Rangers told to pay £500k legal fees to Sports Direct

Rangers told to pay £500k legal fees to Sports Direct

After their latest defeat in the courts to Mike Ashley’s Sports Direct over breaching a commercial contract with the Sports retailer supremo, Rangers have been ordered to pay around £500,000 in legal fees.

Court papers released on the 29th July, but dated the 19th July, stated that Rangers ‘shall make a payment on account’ to Sports Direct of costs amounting £444,846.60 by 4pm on the 16th August 2019.

It further adds that Rangers’ application for permission to appeal is dismissed, and if Rangers do not comply with the order, they may be held to be in contempt of court and directors may be imprisoned or fined or have assets seized.

A series of hearings earlier this year were overseen and concluded by Judge Persey QC at the High Court in London ruling 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.

Following their court win, Sports Direct requested that the sale of Rangers away and third kits were halted for the next two seasons. A year on from Sports Direct winning another injunction to halt the distribution and sale of the new Hummel Rangers kits and other merchandise following further breaches of contract - which also saw the sports retailer’s legal fees paid by Rangers.

Forced to abide by contract and court injunctions

Judge Persey QC ordered an injunction on Rangers, stating they will no longer be party to the Elite/Hummel Agreement, that they will not assist either Elite or Hummel in the agreement and that they must inform both parties that they will no longer work with them in regards to the agreement.

Furthermore, Rangers shall not propose or agree sale dates in respect of replica Away and Third kits - defined by the Elite/Hummel Agreement - that they must not advise Elite of sponsor’s logotypes in respect of future football season 2020/21 and that they will not propose nor agree to kit designs for future seasons 2020/21.

Rangers have also been ordered not to order any Official Rangers Technical Products from Elite or Hummel, or bearing the Hummel brand, for seasons 2020/21. They will also not be allowed to wear any Official Rangers products designed by, supplied by, gifted by or manufactured by Elite or Hummel, or bearing the Hummel brand.

Next season, Rangers will not be allowed to register any Official Rangers Home, Away or Third playing kit designed by Hummel or Elite, or bearing the Hummel brand, with the Scottish FA or UEFA for seasons 2020/21.

The club will also not be allowed to create a Hummel branded area within the Rangers Megastore at Ibrox and they will not assist Elite in the co-ordination of any product launches.

Effectively, the court has ordered that all business between Rangers and Elite/Hummel cease and desist from season 2020-21 - which could see Rangers face further court action and financial penalties from Elite and Hummel.

The court has also intimated that a directions hearing will heard on the first available date after the 23rd September 2019, for the judge to see how both parties have resolved the matter of damages to be paid out to Sports Direct. If no deal has been agreed then the court itself will impose the amount of damages to award to Sports Direct - this may occur on the day or more than likely a future date.

Despite claims to the contrary from Rangers in an official statement published on the club’s website, the Judge rejected Rangers’ legal counsel’s claims that damages should be secured at a maximum of £1 million and an injunction against sales should not be granted.

Their counsel stated that Rangers would:

  • 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

  • Damage their ability to function as a football club.

Judge Persey 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.”

Club 1872 in the firing line with deflectors on full

Judge Persey also fired a broadside as Club 1872 board member and Rangers company secretary James Blair during his ruling, stating: “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.”

Earlier this week, Club 1872 once again came out in defence of the club and in particular Dave King, despite the blame lying squarely at the feet of the South African-based businessman. They also seemed to tow the party line rather than reading the acting court ruling for themselves - while refusing to comment on the Judge’s conclusions around their own board member James Blair.

Part of their statement read: “Club 1872 was, in common with all Rangers supporters, concerned to see reports of the outcome of the latest court case involving the club and Sports Direct. Clearly it is not a positive situation to be on the wrong end of such decisions and of particular concern were tabloid headlines regarding the possibility of Rangers having to pay “millions” in damages following the latest ruling.

“It is always our wish to be able to communicate in detail with supporters but on this topic we must be mindful of the club’s position which is restricted by confidentiality provisions, court decisions and the ongoing nature of these proceedings. This means that they simply cannot discuss this issue in detail with Club 1872 or indeed anyone else.

“We have asked Rangers to give Club 1872 and the supporters what reassurance they can and they have reiterated their statement on the club website. It is the club’s position that the judgement is not as reported and that the damages cap of £1m has not been removed. As supporters will see from the release of the new away kit, there is no restriction on supporters buying this season’s kit and the purchase of those kits continues to benefit the club.

“This is a complex and far reaching legal dispute and there are a number of aspects of it still be to decided by the court. We feel the same frustration as all supporters when there are setbacks in that fight but the goal remains the same.”

The only aspects of this legal dispute still to be decided is how much Rangers are to pay Sports Direct. The court will get involved if neither party can come to an agreement - a decision that could cost Rangers several million.

Club 1872 since then have went on the offensive attacking Mike Ashley, calling on Newcastle United fans to take action against Ashley and also continued their vendetta against the BBC - as a pathetic attempt at deflecting away from Rangers’ continued off field troubles, like the dutiful Dave King poodles that they are.

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