tazzabear
Well-Known Member
There’s no doubt that there have been mistakes since but, it was the spivs who entered us into, probably, the most one sided contract in the history of contract law.
Who were these guys working for?
SD v RFC Judgement
- Thread starter the_paceman
- Start date
Who were these guys working for?
Cutty/Young
Well-Known Member
Said yesterday and i'll repeat it, shareholders should go after both Somers and Green, those deals were not in the best interest of the shareholders or the club, Somers and Green are supposed to do things in the best interests of both club and shareholders.
Recieving 7p from every pound while Ashley recieved 93p from that same pound quite clearly isn't in the best interest of shareholders nor the club.
Why wasn't Somers taken to task or Green as both failed in their duties by working to give Ashley a much more lucrative deal at the expence of the club and shareholders.
Cutty/Young
Well-Known Member
Bit more about price matching rights.
Price matching rights: more trouble than they're worth?
Price matching rights were the subject of a recent dispute between Rangers Football Club and Sports Direct. They typically allow an incumbent supplier to match an offer that its customer has obtained from a competing supplier. For incumbent suppliers, such rights can be very valuable - but customers may find themselves locked into using a supplier for longer than is ideal. Price matching clauses also require careful drafting and can sometimes raise competition law and confidentiality issues.
What happened in the Rangers case?
In 2017, Rangers appointed Sports Direct as its exclusive retailer for Rangers-branded merchandise at its ground and on the Rangers webstore. It also granted Sports Direct the right to manufacture and distribute Rangers merchandise more widely, but on a non-exclusive basis. As no other supplier had been appointed, Sports Direct had de facto exclusivity in relation to these rights.
Rangers was permitted to approach alternative suppliers during the six month period prior to expiry of the initial term of the agreement on 31 July 2018. However, crucially, Sports Direct had a right to match any offer which Rangers obtained. If Sports Direct could match the offer, Rangers was prohibited from entering into a contract with the new supplier.
The price matching dispute
In June 2018, Rangers offered Sports Direct the opportunity to match an offer obtained from another supplier, Elite. Sports Direct argued that it had not been given sufficient information about this offer to exercise its matching right effectively. It obtained an injunction preventing Rangers entering into a contract with Elite until the dispute had been resolved.
Subsequent attempts to settle the dispute failed and, on 11 September 2018, Rangers notified Sports Direct that it had entered into a non-exclusive agreement with Elite, based on a revised offer. In a further attempt to enforce its price matching right, Sports Direct brought additional court proceedings. Among other things, Rangers argued that:
The court preferred to concentrate on the wording of the clause itself. It concluded that the price matching right was capable of applying more than once - and that Sports Direct could continue to exercise it at any point up to 2 years from expiry of the initial term of its agreement with Rangers. In practice, this meant that Sports Direct could maintain its de facto exclusivity, provided it could match any offers that Rangers obtained from another supplier during that period. Among other things, the court granted an injunction preventing Rangers from performing the agreement with Elite.
Lessons for suppliers
For suppliers, the outcome of this case highlights the potential value of price-matching rights - although Sports Direct still had to go to court to enforce them. It is also a reminder that, to be effective, price-matching clauses need to specify:
For customers, requests from suppliers for price matching rights may initially appear reasonable - after all, if the supplier cannot match an offer from a rival, you should be free to contract with that rival. But any wording put forward by the supplier should be carefully scrutinised, since it may impose more constraints than are desirable - as Rangers found in this case.
In addition, bear in mind that price may not be the only reason for wanting to switch suppliers - other factors such as quality of service may be just as important. If so, it may be preferable to reject any requests for matching rights, since factors such as quality are much more difficult to compare on an objective basis.
Competition law risks and confidentiality
Finally, there may be circumstances in which price matching clauses could give rise to infringements of competition law or a breach of confidence. For example, as demonstrated by this case, price matching rights can result in de facto exclusivity for suppliers, effectively shutting rivals out. If the supplier has significant market power and/or has managed to obtain such rights in contracts with a significant proportion of the available customer base, this could amount to an infringement of competition law.
A breach of confidence could arise where a customer passes on details of a rival offer to the incumbent supplier without having first obtained the permission of the rival supplier. Even where permission has been obtained, such exchanges of sensitive information would constitute an additional competition law risk, especially where the use of price-matching clauses is widespread. It is therefore essential to ensure that information flows in the context of price matching are very carefully managed.
Price matching rights: more trouble than they're worth?
Price matching rights were the subject of a recent dispute between Rangers Football Club and Sports Direct. They typically allow an incumbent supplier to match an offer that its customer has obtained from a competing supplier. For incumbent suppliers, such rights can be very valuable - but customers may find themselves locked into using a supplier for longer than is ideal. Price matching clauses also require careful drafting and can sometimes raise competition law and confidentiality issues.
What happened in the Rangers case?
In 2017, Rangers appointed Sports Direct as its exclusive retailer for Rangers-branded merchandise at its ground and on the Rangers webstore. It also granted Sports Direct the right to manufacture and distribute Rangers merchandise more widely, but on a non-exclusive basis. As no other supplier had been appointed, Sports Direct had de facto exclusivity in relation to these rights.
Rangers was permitted to approach alternative suppliers during the six month period prior to expiry of the initial term of the agreement on 31 July 2018. However, crucially, Sports Direct had a right to match any offer which Rangers obtained. If Sports Direct could match the offer, Rangers was prohibited from entering into a contract with the new supplier.
The price matching dispute
In June 2018, Rangers offered Sports Direct the opportunity to match an offer obtained from another supplier, Elite. Sports Direct argued that it had not been given sufficient information about this offer to exercise its matching right effectively. It obtained an injunction preventing Rangers entering into a contract with Elite until the dispute had been resolved.
Subsequent attempts to settle the dispute failed and, on 11 September 2018, Rangers notified Sports Direct that it had entered into a non-exclusive agreement with Elite, based on a revised offer. In a further attempt to enforce its price matching right, Sports Direct brought additional court proceedings. Among other things, Rangers argued that:
- it was only intended that Sports Direct should have one opportunity to price match - which it had effectively "used up" by failing to match Elite's initial offer to Rangers' satisfaction; and
- given its non-exclusive rights, it could not have been intended that Sports Direct should be able to block the appointment of a new supplier by repeatedly exercising its price matching right.
The court preferred to concentrate on the wording of the clause itself. It concluded that the price matching right was capable of applying more than once - and that Sports Direct could continue to exercise it at any point up to 2 years from expiry of the initial term of its agreement with Rangers. In practice, this meant that Sports Direct could maintain its de facto exclusivity, provided it could match any offers that Rangers obtained from another supplier during that period. Among other things, the court granted an injunction preventing Rangers from performing the agreement with Elite.
Lessons for suppliers
For suppliers, the outcome of this case highlights the potential value of price-matching rights - although Sports Direct still had to go to court to enforce them. It is also a reminder that, to be effective, price-matching clauses need to specify:
- the scope and duration of the right in detail (including whether the right can be exercised multiple times);
- all the relevant information to be provided about a rival offer from another supplier and what counts as "matching"; and
- the consequences of the rival offer being matched (e.g. the other party is prevented from taking up the rival offer).
For customers, requests from suppliers for price matching rights may initially appear reasonable - after all, if the supplier cannot match an offer from a rival, you should be free to contract with that rival. But any wording put forward by the supplier should be carefully scrutinised, since it may impose more constraints than are desirable - as Rangers found in this case.
In addition, bear in mind that price may not be the only reason for wanting to switch suppliers - other factors such as quality of service may be just as important. If so, it may be preferable to reject any requests for matching rights, since factors such as quality are much more difficult to compare on an objective basis.
Competition law risks and confidentiality
Finally, there may be circumstances in which price matching clauses could give rise to infringements of competition law or a breach of confidence. For example, as demonstrated by this case, price matching rights can result in de facto exclusivity for suppliers, effectively shutting rivals out. If the supplier has significant market power and/or has managed to obtain such rights in contracts with a significant proportion of the available customer base, this could amount to an infringement of competition law.
A breach of confidence could arise where a customer passes on details of a rival offer to the incumbent supplier without having first obtained the permission of the rival supplier. Even where permission has been obtained, such exchanges of sensitive information would constitute an additional competition law risk, especially where the use of price-matching clauses is widespread. It is therefore essential to ensure that information flows in the context of price matching are very carefully managed.
Mr Aqua
Well-Known Member
I wonder if we could make a deal which saw Tav go to Newcastle for a cut price and for this contract to be ripped up by Ashley. Could such a deal be even possible?
It's the last thing I'd want to do with Tav let me point that out. But surely all options must be considered, because I can only see this dragging on and on while we could be potentially losing a fortune in merchandise. Players can be replaced, loss in revenue can not.
It's the last thing I'd want to do with Tav let me point that out. But surely all options must be considered, because I can only see this dragging on and on while we could be potentially losing a fortune in merchandise. Players can be replaced, loss in revenue can not.
Total feck up, but on a lighter note, will this rulling effect Memhets market stall in Turkey sales?
tazzabear
Well-Known Member
Great piece, bud.
Reading the courts view, it seems to me that we’ve actually did nothing wrong, could have done it better, but it’s no different from SD’s side.
Other than that the judge’s interpretation has went against us.
We gave them a chance, they said no/failed to say yes, we went elsewhere, the judge decided they should’ve had more chances?
One thing that I’m alarmed about is that I read/heard we hadn’t offered SD the right to match and that we lied.
Is this just another interpretation of events?
Klos the Boss
Well-Known Member
June 2022 . The original 7 yr deal would have ended March 2022, under the new deal negotiated few yrs back, it's now june 2022, so weve got court costs and comp to pay, and all we achieved regarding the contract was to extend its expiry by 3 months.
HenningBerg
Well-Known Member
I don’t think that’s strictly true . I think despite having to pay comp to SDI we are still better off now than under the old contract . Far from ideal but still better .
Alan Johnson
Well-Known Member
You know that’s a pack of lies.
Klos the Boss
Well-Known Member
Alan Johnson
Well-Known Member
He’s also anti King and was an Ashley fan boy back in the spivs day I seem to recall,like most of Rangers Media.
Klos the Boss
Well-Known Member
Really?
Except we would have had to endure 7 years from March 2015 receiving £0.07 per top (if he even bothered to pay us). We were well out of that deal as early as we could.
Valley Bluenose
RTV? Completed it mate!
What Jas also fails to highlight there is that the old deal (he’s suggesting we should have stayed on) saw us get something like 7p in every £1 from the retail deal rather than the significantly higher figure from the contract that followed - and to which we will revert when forced to go back to SDI next Summer. Maybe he’d like to do some analysis of the numbers involved there?
His stuff can be good, and the Board deserve the criticism on this matter, but Jas is allowing his personal views on King (and Paul Murray) to cloud his judgement on this matter. Which is a shame. Consequently it casts doubt upon the objectivity of his work on this. Its also typical of many who follow Rangers Media of course.
JD1872
Well-Known Member
How do we know after 7 years there was not another matching clause, don’t it would have been a shake of hands then them walking away
Sasa5Papac
Well-Known Member
Haha bullshit. The guys calling the shots cash the cheques
CoulibalyLoyal
Well-Known Member
I still don’t understand .
So the deal is to end 2022. What happens in June 2022, are we free to go else where and don’t need to worry about SD matching any deal we get from anyone else?
The way I read previous posts was that basically SD can throw up this matching clause every season indefinitely?
SOS & RANGERS are saying the judgement is not as bad as being wrote. Carry on using elite .
Valley Bluenose
RTV? Completed it mate!
If no other party bids then the contract with SDI is renewed on its existing terms. Came out in one of the earlier Court cases.
Alan Johnson
Well-Known Member
The deal ends every 2 years,SD have the right to match any other deal offered by a third party.
Alan Johnson
Well-Known Member
As in the current terms?
I seen someone say it would revert to the old toxic deal which I believe is bullshit?
Valley Bluenose
RTV? Completed it mate!
My understanding is that it continues on the existing terms - namely SDIs deal next Summer would be matching the current Elite/Hummel deal. When that comes up for renewal 2 years down the line if nobody else bids then it would renew again on the existing terms, namely the Elite/Hummel terms NOT the old 7p in the £1. That is gone thankfully.
HenningBerg
Well-Known Member
I listened to the H&H podcast daily update last night. I tend to take what they say at face value . It sounded grim in terms of the judgement . Also it seems it will drag on and on for years .
DE reiterated its not Armageddon the way some media outlets have made out , but it will cost us . Balancing that out SDI owe us £3 million . The only winners here as usual are the lawyers .
I don’t think it can be dressed up as anything other than a crushing defeat legally however .
DE reiterated its not Armageddon the way some media outlets have made out , but it will cost us . Balancing that out SDI owe us £3 million . The only winners here as usual are the lawyers .
I don’t think it can be dressed up as anything other than a crushing defeat legally however .
Shongo
Well-Known Member
I have been working on the same
. Part VII migrations and so on.
CoulibalyLoyal
Well-Known Member
In that document on the first page if you go to page 12 and read that section 5 , it says if that happens it reverts to the puma kit terms
cambridgeblue
Well-Known Member
Let’s face it - SD will make more money by letting Hummel make strips and collecting the damages. If a SD / Puma strip ends up being the option for next season , no one is going to buy it.
Where did you see that Rangers said that? Tks.
EndOfDays
Well-Known Member
Anyone that thinks there was no matching clause in the original 7 year deal is extremely naive or just plain daft.
They were putting in 7 year notice periods and buying stadium naming for £1, they absolutely would have had matching rights and a whole host of other corporate shaftings.
Klos the Boss
Well-Known Member
Statement
mkgers
Well-Known Member
"
RANGERS would like to reassure supporters that matters concerning the litigation currently being brought against it by SDI Retail Services Limited are not as reported.
Rangers was disappointed by the terms of the recent court Judgment but respects the decision of the court and will meet any financial award made by the court.
No such award has yet been decided and at this stage Rangers does not even know how much will be sought. Contrary to some reports, the Judge has not determined that the contractual cap on damages will not apply.
Rangers would also like to reassure supporters that no steps have been taken to stop supporters being able to buy this Season’s Replica Kits."
https://rangers.co.uk/news/headlines/message-to-supporters/
I feel for youI have been working on the same
Bknowe
Well-Known Member
I think the club tried to engineer an out by breaching the contract if the damages were going to be capped at £1m. It was a gamble they took and it failled.
James Blair should be out on his erse as he embarrassed us in court. The judge being particularly scathing of him and he didn't seem too enamered with Fat Mikes legal team either but he agreed with them.
As DE said on yesterdays pod, this deal is so much more complicated than Matching Clauses. SDI are suing us, we're suing SDI back. They still owe us money from the old deal that they're refusing to hand over etc. Its all a huge mess.
FWIW I think we will eventually get rid of the Fat Leech but it will cost us, although I think some of it may be offset by the monies owed to us by SDI and if we have a contingency with Hummel/Elite.
There is a long way to go still unfortunately.
James Blair should be out on his erse as he embarrassed us in court. The judge being particularly scathing of him and he didn't seem too enamered with Fat Mikes legal team either but he agreed with them.
As DE said on yesterdays pod, this deal is so much more complicated than Matching Clauses. SDI are suing us, we're suing SDI back. They still owe us money from the old deal that they're refusing to hand over etc. Its all a huge mess.
FWIW I think we will eventually get rid of the Fat Leech but it will cost us, although I think some of it may be offset by the monies owed to us by SDI and if we have a contingency with Hummel/Elite.
There is a long way to go still unfortunately.
Sheik Ma Shammy
Well-Known Member
It is bad anyone telling you it isn't just isn't reading the judgement right or cannot understand it.
Marty101
Well-Known Member
It’s a bit more complicated than that, I think. The contract being looked at in the action actually has come to an end, and it’s exact terms didn’t renew.
It’s provisions provided though that SDI have to be given the chance to match a 3rd party offer, and if If SDI do match a third party offer then it creates a new contract with exactly the same terms as the old one except for any changes needed to implement the matched terms.
In the current action SDI are trying to have us held to a hypothetical situation where we gave SDI the chance to match the second elite offer and they took it up. Following that through, as at renewal time it would be a version of the contract derived from the second Elite offer’s terms which would renew in the event there’s no new third party deal.
It’s actually more complicated than that again though, since in another action SDI successfully argued that they were allowed to, and did, match the first version of the elite deal. That’s what brought the SDI-RFC contract the subject of the current action to an end.
The court found that created a new contract where the terms were the same as the SDI deal except in so far as changes were needed to match that first version of the elite deal.
When it comes to renewal time I think it’ll probably end up being a contract based on those earlier Elite terms which renews if there is no 3rd party offer - but it’s a complicated mess.
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Sos Facebook page
LetsGo
Well-Known Member
It is covered in para 70 of the judgment. It is not going to happen as we aren't allowed to artificially manipulate the deals to make them more onerous to SD basically.
The only way around third party offering rights is to not use a third party, effectively do all the design, manufacture, distribution and retail in-house.
Coza
Well-Known Member
Excuse my ignorance as this might already have been posted and answered.
It read to me like rangers have had the ruling go against them as the judge is taking all the contractual obligations and nuances very literally. As is his right and possibly duty. Ie contract says “x” so “x” must be done.
Fair enough.
Same contract has a section for damages from breach of contract the explicitly states a cap of £1m. Are we then saying the same judge is following the contract by the letter in one part and then suddenly ignoring the wording of the contract when it comes to damages. Seems a tad unreasonable and mildly suspicious to me.
Looks to me like rangers and elite were willing to cut Sports Direct out and pay the £1m limited damages and move on (Ie £4m not £3m to get rid of Sports Direct) but the judge isn’t letting this happen.
It read to me like rangers have had the ruling go against them as the judge is taking all the contractual obligations and nuances very literally. As is his right and possibly duty. Ie contract says “x” so “x” must be done.
Fair enough.
Same contract has a section for damages from breach of contract the explicitly states a cap of £1m. Are we then saying the same judge is following the contract by the letter in one part and then suddenly ignoring the wording of the contract when it comes to damages. Seems a tad unreasonable and mildly suspicious to me.
Looks to me like rangers and elite were willing to cut Sports Direct out and pay the £1m limited damages and move on (Ie £4m not £3m to get rid of Sports Direct) but the judge isn’t letting this happen.
BrownBrogues
Well-Known Member
Can we stop talking about SD moving us back to Puma when the 7 year deal ended the contract and responsibilities of picking a supplier reverted back to Rangers as an agreement to wynd up RRL who held the rights. Under the offered rights kit supplier is not one of them.
He was never an Ashley fanboy, you've completely made that up.
Wouldn't even call him anti- King, either, maybe some of our support should challenge their beliefs from time to time instead of blindly following people because of who they are?
King's tenure as chairman has been pretty poor - some awful commercial decisions, terrible mangerial appointments & £20m+ wasted on poor signings.
We can go round & round the houses, but unless Gerrard wins a title, King's overall tenure will have been a failure.
I support him and hope we do it, but this mentality some of us have that we need to be blindly loyal to chairman, gaffers etc jut doesn't wash.
Snoopproddiedogg
Well-Known Member
Would that not be a possibility because the Hummel/elite deal was packaged in such a way to include manufacturing which in turn meant SD could then also bid for manufacturing rights, I'm sure that's what the judge said.
Was about to post the same. Folk saying that we matched the SD offer clearly haven’t read it either.
StirlingBear
Well-Known Member
Thank you!
Seen it posted numerous times now that we will be back with SD and Puma its totally farcical that people think the Judge has the power to revert us back to a contract that was long finished and with a party (Puma) who have already severed all ties with us.
The same folk banging on about how stupid we were to agree to a matching clause are totally ignoring the fact that we also signed up to capped damages at £1M. The judge may not agree that those damages are sufficient but at the end of the day that's what SD agreed to, same as we agreed to a matching clause.
tazzabear
Well-Known Member
He forgot to add there’d be pretty much nothing in sales from our merchandise.
What there would have been is a helluva lot less than what we get, even now.
Southside_shug
Well-Known Member
I go back to my post yesterday morning.
SDIR have no intention of producing and selling RFC kit.
They just want to make sure no one else can.
Sasa5Papac
Well-Known Member
Reeking
BrownBrogues
Well-Known Member
No. The offered rights are offered rights. Whether they were on the same contract or not it’s still not part of a retail distribution deal or the offered rights.
