RANGERS is fighting a multi-million pound damages claim over an alleged merchandise deal breach over its agreements with Mike Ashley's Sports Direct.

Details of the claim emerged in the latest twist over the bitter battle between Rangers and Sports Direct after a judge previously stated the club had breached a legal agreement allowing Mr Ashley's company to make an offer over club merchandising, including the Scottish Premiership leaders' replica kits.

And lawyers acting for the Newcastle United owner's sports firm claimed yesterday that the club feared a supporter boycott if Sports Direct had won valuable merchandise rights.

Mr Ashley, once a controlling figure at the club with a hold over its trademarks and merchandise and Rangers have been embroiled in various High Court litigations, centred on the merchandise deal, in London for more than two years.

Yesterday it emerged that a company in the Sports Direct Group, SDI Retail (SDIR), is pursuing damages over an alleged breach of obligations under merchandise deals through the Commercial Court in London.

In July, 2019, Judge Lionel Persey said that Rangers had breached the agreement with Sports Direct over the club's kit deal.

He ruled Mr Ashley's company should have been given the chance to match a shirt deal struck with Hertfordshire-based football merchandising firm Elite and sportswear firm Hummel thought to be worth £10m.  A damages hearing was expected to follow.

READ MORE: Rangers due to pay nearly £450,000 in legal fees to Sports Direct in merchandise row

The case revolves around Mike Ashley, who was a former Rangers shareholder and once seen as a club kinpin, striking a deal with a previous board that saw his company take in around 93p from every £1 made from the sale of strips and merchandise.


That deal led to some fans boycotting Sports Direct stores and their sale of Rangers kit.

At the end of 2014 the fans group, Rangers Supporters Trust launched an alternative shirt for fans as they took on Mr Ashley - and said all profits would be ploughed back into an increased shareholding in their club.

The Herald revealed that in early 2015, Mr Ashley was declared the "ultimate controlling party" of Rangers Retail, a joint venture with the club which controlled the club's merchandising and stores.

When the venture was first confirmed by the club under then chief executive Charles Green in August 2012, it was promoted as enabling Rangers "to once again control its retail operation and give supporters the chance to buy direct from the club and in doing so, continue to invest in its future".

A campaign was subsequently launched in early 2015 by the Sons of Struth fans group as South Africa-based businessman Dave King moved to try and shift Mr Ashley's influence at the club and one petition calling for a boycott of Sports direct attracted over 8000 signatures.

And in March, 2015, Mr King and his so-called Three Bears associates including Paul Murray achieved a landslide victory at an extraordinary general meeting to control the boardroom while evicting associates of Mr Ashley, Derek Llambias and Barry Leach. That came after David Somers, who was chairman, and James Easdale had already resigned.

Yesterday at the Commercial Court in London in a debate over what should be disclosed by both sides in the damages claim, Sa'ad Hossain for SDIR, told Judge Persey Rangers were requiring financial documents that would show the financial effect of any boycott of the club.

He said: "Rangers say there are were some supporters who would not have bought kit in the relevant period from around July, 2018 in the event that SDIR acquired the offered rights because of antipathy to SDIR."

READ MORE: Rangers 'will make payout to Mike Ashley' over strips

"This disclosure is contested as it is not to do with July, 2018, onwards, it is to do with the historical boycott that took place when the joint venture with [Rangers Retail] was in place, commencing around November, 2014.

"As we understand, Rangers' position is searches should be made of financial information of [Rangers Retail] going back to 2014 so that the impact of the boycott in 2014 can be determined.

"And then in turn [they will] make inferences of a boycott in different circumstances relevant to the damages claim.

"There are several reasons for thinking that this isn't going to be a very informative exercise.

"Firstly, the extent to which supporters boycotted kit in the past period may obviously be very different.

"It is common ground that from 2018 onwards that Mr King and Mr Murray would have complied with their obligations which would have required them not to support a boycott of the goods.


"Also Rangers was in a very different period during most of the boycott period.

"The boycott started in November, 2014, and Rangers only returned to the Scottish Premiership at the end of the 2015/16 season.

"In the period relevant to damages, Rangers is not only in the Scottish Premiership but competing in the Europa League.

"We say it this is a fringe or unimportant issue."

Akhil Shah QC for Rangers, said it would be the "end of the issue" if monthly management reports for the retail operation were provided, adding that they were not sent regularly by Sports Direct.

The Commercial Court 'trial' is expected to take 12 days and both sides have been arguing over the costs to be incurred.

Sports Direct have said there is an agreement over its £299,400 costs budget for the 'trial'.

But it says its costs over the document disclosure procedure is disputed by the club. Mr Ashley's firm says it should be £204,725, while the club wants to limit it to £157,400.

SDIR told the court that an agreement was reached that Rangers costs' for the disclosure procedure would be £314,402. Rangers had claimed around £319,000.

In Judge Persey's July, 2019 judgment, he said: “I am satisfied that [Sports Direct] was not only entitled to match the rights offered to Hummel/Elite but would have done so.

“Those rights were not only not offered to them but Rangers... untruthfully asserted that Hummel had not been granted any Offered Rights and did not provide SDIR with a copy of the Elite/Hummel Agreement.

“The upshot of all this is that Rangers, Elite and Hummel have until now performed and enjoyed the benefit of the Elite/Hummel agreement.


At the end of June, 2018, Rangers had announced that Mr King's dispute with Mr Ashley was over while confirming a new one-year kit deal with Ashley's retail firm has been agreed.

Mr King then hoped the deal would encourage supporters to end their kit sale boycott and provide a major financial boost as Rangers aim to challenge for the Scottish Premiership title.

The damages case comes a year after Rangers won a separate battle with Sports Direct centred on the terms of an injunction aimed at preventing further breaches of the original agreement between Rangers and SDIR.

The case continues.