I just spoke to my Shirebrook guy.
Let’s just say he was rather dismissive of the most recent statement from the Sevco High Command.
The phrase “disingenuous at best” was used on several occasions during our brief chat and not by your humble correspondent.
He also shared some new information with me.
Apparently, in January 2019 SDIR submitted to the High Court what they thought they were owed by Sevco for the car boot sale fiasco.
The chaps in the Blue Room were also copied in at that time.
Consequently, from the start of this year, the Sevco High Command have been under no illusion as to what Ashley’s potential bill could be.
Dear reader, just think of HMRC and old Rangers in early 2010.
The contingent liability is known and is equally unpayable.
My reporting at the time of the Big Tax Case is on here and the site is fully searchable.
As I chatted with Ashley’s guy I had more questions for him:
“So when does your boss ask for his money?”
I offered my take is that Ashley will move at the point of maximum financial damage to Sevco.
Shirebrook guy did not confirm or deny that I was on the right track.
let’s just say there was a Rory Stewart silence on the other end of the line.
It is worth noting that if someone in the Blue Room won Euro millions tomorrow and paid off Big Mike that would not be the end of the saga.
Such a windfall would not null and void the current deal that the Sevco High Command signed in June 2017 with SDIR.
All Ashley has to do is to match any offer that the basket of assets can attract.
Moreover, don’t think that they will be inundated with great deals from the sportswear world.
The Sevco High Command has suffered massive reputational damage in that industry because of this court battle.
For the avoidance of doubt, it is entirely self-inflicted.
This is all the doing of Mr King and his legal expert the Conveyancing Consigliere.
General Ashley, like any shrewd commander, did not interrupt them as they were making a disastrous mistake.
Quite frankly, Big Mike has them now right where he wants them.
The statement said that “no steps have been taken to stop supporters to supporters being able to buy this Season’s Replica Kits”.
Really?
Well, the Shirebrook guy pointed me to this part of the court ruling:
SDIR now seeks an order for damages to be assessed, an order for declaratory relief, and an injunction in the following terms:
“… UPON SDIR agreeing that, for the 2019/2020 season, the Rangers FC teams may wear any Official Rangers Kit (as that term is defined in the Agreement between Rangers and SDIR dated 21 June 2017) that had been approved by Rangers prior to 17 April 2019
- Rangers shall:
(i) not perform the Elite/Hummel Agreement;
(ii) not assist Elite or Hummel to perform the Elite/Hummel Agreement;
(iii) inform Elite and Hummel that it will not perform the Elite/Hummel Agreement.
- Without prejudice to the generality of paragraph 1 above, Rangers shall:
(i) not propose or agree sale dates in respect of Replica Away and Third playing kits (as those terms are defined in the Elite/Hummel Agreement);
(ii) not advise Elite of sponsor’s logotypes in respect of future football season 2020/2021;
(iii) not propose and shall not agree kit designs in respect of future football season 2020/2021;
(iv) not create a Hummel branded area within the Rangers Megastore at Ibrox Stadium;
(v) not deliver (insofar as not already delivered) any of the items noted in points under “Sponsorship” on pages 5 and 6 of the Elite/Hummel Agreement for the football seasons 2018/2019, 2019/2020 or 2020/2021;
(vi) not assist Elite in the co-ordination of any product launches, in particular, shall not respond to any requests for assistance and co-operation by Elite in relation to the same and shall not indicate to Elite that it may act unilaterally in relation to product launches; and shall
Judgment Approved by the court for handing down
Lionel Persey QC
SDIR v Rangers
(vii) forthwith terminate the Elite Non-Exclusive Rights Agreement in the event that Elite fails to comply with any of its obligations under such agreement …”
I feel for anyone on the Sevco payroll who is trying to spin this as anything other than a disaster for the seven-year-old club.
That is a hard station.
Of course, they can always rely on the sterling efforts of the usual suspects within the Stenography Corps to sooth the Ibrox klanbase that everything is ok.
Dear reader, it isn’t.
It really isn’t…
In fairness here is one Ibrox chap who DOES get it:
THAT contract. What were they thinking?
Finally sat down and been right through the findings. I don’t think anyone will be surprised when I say its yet another shit show from a Rangers Boardroom. Until I read the findings, I had played my cards close to my chest on who was giving the legal advice throughout but Lionel Persey QC makes it clear that James Blair is at the heart of it all. In fact, he even goes one step further and calls out something I have called out for years, the conflict of interest between Blair, the club and Club1872. Even an independent neutral with no skin in the game can see right through it all.
Anyway, there really actually is nothing surprising in the judgement and nothing that wasn’t mentioned on Rangersmedia a year ago when it all first came out and a 120 page thread was created.
In “getting rid of SD” the Rangers Board paid them £3 million to rip up the old contract, drop PERSONAL, CIVIL cases against Dave King and Paul Murray and then signed a new contract that basically said that SD can stay with us at renewal as long as they match what offer we got elsewhere.
Just to go off on a little tangent here, NORMALLY, those terms would be perfectly fine. I would love to have lots of contractors and suppliers on terms that if I go and find a better deal elsewhere, then they step up to the plate and pay my businesses more. There is ZERO wrong with that. But only if:
- a) You are happy working with them.
- b) You are not trying to get rid of them.
- c) You are not telling all your paying customers you have got rid of them.
- d) You plan to not tell them about getting a better deal elsewhere then get sued.
What the actual Feck were they thinking ?
How can a qualified and experienced lawyer allow such a contract be signed. And even more incredible, how can he believe or convince us to spend millions defending what was absolute black and white.
If this was an independent legal firm, we would be going after them for “wrong advice” I don’t think we can do that in the current set up.
So, putting aside the absolute mess King, Murray and Blair have put us in(im giving the rest the benefit of doubt as they would take the word of Blair before approving) where does the findings actually leave us ?
Its not always easy to interpret everything without the full context and other agreements made and despite my nom de plume on Rangersmedia, im not actually a man of the Law so this is only my interpretation of Paras 87 onwards.
SD have said they will “allow” us to continue to wear the Hummel Kit as official kit for season 2019/20.
In return, we have to stop “working with Elite/Hummel” in the background by not supporting new product launches or working with them for season 20/21 as SD will be back in contract for next season.
SD have a claim for damages and loss of income for the seasons 2018/19 and 2019/20 which will likely involve some sort of disclosure of our profit streams for last season. Persey believes this will run to “millions of pounds” but I still don’t think we make as much money on retail as my fellow fans believe we do, so that one is a wait and see job.
Although there is a clause limiting damages to £1m, the judgement suggests this is “not damages” but simply the matching right provisions due and therefore in this case, he sides with SD in that the £1m limit does not apply.
So in summary.
We will pay SD court costs.
We will pay SD loss of revenue for 2 seasons.
We will stay as we are with kits etc until next season.
We will be back in contract with SD again from next season.
We potentially face further court cases and contract breaches from Hummel and Elite.
Our Board are abysmal.
So a hat tip to@Jas72Boyd
Perhaps the Penny Arcade is starting to drop about the King regime.
I wrote at the time of the Off License Putsch that the Ibrox faithful would rue the day that they chased Ashley’s guys out of the building.
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It is fairly evident that the only plan at Ibrox that could possibly work to their advantage is to copy Celtics approach to Transfers.
If you look at the appointment of Slippy G as Manager and the subsequent dealings in the Transfer window it kinda mirrors Celtic in Neil Lennons first tenure as Celtic boss.
A respected player who had played at the highest levels in Europe in a Successful side given his opportunity as a Rookie coach and backed to a certain degree in the Transfer window with a mixture of cheap potential and Free Agents.
This is not to say that they that is the Tribute Act are picking up the same level of player but at some point they are going to get lucky just with the sheer numbers of players coming and going at the Basket of Arses.
Whilst I don’t think Morelos is that well rounded a player or Tavernier is that great a defender both do have a worth and all it will take is a Club cash rich and who can afford an expensive punt to take a gamble on either.
If the Askit of Farces were to get say £10-15m for both this would or could enable them to keep the pretence up that they are in a position to both compete for Silverware and perhaps even scrape their way to another European windfall.
It is not beyond the realms of fantasy that this could transpire in the next few weeks.
They won’t be the first Club to run on debt and certainly won’t be the last.
The fact that they have been a loss making enterprise from the day one has had little effect on the fact that they are still functioning as one.
It won’t last forever on its current trajectory but as I say one bit of luck in this window and that trajectory could be altered somewhat.
Even the dummies amongst the Ibrox club fan base will wonder what the hell is going on when Morelos and Tavernier are sold, not to present Stevie G with a transfer war chest but to pay off Sports Direct and Close Bros, the latter of whose loan is secured on everything at Ibrox which isn’t nailed to the floor.
Will 55 still be in sight if their two most prolific assists and goalscorers up sticks in the next few weeks?
No doubt Gerrard will be demanding replacements for the squad and won’t be too pleased if his wishes are not fulfilled.
Will Kingco dig deep again or have they already thrown too much good money after bad and by swopping the soft loans for equity leaving themselves powerless in an admin event?
Of course when the whole world knows that the sale of your top two talents is of the extremely distressed type then no one is going to be offering the asking price or anything near it.
Is it possible that Close Brothers, since the finance facility being made available and until fully satisfied, actually have ultimate control over any new money that comes into ibrox bank account , which Close then hold for a short period of time and then release the remaining monies back to ibrox club/company after taking their cut ?
If so what sort of issues could this present for cash flow ?
I have heard this is how some of these finance companies work when agreements are made for finance !
Keep at it Phil well done
One key statement Sevco made in their official response to the fans, they declared that they “will meet any financial award made by the court”.
That means actually coughing up hard cash guys, no popping into administration, trying to conjure up a CVA (that went so well the last time) etc…
Love reading you lol you make it so funny mon the hoops🍀🍀🍀🍀🍀🍀🍀🍀
Do I get the ice cream machine on the go, along with setting the jelly. Or am I best hanging g fire fr a bit. These are the important questions that need answered.
The ”soothing statement” was so poor that I can only surmise that Jabba is on his hols. HH
Phil, one thing that still seems to be lost on nearly all on the blue side of Glasgow is that the damages here via the matching clause are going to be astronomical compared to the original deal they had with SD. As the ruling makes clear, what SD had the right to match is not only the low-margin retail part of the deal, but also the manufacturing and distribution parts which SD has never had before and are worth considerably more than retail rights. Rather than getting 10-15 cents on the pound in retail, they’re probably going to end up with something north of 60 cents on the pound.
So this explains why your sources are suggesting damages approaching £10m (and that may be too conservative given this is a 3 year contract!).
Also, should Judge Percy grant the injunction as requested, that will basically be an order for Rangers to break their perfectly valid contract with both Elite AND Hummel. And since Rangers indemnified both, they will end up either paying them both off for the value of the remaining term of the contract or be sued for breach. The ultimate cost to Rangers is going to easily be an 8-figure sum, and it might not even start with a ‘1’.
Close Brothers are certainly aware of all this and keeping an eye on the situation. But a very valid question at this point is when are the damages going to be awarded, and how does the board intend to fund such a settlement ? And if Close are concerned about the return OF their capital, do they have the ability to call the loan prior to the end of the term? Depending on the answers to these questions, we could see a liquidity event in the coming weeks or months.
Good post and you summed it up well! Key to watch for is what Close Bros do. If they get skittish and call the loan in then it’s game-over.
I don’t know much about company finance etc but after reading the judgement I understood that SD weren’t after the profit Sevco made from the retail deal they were after the money Elite/Hummel made, as that is the part of the deal they were not allow to match, which is a hell of a lot more
What would be most interesting to know is who wrote that “soothing statement”?. My best guess would be Murty has been drafted in again as desperation sets in. Either that or one of the ball boys was overheard saying he had just passed his O grade English exam.
You’re showing your age John. O-Grades disappeared 30+ years ago.
Yeah Phil. We would like to know if there is a possibility of adminsration/liquidation?
in other news.I hear the renagers fans,have nearly 600 signatures,on their petitition to stop big mick receiving any damages…claiming “we widny buy any stuff from SD,so owe him nuffing”……..my sides are getting sore again..HAW
The money owed to SD will be significant as much for paying their court costs as it will be for breaking the contract.
Im more interested now in how Elite/Hummel react to this.
Phil, thanks for all your work on this! Fascinating reading!
If administration comes up is it a 10 point deduction forthe new klub or a 25 point deduction because that would be the second time if they are the old klub ?
We know how that one will play out with a little help from Hampden.
Trophies, titles, no problem, defo same club.
Unpaid creditors, points deduction for 2nd admin event?
Nothing to do with us, go speak to the liquidators.
Since “they” like to remind us they’re “the same club, and it was the ‘company’ that went bust”, I shall expect to see a 25-point deduction.
The SFA and SPFL have painted themselves into the proverbial corner on this as, should the ibrox-based club receive only a 10-point deduction, they are effectively saying that they are, indeed, a NEW CLUB. I’m guessing that if it is the 25-pointer, then the 5-way agreement (and associated rulings, etc) must be revisited. If it is not, then surely a full investigation by either/or the CAS/UEFA must follow?.. and, in light of the fact that only a matter of about 4 years ago, America’s own Federal Bureau of Investigation took an active interest in the governance of world football, FIFA would be mindful of ensuring that this is handled openly and honestly.
25 point deduction only applies if there is a second insolvency event within 5 years. Even if RFIC were determined to be the same club it would be more than the five years within the rules so an insolvency event would have to be judged on its own merits ie a 15 point deduction in the season of the event and a five point deduction the following season
I think it’s 15 points now. The 25 points is two admins in a five year period I think.
Admin would result in a 15 point deduction in the season that it happens and a 5 point deduction the following season.
I wonder how long it took Jas to wean himself off the Deludamol?
Hats of for that alone.
He still maintains it’s the same club though
Kinda takes a while for sanity to set back in after being hooked on something so strong for so long
Same flies different shite.
Aye. Maybe even different flies same shite. Whatever!
So Lafferty’s gone. No transfer fee but the last year of his contract cancelled by mutual agreement.
I wonder if there was a wee sweetener in the deal to get him off the books?
Those guys on Ibrox Noise are a scream. They have printed an article today claiming that Sports Direct are a crap company, the proof of which is the weekly court cases that SD is involved in.
If thats their definition of a crap company then Rangers must be equally guilty given the number of court cases they have been involved in since 2012.
It would appear that IN don’t do irony.
Luckily, according to Ibrox Noise, Newcastle have put a £10 million in for Taverner. So that’s £30 Million Newcastle are paying Sevco, along with Moreorless, maybe Big Mike and Benetez will settle for a straight swap. When you add the £10 million for Calendarass then Sevco have no problems. Add in RRM Bale, Ronaldo and Messi and there is nothing to worry about!!
Phil; just want to make sure I have this clear after reading your piece. You are saying that the amount they will owe Ashley (through last January) is both a known amount and that this amount is as unpayable by the club as the Hector claims against them back in 2010?
However, in the piece you highlight by the “enlightened” Bear, he states that the amount amount they will owe Ashley isn’t going to be huge as they don’t make a lot of money off the Retail.
Although I think I know the answer, my question is this; will the damages sought by Ashley be for the “amount of the business that was done (i.e. the gross)” and not just for the purely profit piece that would have flowed through to be shared with club? That is a very clear and different distinction that needs made in understanding how SDI’s lost revenue and the clubs exposure may be calculated.
I was making the point about knowing the possible quantum of a contingent liability.
That’s all.
Got it. Ta!
I agree with Bob’s point. The money that SD have lost IS NOT the money that sevco have taken in. They would have got that anyway. It’s the money that Hummel and Elite have taken in which will be considerably more. If sevco are indeed liable for this sum I SIMPLY CANNOT SEE HOW they can survive. There will also be cross litigation between sevco, Hummel, Elite and SD. This could run for years and all the while sevco will be paying EVERYTHING FOR EVERYONE.
WELL PLAYED DAVE!!!
That was the gist of what I tried to clarify with Phil. That the amount in question here isn’t the end profit margin, but rather the entirety of the profit along the manufacturing and distribution chain – as you put it, the money Hummel and Elite made as well as the end profit SD would have made. That number is going to be VERY large and probably explains the comment that it is like the HMRC bill presented in 2010.
Aye. AND the point in the judgement that SD’s losses will run into “MANY MILLIONS”
Gaun yersel Dave!!
Seriously, what are the chances of liquidation? Please tell me they’re good…
Please tell us this means not administration, but liquidation
Even although Jasboyd prematurely stated in June 2016 that Res12 was dead. to be fair he didnt take fraud into account, good to see him reaching a correct conclusion this time.
The new sevco 2012 needing a new CRAIG white Asap Billion dollar man Wanted!,,,,,,,
PS
No time wasters this time cause Dave’s fucking crazy the now!!! Cheers
Spot on Phil 🎯