Newcastle United will be able to sell their new Adidas uniforms through JD Sports despite Sports Direct’s attempts to ban them from doing so.
Sports Direct had ‘no legitimate’ reason to expect Newcastle United to continue selling the club’s new shirts at former owner Mike Ashley’s stores.
This is the decision of a Competitions Appeal Tribunal (CAT) panel after the retailer’s plea for an injunction to prohibit Newcastle from selling their new Adidas uniforms through rival JD Sports was denied. Sir Marcus Smith, the CAT president, and fellow panelists Carole Begent and Dr William Bishop unanimously rejected the appeal for ‘interim injunctive relief’.
The panel found that granting an interim injunction would put ‘a major kink’ in the ‘sensitive and intricate’ reorganization of Newcastle’s replica kit business after the Magpies terminated their arrangement with Castore to partner up with Adidas this summer. In the written decision, the panel went on to declare that the income expected from the business over time were likely to be ‘substantial’ and that Newcastle were ‘justified to be concerned about the enormous disruption that would occur’ if an interim injunction was granted.
“Sports Direct pleads that it ‘had every expectation that this supply would continue from Castore, or any successor’…we consider that there was no reasonable or legitimate expectation on the part of Sports Direct of continuity of supply from Castore,” a portion of the judge’s ruling stated. “To imply that Newcastle United FC and Adidas had an obligation in their agreements to ensure that supply to Sports Direct was sustained over time is a serious impediment to competition rather than an enhancement.
“The claim is that a company that ‘operates the largest network of sports retail stores in the UK’ is entitled to a guaranteed future supply.” We do not believe that claim is debatable based on the facts as presented.”
This is unlikely to be the end of the matter. The written ruling stated that ‘this rejection makes a fast trial more, not less, necessary’ and made several allusions to the possibility of subsequent actions at the initial hearing. Tony Singla, representing Sports Direct, told the tribunal that Newcastle would have to explain ‘with precision’ why they had chosen JD at the ‘exclusion’ of Sports Direct. “Saying JD has a shop in Paris?” the KC inquired. “With respect, they’re going to need to do it a lot better than that at trial.”
