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Newco: how long can this phoenix fly?

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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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  1. SFTB would like your views on our coaching staff

     

     

    if as it seems to be case that we are not investing in team, then it is uttermost important that we have experienced coaching staff.

     

     

    Neil has been with us, Bolton and Hibs, not a great wealth of experience when it comes to Europe, but better than many .

     

     

    am experienced assistant would have been beneficial but we got John Kennedy with zero experience of being even an assistant manger

     

    John is know as lawells man, his eyes and ears on the training pitch

     

     

    when I was back in Glasgow last year, was chatting to friend who knows some players. rumor was they keep John at arms length due to him being lawells man. it even got to the point that the only coach who did travel to Dubai last year was John kennedy as BR kept him away from the inner circle

     

     

    I took that with a pinch of salt until I was posing for a photo on the celtic crest inside front door when who walked down stair but big JK who is indeed PL man

     

     

     

    we need more experience with coaching than just being peters man

  2. ST

     

     

    I think that is a dubious table

     

     

    Flora Tallin have been knocked out of Europe in all of their first round ties except for this year where they got by their first Europa qualifier beating a Serbian team- they now face Eintracht Frankfurt. They lost on aggregate to Lincoln Red Imps 2 years ago.

     

     

    Levadia Tallin have won a few qualifiers but have never got past their 2nd qualifier. They were knocked out by Stjarnan this year and Cork & Dundalk in the 2 previous years.

     

     

    Someone has Awe Nawed that table, I am afraid.

     

     

    Goodnight

  3. Fool Time Whistle on

    Ehm If I have this correct…

     

     

    Celtic released a 32 year old Right Back who also played Centre Back as required.

     

     

    Celtic are about to sign a 28 year old Right Back who also played Centre Back as required.

     

     

    HelloGoodbye CSC

  4. Pog/ brth 8.14

     

     

    Good wee informative post thanks :-)

     

     

    As a wee aside An Tearmann is irish for sanctuary and the Abbey/monastery was at kilmacrenan(irish Coll mhic nEanain) where our local saint,St Columba received his early education..

     

     

    Ah Mr Close :-))) like hrvatski Jim said I feel a gentle air of panic.

     

     

    HH

  5. fool, time whistle

     

     

    think it should read

     

     

    Celtic released a 32 year old Right Back who also played Centre Back as required.

     

     

     

    Celtic are about to sign a 28 year old utility center half who has rarely played at right back, one of those games from a with Ghent where he played at right back before he was found out and never played for them again (hopefully a 2nd or 3rd choice for us)

     

     

    oh dear

  6. MIKE IN TORONTO on 23RD JULY 2019 10:15 PM

     

    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….

     

     

    Hi Mike,wee five buck bet Mr Blair’s position may free soon (Mary’s meals).

     

    No not club1872

     

    Nor the supporters group rubtheknuckle or whatever it’s called

     

    As company secretary lol

     

    Go on go on dare you to apply

     

    :-))

     

    HH

  7. quadrophenian on

    FTW

     

    Surely its the terms of what the player wanted that have to be factored in…

     

    A tired 32yr old wanting a three year at 24k + per week

     

    A fresh 28yr accepting a four year at circa 8k p/w

     

    We have had several senior sick notes draining us over the years (Derk, Compper)…

     

    For me, I thought that Senor G was a proper RB, as did the CR coaches who slotted him in every game at recent WC level.

     

    Lenny likes Hatem.

     

    OComeAllYeFaithfulCSC

  8. It’s hard to know whom to detest more, the Celtic haters on here or der Hun filth.

  9. henry joy I agree I detest peter law ell as he takes the mickey out of our team every year penny pinching

     

     

    its all about his bank balance I am afraid

  10. Melbourne Mick 1.06

     

     

    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

     

     

    Tonight is the first time I seen that interview with Jock.Absolutely brilliant you were there Mick,

     

    i was 5 at the time,but any Celt like yourself who has regaled me with tales of our road to Lisbon says they were undoubtedly our toughest opponent(agreeing with jock) they also like you do above smile and recall the joy detonated by one king Billy’sheader from Charlies cross.

     

    Billy now looks down on us and Charlie Gallagher still attends Celtic matches and meets up with the original holy goali just along from can coarna.a gentleman indeed

     

    Hope all is good down in Melbourne Mick

     

    :-)

     

    HH

     

     

    Bada Bing

     

    dint realise you posted earlier,tis a great wee clip.hope yir good mate

     

    :-)

     

    HH

  11. DAVID17 on 23RD JULY 2019 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

     

     

    Dark post there David.

     

    we stand alone.

     

    Following the SDI verdict twas the succession of transfer fables myths and farts from the friends and knucklepals from the jabba at level5 bout el duff,tavernier etc

     

     

    Tactical deflection and transfer activity,as said above we stand alone,twas jabba at level5 at what your implyin our club are doing.

     

    Squirrelling n story planting.

     

     

    May see you at St j game:-)

     

    HH

  12. Der Hun filth have much to distract from. The Celtic haters on here risk exposure.

  13. An Tearmann

     

     

    I do not think its a deliberate ploy, but indeed Pl is taking advantage of it to hide our usual penny pinching shambles

     

    never in recent memory has our club had so much cash available at transfer window that peter lawell must have been praying for something falling from heaven, and along come dodgy dave .

     

     

     

    I do remember number of years ago we had sold a player for a substantial sum, transfer window opens around new year and along comes a referee called Dougie telling fibs about a game at Tannadice.

     

     

    Now I have it on good authority that a certain CEO fed Cyberspace with how awful it was and we should speak up and that celtic would make statements

     

     

    the whole cyberspace spoke about the dougie dougie incident for 8 weeks

     

     

    after the transfer window shut the statements stopped from Celtic funny that eh

     

     

    and we said, where is our signing, response of course was too late

     

     

     

    lets be clear, we call it a transfer window, Peter lawell calls it that troubled time when his bonus is threatened

  14. TIMBHOY2 on 23RD JULY 2019 4:55 PM

     

     

    Celtic Prop up Sevco,with hireing a bus for first team players and other personnel,from none other than Parks of Hamilton,who between him and his son prop up Sevco,

     

     

    Think that was brought up at last agm,relationship with parks etc it got answered by saying we are bit bigger than that.i agree.nae need for whip roon furra driver :-)

     

    HH

  15. Kudos Paul

     

    Concise and very easily understood analysis of Sevco’s quicksands position.

     

    How much jelly and ice cream can I consume without endangering my glucose levels?

  16. SYDNEYTIM on 24TH JULY 2019 4:49 AM

     

    An Tearmann

     

    Hi SydneyTim

     

     

    U-I do not think its a deliberate ploy, but indeed Pl is taking advantage of it to hide our usual penny pinching shambles

     

     

    Me- if it’s not deliberate ploy,what is it?chance,opportunism,involuntary reaction,We stand alone ST,I see no correlation between our transfer activity and nooklub in real business terms.the abstract world of t’internet the old firm still iisnae deid,why “tupe’over the ol we do this cause o them fears.

     

     

    U- never in recent memory has our club had so much cash available at transfer window that peter lawell must have been praying for something falling from heaven, and along come dodgy dave .

     

     

    Me- agreed,we have never had so much cash but never before have we spent it like we are doing all over our club, on transfers this window and more will be spent.Again we stand alone,dodgy Dave brought it on himself setting out with hubris and us as a target instead of sorting out the mindset and hubris within his own house.first.dodgy Dave and his lot are defined by us,not the other way around

     

    For pennypinchin you and I both recall the Kelly’s!!,

     

     

    U-I do remember number of years ago we had sold a player for a substantial sum, transfer window opens around new year and along comes a referee called Dougie telling fibs about a game at Tannadice.

     

    Now I have it on good authority that a certain CEO fed Cyberspace with how awful it was and we should speak up and that celtic would make statements

     

    the whole cyberspace spoke about the dougie dougie incident for 8 weeks

     

    after the transfer window shut the statements stopped from Celtic funny that eh

     

    and we said, where is our signing, response of course was too late

     

     

    Me-I do think more signing wI’ll be forthcoming,we have a poss 9iar historic position to work for and imo I think our board know/verging on shitin it about the importance of this season.

     

     

    lets be clear, we call it a transfer window, Peter lawell calls it that troubled time when his bonus is threatened

     

     

    Me-Sorry ST,no link with bonus and transfers it’s what happens on the pitch that counts.9 trophies in a row….could you have thought that when cheering the fox(sign it sign it)

     

    Wayne biggins etc circa 1992-4

     

    Hope all’s well down under:-)

     

     

    HH

  17. Good morning CQN from a damp and grey Garngad

     

     

    Come on Lenny’s Lions, let’s get a good first round lead tonight.

     

     

    Hail Hail

     

     

    D. :)

  18. For all the obvious frustration the window remains wide open with its usual final furlong bringing the inevitable movement as squads get pruned and players become available.

     

     

    With Stepehen O’Donnell sitting in his Celtic PJs and NOT getting the call, I’m going with the theory we want some quality rather than bodies as reinforced by our pretty honest manager Neil.

     

     

    The money is there. Let’s see what we spend by the end of the window to be a stronger squad and qualify for the ECL group stage. The quality of the teams in the next 2 round shouldn’t have us blaming a lack of a recognised right back yet.

     

     

    Spend the money Celtic.

  19. On the day when Scotland`s representatives in the CL are in a qualifying game, impartial BBC Scotland`s website feels the headline news is that Sevco`s Director of Football is satisfied with his Club`s transfer dealings.

     

    In spite of the fact that this type of `reporting` is all too common in Scotland, we still have CQNers whose sole reason for posting is to point out perceived failings in our incredibly successful Club,

     

     

    Incidentally, if Tierney stays, I would like to see an occasional Tierney/Morgan partnership on the left.

     

     

    JJ

  20. Good morning, friends, and a Big Happy Matchday to you all. Another warm and muggy start to the day here in cloudy East Kilbride. Still hoping it’s a ‘shorts and Sellik Tap’ option for tonight’s visit to The Holy Ground (once more).

  21. CQN … any chance of having a normal “Reply” function in the comments section so that threads can be followed?

     

    !!Bada Bing , thanks for the Ad blocker suggestion, HH

  22. BIG WAVY

     

     

    I agree that O’Donnell is an OK RB and if he’s a Tim that’s a bonus.

     

    Did alright for Scotland too. Caught my eyes a decent calm footballing defender.

     

    Why not take a punt ….he might be one who can blossom in the hoops or otherwise be a good stand-by.

  23. If KT stays we can give him plenty time to regain full fitness. We got Boli to take the pressure off him.

     

    Always thought as a young player he could have been rested occasionally .

     

    Plus he took brutal punishment from the hammer throwers.

  24. prestonpans bhoys on

    Good morning from a dry and humid Bowness on Windermere but anything weather wise can happen down here. My ticket is going to a hertz fan today, need to convert the man since his only hertz game in five years was the final😱

  25. !!Bada Bing!! on

    PC- I’m hoping Morgan might surprise us this season, looked sharp so far,2 footed and can cross a good ball, not scared to shoot, hope he gets a chance tonight.

  26. sydneytim

     

     

    We are actually joint 46 with among others inter milan. There are five other clubs on 31 so 50th position is as negative a spin anyone could put on it. Why is there a celtic fan putting a negative spin on our stats? I’ll never know!!

     

     

    Here is the list of clubs (outside the big five leagues) who are above is in the rankings.

     

    shakhter donetsk; Ajax; Benfica; Dynamo Kyiv; Besiktas; Salzburg; Basel; Sporting Lisbon; CSKA Moscow; Anderlecht; Olympiakos; Club Brugge; PSV; Sparta Praha; Krasnodar; Pilsen and Fenerbahce.

     

    All from nations with a higher club coefficient than scotland. The difference between the last few’s coefficient and ours is less than 5 points (2 wins and a draw more over five years).

     

    Delving into statistics often sheds more light, what do you think?

  27. ……………..Bain…………….

     

    …………………………………..

     

    Ajer…Bitton…Jozo…Boli

     

    ……………Brown……………

     

    Christie……….McGregor

     

    ……………………………………..

     

    Forrest…Edouard…Morgan

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