Judgement from the High Court in London in the case between SDI Retail Services Ltd, part of Mike Ashley’s Sports Direct group, and The Rangers Football Club Ltd (Newco) was published yesterday. It was a scolding humiliation for the Ibrox club and its directors.
The case centred on rights Newco granted to SDI in a Retail Operations Distribution and IP Licence Agreement, concluded in June 2017. This Agreement was heralded at the time in the Scottish media as a great victory for Newco, and chairman Dave King in particular. The Daily Record proclaimed, “Rangers fans celebrate Dave King’s victory over Mike Ashley and Sports Direct”.
Dave King told The Evening Times: “There was a bit of an impasse. Sports Direct applied their mind and asked themselves whether they felt Rangers were going to back down.
“The answer was ‘No’, so was it not better to seek some sort of negotiated outcome. It was a realisation from them that the initial strategy of trying to blow us away hadn’t worked.”
What King did not reveal at the time, was that Newco agreed to pay Sports Direct £3m to terminate the old agreement early, while granting them rights (now asserted) to pick up subsequent deals at competitive rates.
The June 2017 agreement allowed Newco to seek retail, distribution and kit manufacturing agreements independent of SDI from June 2018, but obliged the club to disclose bids and agreements to SDI, and permit them to conclude an agreement on the same terms.
The judgement found Newco breached those terms. Instead, it entered into an agreement with an SDI competitor, Elite Group. It was also found that SDI were entitled to rights Newco concluded with their new kit manufacturer, Hummel.
SDI were granted damages and relief in relation to sales not achieved for exclusive distribution rights of Newco merchandise for seasons 2018-19 and 2019-20. The judge noted SDI’s losses “are likely to be in the order of many millions of pounds”, denying Newco’s attempt to set a £1m limit on damages.
The ruling affirmed an earlier finding from October 2018 that Newco “will be exposed to a claim by Elite (who will now lose their merchandise deal), but that is because of the action taken by Rangers with its eyes open to the risk as the indemnity provisions of the Elite Agreement make clear.” So as well as paying SDI, Newco will have to pay Elite Group for being unable to fulfil their current agreement.
SDI were also granted an injunction, instructing that “Rangers shall not perform the Elite/Hummel Agreement, with various sub-clauses. On top of all the financial consequences, this adds the indignity of giving Mike Ashley control over what happens now.
Newco attempted to avert the worst consequences of the ruling by claiming that if the judge upheld SDIs’ requests, “Rangers’ ability to function as a football club will be impaired.” I am sceptical of this claim, which sounds a bit like earlier claims made in similar circumstances in court on Dave King’s behalf that he was “penniless”.
James Blair, Newco company secretary and until late 2018, a partner at Anderson Strathern LLP, Newco’s lawyer (for whom he is still a consultant) came in for the most scathing treatment.
The judge noted, “He was closely involved with the disputes between the parties, with the drafting of the Agreement and the other contracts to which I will refer and with dealing with Elite.
“It appears that Rangers’ legal team obtained their instructions from him. Much of the correspondence between [SDI’s lawyers] and Rangers involved Mr Blair.”
It was noted that SDI’s lawyers “asked Rangers to confirm that Hummel had not been granted rights of distribution, marketing, advertising, promoting, offering for sale and/or selling the Official or Replica kit.
“On 18 May Mr Blair gave that confirmation, stating that “Hummel has not been granted any of the rights set out in your email”. This was untrue. He later acknowledged in his Seventh Witness Statement that “ … Of course Hummel did have rights to distribute, market, advertise, promote, offer for sale and/or sell the Official Kit and/or Replica Kit …”
Newco were obliged to provide SDI with replica kit, but the judgement found, “Mr Blair’s assertion on 3 September 2018 that Rangers’ supplier could not make units of kit available to SDIR until such time as the Further Agreement was in place.
“It has now been held……… correspondence between Mr Blair and Elite in late August shows that Mr Blair’s strategy was, in his own words, to lead SDIR a dance.”
In evidence, Blair managed to tie himself in knots over the fan boycott in the years before the June 2017 agreement. In addition to his role as Newco company secretary, Blair was also a director of Club 1872 Ltd, a supporters’ group which issued statements supporting the boycott.
Blair “sought to distance himself in evidence by saying that the statements were, in fact, issued by another supporters’ group, called Supporters Voice Ltd.” However, the judge noted that Blair was also a director of Supporters Voice Ltd.
The judge noted, “I found Mr Blair’s evidence to be unconvincing”, a significant reprimand for a solicitor.
The entire escapade could have been avoided if, as the judge found, Blair had not “untruthfully asserted that Hummel had not been granted any Offered Rights and did not provide SDIR with a copy of the Elite/Hummel Agreement.
“The upshot of all this is that Rangers, Elite and Hummel have until now performed and enjoyed the benefit of the Elite/Hummel agreement. The 2018/2019 season has been completed and, as the evidence before me showed, preparations for the 2019/2020 season were well underway by the time of the hearing.
“Had the rights been offered to SDIR then SDIR would have found itself in the shoes of Elite and would have been in a position to make the sales and profits that Elite has made.”
Newco managing director and SPFL board member, Stewart Robertson, gave evidence of little weight, the judge branded him a “mouthpiece”. More appropriate parts of the anatomy are seldom referred to in written judgements.
This is a shambles. An unmitigated, embarrassing, shambles, but you may be tempted to ask why?
Why did Newco pay £3m to enter into an agreement that granted SDI so many rights?
Why did they try to subvert those rights shortly after the agreement was struck and why did they think Mike Ashley would not notice?
Why, when Ashley asserted his contractual claims, did Newco not back down, instead of dragging everyone through this publicly humiliating spectacle?
You and I would not behave like this. You would not publicly self-congratulate a truly dreadful deal while not disclosing you paid £3m for the privilege.
You would not sign a contract with a rich and litigious man, then sell someone else the properties he is legally entitled to buy.
You would not be so contemptuous of the supporters you profess to care for, that you would make their club a laughing stock. This behaviour is exploitative of others, indicates a poor sense of reality, is grandiose and entitled. It is disordered.
All that was needed to gain initial control was to assert enough of an absurd fantasy and invest others with enough incentive to look away.
I know others want Fit & Proper tests applied to these people but I will regret the day any of them leave. They can stay for as long as they are prepared to peddle their nonsense to the unsuspecting masses – who are mostly prepared to look away, as the alternative is to contemplate the unpalatable reality, that 10-in-a-row is only just the beginning.
The big question is, how long can this phoenix fly? Newco lost £14m in the year to June 2018 and remain reliant on support from directors. When the figures for the year to June 2019 are released, they will show an increase in income as well as operational costs, reflecting the recruitment of 22 players since that time.
This judgement introduces a powerful new creditor to a financially fragile operation. Money will need to be found to compensate him, as well as for operational costs. If not – and I do not see where it is coming from – the phoenix will fall.
You and I have known how this story will end since it began with King and Co. undermining Newco at its inception in 2012. The writing has been on the wall ever since, it is only a question of when?
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Regardless of what happens with Rangers, Celtic need a right back. It’s news that they are incompetent. Liars, owe money, borrow etc? It’s been their reality since well … since at least 1986.
Anyway we need a right back. Have Celtic realised that they may need to spend a bit more yet or are we going so far down the list of targets that Peter will be dialling 0161 soon?
Tierney out of the shop window and the McGregor mannequin being readied.
Have we signed a top class specialist right back yet?
We continue to look like a heavyweight fighter with a huge reach and significant height and weight advantage but who fails to get annoyed enough to obliterate his serial cheating inferior opponent.
8 games to make or break this seasons income and we play a make shift team yet again because it might just be enough.
Don’t understand Neil Lennons answer when asked about Danny Simpson. The Israeli is not a right back
Neil searching for the Celtic Right Back
TBB
Shabby Chapeau, well and truly doffed……………………….
:)
CQN at it’s best.
HH.
Chelsea do a deal to pay an 18 year old boy,£180,000 a week…
The Israeli player has played most of his career at Centre half according to all reports. He has played some games at right back.
We are signing a right back who is primarily a centre back. At least he’s a defender. It’s the right area of the pitch I suppose but out of all the right backs in the world we sign a guy who isn’t one.
Time will tell
What’s the preference? A good right back or an expensive right back?
Offaly await the arrival of the boul’ bhoy Lowry……………..
;)
HH
As Newcastle sign a ‘striker ‘,who has never scored more than 8 goals in a season…
TBB…
Thanks for putting it in Layman’s terms, makes it all the easier to rip the pish out of the huns in work. ☘️☘️
Hasn’t Jim” Red White and Blue” travelled back ooooot to kontroverdial kuntry Sith Effrika to doorstep kontroversial “businessman” Davey over the recent revelations aboooot the kash-humped Klub?
Naw!
HHH.
Absolutely brilliant article Pablo.
It reminded me of something from the past called journalism.
Hail hail
Even the BBC
Take it Chris is still banned
https://www.bbc.co.uk/news/uk-scotland-glasgow-west-49089986
1) This site is not easy to work with on an Android device
2) Can Blair not be done for contempt of court?
You cannot blame the newco support for thinking there’s no financial problems – they get their news from level 5 – and with all the new signings and loans coming in ?
Paddy- use Adblocker,works on android for me
My thanks to the Battered Bunnet. As has been said, CQN at its finest.
Bada
Think it’s £100k per week – don’t know how he’ll manage
Great synopsis from The Battered Bunnet.
Thanks.
Big Jimmy, also terrible what you had to go through. Tom Minogue writes about similar injustices https://www.tomminogue.com/tom/?page_id=572
SIPSINI,
Did you see my reply to you yesterday?
Paul67 et al
Speaking of selling the jerseys, does anybody know when the new Celtic home shirts will be available?
As things stand continuing to sell the one on sale now could open up the club to a series of legal battles, and accusations of allowing third parties not only to redesign our strips but to actually market them to those gullible enough to believe that they are the real thing. Or even better than the real thing!
Gene- SSN were saying 180k,truly obscene
Bada you may well be right – in either case, as you say, truly obscene.
Gene- the cricket final was unbelievable….
Bada
It certainly was and if it hadn’t been for umpire error – who knows
If you had written it beforehand it would be seen as pure fiction
TBB 5.27
Not a lot of people knew that so thanks for setting it out.
What does puzzle me is anyone thinking an indemnity from “Rangers” is worth the paper it’s written on, certainly not without taking out some form of insurance it will maintain its value at time of signing.
POG..
Not looked back, to busy laughing.
I’ll check now.
Following SDI judgement,Celtic Board start a rumour and then follow it up with an article from Paul suggesting Newco are on the brink.
Deliberate tactic to deflect and take the pressure off transfer activity or lack of?
Cynical CSC.
POG…
Got it, too much of a coincidence not be Bill.
A true gentleman and sharp as a tack. HH
Shine as much light as possible on hundom………….
thems don’t like it.
Which is a;ways good.
https://www.bbc.com/news/uk-scotland-glasgow-west-49089986
The Level of hun kover is “professional”………
After the MASH judgement as far as the huns are concerned everything in the garden is rosy. Well they can blame Kafflik schools for many things but they can’t blame them for their own stupidity 😉😂
……………………………meanwhile somewhere on a small bit o’ timland , far, far, far away………. in cyberville……….angrycelts.org………..a WhatsApp group for the bewildered, beery and belligerent react extremely to the news that KT might no’ be sold…………
https://www.twitlonger.com/show/n_1sqv59s
Penny dropped with this hun…
“news”…………
:)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))
A rather long read:😉
This was posted on FB by BRTH, thought it was worth a post here:
Good Morning Brendan – from the Monastery of San Silvestro which was first recorded as being in existence in 1337!
Back in olden times, when someone was being pursued for debts (sometimes violently and even fatally) the only way for them to escape those debts and the violent intention of their creditors, was to seek sanctuary and protection in the grounds of a church or monastery. As long as they remained within the sacred grounds and never left them, they were ok as creditors weren’t allowed in to collect debts or inflict retribution for not being paid – but the debtor was not free to roam the land or participate in anything outside the church grounds.
This was the first example in our law of “insolvency” or notour bankruptcy and it still forms the basis of our insolvency law – basically admin or worse still liquidation – means you can escape your debts but you cannot continue as before. Admin is like running into the church grounds and from that place of safety reaching a deal with your creditors and then being able to leave the church and moving on – liquidation means you never pay anything to creditors and so you are stuck in the church for ever – isolated from the world outside.
Now, the big decision about going into the church grounds in the first place was always whether you were chased in there by an angry creditor, in which case you rushed in in a panic – or whether you decided to up sticks quietly in the middle of the night and voluntarily picked a nice church, with big grounds and a cosy cottage to stay instead of being chased into any old church which might not be of your choosing and would be less comfortable.
Hmmm decisions decisions?
Sometimes you don’t get to leisurely make decision. For example, imagine there is a creditor out there to whom you owe a lot of money – maybe we will call him Mr Close – and he gets wind that you also owe a lot of money to another creditor – Mr SD who has recently demanded payment via the local Sheriff who has ordered that you had better pay Mr or else!
Mr Close also knows that there are other smaller creditors, none of whom are owed a fortune, but who are certainly there and getting antsy. One of these at least has also gone to the Sheriff!)
Mr Close stands to lose a lot of money if he isn’t paid and he is not in the strongest position in terms of his security. In olden times Mr Close might have had a promise that if he weren’t paid in cash he would at least get two old cows, two sheep and an old horse but nothing else.
Now he hears that someone else, if they move fast enough might swoop into town with the consent of the sheriff and rustle the sheep cause they are owed money and the debtor can’t pay!
What is Mr Close to do? Does he sit and wait some more or does he demand payment or the livestock immediately?
And from the debtors point of view, while he promised the cows, and the sheep to Mr Close, he really doesn’t want to give them to him because the sheep and the cows produce lambs and milk each year and well you need that to live off!
Worse still, the debtor has a nagging wife and children who keeps telling him “hey, these are our cows and sheep too, and we can do nothing and go nowhere without our old horse, who limps along but at least pulls the cart year after year!
Worse still is they might have to leave their rickety old house which costs a fortune to run – who would look after that if they had to go to a monastery?
You can’t sell the old house – we love it here! What can you do to protect our horse, our sheep and our cows and our old house?”
Well the debtor knows he can run into the church grounds with his family and his assets and they would be protected there – albeit he would have to give some of the milk and the lambs to the monks – but that is better than nothing.
But much depends on how comfortable Mr Close is with his arrangements because if he sends his henchmen to collect the cows and the sheep etc – well that could happen overnight – something that the wife and children are very worried about.
Meanwhile, everyone else in the village knows that all this is going on but never talk about it – but they won’t do any deals or trade too much with the debtor because they know that he owes all sorts of strangers who might just come to town one day to collect.
There is even one guy – a distant relative – who maintains that he is the real owner of the cows the sheep and the horse and the old house because they were stolen from his family by the debtors great uncle Charlie many moons ago and adds that if anyone looks at the horse’s hoof his name is still on the horseshoes and his name is etched on the door of the old house!
What a palaver!
Will Mr Close get nervous?
Will the nagging wife – who has sunk her dowry into this relationship tie the debtor to the cart and head for the church of her choice?
Will the debtor himself head for a monastery or will he be chased there by Mr Close or Mr SD or any of the others who know that if Close or SD act first they could lose out?
Will the debtor sell a prized lamb to fend off this possible course of action – though the weans would miss the wee lamb and there is better livestock available so nobody is really willing to pay a good price – and besides the lamb is a temperamental wee runt who sometimes head-buts things and knocks himself clean out!
God alone knows what will happen but each and every day the sun rises and the first thing this family do is get out their bed and look to see whether any or all of their creditors are on the horizon – and then they have a quick look to check if the monastery gates are open – just in case like.
Interesting place is a monastery – some people come to reflect, contemplate and so on and then move on – but most monasteries also have a graveyard.
Either way – they are peaceful!