This morning, there’s an interesting piece by the Sevco blogger John James in which he clarifies some of the legal possibilities facing King and the club as a dogfight with Ashley looms in the courts. This is a remarkable turn of events, as I suggested yesterday, with more potential legal landmines than could be taken care of by the Army Corps of Engineers.
For openers, those who viewed the Sports Direct website last night will have been struck by two things, both rather funny and rather revealing.
First is that every item relating to the Ibrox club is still on sale there, but all are marked with Must Go labels, consigned now to the equivalent of the bargain bin.
The second is that the site itself carries, on its home page, a huge Celtic ad.
Both are sly digs at the Sevco chairman and his idiotic actions.
I said yesterday that no-one in Shirebrook was clearing shelves, and that’s proved to be accurate.
Sevco’s statement said the contract was “terminated with immediate effect” yet a full day after Sevco’s startling announcement, Ashley and his company are still audaciously selling this stuff and not paying a blind bit of notice to King’s posturing.
Because posturing is really all it is.
King probably expected Ashley to head straight for the courts this morning. Many people did.
I thought he would myself, but that’s because I didn’t take a minute to actually consider what legal force and effect Sevco’s statement had yesterday.
Let me put it this way.
Imagine you find out that a national newspaper is running a story about your private life. You could go online and release a strongly worded statement telling them not to. Demanding that they don’t. Telling them they don’t have your permission to do it.
What notice will they take?
None, of course.
They’ll run it anyway.
The only thing that would stop them doing so is an injunction, and that’s what it’s going to take to actually prevent Mike Ashley and Sports Direct from selling Sevco stock.
I suspect that Ashley will only stop when a court tells him to.
As far as the merchandise for this season goes, every bit of it is still on sale.
If he decides to start selling next season’s stuff then we’ll see this escalate rapidly, and there’s only one way he can stopped.
That will take King filing an action in an English court, where any lingering Scottish pre-disposition towards the Ibrox operation won’t matter a whit.
Even if King’s people, at great cost, somehow win and enforce a temporary injunction whilst the larger matters are sorted out – or Ashley simply decides to do what they say, and doesn’t list a single item of the club’s merchandise for next season; unlikely, but the money he’d “lose” is a pittance compared to what they make – you have to remember, first and foremost, that this doesn’t help Sevco one bit. It doesn’t put a penny in the club’s accounts.
Think of this deal as the business equivalent of a £20 million player in the Newcastle Reserves. Ashley’s managers have signed more than a few of them, and a couple are rotting away right now, not part of anybody’s first team plans, and especially with the club relegated.
Think Ashley sits up at night worried about those “depreciating assets”?
Of course not. It’s the cost of doing business. The Sevco contract is worth roughly that sum to Sports Direct over the next six years, but that’s chump change to a guy who’s worth billions anyway and there’s nothing to stop him from simply sitting on the contract until it expires.
And in the meantime, what? Not a single item of merchandise can be sold by another retail outlet.
What do you think Sevco jersey sponsorship will be worth by the time that contract is up?
Nothing whatsoever. Nada. Ni. And they’ll face clawbacks from the people who’ve already shelled out. This will cost the club money; right now they’re simply not making the profits they think they should. But this will actually see them lose out year on year.
Think those 38 Red shirts the fans currently wear will still look alright in 2023?
Think they’ll still be able to wear them?
It’s a catastrophe, a war that no-one really wins in the short term, but in the medium to long term would devastate Sevco and open the floodgates of legal action which only the most foolish director would hope to win.
This affair is potentially damaging to Sports Direct in terms of reputation, status and money. They can argue all of that in court, and once again drag in the likes of Keith Jackson and Level 5 to support the case. They can cite literally hundreds of news articles generated in just the last 12 months in which their company is hammered in a PR war. Added to that efforts to restrict trade and commerce, King’s alleged breach of confidentiality, the attempt to stop Ashley Holdings from being able to use their shareholder votes … I could go on.
Why does all this matter, outside of how hilarious it all is to us? It matters because this is the all-too predictable outcome of having an egomaniacal goon like King in the director’s box in the first place and he’s only there because the SFA granted him leave.
This will cost Sevco millions before it’s done, millions they don’t have and can’t afford to squander in the pursuit of a King win over a guy who’s business acumen and skills are legendry, who achieved it all within the law and who could buy and sell the South African millionaire a hundred times over with what’s in the petty cash box at Shirebrook.
Who pays for that? The last time an Ibrox club over-reached like this it ended up you and me and the rest of the taxpayers who did. Scottish football needs a quiet period of calm, and although I never thought Sevco would allow us one I did think that the next 12 months might pass without serious doubts being raised about us getting through the season.
Sevco is in great financial peril already. King has brought in a few extra bucks in season tickets sales, but he’s already making it clear that they intend to spend even more. Squaring the circle is impossible as it is, without committing them to a lengthy legal war where the other side has money to burn and all the time in the world.
I never believed the King experiment would last; it’s got a shelf life of 24 more months if even that. The club got through last season by a miracle, getting its own directors to subsidise it and keep on the lights. I think all of them will balk at subsidising this, King’s own personal ego trip through the tort courts of Britain. There’s no appetite for any of this from a bunch of guys who simply wanted to help their football club get onto its feet.
Who knows? Perhaps in the fullness of time we’ll see them mount a counter-revolution of their own.
Because the King experiment only ends one way for Sevco.
In tears.