Well, who’d have thought it?
His Big Mikeness means business.
Lawyered-up, High Court induction-seeking business.
It turns out that he’s quite keen on protecting his commercial interests, and the terms upon which they were agreed.
It probably makes him money in the long run.
And probably by-the-second too.
Anyone who thought HBM had been driven out of Sevconia by the March EGM, boycotts of merchandise, endless spin, hostile headlines in Scottish newspapers, and some quite ridiculous grandstanding by the ‘new regime’ got a very rude awakening last night with the news that Sports Direct was heading for the London courts.
Today. For unspecified reasons.
The feverish online speculation was great fun to read, but the hours until kick-off were interminable.
It turned out that Mike’s legal team were seeking an injunction to prevent commercially confidential matters being discussed at tomorrow’s EGM.
The nature of Sevco’s commercial deals with Sports Direct has been in the spotlight for some time.
The Komedy King and Baron Bouffant have repeatedly mentioned the need to negotiate a ‘better deal’ for Sevco, and King himself has suggested that repayment of the £5m Sports Direct loan should be considered ‘holistically’ as part of that discussion.
The Sevco Board’s statement of 26 May (which gave notice of the General Meeting) suggested that (while respecting commercial confidentiality) they would want to draw certain matters to the attention of shareholders.
And the following day, the Daily Record ran with a splash about the regime being ready for “war” with HBM over the contracts. It also revealed that the commercial relationship was on a seven year rolling basis.
This was news which caused much mirth among Clumpaneers at the time.
And how that laughter soared past Level5 today when it turned out that that Daily Record piece formed a significant part of Sports Direct case!
I won’t take you through a blow-by-blow account of the case as there are numerous reports on the internet. [Although you would do well to read through the excellent Twitter timeline of @JamesDoleman, who was present throughout].
But in short, Sports Direct and Sevco have different views on the extent to which their contacts and discussions are covered by commercial confidentiality.
Sevco were prepared to give undertakings regarding tomorrow’s EGM, but not the blanket guarantee of absolute confidentiality that Sports Direct wanted.
The Sports Direct lawyers argued that the aforementioned Daily Record piece contained sensitive information that only those with privileged access could have known about.
They suggested that this (coupled with the differing views over the nature of the contractual obligations) cast doubt over the prospect of information being kept confidential.
And of course as soon as something confidential is ‘released’ it cannot be ‘put back’. There is no subsequent remedy available.
Given all of this and numerous other considerations, Spots Direct sought an injunction preventing the disclosure of anything that might breach commercial confidentiality.
Sevco argued against this, pointing to the undertakings they were prepared to make, and suggesting that it coudn’t be known that the ‘7-year rolling contract’ information got into the public domain via someone breaking confidentiality.
They also pointed out that the EGM was designed to focus on a key part of the Sevco-Sports Direct relationship (the loan) and that it would seem excessive to curtail discussion through the granting of an injunction.
The Judge accepted the argument of the Sports Direct team, which outnumbered the Sevco team by 5-1. And whose work was apparently so expensive that even the Judge was taken aback when considering the costs to be awarded against Sevco!
[Incidentally, the main disappointment of the day was that Sports Direct did not bring an additional lawyer so as to have a play-off-final-commemorating 6-1 scoreline.]
The outcome caused hilarity among the massed ranks of Clumpaneers.
And outrage among Sevconians. Especially the Rangers* Supporters Trust which (yes, you’ve guessed it…) ISSUED A STATEMENT!
As before, I will leave you to digest the statement at your leisure, but it contains some magnificent (and ‘brave’) lines, including:
“Today we have seen the absurd spectacle of Mike Ashley taking our club to court to stop the Rangers board from informing shareholders and fans about details of the Sports Direct contracts
At the same time Mr Ashley demands clarity from the board at an EGM called by him. It seems that Mr Ashley’s hypocrisy is matched only by his avarice”.
In discussing the ‘7-year’ story, the lawyer for Sevco made several references to the Daily Record, in particular referring to “an article in a tabloid newspaper that is full of hyperbole”.
“Ouch!” said Clumpaneers….
The reaction from Keith Jackson was also quite interesting.
That may be the case Keith (and it WAS a cracking story) but as you well know, that wasn’t the focus of the application for the injunction.
The issue at hand was whether there was a prospect of commercial confidentiality being broken, and whether that necessitated a court ruling…
However, it (almost) goes without saying that the subsequent Record headline duly screamed “Mike Ashley Gags Rangers* Board”
But that entirely misses the point. They are being obliged to respect the terms of the contracts to which they – as directors – are a party until such time as a different view of the confidentially requirements is agreed or decided by a court…
The Sevco fans can complain all they like about information being kept from them, but if it was covered by a confidentiality agreement IT IS SUPPOSED TO BE KEPT FROM THEM!
Complain all you like about secrecy and the ‘unfairness’ of the contracts, but they were agreed by two parties and they are going to have to be adhered to until they end, are bought-out, or dissolved in some way…
Unless of course a boycott of Sevco merchandise and other Sports Direct goods brings HBM to his knees.
Yes. That might work.
Apart from the impact of any provisions requiring Sevco to buy unsold stock from Sports Direct.
And apart from any further damage that might be inflicted on Sevco by the inevitable reduction in their retail income.
Oh, and apart from the fact that HBM is the billionaire head of a multi-billion pound retail empire. And isn’t going anywhere. Not when he can sit back and watch the hilarity unfold over contracts that are mere chicken feed to him.
So on you go with your boycott.
And your spin.
And your statements.
His Big Mikeness might even notice you are doing it one day.
Still, at least that’s the end of HBM’s ‘aggression’ isn’t it…?
Oh no! What’s that coming over the horizon?
It’s the Sevco EGM! Tomorrow!
Wherein HBM will pursue two other trifling issues: namely the loss of Nomad/delisting of RIFC’s shares, and the repayment of that £5m loan.
As has been said before, the EGM is unlikely to resolve anything. HBM’s resolution will be defeated, the board’s will be approved.
The real entertainment may well come from any questioning of the board about the Nomad and delisting.
The Clumpany wonders if HBM will send someone to ask questions, and whether they be heckled and booed by the Dignitydome faithful?
The Clumpany also wonders if his lawyers – fresh from today’s victory – will be studying every utterance from the board with interest.
Today’s events were absolutely fascinating, but it certainly feels like the Sevco saga still has a long way to go…
So please do