More bleak times ahead for Rangers after latest court ruling
Rangers’ ability to function as a football club will be impaired after their latest legal defeat to Mike Ashley and Sports Direct, according to their legal counsel.
Bosses at the Scottish Premiership side lost the latest round in their long-running war of attrition at the High Court over merchandising with Sports Direct’s Mike Ashley.
Mike Ashley’s SDI Retail Services stated that Rangers were in breach of obligations under a deal relating to club merchandise - which had been renegotiated by Dave King and the current Rangers board after paying Ashley £3 million to do so.
A series of hearings earlier this year were overseen and concluded by Judge Persey at the High Court in London and on Friday, he ruled in favour of Sports Direct after Rangers had made a new agreement with Elite without giving Sports Direct a chance to match that firm’s offer.
And with their latest victory in court, Sports Direct have requested that the sale of Rangers away and third kits are halted for the next two seasons. A year after Sports Direct had won another injunction to halt the distribution and sale of the new Hummel Rangers kits and other merchandise following further breaches of contract.
This led to a firm called Elite being created by a London-based Takeaway owner who worked with sports kit manufacturer Hummel to launch an online shop in September and a city centre store in December. But despite no official promotion from Rangers FC - Dave King’s puppets Craig Houston, Chris Graham and the not-so-independent fan group Club 1872 [who has Rangers company secretary James Blair as a board member and Chris Graham being paid by the club to help run it] called for Rangers fans to buy the new gear from the online store and retail store.
Funds from those two outlets helped fund Steven Gerrard’s latest revolution, but with this latest court ruling it could have damaging consequences for the Ibrox club.
Damages to Sports Direct is just part of the defeat
Not only will they face the prospect of no revenue from future merchandise sales, they could face a legal bill from Elite over their own breach of contract and then there is the prospect of an invoice from Hummel for not only the surplus stock that they cannot now shift, but also the investment they made in Elite to help circumvent a legally binding contract.
It could even cost Rangers their lucrative commercial deal with Hummel and 32 Red - with both companies now seeing their brands linked to a club that is going out of their way to circumvent contracts and company law. What company would do business with such individuals and a club who stick two fingers up to contracts they negotiated and signed willingly?
Another damaging aspect of the court ruling is the amount in damages that is set to be awarded to Sports Direct. The judge has left the two parties to come to an agreement over the amount of damages that will be given to Sports Direct - but if there is no agreement then the court will take charge once again and impose a penalty that they themselves see fitting. Which will not be kind to Rangers.
The judge also rejected Rangers’ legal counsel’s claims that damages should be secured at a maximum of £1 million and that an injunction against sales should not be granted because:
It will lose significant revenues and will be exposed to claims for damages from Elite.
The club, players and fans will be unable secure kit and other products; and
Rangers’ ability to function as a football club will be impaired.
He stated: “There is in my judgement no sensible risk that fans will be deprived of the opportunity to spend their hard-earned money on purchasing the forthcoming season's kit
“Rangers have pleaded in that it will rely upon clause 16.3 of the Non-Exclusive Rights Agreement to limit its damages to £1,000,000. I accept SDIR’s submission that it would be unjust to deprive SDIR of the benefit of its matching right provisions
“If relevant, I am satisfied that damages are not an adequate remedy for Rangers’ breaches. SDIR’s losses are likely to be in the order of many millions of pounds.”
Judge damning of James Blair, Club 1872 & Rangers
Judge Persey also took aim at Rangers, CLub 1872 and in particular company secretary James Blair in his ruling.
He added: “As well as being company secretary of Rangers Mr Blair was also a director of Club 1872 Ltd., a group of Rangers supporters’ groups. Club 1872 issued statements that supported the fan boycott, although Mr Blair sought to distance himself from this by saying that the statements were in fact issued on behalf of another supporters’ group called Supporters Voice Limited (of whom he was also a director).
“The evidence strongly suggests that the fan boycott was not merely being tolerated by Rangers and Mr King in particular but was actively approved of and promoted by it and him. I consider it probable that Mr Blair played at least some part in this.”
What will the shareholders & investors think?
This latest court defeat will almost certainly ward off future investors to the club as long as the likes of the glib and shameless liar Dave King has his grubby little mitts on the Quintessential British club Mk2. Shareholders have already seen the likes of Paul Murray walk away from the club under King and those who invested money in Rangers to fund the failed revolutions of Warburton, Caixinha and Gerrard last season have now seen their money converted into shares that are next to worthless.
And with the club’s legal counsel claiming that an injunction - which has been awarded - could impair their ability to function as a football club - questions must be asked of the Rangers board and their ability to actually function at all. You won’t get their puppets at Club 1872 asking such questions, you won’t get the SPFL or the Scottish FA asking such questions as they don’t want to upset the apple cart like they were forced to when Rangers 1872 was liquidated. And with Dave King now securing a majority shareholding thanks to the latest shareholding - helped through by his poodles at Club 1872 - the shareholders can all club together and ask or demand answers, but King can sweep their demand aside thanks to his majority shareholding.
With a bloated squad of around 35 players [with a wage to turnover ratio of well above the 74% that was reported last season], the club’s failure to reduce their expenditure has led to at least five members of staff behind the scenes to be shown the door to alleviate the wage bill. Their failure in getting rid of the likes of Kyle Lafferty, Jason Holt, Jordan Rossiter, Eduardo Herrara, Graham Dorrans, Jamie Murphy and Borna Barasic to further reduce the wage bill, paints a picture of a club who are now seeing their gambles over the past few seasons come to a head and back fire massively.
Their failure to pimp out James Tavernier and Alfredo Morelos throughout the summer and before, thanks to their poodles in the Scottish mainstream media, is the sign of a club that knows that if they fail to win the league this season then they will have lost their chance to end Celtic’s dominance for years to come and major cuts will have to take place - starting with the management team of Steven Gerrard and Gary McAllister.
I don’t expect Rangers 2012 to go the same way as the previous tenants at Ibrox, but they are certainly within tangible reach of financial collapse under Dave King. A man who seemingly can do no wrong in the eyes of a hate-filled fan base that blames everyone else for their own failings rather than the good Rangers men in charge of the club. Not even a shareholder revolt will be able to usurp the tax dodging convicted criminal.
Eight years ago, while editor of Scotzine, I was told by Chris Graham that he was very impressed with Craig Whyte and that he foretold bleak times ahead for Celtic. Eight years on and Celtic fans are cheering their club on to a potential ninth title in a row this season and a record breaking tenth next season. They’ve won an historic domestic treble in three years and will be looking to qualify for the group stages of the Champions League for the third time in four seasons.
Bleak times indeed Chris.