The long-running competition dispute between SportsDirect.com Retail Limited and Newcastle United Football Club has been settled by consent, bringing an end to legal proceedings that centered on allegations of anti-competitive behavior in the wholesale and retail supply of replica football kits.
Background of the Case
The case originated from a claim filed on 15 March 2024 by Sports Direct, part of the Frasers Group plc, against Newcastle United Football Club, its parent company Newcastle United Limited, and major sportswear retailers JD Sports Fashion Plc, Adidas (UK) Limited, and Adidas AG.
Sports Direct alleged that Newcastle United had abused its dominant position in the wholesale supply of replica kits by granting JD Sports exclusive third-party retail rights to sell the club’s official merchandise. The claim argued that this foreclosed Sports Direct from the market, limiting consumer choice and eliminating effective competition.
Sports Direct further contended that if this exclusivity arrangement stemmed from agreements between Newcastle United and Adidas or JD Sports, those agreements themselves violated UK competition law by engaging in anti-competitive exclusivity provisions.
Legal Developments and Tribunal Rulings
Throughout 2024, the case saw multiple hearings and legal maneuvers:
- April 2024: Sports Direct sought an injunction to prevent Newcastle United and its partners from enforcing the exclusive supply arrangement. However, the Competition Appeal Tribunal rejected the injunction application, a decision later upheld by the Court of Appeal in May 2024.
- October 2024: Following a Case Management Conference (CMC), Adidas (UK) Limited and Adidas AG were formally joined to the proceedings.
- February 2025: The case was officially settled, with a Tomlin Order issued on 24 February 2025, confirming the terms agreed in a confidential settlement agreement dated 20 February 2025.
Key Allegations Against Newcastle United and Adidas
Sports Direct’s claim primarily focused on the wholesale supply of Newcastle United replica kits, which are high-demand items among fans. Historically, Sports Direct had stocked and sold Newcastle United kits through a long-standing agreement with the club’s previous kit supplier, Castore. However, Newcastle United terminated its contract with Castore and entered a new agreement with Adidas as its exclusive manufacturer for the 2024/25 season and beyond.
Sports Direct argued that Newcastle United’s decision to reserve wholesale distribution rights exclusively for itself—while allowing only JD Sports as an external retailer—created an anti-competitive market structure. The retailer claimed that this:
- Prevented fair competition by blocking Sports Direct from accessing wholesale supply.
- Violated Chapter II of the Competition Act 1998, which prohibits the abuse of market dominance.
- Potentially breached Chapter I of the Act, if exclusivity agreements between Newcastle United, JD Sports, and Adidas contained anti-competitive clauses.
Settlement
Under the Tomlin Order issued by the Competition Appeal Tribunal, the case has been stayed, meaning no further proceedings will take place unless required to enforce the settlement terms.
While the full details of the confidential settlement agreement remain undisclosed, it marks the end of the legal battle between Sports Direct and Newcastle United over replica kit distribution rights.
This case highlights ongoing scrutiny in the sports retail sector, particularly regarding exclusive supply agreements between football clubs, kit manufacturers, and retailers. It also underscores the importance of fair competition in ensuring that fans have access to club merchandise through multiple retail channels.
