NEWS: Toulon threatened with relegation over Puma kit deal compensation

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The French press has today reported that Top 14 finalists RC Toulon are being threatened with relegation to the ProD2 due to a €2 million hole in their finances related to the termination of their kit deal with Puma in 2011.

The DNACG, French rugby’s financial gendarmes, have ordered Toulon president Mourad Boudjellal to inject the shortfall into the club’s coffers before the start of next season, or face sanction.

Interestingly for us, €1.7 million of the fund is specifically to be set aside for the unpaid fine levied on Toulon for the illegal termination of their kit deal with Puma back in 2011.

The German sportswear company supplied Toulon for several seasons as they established themselves as a European superpower, but the club ended the agreement in 2010, alleging unpaid fees and unapproved use of logos.

However, Puma countered Toulon’s claim, claiming €6.5 million in damages and alleging that the club had signed a contract with the company until 2013, but had secretly negotiated with their new supplier, at the time Burrda, and then broke the deal with Puma.

The High Court in Strasbourg initially found in favour of Puma in 2015, acknowledging that Toulon had “concealed its dealings with a competitor equipment manufacturer in order to obtain a more advantageous partnership, before denouncing its contract with the Puma company on the basis of misleading reasons.” However, Puma claimed the initial settlement €730,000 was insufficient, and this sum was increased to €1.7 million in May this year.

Toulon have yet to comment on the situation, but if the funds are not found, then relegation or a restriction of the club’s wage bill to cover the shortfall, are both on the table.

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