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Sports Direct, JD, Hummel contracts all in flux

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At the High Court in London yesterday, Mr Justice Phillips was told by both counsels that Newco Rangers had accepted claims by Sports Direct that they were entitled to match and retain any retail contract offered by a competitive organisation.

A clause to this effect was inserted in the agreement signed a year ago, which also saw Newco pay Sports Direct £3m to terminate their existing agreement this summer, while buying Newco shares owned by Mike Ashley at a premium price of 27p per share.

Apart from ordering Newco to pay Sports Direct costs, the judge declined to act, telling both parties to get on with it.  Although Newco have conceded their earlier position was wrong, much work has still to be done to effect the terms of the contract and put any new deal in place.

The mechanisms to bring about a new deal between Newco and Sports Direct are difficult.  The deal Newco apparently made with JD Sports to pick up retail operations from now is clearly in jeopardy, which could cause additional problems for the Ibrox club.

Justice Phillips told Sports Direct counsel, “You are going to get your new contract with Rangers (sic.),” but this is far from certain.

Newco will have to look at whatever contract they have signed with JD Sports, a contract they will have to terminate before they can even open discussions with Mike Ashley’s representatives.  A sticking point in this respect is likely to be non-disclosure terms.  JD cannot allow their direct competitor sight of their offer.

It would be more appealing to pay Ashley off, again, and do business with JD Sports, than offer JD Sports compensation for terminating a contract they will expect to earn millions from.  The latter option would necessarily reveal JD’s offer structure, terms and contract nuances to their principle competitor.  A clear violation.

Ashley knows this.  He is likely to hold out for the disclosure the contract requires.  It will be an added bonus to an already sweet deal.

The first call will be to JD Sports, who will be asked if they will tear up a contract worth millions, and agree that their commercial offer details can be shared with Sports Direct.  JD are a FTSE 250 company in their own right, and a subsidiary of Pentland Group, which also owns Speedo, Mitre, Red or Dead and Kickers.  I cannot even imagine who would have the authority to tear up such a deal without appropriate compensation.  But, there again, I cannot imagine the compensation figure Ashley would demand to tear up his contract.

Then there is the Hummel contract to consider.  Kit sponsorship deals depend on kit being sold.  Financial returns are performance dependent.  This is another can of worms.  The first summer of this deal will be over with the Danish manufacturer significantly down on projections.

The short history of Newco has seen a litany of horrendous commercial decisions but none more onerous than the deal signed with Sports Direct last year, or this year’s cataclysmic oversight not to honour that deal.

They bought 9% of their own shareholding for an inflated price of 27p, paid £3m in cash to curtail the existing agreement, will now have to make good to either JD or Sports Direct, and pay £500k legal costs.

The problem, as you and I know, is not Mike Ashley.  The world knows what kind of character Ashley is, there can be no surprises on that front when it comes to this.  The problem is Newco is a shambles of an operation.  Vain-glorious statements are the only environment they compete in, and in that competition, they are the real world champions!

Why the ‘Rangers’-sympathetic journalists have not chased him out of town is inexplicable.  He is doing damage in plain sight but being allowed a free ride.  We will miss him when he goes.

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396 Comments

  1. The day David King ends his reign at Sevco will be a dark day for the Schadenfreude enthusiasts…

  2. So, if Sevco manage to get some kits made and sold by Sports direct they will get a cut of the sales after Hummel, Sports Direct and the VATman gets their cut. On another site it has been suggested that they will get £4.20 per strip. Now if they manage to sell 100,000 strips then they make in the region of £420, 000.

     

     

     

    Out of this profit they need to pay:

     

     

    Legal costs for Sports direct court case —- £500,000

     

     

    Legal Costs for new Sports direct contract

     

     

    Compensation to JD sports

     

     

    Compensation to Hummel

     

     

    Whatever way you look at it, even if they overcome the remaining hurdles ,then, their net income will be a lot less than their costs.

  3. The hands cant hit what the eyes cant see on

    @GER57 on 31ST JULY 2018 12:06 PM from previous article

     

     

    Based on your comment your position is evidently based on sentimentality which is fine to an extent.

     

     

    But Celtic are a business and the business is predicated upon having a good team. We should always look to improve the team and any area in which there is a deficiency.

     

     

    Also, this question that you pose “does the purchase of a “quality” centre back change this?” is problematic, as to what degree do you continue with that line of thought? i.e. If the signing of a quality CH doesn’t change our position, then does the signing of Edouard change our position? If you contend that it doesn’t, why do it? You can continue to pose the same question in relation to all our transfers.

  4. Dexter P. Bampot on

    To any Bhoys or Ghirls in the know-

     

     

    I’m a Celtic TV domestic subscriber but currently abroad (Portugal).

     

     

    Will I be able to watch the game online as my device is logged in abroad or am I restricted because my account is domestic??

  5. All this talk on here about Sevco King, Ashley, Stripes,just takes away of what is really going on at Celtic Park,ie new players coming in or not, personally myself I don’t think there will be any new players coming, certainly not in this Transfer Window,and sadly it will be the end of Brendan Rodgers,at Celtic,Peter Lawell has chanced his hand to many times , regarding letting the purse strings go,it’s came back and bite him before,and if and it’s a big if ,the Huns win next season’s league,then it will spell the end for Lawell and Co, will it worry him not a chance,he will pick up a huge payoff Check,fans cash,who over the years have ploughed millions into the club,and for what,so as the lawells of this world have a good life.

  6. DEXTER P. BAMPOT on 31ST JULY 2018 12:41 PM

     

    To any Bhoys or Ghirls in the know-

     

     

    I’m a Celtic TV domestic subscriber but currently abroad (Portugal).

     

     

    Will I be able to watch the game online as my device is logged in abroad or am I restricted because my account is domestic??

     

    ————————–

     

    I doubt it. I think there is a different pricing structure. Overseas monthly sub is £14.99.

  7. Is dedicating a podium that you don’t own the cyber equivalent of dealing in reset goods?

     

    Should lawyers who indulge in this practice be reported to the Law Society?

  8. mike in toronto on

    HJ

     

     

    You want to report a lawyer for improper conduct .. to a body made up of lawyers?!

     

     

    Good luck with that one?

     

     

    Actually, go ahead … if I can figure out how to sell something that doesn’t belong to me, they will probably name a Court building after me.

  9. Billy Bertie and Bobby on

    Absolute shambles. Pretty sure one of the red top reporters will find a way to spin it as a great deal for newco. Music to my ears to be honest and long may it continue. Best of luck to broony and the boys the morra night. Win ugly would be fine by me as long as they win and get through to the next qualifier.

     

     

    Lenny and wee Gordon had to grind out results at times. Nobody really wants to see the team grinding out results on a regular basis but all the big clubs have to do it now and again. The priority has to be getting through.

     

     

    A French Eddie hat trick would do nicely. HH

  10. !!Bada Bing!! on

    DEXTER- Jinky’s and Kitty O’Shea’s in Albufeira have it if you near there

  11. weebobbycollins on

    Greetin’ and greetin’ and mair greetin’…..’mammy, kin ah get sweeties?…kin ah no get a comic?…but ah waaant it! Bwaaaahhh…’

  12. Timbhoy2 on 31st July 2018 12:51 pm

     

     

    hahahaha

     

    thought I’d logged onto FF by mistake

  13. weebobbycollins on

    But hey! Keep ’em comin’…if no, this’ll become a big empty hoose. And it’s getting there!

  14. It is a popular view that everyone is entitled to an opinion. That being so, it is my opinion that Timbhoy2`s post at 12:51 is utterly ridiculous.

     

    JJ

  15. mullet and co 2 on

    Denayer and Roberts £20m the pair.

     

    I don’t think so either. Then again our main striker is injured and will be until the transfer window in England closes. He is worth a few bob.

     

    Conspiracy and hyperbole for discussion and amusement.

  16. weebobbycollins on

    Timbhoy2…I bet you yourself personally called our previous manager Rodney Daylia… :-)

     

     

    Don’t take it personally…keep ’em comin’…..

  17. Timbhoy2 bidding to be the next ‘junglekev’. But not anywhere near as annoying.

  18. Friesdorfer

     

    ” I’ll be there, courtesy of Arbroath Emerald CSC bus.

     

    Hot Smoked, are you with us tomorrow?”

     

     

    Is Sticky running a bus to Trondheim? Don`t know if I can make that.

     

     

    I will, though, be travelling on the Emerald Express on Saturday.

     

    See you then,

     

    JJ

  19. Just seen a communication in work for road closures in Glasgow up to 2200 on Wednesday the 8th of August in relation to the European Championships. That is the provisional date for the home leg v Athens. Chaos won’t cover it.