Dispute Resolution

With England’s Rugby World Cup team getting off the plane from Tokyo battered and bruised from their final loss, you could be forgiven for feeling some sympathy for them. However, some of the squad, indeed the backbone of the side some might say, have flown back into the eye of another storm as the English Club champions, Saracens, were docked 35 points by their governing body for what is alleged to be breaches of the financial fair play rules. In essence, the governing authority thinks that the salary cap imposed on all the Premiership clubs has been circumvented by Sarries through the use of private companies set up for various commercial activities, property and the like, where the club’s owner is a shareholder alongside his star players in those companies. The club is appealing and, as matters stand, the points deduction has been delayed. The devil will be in the detail and it will be interesting to hear a further explanation as the appeal proceeds but for now at least, the optics aren’t looking too good as the media starts to get its teeth into this one.

Farrell, Itoje and the Vunipola’s are all wonderful players but some arrows have already been fired by other club representatives to the effect that this is nothing short of cheating. The cheating claims seem to be aimed at the club rather than the players. We’ll have to wait and see what transpires here as the rules are the rules but the lawyers for the club and Premiership Rugby will be busy on this one for a while.

Switching codes; New Balance v Liverpool

Elsewhere, Liverpool’s march towards destiny in the football premiership has also been played out against the back drop of ongoing court action between them and their shirt sponsor, New Balance. Their current deal comes to an end in 2020 but the contract was designed to give New Balance another bite at the (red) apple. In summary, the contract had good faith provisions surrounding renewal which New Balance claimed had not been observed to the letter. The contract did also allow New Balance an opportunity to match any other offer that Liverpool might receive.

Nike v New Balance; discuss

Enter global superbrand Nike who, amongst other things, including £30 million a year and 20% of shirt sales, had some ingenious clauses where they were offering to market Liverpool’s wares with global superstars including Drake, LeBron James and Serena Williams. The judge, showing a keen grasp of popular culture, agreed with Liverpool that New Balance couldn’t match that star studded line up so, come 2020, we can perhaps expect to see the Nike swoosh on Liverpool’s kit.

And Now Sports…in the dock

Two different sports with different legal problems, just goes to show the increasing issues that UK sport has to deal with as money flows from global opportunities. Who knows what Bill Shankly would have made of it all? But frankly Mr Shankly, we’re certain to see more sporting disputes spill out into courts and hearings before governing bodies.

Stephen Goldie

Head of Litigation & Partner at Brodies LLP
Stephen is a partner at Brodies and heads up the Business Disputes and Asset Recovery team. Stephen acts for oil & gas companies, private equity funds, commercial lenders‚ institutional investors, estate owners, retailers and corporate occupiers throughout the country.
Stephen Goldie

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