King Facing Lengthy & Expensive Legal War As Ashely Makes Dramatic Moves

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On Friday last week, Level 5 sent word to some of their pet hacks that Mike Ashley had been “humiliated” over the Sports Direct merchandising deal.

The Herald duly ran the piece, with a headline to that effect.

Most didn’t even touch it.

That’s how bad this story was. How weak.

The article was about boardroom turbulence at Rangers Retail Limited, the partnership between Sports Direct and Sevco, which gives the club a pennies in the pound “profit sharing” arrangement, and which hilariously has six and some years left to run.

The story was centred on an announcement Ashley had made to the Stock Exchange, giving notice that he and one of his key lieutenants had resigned from the board, leaving one member of the Sports Direct team there with Dave King and Paul Murray.

Not that it mattered, but the story was factually wrong.

In fact, the Stock Exchange statement confirmed that SD had already appointed a new board member to take one of the places.

In addition, the composition of the board didn’t change anything in terms of voting rights; Sports Direct still have control over the company, and even if they’d left one guy minding the shop as the paper appeared to suggest it would have made no difference at all to how things were decided. The of a new board member simply rebalancing things in terms of bodies; the real power still lies with Ashley himself.

But Ashley was stepping back, and the first thing that popped into the heads over at Level 5 was that this was some kind of retreat, hence the word “humiliation” creeping into newspaper headlines. That was soon clarified.

This is a retreat only in asfar as it’s a tactical one.

Ashely has been a busy man of late.

Newcastle have been relegated, which makes he and his club the province of the Football League, and he has to be careful that there’s no appearance of a “controlling interest” or anything like it at Ibrox. He’s been trying to put Newcastle back on a good footing, and he’s also been appearing before Commons Select Committees and being asked to justify the practices down at the Shirebrook warehouse.

It’s worth reminding people that I actually dislike this guy pretty strongly; his business practices are absolutely abysmal, robbing his workers of dignity and decent conditions even as he ruthlessly preys on other firms and rips off consumers with misleading “deals” and “offers.”

He’s not a nice guy.

Which makes King’s behaviour towards him all the more remarkable, not to say absolutely bloody stupid.

At least one board member is said to be deeply troubled by the way King and Murray seem to push Ashley to saying “see you in court.”

Perhaps we’re a step closer to that today.

It turns out that the guy Sports Direct appointed on Friday is Justin Barnes, who turns out to be an intellectual property lawyer and an expert on IP disputes, such as the one King has pushed Ashley and the company into.

It’s clear that although he’s taking a step back, to concentrate on his myriad other issues as well as avoiding any conflict with the English FA (a move so obvious every Celtic site was writing about it as the media was warning that Newcastle could be banned from football if Ashley didn’t up and give King what he wanted) that Ashley is obviously dedicated to winning this particular war. Appointing Barnes is a direct challenge to King and Co to do their worst.

When ’s new shirt comes out and goes on general sale, it’ll be interesting to see if Ashley continues to punt it in his Sports Direct stores and online.

King has told him he can’t, but there’s a difference between a blowhard saying “don’t do something” and a cease and desist letter from a reputable law firm.

Ashley hasn’t received one of those yet, and King’s petulant demand is unlikely to sway him.

Barnes is an expert on the subject at hand, so King better hope that his own legal people have been giving him good on this one.

Either way, Barnes’ spells trouble.

Ashley’s probably given him carte blanche to handle things as he sees fit, with the caveat that Sports Direct win and are perceived to have won. Nothing would do Ashley’s reputation greater harm than being seen to lose a full-on legal contest with the South African tax cheat.

This is how it starts.

fans can only wonder how it will end.

King has pushed Ashley to this and if he and he alone were in line to reap the whirlwind fans could sleep more soundly in their beds. But King speaks for all of them and his actions reflect on all of them and they will have consequence for all of them.

Sevco itself has been imperilled by its chairman’s ego and stupidity.

And I think we’re very soon going to see the results of that.

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