Newco: how long can this phoenix fly?


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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    The Newco are in financial difficulty. According to yesterdays transcript the Celtic Board are awaiting their implosion. We have been rebuffed in our attempts to sign a number of players to the extent that we are unprepared for crucial matches upcoming. Peter Lawwell commented that Neil Lennon ‘knows Glasgow’ at the time of Neil’s appointment. So its reasonable to assume Peter himself ‘knows Glasgow’. Paul is Peter’s friend.



    The only downside to my theory is that the PLC are probably not forward thinking or smart enough to execute it.

  2. quadrophenian on

    Why all the girning about a dedicated RB?


    Kris Ajer was an attacking mid when Ronny pulled him in to the fold. As a yoof, KT was a winger. Rogic too.


    We’re signing slowly, selectively but we’re signing well. Could be worse; we could be them. Or Killie. Or embdy.


    Keep the FAITH bhoys, HH

  3. ” see me, see sellic………see r’at Peeeee elll seeeeeeeeeee……………..”





  4. PeterLatchfordsBelly on

    Brilliant piece. A pleasure to read. Both for the quality of the analysis and the conclusion.

  5. David17



    “We have been rebuffed in our attempts to sign a number of players to the extent that we are unprepared for crucial matches upcoming.”



    Were we unprepared for Sarajevo?


    Are we unprepared for Nomme Kalju?


    Will we have an 11/14 that can easily beat their 11/14?


    Are we unprepared for St. Johnstone?


    Were you not warning that we would not win last year’s league?


    What is your track record for forecasting doom for Celtic?




    If we sign a RB will we, suddenly, be prepared for crucial matches?




    The only downside to my theory



    It is far from the only one and it is wild, scurrilous speculation and not a theory.




    For example, it would be dead easy to type that “Every time CQN publishes something negative about Sevco, the word goes out from Level 5 to tell David 17 to get his arse in gear and start some Celtic slagging on CQN instead.”



    Trouble is it is wild nonsense, isn’t it? But hurtful nonsense nonetheless.

  6. DAVID17 on 23RD JULY 2019 10:31 PM



    The Newco are in financial difficulty. According to yesterdays transcript the Celtic Board are awaiting their implosion.





    Transcript? Where can I read it??





    The only show in town is the UCL qualifiers. We are unprepared, as usual. Sure, its great to hear that the Newco are in trouble but we need to be bigger and better than whatever version of themselves they bring to the table. Most folk are talking about Sevco rather than how we can be as good as we can possibly be. That past decade has proved that a huge number of Celtic supporters love to hear about the impending demise of whichever version of Rangers. It is not in my view unreasonable to suggest that a convenient effort could be made to give those Celtic supporters what they want. You evidently disagree so we should probably leave it there.

  8. SFTB @ 10:22


    I agree. I happened to watch the game, and was impressed with both teams. We are not yet ready to face teams of that standard. I just hope that we aspire to that aim.



  9. DAVID17 on 23RD JULY 2019 11:05 PM



    NATKNOW on 23RD JULY 2019 10:44 PM



    Read yesterdays blog around 5pm.





    Cheers dude – assume it’s the A. Clarke rumour thing?





    Who to believe?


    The SMSM have reported that Sevco are up for £millions, specifically stating that the judge had thrown out Sevco’s argument to limit damages to £1 million.


    But, Sevco’s official statement flatly denies all of this.



    Who to believe?


    Who to believe?





  11. to be honest paul67 scrolled past the stuff about sevco



    we have only a few weeks of window to go,


    lets be clear, we don’t have right back, I don’t know who wrote that nonsense in CQN header about NL saying he had his right back.




    not true still about 20M can be spent by our club right now without going into debt, we have not even spent the dembele money



    If peter lawell things he can give our manger 1.5m for a project right back he must be kidding



    please paul67 please done post about sevco stuff until after window has been closed. I am sure PL will be laughing away that this tosh has taken the focus away from investing In ten a row and CL




    as one blogger said yesterday




    “Lawwell, I know what you DIDN’T do last summer



    ……..and its happening again!”




    how true and he is getting away with it again

  12. David 17



    “The only show in town is the UCL qualifiers. We are unprepared, as usual”



    2010/11- lost 2 out of 2 CL qualifier ties- and both Europa qualifier ties


    2011/12- No CL ties to play- finished 3rd in Europa Group


    2012/13- won 4 out of 4 qualifiers and finished 2nd in CL group- made last 16


    2013/14- won 4 out of 6 (lost one only) q ties- 4th in CL Group


    2014/15- won 2 out of 6 on the pitch+ 1 draw (4 out of 6 in the rule book-) lost in play off round


    2015/16- won 4 out of 6 (1 lost only) – dropped into Europa at play off stage


    2016/17- won 3 out of 6 qualifiers – (2 lost) made it to Group Stage


    2017/18- won 4 out of 6 (lost one)- made it to Group stage


    2018/19- won 4 out of 6 (lost one) dropped into Europa at Play off



    So, even giving you both Legia results, we have won 25 CL qualifying ties, lost 11 and drew 6.



    We have a strong winning record, even in the last decade where it has been made harder and harder for us.



    In those 9 seasons, we made CL Group on 4 occasions and Europa Group on 4 occasions. We have played in Europe after Xmas on 4 occasions.



    This “Usual unpreparedness” leads to a lot of flukey results obviously. Or else, we prepare better than you think.

  13. What is the Stars on



    Celtic was founded by poor downtrodden Irish immigrants


    On a Celtic fans blog/forum over one hundred years later we have an emigrant from Scotland posting anti immigrant claptrap through twitter links to right wing conspiracy nutjobs who criticise Ireland for accepting immigrants.



    Grand so..

  14. macjay1 for Neil Lennon on




    I`m on your side.


    But you don`t understand that.



    So you attempt to shoot the messenger .


    And miss.

  15. SFTB interesting statics, won 25 lost 11 the most important ones are the CL qualifying games



    question for you, when was the last time a team with a bigger turnover knocked us out the playoff or qualifying rounds for CL




    I might be wrong , but I think the answer is Arsenal




    statistics tell fibs we should never be put out by teams on a fraction of our income I noted the other day that we must have about times the income of Maccabi , which would be similar to Cluj





    a damming statistic the other day I saw was Celtic are approx. 30 in Europe when it comes to Income , but 50 when it come to ratings in Europe




    summary, there are 20 teams with leas income than us that have higher rating in Europe due to results



    now that is damming result for our CEO as it shows his polices of not investing the money we have



    never have we had a preseason with so much money to spend, but its same old same old



    need a new CEO

  16. What is the Stars on



    You’re not on my side


    And frankly I would appalled and disgusted to share your world view.


    But feel free to post your poison.

  17. ST



    Arsenal would be right



    But Turnover does not make a good team. You also need a competitive playing environment. Andy Murray had the wealth of the British Lawn Tennis Association to back him and make him a good player but if he used that wealth to train and play in Britain against Brits he would never have made the top.



    The top clubs, and Arsenal were automatically into CL Group stages most years have sought to insure against the possibility of being knocked out by a Celtic or Anderlecht or Zagreb. So, only if you finish 4h or 5th in your league do you suffer the indignity of taking your chances against the 2nd best team in Switzerland or Greece or Austria before you get your rightful place in the big boys playground.



    Celtic, on the other hand, have habitually to face 4 to 6 qualifying ties and, if that was not bad enough, we now have 8 ties to negotiate, before we get to lose to the big boys.



    In each of those 4 qualifying bouts we will be the team with the biggest turnover. We will be the team with the highest ranking AND, we might even be bookie’s favourite at all 4 stages.



    But it is still 4 competitive ties. That brings the prospect of a defeat to a Maribor or Malmo or AEK, even over 2 rounds (sure we can lose to Red Imps in one round). Even a league favourite rarely beats everyone. We have 4 cup finals to play. Sarajevo gave us as tough a tie as Hearts did in the SC. I think the Estonians will be more at a Livi/Ross County Level i.e we beat them 8 or 9 times out of 10 bu it is not outwith the bounds of possibility that the 2 times out of 10 happen consecutively.



    The teams we face at Q.3 and Play-Off will habitually beat Aberdeen and often, the Sevco, of recent years.



    So, it is always a great achievement when we make CL Group, because, even though we are the slightly stronger team, we have to prove this more than once and, each time, carries the seeds of possible failure.


    That is why we only make it every 2nd year or so, on average, and it’s getting harder.



    Just as it is to type on this accursed site, that freezes and jumps and auto corrects you’re spelling.

  18. Melbourne Mick on

    Hello again all you young rebels.



    Brilliant summary of events from TBB about the SDI/ragers contract.


    Some people don’t like any talk about ragers on CQN, but me?


    I love to wallow in their fallow..fallow.


    See what i done there 8-))


    H.H Mick

  19. macjay1 for Neil Lennon on

    WHAT IS THE STARS on 24TH JULY 2019 12:26 AM



    You`re right .


    I meant I was on the side of Ireland.



    ” But feel free to post your poison”.


    This poison ?






    Leo: Immigrants are now ” a burden “. Nice one Leo. Freudian slip ?





    ” Ireland also pledged €15 million towards a €500 million trust fund aimed at assisting African countries in stemming the flow of migrants leaving for Europe.”



    Stem the flow of ” migrants “?


    But hang on .They were invited by Merkel .


    Yep . Pay up to shut the stable door.


    Hilarious if it weren`t so sad.

  20. STTB thank you for your well put post



    indeed some of your points are correct




    but many times we don’t even attempt to improve like last summer and so far this summer



    note we had a top class striker in dembele and we have not even tried to replace him, we are weaker with less of a threat.



    one thing that blows your argument/discussion is tye clubs above us, we are at 57








    Slavia Prague


    Czech Republic











    APOEL Nicosia














    Flora Tallinn













    FCI Levadia Tallinn


























    PAOK Thessaloniki FC













    PFC Ludogorets 1945 Razgrad













    Viktoria Plzeň


    Czech Republic




    all the clubs above are above us in rankings and don’t play in competitive leagues





    indeed spell check, rolling pages, make this a vert hard blogg to post these days

  21. Melbourne Mick on




    Remember the Vojvodina game very well, brilliant side and to


    be honest i thought we were going out even if it went to a replay.


    And as me and the mates headed towards the exit feeling really


    down Charlie’s cross and big Billy’s header sent us all into scenes


    of wild celebration.


    The rest is history.


    H.H Mick

  22. macjay1 for Neil Lennon on

    My mate met the Vojvodina goalie in Wollongong.


    He claimed that he had been obstructed when going for Charlie`s cross.


    Can`t see it myself.


    He would say that.



    What a night that was.


    And the Dukla game to follow. Wee Bertie`s sleight of foot for Wispy`s goal .

  23. Tradamus Lampada ! !



    Keep The Faith !!



    🍀🏴󠁧󠁢󠁳󠁣󠁴󠁿 🥃

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