Association, which was recently formed to negotiate a contract with Canada Soccer.

Huoseh isn’t the only one who has said no in recent weeks to Canada Soccer.

The players association, which has hired the Carlsbad, Calif.-based sports marketing firm Brevettar to explore licensing opportunities, has also delivered Canada Soccer a warning that sponsors of the federation are not to use images of players in ads without first negotiating permission. It’s the first time in recent memory players are believed to have exerted those rights. Canada Soccer has responded that sponsors can use group images of players in ads because of historical precedence.

(Companies that have individual deals with players will still be allowed to market those ties. Davies, for instance, has personal deals with Bank of Montreal and Nike, while striker Jonathan David has an agreement with Adidas.)

“The biggest area of potential growth for Canada Soccer making a World Cup is sponsorship,” the source said. “It’s tragic. We are strangling ourselves. Sponsors are paying millions for deals to align with Canada Soccer and are being told they can’t use the most marketable players in their ads. There’s a complete breakdown in our partner and sponsor ecosystem... While no one is walking away yet, no one is happy about this, either.”

The Canada Soccer source requested anonymity because they were not authorized to speak publicly about the organization. 

As first reported by TSN in June, Canada Soccer’s contract with a little-known company called Canada Soccer Business (CSB) remains at the heart of a months-long feud between the federation and men’s national team players.

The CSB contract began to draw scrutiny after sources told TSN that Canada Soccer president Nick Bontis told men’s national team players during a June 4 meeting in Vancouver that the organization couldn’t afford to pay them the bonus they had requested after qualifying for the 2022 World Cup.

Bontis allegedly told the players that he inherited a contract with CSB that was siphoning away too much of the federation’s revenue when he was elected as Canada Soccer’s president in November 2020.

But documents and emails recently obtained by TSN raise questions about Bontis’ involvement in negotiating Canada Soccer’s deal in December 2017 with CSB, which is jointly controlled by Canadian Premier League (CPL) team owners. Bontis at the time was a Canada Soccer board member and vice-president.

In a Dec. 22, 2017, email to CPL investors which was obtained by TSN, CSB president Scott Mitchell celebrated reaching an agreement on a contract with Canada Soccer and credited Bontis and Victor Montagliani, who left his position as president of Canada Soccer earlier in 2017 and who is now a vice-president of FIFA and president of Concacaf, the 41-nation soccer confederation for North and Central America and the Caribbean.

Mitchell wrote in his email that Canada Soccer had backed off a demand made weeks earlier for the federation to have an ownership stake of CSB and that there would no longer be any uncertainty around guaranteed payments to the federation.

“This has very positive short term and long-term impact to us and to your own value as shareholders,” Mitchell wrote.

“David Clanachan [who was named the CPL’s first commissioner] has done an outstanding job on this file in the last few weeks. We would not have gotten to this point this quickly without David’s great work and enthusiasm. Combined with the work of Nick Bontis from the CSA and Victor Montagliani (as usual) we have great reason for optimism going forward.”

Mitchell declined to comment on his email. The CSB does not publicly disclose its financial statements.

The marketing agreement between CSB and Canada Soccer obligates CSB to pay a guaranteed fee to Canada Soccer annually between 2019 and 2027 in exchange for the rights to sell both broadcasting and corporate sponsorship rights to the men’s and women’s national teams.

That fee was $3 million in 2019, according to a copy of the contract obtained by TSN. The guarantee climbs each year, topping out at $3.5 million in 2027.

The contract, signed by Steve Reed, who succeeded Montagliani as Canada Soccer’s president from 2017-20, says CSB has the right to extend the deal for an additional 10 years and if it triggers that extension, must pay Canada Soccer at least $4 million per year from 2028 to 2037.

CSB has the right to keep all revenue from selling the national teams’ sponsorships and media rights.

In the months since TSN reported details of the contract, Canada Soccer has steadfastly refused to provide both men’s and women’s national team players with copies of its contract with CSB. The men’s national team players association has also been stymied in its attempts to obtain any sponsorship contracts covering the national teams.

“Players are now aware that Canada Soccer does not get any of the revenue from its own sponsorships, that none of that money besides the annual guarantee flows back to the national team players, either in perks or in cash bonuses,” a Canada Soccer source told TSN in an interview. “Players are like, ‘Why would we give up our likeness rights when we know that all of this money is going to CSB, whose owners run the Canadian Premier League?’ The trust between the federation and national team players has been broken.”

Canada Soccer spokesman Paulo Senra wrote in an emailed statement to TSN that the federation is pleased with its relationship with CSB.

“Fuelled by our on-field success, Canada Soccer and CSB have a great working relationship, and they are the right partners to continue building the stable and successful soccer ecosystem that we need in this country,” Senra wrote. “Our partnership has and will always be one of continuous dialogue and progress.”

Ryan Fequet, a Canada Soccer board member from 2007 until May of this year, said in an interview that because CSB did not pay Canada Soccer the fees it was obligated to pay during the COVID-19 pandemic, the federation has the opportunity to break its contract. (CSB executives argue it didn’t pay its full rights fee during the pandemic because so many games were cancelled.)

“The deal Canada Soccer approved with CSB doesn’t make sense,” Fequet said. “As directors, we have a fiduciary duty to the association. How can this deal with CSB ever be described as being in the best interest of the association and the players? Even at the time the deal was signed, Canada Soccer executives told me and other members of the board how much they hated it. We sold the farm down the river and it’s a decision that will impact the federation and national team players for the next 20 years at least.”

Fequet said Bontis told board members when the deal was being negotiated with CSB that it would not be finalized without ensuring Canada Soccer had a voting position on CSB’s board, and that there was a guarantee that some national team games would remain on one of Canada’s mainstream television networks.

Canada Soccer’s agreement with CSB took effect on Jan. 1, 2019, and in the three years since then, it has had a ripple effect throughout the federation, the Canada Soccer source said.

After Canada Soccer approved a seven-part TV series documenting the men's national team's journey to the World Cup – spending more than $100,000 for editing and post production for the project – the federation couldn’t find a broadcaster for the series to recoup its investment, the source said, adding that federation executives worried that if the series ran on a network such as TSN or Sportsnet, that Spanish media company Mediapro might sue because it had acquired the broadcast rights from CSB to the national team's World Cup qualification games.

The series will instead be posted on Canada Soccer's YouTube channel. The first episode, posted on Oct. 12, has about 28,000 views. By contrast, Canada’s World Cup qualifying games have attracted exponentially more. For instance, a television broadcast of Canada’s 4-0 win over Jamaica on March 27, clinching a World Cup berth, reportedly drew 1.65 million viewers.

Bontis’ alleged claim to the men’s national team that the federation could not afford to pay players as much of the $10 million (U.S.) bonus for qualifying for the World Cup as they had asked for seemed to be supported by some of the national team program’s practices.

For instance, as recently as during this World Cup cycle, men’s national team players and staff have been directed to give back to the federation the Team Canada sweat tops, pants and polo shirts they have been provided for training sessions.

The federation receives a few hundred sets of clothing each year from its sponsor Nike and doesn’t have enough for all the senior and junior national teams. Following senior team camps, some of their clothing has been laundered and passed down to players and staff at junior national team camps.

“It’s not great when you are asking Alphonso Davies and Jonathan David and our other star players to please give back their sweats,” the Canada Soccer source said. “It’s bush league.”

Senra confirmed the policy. 

“Canada Soccer maximizes the use of its Nike product to support all national team program needs,” he wrote. “The rotational use of product allows us to ensure that all levels of Canada Soccer programming are ultimately prepared for their performance.”

Yet at the same time as the federation has told men’s national team players it is cash poor, the source within Canada Soccer said the federation spent thousands of dollars on bespoke suits for board members to wear to the World Cup in Qatar.

Senra confirmed the federation spent $11,074 at Montreal clothing boutique Nota Bene this summer on 14 suits for board members. Bontis’ suit, Senra said, “was his first new suit in 10 years.”

After Bontis went with his family on vacation to Europe this summer, the Canada Soccer source said the federation purchased Bontis a business class return ticket from Greece to Vancouver in July so that he could take part in the medal ceremony with Vancouver Whitecaps players and staff following their Canadian championship win, even though Canada Soccer general secretary Earl Cochrane was also in attendance.

“Forget about the thousands spent on that ticket,” the source said. “It was tone-deaf… The rest of our organization is flying economy class to stretch money and make it go farther. Maybe a good leader sits in economy class the same as some of our national team players and coaches have had to in recent years.”

Senra said that while Canada Soccer’s policy is for board members and staff to travel economy class, the audit and finance committee, chaired by board member Brian Burden, approved a new rule in late 2021 for the organization’s president to travel business class on flights that are at least three hours. The federation’s board also approved that rule, Senra said.

(Senra also said Canada Soccer’s spending of about $150,000 each year on board meetings is illustrative of the organization’s financial restraint. He said perks for board members are kept to a minimum and include an iPad when new members join the board and a gift worth about $200 at Christmas.)