Sports Direct have won the latest round of their long running battle with the club from Ibrox forcing disclosure of the world record commercial contract with Castore Sport.
In 2019 Dave King broke with the contract that he had negotiated two years earlier to cut all ties with Sports Direct as a world record three years deal was opened with Hummel of Denmark.
It wasn’t until September that bears could squeeze into some iconic chevrons with Sports Direct launching a variety of injunctions, claiming that they had been denied the opportunity to match the terms of the deal with the Danes.
After multiple disputes Hummel ended their contract a year early with a High Court judge awarding Sports Direct full costs in their on-going dispute.
It has been a slow and expensive case, along the way there has been a couple of declarations from the Scottish media of how ‘Rangers’ had won the battle without examining the detail and the bigger picture. Sports Direct are certainly playing the long game to ensure that no one else repeats the tactics of Dave King.
The latest hearing was before Peter MacDonald Eggers QC on December 3, the fact that no detail has surfaced in Scotland suggests that it might not be good news for the club founded in 2012 by Charles Green.
Item 51 in the lengthy report details the objections from Sports Direct to the Castore Report that was offered by the Ibrox club:
- Mr Hossain QC on behalf of SDIR submitted that this offer is insufficient because:
(1) The offer includes no information as to Castore’s operation of Rangers’ official online store.
(2) No retail numbers or figures of any kind are offered to be provided. According to its case, SDIR would have held the relevant rights in respect of retail. In the counterfactual scenarios, SDIR would have benefited from rights to operate the Rangers Megastore and Webstore until 31st July 2020 and SDIR would have sold large amounts of 2020-2021 stock from the launch in May 2020 to 31st July 2020, and the Castore retail figures will be an important comparator for such sales.
(3) In excluding retail numbers and figures, Rangers would be depriving the Court and the experts of information which would be the best (or amongst the best) comparator as to what SDIR would have sold when holding hybrid rights for 2018-2019 and 2019-2020 seasons.
(4) There is no information as to the 2021-2022 season.
(5) The offer does not include information about the prices at which the relevant sales shown in the Wholesales Report were made.
(6) The offer is to provide a brand new and bespoke sales report from Castore.
(7) The offer does not include the Castore Agreement.
The report concludes:
- For the reasons explained above, I allow SDIR’s application for an order under paragraph 18 of CPR PD51U for the disclosure of the Castore Agreement, as well as the Castore Quarterly Statements (to include documents containing the accompanying information within the meaning discussed above) for the 2020-2021 season, but not the Quarterly Statement for the first quarter of the 2021-2022 season.
- In my judgment, an order for specific disclosure within the meaning of the second sentence of paragraph 18.1 of CPR PD51U is justified given that the documents sought are specifically identified or fall within a narrow compass and relate to Issues for Disclosure, even if they do not fall within the date range within the Court’s order for Extended Disclosure dated 16th February 2021. Insofar as it is relevant, I would alternatively have been prepared to make an order varying the Court’s order for Extended Disclosure to embrace these documents.
- I am very grateful to both counsel for their helpful submissions.
Without having any real expertise in the area it seems like Sports Direct are questioning the detail in the Castore Sports contract with just a £4.1m profit reported in the club accounts for the year to 30 June 2021.
In May 2021 the club announced on their own website that over 250,000 replica shirts had been sold in the previous 12 months which ‘surpassed all previous sales in the club’s history’. The same paragraph referred to the 150th anniversary which Companies House will celebrate in 2162.
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