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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Wonder if MASH is aware
Of the super brains he is up against
Maybe change his mind on picking a fight
https://www.change.org/p/glasgow-rangers-and-their-fans-glasgow-rangers-versus-sports-direct?recruiter=false&utm_source=share_petition&utm_medium=twitter&utm_campaign=psf_combo_share_initial&utm_term=psf_combo_share_initial&recruited_by_id=d2eb0a50-ad62-11e9-8284-41baaf97f3f4&share_bandit_exp=initial-16847980-en-GB&share_bandit_var=v0
441 signatures in 7 hrs
It’s trending globally
!!BADA BING!! on 23RD JULY 2019 7:16 PM
Gene- the cricket final was unbelievable….
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UP YOURS BADA!
Voguepunter
Have I missed something?
A couple of references to TBB` s 5:27 post but I cannot find it. Has it been moderated?
JJ
Wonder if the Close brothers are getting very close to their lawyers😱😵😂
Hot Smoked it’s 2.57
Gene
Thanks. Now for a read !
JJ
https://twitter.com/tirnaog09/status/1153581156027293697?s=12
Big Jock post Lisbon
VP- i will inform you of the finer points of cricket, over a G&T in the Vogue old Bhoy..😉
….and a good read it was too. I particularly like this bit:
`Fag packet figure? I’d reckon between the two retail partners, north of £10M damages, plus the hefty costs to date.`
Thanks, TBB. (…and Gene.)
JJ
VP
I take it you’re watching the T20 blast
The pope has just been caught for Surrey
DAVID17 @7:39 PM
“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.”
I would say Sscurrilous more than cynical but, thank God, we have superior beings like yourself who can see through this sort of thing and enlighten the rest of us.
Quit slagging Sevco and start slagging Celtic csc
The Dallas Cowboys remain the most valuable sporting franchise in the world.
Wish it was us and not the huns that had the link with them :-)
Basel beating PSV 2:1 in Eindhoven tonight.
Great result.
How’s that £1 million Crossbar Challenge thingy doing?
Sftb
And that’s without winning the NFL for over 20 years
Sftb
Don’t worry the 4th place in the ‘top’ leagues are safely through to the group stages
Gene
Do they not have the best Cheerleaders Squad though?
Bit like Sevco and the Scottish Press.
Anyone got an image of Chris Jack in a Ra-Ra Skirt?
SETTING FREE THE BEARS FOR RES. 12 & OSCAR KNOX on 23RD JULY 2019 8:49 PM
DAVID17 @7:39 PM
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It was just a theory but now I’m worried you’ve went with it.
Sftb-8:49pm. Cynical never the less🤔
Gene
PSV finished just 3 points behind Ajax last year and they were well ahead of Feyenoord, yet they still have to play at the Q.2 stage.
I assume if Basel win on aggregate PSV get to drop into the Europa but not straight to Grou Stage
Sftb
‘Champions’ League my ass
!!BADA BING!! on 23RD JULY 2019 8:53 PM
How’s that £1 million Crossbar Challenge thingy doing?
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It’s a rollover mhate.
Sftb
The loser drops into the 3rd qualifying round (like us) against the winner of
Haugesund (NOR) / Sturm Graz (AUT)
Aw naw,no Jaw-Jaw an’ Baw Jaws oan anaw nooooooo?
Everything is fine at ibrox
https://rangers.co.uk/news/headlines/message-to-supporters/
No matter the facts,………….. wull ne’er be rid o’ the hunned-up Sleekit(s)
HHH.
JC2-whewwww thank god for that😉
DAVID 17,
Where is this lack of transfer action?Last time I looked,we had signed a LB,and 2 CHs,took one of Englands best youngsters,and were very unfortunate with the Motherwell boy.The panic about the RB,is ridiculous.We are trying to get one in.Reading too many papers.Lenny said he wanted another CH.He got one.Because the guy has played at RB,everyone jumping on the fact.The EPL window shuts I think,well before ours.I keep saying,why get upset now,the end of the window is the time.
THE Bhoys are back in European action tomorrow night (Wednesday, July 24), with Estonian side Nomme Kalju making the trip to Paradise for the first leg of the UEFA Champions League second qualifying round tie.
It’s a 7:45pm kick-off, and you can watch all the action LIVE* right here on Celtic TV as the Treble Treble Champions set out to get a positive result before they make the trip to Tallinn next week (Tuesday, July 30).
Overseas only
Watchin the news thinkin…. I hate Boris Johnston more than I hate Maurice Johnston
NALLY81 on 23RD JULY 2019 9:59 PM
Watchin the news thinkin…. I hate Boris Johnston more than I hate Maurice Johnston
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Steady on there Nally.
Got all my Oz mates over.This will be their last game at my gaff.Fly back on Friday.Celtic TV it is.Looking forward to it.
🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥 🤥🤥🤥
RANGERS would like to reassure supporters that matters concerning the litigation currently being brought against it by SDI Retail Services Limited are not as reported.
Rangers was disappointed by the terms of the recent court Judgment but respects the decision of the court and will meet any financial award made by the court.
No such award has yet been decided and at this stage Rangers does not even know how much will be sought. Contrary to some reports, the Judge has not determined that the contractual cap on damages will not apply.
Rangers would also like to reassure supporters that no steps have been taken to stop supporters being able to buy this Season’s Replica Kits.
🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥🤥
ayerightcsc
DAVID17 @ 9:02 PM
“It was just a theory but now I’m worried you’ve went with it.”
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A theory is a good thing. It is a hypothesis that best fits the known observations.
It is not an imagined interpretation of what it might be if you take a twisted view of your Host’s motivations.
And above all, it has to be falsifiable.
Your’s fails on all counts.
Sevco have announced that they are looking for people to fill three posiitions…
Marketing Manager
Commercial Business Intelligence Executive, and
Partnerships & Executive Assistant ….
(I’m not joking…)
I wonder if this might have anything to do with yesterday’s decision …. obviiously, commercial business intelligence is not their strong suit, and they dont seem to work so well with their business partners….
SFTB @ 8:52
Maybe a wee bit hasty with the result?
IniquitousIV