Ruling On Latest Fat Mike Court Case – Still Waiting...

Sorry to sound daft but can anyone tell me how this outcome will affect us financially short term and long term?
 
I’ve seen people refer to damages being capped at £1m, from what I’ve seen the judge refused that as it effectively benefitted us over SDI, can anyone point me in the direction of where it’s confirmed they are capped?

Hopefully we appeal but it doesn’t seem as though we put up much of a defence, the new agreement made under King in 2017 seems to have not been worded to our benefit which is why this is still causing us issues.
 
ald said:
I get that and my terminology wasn’t right. I agree that repudiatory breach is where the innocent party terminates a contract in response to a material breach by the at fault party. But I am not convinced that we can’t simply terminate the contract - or at least notify SD of termination effective on X date - notwithstanding that we don’t do so in accordance with the notice provisions of the contract. In that situation we force SD either to (1) accept the termination (wrongful though if may be on our part) and sue for damages for breach or (2) to seek some other remedy (injunction stopping us giving effect to the purported termination or specific performance). My point is that I am not convinced that a court will grant either of the remedies at (2) above where damages would prove an adequate remedy.
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I think what you've said is a fair summary of the position, and when this situation first came to light I doubted that a Court would insist on parties being bound to a toxic relationship too.

In principle though, it's the innocent party who decides how to respond to a breach of contract. In Scotland, anyway, the court will grant specific implement in these circumstances unless implement of the contract is impossible.

There is an exception to that - if the implement would result in exceptional hardship to the other party then the Court can exercise its discretion and not grant implement.

Would forcing implementation of the current contract amount to exceptional hardship as meant under the law? I don't know, but I tend to doubt it.

I think similar points can be made re injunctions - the question for the court is really why shouldn't RFC be held to what they contracted to. So far the court seems to have come to the view that there's no good reason, and we're stuck with it.

I'm not sure an exceptional hardship argument has been tried so far - it may be that we go for that if SDI do try to get implements/injunctions based on this latest contract which has been found to exist.

SDI have been arguing that damages are not an appropriate remedy because they are capped under the contract. If the cap doesn't work, then perhaps damages would be an appropriate remedy - but uncapped damages would potentially be a fierce amount given the nature of this contract.
 
Can I ask if someone can clear up a point about the damages.

Let's assume they are capped at £1m. Does that mean that SD get £1m every year, if Rangers refuse them their right to match contracts.

So they get £1m this year, but their matching right remains in place as they didn't decline to match. They get £1m next year, but the contract stay in place because they didn't decline to match ...
 
Greebo said:
Can I ask if someone can clear up a point about the damages.

Let's assume they are capped at £1m. Does that mean that SD get £1m every year, if Rangers refuse them their right to match contracts.

So they get £1m this year, but their matching right remains in place as they didn't decline to match. They get £1m next year, but the contract stay in place because they didn't decline to match ...
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That’s what I took from it. For £1 million a year we can keep doing what we are doing but they keep the club shop . It’s not acceptable .
 
Dempster said:
That’s what I took from it. For £1 million a year we can keep doing what we are doing but they keep the club shop . It’s not acceptable .
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I agree it's entirely unacceptable.

£10k a week pays the wages of a pretty decent player, so that would be 2 wages off the budget before doing anything else.

It also explains what's in it for Ashley. £1m a year for doing nothing.
 
Guerilla said:
Forgive my laziness guys in not reading the whole thread. Is the issue still that he will match the deal we have now? So we would get the same % of sales that elite have with us or is he still trying to shaft us further?
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Yes, fatty has to match the Deal on offer from any new bidder each renewal time, suppose he will, have to match Hummel Elite deal?
 
Might be daft but why don't we set up a merchandise company of our own where all profits go directly to the club, if Ashley wants to renew he'd need to match the deal so he either drops interest or sells our strips for no profit whatsoever to SD
 
Mark Walters said:
Might be daft but why don't we set up a merchandise company of our own where all profits go directly to the club, if Ashley wants to renew he'd need to match the deal so he either drops interest or sells our strips for no profit whatsoever to SD
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Club1872 should be looking into this idea as a matter of urgency . Seems exactly the type of scenario where mass fan participation and unity is called for .
 
Dempster said:
Club1872 should be looking into this idea as a matter of urgency . Seems exactly the type of scenario where mass fan participation and unity is called for .
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When I said we I meant the club but if the apparatus is there for it to be a supporter initiative then I'd be all for it. There has to be a scenario where the terms and conditions on offer to Rangers in a trade deal would be just too awful for that fat poisonous slug to deal with and match.
 
It's good that people are coming up with ideas to try to get round this, however I would be horrified if the club hadn't explored all of the options available.

The hundreds of thousands being spent on litigation would suggest that fighting this legally is the only option available.
 
muttley said:
Or a sane Judge who asks the simple question as to why would any club willingly give away a highly lucrative revenue stream to its own detriment ? That's not been answered yet.
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Its not the judges job to ask that. No one forced us into signing the deal. Remember King procalimed he had got out of the deal. We later found out he paid £3m to renegotiate the terms and signed up to this.
 
Wh
Greebo said:
I agree it's entirely unacceptable.

£10k a week pays the wages of a pretty decent player, so that would be 2 wages off the budget before doing anything else.

It also explains what's in it for Ashley. £1m a year for doing nothing.
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What happens when the current deal expires and we negotiate into the new contract that damages are capped at say £100 and we just keep dealing with Elite even though SD are willing to match,is that a possibility?
 
MrBrightside said:
Wh

What happens when the current deal expires and we negotiate into the new contract that damages are capped at say £100 and we just keep dealing with Elite even though SD are willing to match,is that a possibility?
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As I understand it the cap is in the deal with SD which the board agreed. I don't think that can be changed unless both parties agree.

Can we just be clear on this btw. This is what the club had to say about the new deal when it was entered into.

Its an official club statement dated 21 June 2017, so is not a biased paper reporting.

https://rangers.co.uk/news/headlines/club-statement-77/

THE Rangers Football Club Limited (TRFC) and Sports Direct (SD) are pleased to announce that they have terminated all prior agreements between them and entered into a new commercial arrangement on terms substantially different from the terminated agreements. As part of the new arrangements, the Rangers Retail Limited (RRL) joint venture between TRFC and SD has ended and, going forward, TRFC will deal directly with SD.

The negotiations between the parties have been protracted and have not been smooth. In that regard, TRFC and SD thank PUMA for its assistance and patience during a period that has been difficult for them as official kit supplier to the Club.

TRFC has also expressed its thanks to SD for its willingness to restructure the arrangements between the parties. TRFC recognises that SD entered into legal agreements with a prior board at a time in the Club’s history when the future was very uncertain. SD’s willingness to restructure the relationship reflects confidence in the way the Club is now being managed.

For obvious reasons it is not the practice for the details of commercial arrangements to be made public. However, in view of the publicity surrounding the previous agreements and the resultant boycott by supporters of kit purchases we consider it appropriate to give supporters some insight into the new arrangements.

The new arrangements represent a fresh start for the Rangers Megastore, the relaunch of the Rangers Webstore and the sale of Rangers kit and products throughout SD’s stores.

The financial arrangements between the parties are transformed. TRFC will now receive by far the majority of net profits from the retail operations at the Megastore and Webstore together with an equal share of all net profits from sales through SD. TRFC will also obtain a priority dividend on the winding up of RRL.

The new deal will deliver real value for TRFC and SD. Supporters now have certainty that any money they spend on Rangers products will be hugely beneficial for the Club. SD will benefit from the increased sales and from the opportunity of demonstrating the part its retail skills can play in building and commercialising the Rangers brand which was always SD’s intention.

Both parties are delighted to achieve a successful resolution to the issues that have previously marred the relationship between them and bring an end to the protracted and costly litigation.

TRFC and SD hope that the new arrangements will be long standing but there is no longer a fixed commitment on that front. We will rely on our combined commercial performance and drive to cement the relationship going forward.

Rangers has traditionally been one of the best performing brands in British football and the Club believes the new arrangements can restore it to that position, providing funds to invest in the team and facilities at Ibrox and Auchenhowie.
 
Mark Walters said:
Might be daft but why don't we set up a merchandise company of our own where all profits go directly to the club, if Ashley wants to renew he'd need to match the deal so he either drops interest or sells our strips for no profit whatsoever to SD
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Simply on the surface, this would seem to be the next route. Setup a company that offers Rangers the most lopsided terms and conditions in the history of merchandise deals and force SD to match of bugger off.
 
Mark Walters said:
Why? Ultimately the fat slug has a controlling stake much like Murray had with us and would just laugh off any discontent.
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His largest investment hedge funds are already massively discontent, SD shares have plummeted over the last year, completely unimpressed with him in front of the commons select committee over poor practices, if they dump their holding the value will fall further. His command and conquer approach has backfired a few times and hit his pocket hard. Lost a fortunate when Debenhams went for pre pack administration.
 
Dempster said:
Agreed we should block anyone trying to get in to the store and hand out leaflets explaining the reasons . It wouldn’t take long for the message to be driven home .
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said it before we should be removing the sign above the door and just leave it blue.
 
I wonder if we can fook him over with a membership scheme of sorts.

Join the scheme for 70 quid a year and receive a free shirt. Dearer if you want any of the change shirts and cheaper for junior members!!
 
If the cap on damages potentially payable to SDI is £1 million (clause 16.3 of the retail agreement according to the court report from late last year), and the law (in England anyway) insists on a normal reading of the contract terms, then I don't see how SDI can argue that the cap should be ignored.

If it's clear from the contract terms that Rangers should have offered SDI an opportunity to match the terms of the deal from Elite, then it's also clear from the contract terms the damages for breaching this are max £1 million.

Damages are generally calculated to put the injured party back into the position they would have been in had no wrong occurred. Surely SDI's loss would then depend on what the profits are from the deal, which might be less than the cap, especially given the boycott.

In my opinion, this is what Rangers are ultimately aiming for. The capped damages + legal expenses gets this deal booted into touch. SDI are simply drawing this out, with their constant injunctions etc.

After this, hopefully we get commercial lawyers that know what they're doing.
 
Set up a Sports company to offer a bumper deal that SD won't match, the following season we sign a reduced deal! It would all be done on trust but I'm sure it could be done. If SD match it then it a win win.
 
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