Sports Direct take Rangers to Court to cover up details of their contracts

From Diego Sideburns

Today we were alerted to an interim application being made by Sports Direct at the High Court in London against Rangers Football Club. As we happened to be at court anyway, we went down to check out what was going on.

Today’s court action was about confidentiality. Specifically, Sports Direct want to prevent any details of their commercial deal with Rangers from entering the public domain.

Sports Direct (SD) brought the action because of the apparent fear that directors of the club would use the shareholders meeting scheduled for tomorrow, to reveal previously confidential details of the deal they have together for Rangers Retail.

In evidence SD cited an article from the Daily Record, which they said contained leaked confidential information about the deal between Sports Direct and Rangers. The article said:

“he [King] also plans to use the meeting to blow the lid off secret details of the contracts handed to Ashley’s retail company Sports Direct by previous Rangers owner Charles Green.

And Record Sport can reveal the new regime are particularly outraged at discovering the length of their contractual ties to Ashley’s firm.

In short, if Rangers binned the agreement today they would trigger a notice period which would last until May 2022 which means that, effectively, Green gave Ashley an astonishing seven-year rolling contract.”

Sports Direct said they believed the leak to come from Rangers. WHO KNOWS HOW THEY COULD HAVE THOUGHT THAT???

Because of this SD had a real fear that further confidential information would be disclosed at the meeting tomorrow, and were requesting an injunction that would prevent Rangers directors from disclosing any information about the deal.

Rangers will need to put together a better defence if they are going to survive in the Scottish Championship next season. In court, the barrister for Rangers argued that the leak could have come from anyone (despite it being unclear how others would have had access). In addition, the barrister argued that the reason why the club secretary, in his witness statement, had not denied directors leaking the information is that he could have been seeking to protect journalistic sources by not ruling people out.

In any event, Rangers would promise not to reveal any confidential information, and the Daily Record was a tabloid, so who believes what they say anyway.

The judge was unconvinced, and granted Sports Direct their injunction. (The judge did however balk at the amount of costs that SD asked for, and questioned whether the lawyers were exaggerating the amount of work they had put into the case.)

All this sparks the question, what exactly is it that SD are trying so desperately to hide. As we have already reported, the Sports Direct is known to be financially a terrible deal for Rangers, with the club apparently buying supplies from the company for more than they can sell for in the club shop.

The revelation that this shocking deal comes with a 7 year break clause is nothing short of a scandal. We do wonder how the terms could be any worse than they are already, and if they are, surely the fans have a right to know about it?

As we proposed before, a good board with the fans at heart would do well to move forward with specific financial transparency policies, including the publication of contracts with related parties.


© 2014