McIlroy claims ‘markedly inferior’ terms to McDowell

Golfer Rory McIlroy has claimed he got “markedly inferior” terms to those of fellow golfer Graeme McDowell under disputed representation agreements, despite alleged representations made to him they would get similar terms.

Rossa Fanning BL, for Mr McIlroy, told the Commercial Court it was represented to Mr McIlroy by Conor Ridge of Horizon Sports Management that Mr McIlroy would get the same terms as Mr McDowell - but his client got "markedly inferior" terms.

Mr McIlroy wanted to amend his legal proceedings against Horizon and two other companies so as to make that claim, counsel said.

The alleged representation by Mr Ridge was one of two “extraordinary” matters Mr McIlroy become aware of from documents discovered for his case, counsel added. The second matter was that Mr McDowell was a shareholder of Horizon, he added.

Counsel stressed he wanted to make clear Mr McIlroy has no issue with Mr McDowell, was not making a complaint about him and had no intention of involving him in the legal action.  His “very significant” complaint was rather that Mr Ridge had represented to Mr McIlroy his terms would be similar to Mr McDowell’s, counsel said.

Paul Sreenan SC, for Horizon and the other defendants, said Mr Fanning had referred to "extraordinary" revelations but his claim that it was represented to Mr McIlroy his terms would be the same as Mr McDowell's was not part of his case to date, and rather his case was seeking to rescind his representation agreements.  It was not clear now what he wanted to rescind, counsel said.

Mr Sreenan said it was never represented to Mr McIlroy that the terms to apply to him were identical to those of Mr McDowell, and it was rather agreed the terms would be similar to those under an agreement with his previous management company ISM, and he had indicated he was satisfied with that.

Mr McIlroy was also aware since October or November last that Mr McDowell was a shareholder in Horizon, counsel said. The position was that Mr McIlroy's representation agreement was not with Horizon but with another defendant company, Gurteen.

Mr Justice Peter Kelly said he would fix the case for hearing on January 27th next. If the defendants did not agree to the proposed amendments of Mr McIlroy's case, that matter could be mentioned to the court next month, he added.

Mr Fanning indicated earlier Mr McIlroy would require to attend probably the first two weeks of the case, scheduled to run for eight weeks.

In his action, Mr McIlroy is challenging the validity and enforceability of representation agreements involving allegedly "unreasonable" fee rates and commissions. The case is against Dublin-based Horizon Sports Management Ltd; Gurteen Limited, with a registered address in Malta, and Dublin-based Canovan Management Services.

He disputes claims he had a representation agreement with Gurteen or Canovan, which he has described as two special purpose non-trading companies with no assets, rather than with Horizon Sports Management.

He argues a representation agreement signed by him in December 2011 is not valid and unenforceable on grounds including undue influence. That agreement was signed when he was aged just 22, inexperienced and without the benefit of independent legal advice, he claims.

The agreement, he also alleges, resulted in his paying more than US $6.8 million based on “unreasonable” fee rates “many times greater” than the standard in the golf industry, including 20 per cent commission on his off-course earnings and 5 per cent on his on-course earnings.

He also alleges the defendants are not entitled to be paid certain fees into the future related to his US$20 million a year sponsorship deal with sportswear giant Nike.

The defendants deny the claims and have counter-claimed for some US $3 million allegedly outstanding for off-course gross revenues and other sums allegedly outstanding under the December 2011 and a March 2013 agreement, plus damages for alleged past and continuing breaches of the agreements.

They claim they have been denied the opportunity to sell the branding rights to Mr McIlroy’s golf bag and to continue building his global commercial model under an alleged agreed long term brand strategy.