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Egomaniac King Places Sevco In Jeopardy Over Retail Deal

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Things at Ibrox have been quiet these last few weeks, albeit with the media drooling over the possible signing of a 33 year old ned and making up utter nonsense about Sports Direct having to cut up their Ibrox contracts because Newcastle have been relegated.

Someone at Ibrox doesn’t like quiet.

Someone perhaps got too used to seeing courtrooms and talking to lawyers these past ten years.

When the seas appear calm and the sailing is smooth, someone likes to give the boat a good rocking, just to add some interest.

So Dave King has told Sports Direct that from now on the club will not allow them the use, or sale, of the “intellectual property” assets, such as the club badge and logo.

What does this mean?

Well it means that the club is telling Sports Direct that it’s now not allowed to sell any merchandise bearing this stuff through its in-store or online outlets.

The notion is barmy.

Are there people, even now, in Sports Direct warehouses clearing shelves as I write this?

Has their website removed Sevco branded goods from its page?

No and no. Of course not.

This matter won’t end well; in fact, it will end up in court.

But this carries serious consequences which King and his people clearly haven’t yet thought through.

Even if they’ve got legally good grounds for denying Sports Direct the use of the intellectual property, what happens to everything that currently carries it?

Sevco can’t sell it themselves.

The Sports Direct deal is exclusive.

If I were Ashley the first thing I’d do is seek an injunction barring the club from using that stuff until the merchandising issue is resolved.

He would probably win.

If those strips and goods aren’t allowed to be sold, what happens to the stocks which the club and Sports Direct have already purchased?

Last year, a leak suggested that unsold stock would have to be purchased by the club itself; Ashley wrote some sweet clauses into that contract alright.

Do they have the cash for that?

Even if, by some miracle, they do … it doesn’t end there, you see.

Not even close.

It actually opens the club up to potential legal challenges, on multiple fronts.

For one thing, the club signed a shirt sponsorship deal with 32 Red.

They now have to go to that sponsor and tell them that they aren’t getting what they paid for because they’re challenging Sports Direct’s right as the exclusive retail outlet.

Which means no sold goods.

Which means thousands of shirts that were supposed to advertise 32 Red could now be sitting in a warehouse.

How about the kit manufacturer, who would surely have to be involved in the talks if a lot of strips are going to sit in boxes?

What about the literally hundreds of smaller organisations everywhere who have taken out licenses, perfectly legitimately, and now have no sales outlet worth the name with which to market them?

There are legal challenges aplenty here.

This is restriction of trade.

This is tortious interference.

This is more problems than you can shake a stick at.

The club announcement says they will “speak to their commercial partners” to work out where they go from here.

They mean they will speak to teams of lawyers about where they go from here.

Some of those commercial partners will rightly view this is as a hand grenade thrown under the table.

They’ll be livid, and rightly so.

It also sends out a devastating signal to other organisations who fancy doing business with this club in the future.

How can any contract with them be relied on?

How can any deal be seen as secure?

Over the long haul, this is going to cost Sevco big time.

You know, the seven year notice period is a disaster for the club but it’s one they’d be far better off if they simply swallowed.

Without Sports Direct’s reach, its shops, its websites, Sevco has no way to sell any of its merchandising gear.

To build an infrastructure like that will take years, and millions, and they don’t seem to want to wait.

And if they think they’ll simply waltz off and go to Sports Direct’s rivals … guess again.

Who would that be, for starters?

Even if one exists, do you think they’ll happily take Sevco’s business and give them a good deal? If they’re business people at all they’ll see the club for what it is; desperate for money, with no infrastructure of its own, and fleece them accordingly.

There is no quick or easy way out here, no matter what King seems to think.

The Sports Direct deal could have been renegotiated right at the start if the club and its chairman had been willing to treat their partners with respect.

There’s no chance of that now.

King talks a lot about wanting to move his club on. What he’s done today is guaranteed that Ashley and his people will be involved with him for a long time to come, and whatever calculation he’s made about the English FA coming down on his side isn’t one supported in law.

Because this is about commercial agreements, contracts, between a retail outlet and a football club; it’s not something a footballing body would ever interfere in.

Celtic recently signed the most lucrative shirt sponsorship deal in Scottish football history. We already have our own retail outlets. We already have the infrastructure to sell our stuff far and wide. Because we invested in that side of things, whilst Sevco were cutting and shutting and telling everyone who would listen what a great deal they had.

I hope King and his club can afford good lawyers.

They are going to need them.

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