Sports Direct boss and a boozy ‘£15m promise’
THE Sports Direct tycoon Mike Ashley made a drunken promise to pay a colleague millions of pounds then went back on the deal, a court will hear today.
Jeff Blue, a former Merrill Lynch investment banker who became strategic development director for Sports Direct, claimed Mr Ashley promised him £15million if the retailer’s share price doubled within three years.
Mr Blue claims the entrepreneur said words to the effect that “I will have made so much money it doesn’t matter”, during a conversation at the Horse and Groom pub in Fitzrovia, central London. His case, which comes to the High Court today, will lift the lid on Mr Ashley’s way of doing business. According to the papers filed in the court by Mr Blue’s lawyers, Mishcon de Reya, the Sports Direct owner “often conducts business, discussions and concludes business agreements orally and informally, including while consuming alcohol”.
A senior management meeting is held every Tuesday at The Lion Hotel in Worksop, about half an hour’s drive from Sports Direct’s head office in Shirebrook, Derbyshire, the claim says.
The meeting “typically commenced in the bar area at around 8pm with Mr Ashley drinking alcohol at the bar while in discussions with the [Sports Direct] management”. Dinner would be served at around 10.30pm, with the meeting “typically concluding between 1am and 3am”.
“Ashley made decisions at those meetings having consumed alcohol and sometimes considerable amounts of alcohol,” the court papers claim.
Mr Ashley denies any agreement was made and has branded the claims “extremely vague”. His defence notes that a “considerable amount of alcohol was drunk in the pub” which led to “banter” on various topics.
Mr Blue was paid a “discretionary bonus” of £1million by Mr Ashley in May 2014 and claims he is still owed £14million, though the Sports Direct founder denies the payment was part of the alleged £15 million Horse and Groom deal. According to Mr Blue’s claim, Mr Ashley acknowledged their agreement but tried to change its terms, allegedly saying: “It won’t surprise you to know I am going to renegotiate our deal.”
Mr Ashley suggested Mr Blue became finance director, entitling him to a potential share payout of £8.2 million and a salary of £150,000.
He offered to lend Mr Blue £750,000 to cover cash flow issues he might have in the interim and another £750,000 when the bonus was paid, though Mr Blue denies any new agreement was reached.
Sport Direct shares started 2013 at 398p but by February 2014 had passed 800p, and eventually reached 922p in April that year before declining steeply.