Rangers has moved to end its turbulent commercial relationship with Sports Direct after the football club saw off a legal challenge from the retail chain.
In a message to supporters, the Rangers chairman, Dave King, said he had written to Sports Direct formally giving notice to end the joint venture. The statement came a day after the retailer dropped a high court attempt to prevent the disclosure of details behind the tie-up.
“For the first time, a board of this club has stood up to the threats of Sports Direct and has achieved resounding success in court proceedings, including the substantial recovery of legal costs,” King said.
“We will continue to put Rangers first and ensure that we get redress and compensation for the poor commercial and business practices that the club has been forced to endure.”
However, the contract holds Rangers to a seven-year notice period, which means the club’s links with Sports Direct might not be severed completely until 2023. Under the terms of the joint venture, the Glasgow club earned 4p from every £1 spent in its merchandise stores.
King said he had formally given notice to end the relationship “while still reserving our right to proceed with challenges to the existing suite of contracts and side agreements in a court of law”.
Earlier this week, Sports Direct, which is controlled by the Newcastle United owner, Mike Ashley, abandoned efforts to prevent disclosure of the venture.
An interim gagging order was imposed last summer, blocking Rangers from publicly revealing details of its agreement with the retailer, which contains swingeing clauses that have been heavily criticised by fans.
By continuing with efforts to extend the order, Ashley, who owns 55% of Sports Direct and about 9% of Rangers, faced being called to the high court to give evidence.
In agreeing to the nationwide chain’s request to abandon its case, the high court judge Mr Justice Peter Smith said he was keen to curtail a “ridiculous piece of litigation”.
King promised a “turning point in the future of the club” when he led a consortium to win control of the Rangers board in March.
They voted the former Rangers chief executive Derek Llambias and the former finance director Barry Leach, both of whom were linked to Sports Direct, off the board in May.
King described the payment of £5m to recoup a loan from Sports Direct in November to keep the club solvent as an “unanticipated investment”.
Sports Direct’s battle with Rangers is the latest in a string of corporate bust-ups for Ashley. He accused the board of online retailer Findel of “under-delivering for shareholders” after it rejected a proposal to put his representative on the board. Ashley was also involved in a spat with Adidas over the sale of premium football kits and attempted to sack the board of Blacks Leisure in a row about the potential sale of the Freespirit board sports chain.
The company and its founder have also faced a barrage of criticism since December, in the wake of a Guardian investigation that found that the retailer was effectively paying thousands of temporary warehouse workers below the minimum wage.
On New Year’s Eve, Sports Direct pledged £10m for a pay rise for staff from the start of this year and said it wanted to become the best high street employer after John Lewis.
Sports Direct was unavailable for comment and Rangers declined to comment.
