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What it takes to sponsor Liverpool Football Club (why New Balance failed to match Nike’s offer)

What it takes to sponsor Liverpool Football Club (why New Balance failed to match Nike’s offer)
Tuesday, 26 November 2019 By Tomás Nolan

The ending of a relationship is always difficult for those involved. All the more so when one participant has a vision of a bright future only to find their partner swept away by a richer, more attractive rival. Spare a thought then for New Balance who, following a bitter and acrimonious High Court battle over matching rights, must watch on as Liverpool F.C. move on with Nike.

The High Court decision of Mr. Justice Teare in New Balance Athletics, Inc v The Liverpool Football Club and Athletic Grounds Ltd,[1] delivered on 25 October 2019, offers insight into the commercial strategies and objectives of all three parties involved. It emphasises once again the importance of concise definitions in sportswear manufacturing and license agreements and breaks new ground on the question of valuation of marketing contributions. It merits close examination.  Accordingly, this article examines:

  • The background to the dispute
    • The matching clause
    • Nike’s offer
    • New Balance’s counter-offer
  • The High Court judgement
    • First alleged error – Japanese distribution points
    • Second alleged error – Chinese distribution points
    • Third alleged error – Brazilian market assessment
    • Fourth and fifth alleged errors - calculation of figures for North America, South Africa, India and South America
    • Matching Nike’s "marketing" obligations
  • Analysis
    • The importance of clarity and precision in drafting
    • Replica kit cannot be distinguished
    • The interpretation of "good faith"
    • Costs
    • The value of social media impact
    • Could New Balance have done any better?

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Tomás Nolan

Solicitor, Clark Hill 
Tomás Nolan is a solicitor in our litigation department. Tomás possesses a rounded knowledge of litigation at all levels, both general and commercial, with a particular focus on contentious commercial matters, cross-border disputes, employment law and debt recovery. Tomás is equally comfortable when advising and assisting clients engaged in adversarial litigation and in managing conflicts and resolving disputes at the pre-litigation stage.

Tomás holds a Masters of Law from NUI Maynooth and worked with the Irish Courts Service for a number of years prior to qualifying as a solicitor.

Commercial Litigation and Dispute Resolution

- Advising an extensive client base including large corporate bodies, small and medium enterprises, professional partnerships and private clients on a diverse range of litigation including numerous matters before the Commercial Court Division of the High Court;
- Advising both Plaintiff and Defendant clients across a range of matters including contractual disputes, contentious property matters, debt recovery and judicial review actions;
- Advising, representing and advocating for both claimants and respondents before the Workplace Relations Commission;
- Confident and competent advocator on behalf of clients before both the High Court and the Circuit Court;
- Advising clients in dispute with banks and other financial institutions both as to restructuring options, the prosecution of claims against the institution and the defence of debt/security recovery actions;
- Assessing actions on behalf of both potential claimants and respondents and advising clients on statute, previous judicial decisions and the commercial implications if and when litigation is progressed;
- Providing advice and assistance on cross-border enforcement before all levels of the Irish Courts.
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