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Monday 22 September 2014

Rory McIlroy paid $6.8m to Horizon - court papers

Sarah Stack

Published 14/10/2013 | 16:43

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Bill Clinton and Rory McIlroy enjoy a round of golf
Bill Clinton and Rory McIlroy enjoy a round of golf

GOLFER Rory McIlroy has claimed he has paid more than US$6.8m to his agent Horizon Sports Management Ltd based on unreasonable fee rates "many times greater" than is standard in the sports agency industry.

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

 

Mr McIlroy is seeking court orders cancelling "restrictive" and "unconscionable" representation agreements with Horizon and related companies on grounds including alleged negligence, breach of contract and breach of fiduciary duty.

 

Agreements providing for payment to one of the companies of 20 per cent of all pre-tax sums due to him under the Nike deal up to 2017, and 15 per cent of all sums if that contract is renewed after 2017, even if that company was no longer his agent, are "oppressive, it is alleged.

 

The 24-year-old from Northern Ireland, now with an address in Monaco, claims to have paid more than US$6.8m to Horizon based on commission rates of some five per cent on his pre-tax on-course earnings and 20 per cent for off-course.

 

He claims "reasonable" commission should have been zero per cent for golf courses and 5-7 per cent for off-course earnings and he should be repaid the difference. He is also claiming damages.

 

Among other claims, Mr McIlroy alleges Horizon paid US$166,000 of his money to children's charity UNICEF without his knowledge.

 

The UNICEF payment, while later reversed,  was "a deliberate defiance"

of an instruction from Mr McIlroy, who supports children's charities through his personal charity foundation, it is claimed.

 

Horizon, it is alleged, also converted a first class plane ticket to Abu Dhabi in Mr McIlroy's name to business class tickets for use by the agent's staff without crediting that payment to his account.

 

Horizon had acknowledged it had used tickets belonging to ho without his permission on previous occasions, it is alleged.

 

Mr McIlroy also claims his relationship with the Creative Artists Agency - a worldwide agency acting for high-profile sport and entertainment industry figures including footballer David Beckham - was terminated due to the unreasonable conduct of Horizon and particularly its managing director, Conor Ridge.

 

The case is against Dublin-based Horizon Sports Management Ltd, Gurteen Limited, with a registered address in Malta,  and Dublin-based Canovan Management Services over representation agreements of December

2011 and March 2013.

 

The case was transferred to the Commercial Court yesterday by Mr Justice Peter Kelly and is expected to be heard in autumn 2014.

 

The companies deny the claims and their counsel Paul Sreenan SC said they would be bringing a counter-claim. Mr Sreenan said he anticipated extensive discovery of documents would be sought for the action.

 

In letters to Mr McIlroy, solicitors for the defendant companies alleged he had received "extraordinary benefits" from the work of the agents and is seeking to avoid his contractual responsibilities.

 

Mr McIlroy claims the initial representation agreement he entered into in December 2011 was done at a time when he was aged just 22 and had little expertise in business matters. That agreement arose after he, following a presentation by Mr Ridge at Mr McIlroy's Belfast home, entered into a verbal agreement under which Horizon would act as his agent.

 

The December 2011 agreement was entered into at the offices of Horizon's solicitors, William Fry, during Horizon's Christmas party in "circumstances of great informality" when he himself had received no independent legal advice and without receiving any draft of that agreement, it is claimed.

 

That agreement gave Horizon complete control over his affairs, including his commercial activities,  and placed the defendants in a "position of great trust", it is alleged.

 

It is also alleged the defendants had earlier this year sought to amend the December 2011 agreement, which was for three years,  in a manner under which Gurteen Ltd was to be entitled to 20 per cent of all pre-tax sums paid to Mr McIlroy under a contract signed with sportswear giant Nike in late 2012.  He claims the appropriate fees should have been zero per cent on his golf earnings and 5-7 per cent on off-course earnings.

 

Nike had agreed to pay Mr McIlroy about US$20m per year under that contract and the amendments were adverse to Mr McIlroy's interests, it is alleged.

 

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