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McIlroy and Oakley resolve dispute but questions remain unanswered

Oakley were looking for compensation from McIlroy and Nike for breach of contract and the cost of this photoshoot at Ballyliffin, which they say cost $300,000.

Rory McIlroy and Oakley say they have resolved their dispute “amicably” but it remains to be seen if Nike are out of the woods or whether the golfer’s former agent will be left in peace to concentrate on the legal battle with the former world No 1 in Dublin’s Commercial Court.

In a statement released on the website of McIlroy’s new manangement company, RoryMcIlroyInc.com, hints that we have not yet heard the last of the matter:

For immediate release

24 November 2013 
 

Rory McIlroy and Oakley Resolve their Differences 

 

The legal claims brought by Oakley against Rory McIlroy in California have been amicably settled to the satisfaction of both parties. 

Pat McIlvain, VP of Oakley Sports Marketing, said on behalf of the Company: “We are very pleased the proceedings against Rory have been resolved.

We enjoyed an excellent relationship with Rory as an Oakley brand ambassador. He conducted all his engagements on our behalf with energy and professionalism. We recognize that, in his business dealings with us that were the subject matter of this dispute, Rory was represented by his agent.” 

McIlroy also expressed satisfaction that the case against him is resolved. “I always had an excellent working relationship with Oakley’s representatives and I am delighted the case is now behind me.”

Ends

Oakley’s Pat McIlvain. The line referring to his agent, Horizon Sports Management, does not make for easy reading if you are involved in an acrimonious court case with Rory McIlroy.

The golfer wants his contract with Horizon declared null and void and the case is due before the Commercial Court next October. McIlroy has already lodged a lengthy statement of claim and Horizon Sports Management are due to lodge papers with the court on Tuesday as they counter sue.

A spokesman for Rory McIlroy Inc, Catherine Burke of The Communications Clinic in Dublin, said she had nothing to add to the statement and was unable to confirm if McIlroy had paid compensation to Oakley.

Oakley presented a 28-page Complaint against McIlroy and Nike for breach of contract in the United States District Court in California on 10 December 2012.

McIlroy negotiated $20m a year deal with Nike at the end of 2012, when he was still under contract to Oakley.

Oakley claim they were never given a chance to match the Nike offer under the “rights of first refusal” terms of its contract with McIlroy and that a 29 Septemebr 2012 email from McIlvain to Horizon Sports Management’s Conor Ridge [“Understood. We are out of the mix. No contract for 2013. Pat Mac.”] “did not and could not consititute a waiver of any of Oakley’s rights under its rights of first refusal.”

According to the Oakley complaint: “Any waiver with respect to any provisions in the Agreement, or any consent to any departure from any of the terms of the Agreement, required a writing signed by both Oakley and McIlroy, which was not done with McIlvain’s late night email.”

McIlroy claimed in a California court last month that Oakley’s lawyers were trying to “harass” him by seeking an overly broad range of documents and that it is engaged in a “sweeping fishing expedition”. 

The Oakley submission concentrated on their dealings with Horizon’s Conor Ridge and effectively made his former manager the star witness in McIlroy’s defence. 

No-one from Oakley, Horizon Sports Management or Nike was immediately available for comment on whether or not the entire matter was now closed or whether further legal action was pending.

Horizon, who stand to earn fees on McIlroy’s contracts until 2017, are aggressively defending their reputation against all accusations of wrongdoing in the Dublin case.

According to a 350-page plus Statement of Claim lodged by McIlroy’s lawyers with the High Court on October 14, McIlroy’s lawyers are claiming that when it came to his contract with Horizon, “an improvident and unconscionable bargain was struck” and that Horizon “did not exercise their fiduciary duty of responsibility towards their young client.”

Conor Ridge of Horizon Sports Management pictured during the 2013 Irish Open at Carton House. Picture: Fran Caffrey / www.golffile.ieHorizon vigorously refutes McIlroy’s claims that they somehow took advantage of him to maximise their commissions and will lodge their papers with the Commericial Court on Tuesday next, Novemebr 26, as part of their countersuit against McIlroy.

A trail date of late October next year has been set by Mr Justice Peter Kelly, who admitted the case to the Commercial Court, which is a branch of the High Court set up to try cases with financial interests of more than €1 million.

In this case, figures as high as €129m have been mentioned - Horizon’s estimate of McIlroy’s non-tournament earnings, without performance bonuses, over the next five years.

While McIroy’s side are claiming that not only were sponsors queuing up to throw money at him but Horizon’s fees were far too high for a sportsman of that calibre. If he signed the contracts, it was only because he was young, inexperienced and badly advised, court papers claim.

Horizon’s version is that it was their business acumen that led to the huge jump in McIlroy’s income:

According to papers lodged with the High Court by Horizon’s lawyers:

“The history of Mr McIlroy’s relationship with our clients merits some brief comment. As of 2011 Mr McIlroy had achieved significant success on the golf course. However, he was dissatisfied with his commercial performance off the course and the development of his global brand image. He had entered into a number of agreements which, while lucrative in themselves, did not enable him to reach his full earning potential….

“Within a year….our clients had achieved extraordinary results for Mr McIlroy in accordance with his stated objectives. They had extricated him from the less lucrative and conflicting commercial arrangements and secured in their place four very significant and harmonious agreements with Nike, Omega, Bose and Santander. Under the contracts negotiated by his previous management company, Mr McIlroy could have expected to receive approximately US $13 million in 2013. Under the contracts negotiated by our clients, Mr McIlroy will receive approximately US$ 50 million in 2013. The contracts run for periods of up to five years and have an approximate value of US$ 129 million. It should be noted that this is the minimum sum Mr McIlroy will receive irrespective of performance on the golf course, while his previous contracts were heavily dependent on his golf performance.”

“Horizon has confidence in its position,” the company said in a press release issued shortly after the court hearing. “This confidence is underpinned by a legally binding contract and the clear evidence of the exceptional job done for Rory McIlroy by Horizon… This legal action seeks to void his representation contract from its original date, recover fees already paid and avoid paying any further fees as stipulated by the agreement. Regrettably, this legal action has been taken despite Horizon’s efforts to reach an orderly and fair resolution.”