Legal parties for Mike Ashley’s Sports Direct and Newcastle United clashed at the Tribunal on Tuesday, as the retailer sought an injunction against the Premier League club.
Sports Direct, part of the Frasers Group, filed a claim last month to the Competition Appeal Tribunal (CAT) stating that Newcastle United has refused to supply its replica kit for the upcoming 2024/25 season.
The club has refused to supply Sports Direct – and its former owner Mike Ashley – with its upcoming replica kit, as it now has an exclusive retail arrangement with JD Sport.
The retail giant outlined that this new arrangement amount to an abuse of the club’s dominant position in the wholesale market, and is “based on unlawful anti-competitive agreements”.
The retail brand sought an injunction application against this move, which is why the parties were at a hearing at the Tribunal today.
The leading barrister for Sports Direct, Brick Court’s Tony Singla KC, argued to the Tribunal that his clients has stocked Newcastle’s replica kit for decades, and there is no objective justification for this new arrangement.
In his skeleton argument, he tells the Tribunal that Newcastle’s exclusivity arrangements with JD Sports has carve-outs for the Club’s own store, and the limited direct to-consumer outlets operated by Adidas, the kit’s licensed manufacturer.
He stated that “this appears transparently to have been done to improve the profitability of replica kit sales for the club, both by increasing the share of retail purchases made through its own store and by reducing price competition”.
Singla KC outlined in his argument that his client reached out to the director of Newcastle United, Amanda Staveley, and one of the points from the discussion, was that she was “candid about the concerns which the club had about Sports Direct discounting practices”.
For full context, Mike Ashley and Amanda Staveley have history. Ashley owned the club between 2007 to 2021, when it was taken over by the Public Investment Fund, the sovereign wealth fund of Saudi Arabia. Staveley now owns 10 per cent of the club.
Both of them were in the headlines in 2021 when Ashley took legal action against the co-owners including Staveley, claiming repayment of £10m in loans. She paid back the loans and the dispute ended in October 2022.
At the Tribunal today, the club’s leading barrister Blackstone Tom de la Mere KC stated that the Sports Direct application should be refused.
He stated to the court the retail giant has not taken any legal action against any other club who have adopted this arrangement for many years. In his skeleton argument he outlined that exclusive arrangements are in fact relatively common in relation to replica kits.
He quoted major clubs including Celtic, Leicester City and Leeds United as some of whom have had such arrangements with Adidas and JD Sports for long periods. He told the Tribunal that Sports Direct is a “Gorilla in the marketplace”.
Before the parties paused for lunch, Singla KC mentioned reputational issue with fans over ‘hating’ Mike Ashley – as he stated that the retail giant sold out the club’s kit last year. He added that fans would rather have cheaper replica kits.
The one-day hearing is set to comment later today, and there will be a decision on the application to follow.