Ashley wins High Court case over £15m ‘banter’

MIKE ASHLEY, the Newcastle United owner and Sports Direct boss, has won a High Court battle with an investment banker over a £15m deal allegedly made in a Lon- don pub.

The case revolved around a night of “heavy drinking” in 2013 when Jeffrey Blue, a former investment banker, claimed that the billionaire agreed to pay him £15m if he helped Sports Direct’s shares to rise from £4 to £8.

A judge yesterday morning dismissed the £15m claim after declaring that the agreement was “not a serious discussion... but was banter in which Mr Ashley was displaying his wealth and scale of ambitions”.

Mr Justice Leggatt said the “jocular” remark was not a contract and “that there was no one present in the Horse & Groom pub who thought that it was genuine”.

The judge said: “The fact that Mr Blue has since convinced himself that the offer was a serious one, and that a legally binding agreement was made, shows only that the human capacity for wishful thinking knows few bounds.”

Mr Ashley’s legal team tried to pursue Mr Blue for £1.5m in costs and indemnity, but the judge said he did not think it was right to award such costs. Instead Mr Blue will face initial legal costs of £600,000.

Mr Ashley said: “The only reason the Sports Direct share price exceeded £8, and will hopefully do so again, is because of the sterling efforts of all the people who work at Sports Direct.”

MIKE Ashley wasn’t in court to hear the verdict. But then the ebullient retailer, whose presence loomed large throughout the trial into whether or not he’d promised former adviser Jeff Blue £15m in return for doubling Sports Direct’s share price, didn’t need to be. Ashley doesn’t need to do anything, to be blunt, which is a characteristic he often deploys.

With a personal fortune estimated by Forbes to be £$3bn (£2.3bn), he doesn’t need to get up every morning, he doesn’t need to work, he doesn’t need to be in his Shirebrook warehouse each day, working out what stock will sell best in each store and why.

He does it because he’s driven. I appreciate writing anything that is supportive of Ashley will not be popular. Along with Sir Philip Green, he has become one of the best known business people in the country, and, similarly, for all the wrong reasons.

But, just like Green, he’s clearly driven by the rag trade, by the aim of creating the best retail empire he can, and by the financial fortunes that come with that. And he shouldn’t be judged badly for that.

The witness sessions of the Blue trial were a window into his world for the great British public who perhaps hadn’t really heard of Ashley before, other than for his ownership of Newcastle United.

For those who have kept a relatively close eye on Ashley’s progress on and off over the years, such stories of his drinking antics are nothing new. This is a man after all who, following his testimony to a Commons select committee last June, went straight to a favoured Chelsea hostelry and sank a few pints. Where others might have gone back to their public relations consultants, watched tapes of what was said, and worked out where he went wrong, Ashley was happy to take his tie off – heaven forfend – and relax.

It is this unusual approach to his business life that many cannot understand. Maybe driven by jealousy, maybe driven by his more colourful traits, maybe driven by some poor work practices which he has vowed to stamp out, the fact that Ashley makes his own rules does not compute with many who opine on him.

He is painted either as a villainous moder- day Fagin, or a drunken oaf who doesn’t know what he is doing. He is, I would argue, neither.

Judge Mr Justice Leggatt was paid to opine on Ashley as a result of this trial, and opine yesterday he did. Cutting through what he called some of the retailer’s “unorthodox ways”, he actually praised him. He praised his work ethic, which he noted runs through the company, and referred to him as a “serious businessman”.

The judge also concluded that there was no evidence that Ashley is someone who makes deals in pubs or begins business negotiations during marathon drinking sessions.

Does that absolve him of past sins? No. Does that mean that he is whiter than white? Far from it. But can one use this trial to paint a picture of an out-of-control entrepreneur who has no idea what he is doing? Not really.

While this trial served as a cautionary tale that it is never a good idea to end a work night out vomiting into a fireplace, it is a bigger reminder that Sports Direct continues to be distracted by matters that need not have happened.

Had Blue been given an actual remuneration plan, would this trial have happened? Probably not. Had Ashley kept a closer eye on how agency staff are treated in his warehouse, would he have been hauled before MPS? No. For all the zeal of wanting to be the best, he needs to be aware that the larger the company becomes, the less he personally can do. As companies grow, executives put processes in place to make sure they can grow the right way.

Sports Direct, which is largely a corporate governance desert, appears to be devoid of process and as such misfires on a regular basis. That leads to problems, which become distractions. If Ashley, who said after learning of the Blue result he wants to return the Sports Direct share price to £8 (despite it closing at 361.72p last night), is genuine, he needs to learn that, as hard working as he is, as unique as he is, he cannot do it alone. james.quinn@telegraph.co.uk

‘He is painted either as a villainous modern-day Fagin, or a drunken oaf’