Sevco On The Verge Of Losing Key Sponsors Over Shirt Sales Fiasco

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Dave King and his Ibrox board are today facing trouble on multiple fronts.

The “return” of Mark Warburton has ignited a battle over resources, his Q&A has made more promises he can’t possibly keep, the Resolution 12 guys are about to drop a bombshell on the whole club and there are issues over short and medium term financing that render the idea of long term funding almost redundant.

Into this mix comes a disaster of their own making, one which is quite literally stamped Made In South Africa.

About six or seven weeks ago, I wrote here about how King’s rabble rousing press regarding the “termination” of the intellectual property agreement between Sevco and Sports Direct was going to cause more trouble than it was worth. Since then, Ashley has stepped back from the board of Rangers Retail Limited and appointed, amongst others, a lawyer who’s speciality is in intellectual property disputes. He’s also appointed another board member, tipping the numerical balance on that board back in Sports Direct’s favour.

At the time of the announcement, though, I suggested that the real trouble might not even come from Ashley himself but from Sevco’s other commercial partners.

King had said he was going to consult them to find the best way forward; the rumour mill suggests that those discussions have gone pretty badly, which isn’t entirely unexpected. Phil reports one hilarious tale of King being so jealous of Celtic’s big shirt deal that he went to 32 Red to ask them to consider putting their name on the back of the shirt instead of the front so that Sevco might try to get a better deal elsewhere … they laughed that suggestion right out of the room.

Shirt sponsorship deals are big business, both for football clubs and for the companies who purchase them. This is in large part to do with television exposure; a name on those jerseys means that whenever the club is on TV you are too. That’s one of the things you are paying for.

Yet there’s an argument for saying that it’s a much bigger deal to have 100,000 people out there walking around wearing the brand name on their chest.

That’s where the real wonga in shirt sponsorship deals comes in; every single person who buys a kit is quite literally a walking advertising board for your product. Every selfie, every crowd shot, every photograph taken of supporters going to games, or even just something as simple as a guy and his girlfriend on holiday becomes, in its own way, a wee endorsement of your company. This has a multiplier effect, as I’m sure you can grasp.

It’s also a great ad for the kit manufacturers, who also spend a lot of money making sure there are many thousands of people out there walking about wearing the brand.

The money these people sink into football is substantial. A club with a large and passionate support is the best cash they’ll ever spend, which is why Celtic were recently able to announce a blockbuster kit sponsorship deal which is the biggest in Scottish football history.

Now, I have no way of knowing how lucrative (or not) Sevco’s deal is with their betting company, or with Puma, but I do know that without that cash there would no new deal for Wallace, no wages for and no chance of Warburton being in Glasgow for Christmas.

Sevco has told Mike Ashley they will no longer allow any goods to be sold bearing their logos or brand name. That has been ignored up until now, as Ashley knows full well that it has no force or effect until accompanied by a “cease and desist” instruction from a court.

But the club has briefed the press that the fans will be unable to purchase any replica kits from Sports Direct websites or shops. As Sevco has no other means of shifting the numbers they need to make this a worthwhile proposition – not to mention concerns over exclusivity rights which Sports Direct is certain to have – that leaves them pretty much high and dry.

It also leaves 32 Red and high and dry too, though.

The value of their deals was dependent on a large number of Sevco fans wearing those very shirts. The multiplier effect of all those Six Counties neds fighting with the police, live on the telly, during the Marching Season can no longer be relied upon. The millions of “impressions” from social media shares will not be forthcoming.

I hear there’s now a very chance of those companies either refusing to pay Sevco another penny in revenues (these deals are usually not paid in one sum but on a staggered schedule system which lasts for the term of the contracts) or of them suing to get out of their deals altogether, and it’s hard, at this moment, to see how the club can change that without the enormous loss of face that would be seen to have happened if Ashley is allowed to carry on as before.

At best, Sevco is only going to get a fraction of the agreed upon sums and I strongly suspect that this matter will end up in a court somewhere down the line, and all this is to say nothing of what Ashley himself might decide to do in order to mix it up even more.

He could, right now and with the likely legal outcome strongly in his favour, simply sit on those shirts as he pursues King and the club through the for restriction of trade, breach of contract and any number of other avenues that might occur to him. Even as he did that, not a shirt would be sold and the sponsors would be climbing the walls.

There is no positive outcome for the club here, and there never was. This boycott doesn’t bring a single penny through the Ibrox cash registers. It exposes them to trouble from their sponsors and kit makers and the way the affair has been handled will almost certainly have knock-on effects in future sponsorship and distribution negotiations.

This site has said repeatedly that King is not an entrepreneur or someone with the know-how or the means to move the club forward. He is an arrogant, egotistical blowhard who has spent so long fighting people that he can’t stop. His view of his club and its place in the world is dangerously lop-sided. This is a fight he should never have taken on in the first place, and certainly not in the bull-headed manner in which he has chosen to.

This particular folly is especially remarkable as it has no upside at all except to satisfy the craving for “payback” amongst the fans and to buoy Dodgy Dave’s own self image, a responsibility the media never tires of embracing anyway. They had a rare old time reporting this decision when it was announced; not one outlet thought to ask if it was a idea.

It wasn’t. That’s going to become all too apparent all too soon.

This really is the gift that keeps on giving, the show that never ends.

Send in the clowns Dave.

Send in the clowns.

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