Breaking News – Keegan Gets £2M Settlement


Former Newcastle United manager Kevin Keegan has won £2M compensation plus interest, in damages from a Premier League arbitration panel, after his constructive dismissal claim against Newcastle United of  £10M.

kevin-keegan-fhfhg

Kevin Keegan – gets £2M plus interest sttlement


We estimated earlier this morning that Kevin would get  £3M – but this is good news for the Newcastle club, and a takeover could well now go ahead with Barry Moat in a good position to buy the club.

Announcing its decision, the panel said in a statement:

“We declare that Kevin Keegan was constructively dismissed by Newcastle United Football Club Ltd, for which Newcastle United Football Club Ltd must pay to Kevin Keegan damages in the sum of £2m plus interest to be assessed if not agreed.”

“We are satisfied that Mr Keegan left the Club (i.e. resigned) because the Club sought to impose upon him a player, namely Gonzalez, whom he did not want, in breach of the term in his Contract which we have found entitled and required him to have the final say.”

“This was his evidence, which we accept, and it is supported by the timing of his resignation.”

Here are the main findings of the ruling:

  • Keegan was awarded £2m, having claimed for almost £25
  • The Ignacio Gonzalez transfer was the straw the broke the camel’s back for Keegan. He was told to watch the player on You Tube by Dennis Wise, according to the Tribunal.
  • According to witnesses to the tribunal, the club did the Gonzalez deal as a favour to two South American clubs.
  • The tribunal was told that Keegan knew that Dennis Wise was coming in and he’d have final say on transfers.
  • Gonzalez – despite costing £1million in wages – was never expected to play in the first team.
  • Keegan always had a rocky relationship with Dennis Wise and Jeff Vetere – despite the club consistently denying it in their official publications.
  • The club claim it was “blindingly obvious” from his contract that Keegan not get final say on transfers – although the Tribunal rejected that.
  • The Tribunal condemned the club for lying in public statements about Keegan’s role – saying it was “storing up trouble” for the future
  • Both parties wanted the judgement to be made public – and Keegan is now free to talk about his final days at St James’s Park.

We’re glad this is now behind the club, and we can move forward again to bigger and better things.

Since Kevin left the club last September, it’s been the worst 12 months in Newcastle’s long and illustrious history, but there are now some  green shoots showing through, as Newcastle are 3 points clear at the top of the Coca Cola Championship.

For the good of the club, we have to hope that Newcastle can be sold shortly, so that Mike Ashely’s absolutely disastrous reign at Newcastle ends – and as far as we are concerned – the sooner the better.

Comments very welcome.



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37 comments so far

  • Macas35

    Oct 2, 2009 at 12:19 PM

    Comment #2

    A good result for most fans I think. Those that respect Keegan will be pleased his argument was upheld in court and the damages awarded won’t financially cripple us or scupper any prospective takeover.

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  • inselaffe

    Oct 2, 2009 at 12:25 PM

    Comment #3

    So no administration then…. !!! Duh – who’d have thought?!
    Just get the bloody takeover sorted now…

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  • Darling27

    Oct 2, 2009 at 12:29 PM

    Comment #4
  • original kash

    Oct 2, 2009 at 12:30 PM

    Comment #5

    Nacho wasn’t signed to ever play, he was signed as a favour for agents. What players have we signed from these agents since?

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  • original kash

    Oct 2, 2009 at 12:31 PM

    Comment #6

    Also the club admitted that they purposely misled the media and the fans about the situation. What else are they misleading us about?

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  • premier

    Oct 2, 2009 at 12:31 PM

    Comment #7

    seems like even Messiahs come cheap these days

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  • Johno Toon

    Oct 2, 2009 at 12:32 PM

    Comment #8

    Its sorted now , so lets try build a bridge and move on

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  • magpie4ever

    Oct 2, 2009 at 12:32 PM

    Comment #9

    Crikey I’ve just read the judgement…he WAS after £25 million! £8 million odd for his contract & £16.5 million future loss of earnings?!!!

    Sounds like he wanted it both ways too. He had a clause in his contract saying if the club sacked him & got rid of him he’s get £2 million but he is saying the clause doesnt apply as he left and not the club getting rid of him but then he claims constructive dismissal so the club did effectivley get rid of him and therefore the clause applies?!!

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  • original kash

    Oct 2, 2009 at 12:37 PM

    Comment #10

    Keegans been screwed by his lawyers like!!! But the club did purposely try to muddy his reputation by purposely misleading the fans and media!!

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  • sirjasontoon

    Oct 2, 2009 at 12:37 PM

    Comment #11

    Well it proves that Fat Boy was in the wrong and the 2million will ensure KK and his family can eat turkey this christmas.

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  • pubcat

    Oct 2, 2009 at 12:38 PM

    Comment #12

    A major relief! We won’t begrudge Keegan the 2M, but it won’t hurt us too much.

    On a different topic – Barton. Because the injury is longer than we thought, it’s a good reason for advancing one the youngsters I reckon. Vuckic, Donaldson or Lua Lua? Maybe Baheng, as he’s older, but choose one of these and start to give him more games whilst JB is sidelined?

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  • vivadavidkelly

    Oct 2, 2009 at 12:40 PM

    Comment #13

    hope a takeover goes through but no barry moat please. dont see how someone with no cash can take the club forward

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  • ginkoh

    Oct 2, 2009 at 12:40 PM

    Comment #14

    I just hope MA will gone as fast as he can. 2m compensation showed that how suXX the press is !!!

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  • original kash

    Oct 2, 2009 at 12:40 PM

    Comment #15

    Hopefully this will be the impetus for the take over to be completed

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  • Geordie Dogs

    Oct 2, 2009 at 12:41 PM

    Comment #16

    Mike Ashley and his Croneys have been accused of lieing time and time again. Now it has been publicly proven.

    Get out of our club now you fat wockney canker

    http://www.premierleague.com/staticFiles/c0/3f/0,,12306~147392,00.pdf

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  • vivadavidkelly

    Oct 2, 2009 at 12:41 PM

    Comment #17

    pubcat so you would play them ahead of jons, lovenkrands, guthrie or taylor?

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  • sirjasontoon

    Oct 2, 2009 at 12:45 PM

    Comment #18

    Time for the Fat Boy to Ship out his Ship of Fools…they messed with the wrong man.

    Barry Moat won’t take us forwards he sounds skintos before he has even began.

    Mike aint going anywhere….I don’t even think the club is even for sale…just stops him having to spend when ever there is a transfer window.

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  • bro56

    Oct 2, 2009 at 12:46 PM

    Comment #19

    excellent news, I’m happy its all over. now for the takeover…

    lol dennis wise told keegan Gonzales was on utube.. “check him out keegan!”, lol now thats what I call player recruitment…OMG!!

    as for JBarton, I think he’s had a falling out with CH and wont play until the sale of the club is finalised. no break no fracture, only a sorry soul after being substituted twice recently…IMO

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  • magpie4ever

    Oct 2, 2009 at 12:46 PM

    Comment #20

    14 ginkoh // Oct 2, 2009 at 12:40 PM

    I just hope MA will gone as fast as he can. 2m compensation showed that how suXX the press is !!!
    ——————————————————————-

    As much as I hate the southern press….he was actually after £25 million. According to the judgement ££8,607,534 for his contract & £16,500.000 representing the income he would otherwise reasonably expected to receive up to his 65th Birthday!!!! Jeez!

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  • derekm

    Oct 2, 2009 at 12:48 PM

    Comment #21

    remind me again – how much was his glasgow based soccer circus losing when he joined us?
    for me the legend is tarnished – I personally can’t believe he walked purely for the issues of player purchasing, he must have been made aware of ashley’s european style set up when they interviewed him, especially with his track record of throwing a strop and walking at the slightest disagreement. If it’s true his player list had henry beckham et al on it then I’m not surprised he did’nt get a sniff at choosing players, and as an intelligent man even suggesting such targets smells of a different type of constructive dismissal case – the other way around! At least he can bail some of his debts out with the two million.

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  • original kash

    Oct 2, 2009 at 12:48 PM

    Comment #22

    From what I have heard, Barry Moat does have money, as do the American investors who are apart of his consortium.

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  • bro56

    Oct 2, 2009 at 12:50 PM

    Comment #23

    original kash@

    what you heard like m8… spread the joy..

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  • original kash

    Oct 2, 2009 at 12:50 PM

    Comment #24

    @derekin – actually, the arbitration have concluded that Keegan had the last say and was justified in his actions!!

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  • Lew Davies

    Oct 2, 2009 at 12:50 PM

    Comment #25

    Moving On!

    NEXT.

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  • magpie4ever

    Oct 2, 2009 at 12:51 PM

    Comment #26

    And as much as I detest Ashley…I can now see why he didnt sanction any buying from the almost £25 million in player sales in view of the amount being claimed.

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  • original kash

    Oct 2, 2009 at 12:51 PM

    Comment #27

    That Moats consortium have deep enough pockets to get us back into the Premier League by investing in the squad.

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  • Chitty Chitty Baheng Baheng

    Oct 2, 2009 at 12:53 PM

    Comment #28

    Tough luck Mike, you and your “Cockney cronies” have now been fully, publicly and officially discredited.

    (Don’t worry, I’ll put this post on YouTube as well so you can understand it :-D)

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  • bro56

    Oct 2, 2009 at 12:56 PM

    Comment #29

    ah, just paper talk, I thought you had some inside knowledge.. :>

    well hopefully he and the Americans have some cash because it seems hes the only 1 in for us..

    come on Barrack Rd Barry! get your cash oot..

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  • bro56

    Oct 2, 2009 at 12:59 PM

    Comment #30

    IN THE PREMIER LEAGUE MANAGER’S ARBITRATION TRIBUNAL
    PHILIP HAVERS QC (CHAIRMAN)
    LORD PANNICK QC
    KENNETH MERRETT
    B E T W E E N :
    KEVIN KEEGAN
    Claimant
    and
    NEWCASTLE UNITED FOOTBALL CLUB LTD
    Respondent
    _________________________________
    AWARD
    _________________________________
    We declare that Kevin Keegan was constructively dismissed by Newcastle United Football
    Club Ltd for which Newcastle United Football Club Ltd must pay to Kevin Keegan damages
    in the sum of £2million plus interest to be assessed if not agreed.1
    REASONS FOR THE DECISION
    The Tribunal’s reasons for arriving at the Award set out above are as follows:-
    1. Introduction
    In these proceedings, Kevin Keegan claims damages for what he says was his
    constructive dismissal by Newcastle United Football Club Ltd (the Club) in early
    September 2008. He contends that when he was appointed as the Manager of the
    Club on 16 January 2008 (until 30 June 2011) it was a term of his Contract or
    1 The payment of this sum is subject to argument as to whether there should be any discount for early receipt or
    any deduction for sums earned since Mr Keegan was constructively dismissed.
    2
    otherwise agreed that he would have the final say as to transfers of players into the
    Club (“the final say”). He says that on 31 August 2008, the Club breached that term
    by signing a Uruguayan player, Ignacio Gonzalez, expressly against his wishes, that
    this breach amounted to a repudiation of his Contract and that he was therefore
    entitled to resign which he did on 4 September 2008. As a result, he claims that he
    has not only lost the salary and other benefits which he would otherwise have
    received under the Contract, amounting in total, he says, to £8,607,534 but he also
    claims “stigma damages” on the basis that as a further consequence, he has found it
    and will continue to find it difficult, if not impossible, to obtain work again as a top
    flight manager as a result of which he will lose up to a further £16.5m representing
    the income which he would otherwise reasonably have expected to receive up to his
    65th birthday.
    2. The Club denies that it was a term of his Contract that he would have the final say on
    transfers of players into the Club. The Club further denies that he was justified in
    resigning. The Club contends that he chose voluntarily to resign and that he is thus
    entitled to no compensation. Indeed, the Club counterclaims as against Mr Keegan
    the sum of £2m which it contends is payable to him under the Contract.
    3. Background
    Mr Keegan was appointed the Manager of the Club (for the second time) under a
    written Contract signed and dated 16 January 2008. He had been approached about
    the position a few days before by Chris Mort, then the Chairman of the Club, and he
    had asked to meet Mike Ashley (the owner) before deciding whether to take up the
    appointment. (He was then running his Soccer Circus business in Glasgow). A
    3
    meeting was therefore arranged to take place in London on 16 January 2008. It was
    attended by Mr Keegan, Mike Ashley, Mr Mort and Tony Jimenez who was shortly to
    be appointed Vice President (Player Recruitment). After lengthy discussions and
    negotiations, the Contract was signed and Mr Keegan was appointed the Manager of
    the Club at an initial salary of £3million pa.
    4. Mr Keegan’s primary case is that under the terms of the contract, he was to have the
    final say and that he would never have agreed to accept the appointment as Manager
    on any other basis. Whether this is what the Contract provides is the subject matter of
    the first of the issues which we address below. He also contends that at this meeting,
    he was expressly assured by Messrs Ashley, Mort and Jimenez that he would have the
    final say. This represents his alternative case and we address it below under Issue 2.
    5. The Club’s case is that nothing was said expressly at the meeting as to whether
    Mr Keegan should have the final say but that it was implicit from the discussions, in
    particular from the structure of the Club as it was explained to Mr Keegan and from a
    number of scenarios which were discussed, that he would not have the final say. The
    structure to which they refer and which they say was explained to him was what has
    been described as the Continental model under which the Club proposed to appoint a
    Director of Football, who would have a seat on the Board and to whom the Manager
    would report. The Club’s case is that Mr Keegan was told that it was likely that
    Dennis Wise, then the Manager of Leeds, would be appointed to this post. The Club’s
    case was that under this structure, the Director of Football and Tony Jimenez would
    be responsible for player recruitment and they, and not Mr Keegan, would have the
    final say.
    4
    6. Although we heard a considerable amount of evidence as to events which took place
    in the months which followed Mr Keegan’s appointment, in view of our conclusions,
    we can proceed at once to the events which culminated in Mr Keegan’s resignation on
    4 September 2008. On 30 August 2008, almost at the end of the transfer window (the
    final day of which was 1 September 2008) Mr Wise telephoned Mr Keegan and told
    him that he had a great player for the Club to sign, namely Ignacio Gonzalez, and that
    he should look him up. Mr Keegan tried to locate him on the internet but could find
    no reference to him. Mr Wise told him that he had been on loan at Monaco but
    having checked out the details, Mr Keegan was unimpressed and told Mr Wise that he
    did not think the player was good enough. Mr Wise then told him that the player was
    on “You Tube” and that Mr Keegan could look him up there but he found that the
    clips were of poor quality and provided no proper basis for signing a player to a
    Premier League Club. Moreover, no one at the Club had ever seen him play.
    However, notwithstanding that he made it clear not only to Mr Wise but also to
    Mr Jimenez and to Mr Ashley that he very strongly objected to the signing of Mr
    Gonzalez (he was to be signed on loan with an option to purchase), the Club
    proceeded with the deal and the transfer was concluded the following day, on
    31 August 2008. The Club did so, according to its witnesses who gave evidence
    before us, because it was in the Club’s commercial interests to do so. It was what the
    Club described as a “commercial deal” by which the Club meant a deal which was in
    the commercial interests of the Club. The “commercial interests”, according to the
    Club, were that the signing of the player on loan would be a “favour” to two
    influential South American agents who would look favourably on the Club in the
    future. The loan deal cost the Club nearly £1m in wages for a player who was not
    5
    expected to play for the first team but no payment was made by the Club to the agents
    in respect of the deal.
    7. Although it is clear that Mr Keegan also had concerns about the nature of this deal,
    his primary objection to it was that it breached what he described as “the golden rule”,
    i.e. the term of his contract by which he, the Manager, would have the final say and
    that notwithstanding that he had strongly objected to the proposed transfer, the Club
    nonetheless had proceeded with it.
    8. The upshot was that despite several attempts by both sides to find a way forward, Mr
    Keegan concluded that he had no option but to leave the Club because, to use the
    language of the law, in breaching what he maintained was a fundamental term of the
    Contract, the Club had thereby repudiated it as a result of which he was entitled to
    resign. Hence this claim.
    9. The Hearing
    During the course of the Hearing, which lasted for nearly two weeks, we read the
    statements of and heard oral evidence from the following witnesses:- Mr Keegan,
    Mr Ashley, Mr Mort, Mr Jimenez, Mr Wise, Mr Lee Charnley (the Secretary of the
    Club), Derek Llambias (who succeeded Mr Mort as Chairman in June 2008) and
    Jeff Vetere (who joined the Club in January 2008 as its Technical Co-ordinator
    having previously been a scout at Real Madrid, Charlton Athletic and West Ham).
    We were also provided with a considerable amount of documentary material which
    included, of course, most importantly the Contract and we were referred to a
    considerable number of legal authorities which we have carefully considered. The
    6
    Hearing was held in private as is the custom and practice in arbitration proceedings
    such as these but we were asked by both parties to allow our decision to be made
    public, indeed we were invited ourselves to take appropriate steps to publish it. We
    are satisfied that we have power to do so and we agree with the parties that in the
    circumstances of this case, it is desirable that our decision should be made public.
    Accordingly, we propose to give certain directions as to the publication of our
    decision which are set out at the end of this Judgment.
    10. The Key Issues
    At the end of the evidence we identified what seemed to us to be the seven principal
    issues in the case and invited the parties to focus their closing submissions on those
    issues. We did not understand the parties to disagree that these were the key issues
    and thus we propose to set out our reasons for making our Award by reference to each
    of those issues in turn.
    11. The First Issue:
    What were the duties usually associated with the position of a Manager of a
    Premier League Football Team in January 2008, in particular as to having the
    final say/final approval as to transfers into the Club?
    Clause 3.1.1 of Mr Keegan’s Contract provided as follows:-
    “During the continuance of his employment, Kevin Keegan will … perform such
    duties as may be usually associated with the position of a Manager of a Premier
    League Football Team (including but not limited to those specific duties set out in
    Schedule 1) together with such other duties as may from time to time be reasonably
    assigned to him by the Board”.
    7
    12. Paragraph 1 of Schedule 1 provided:
    “Kevin Keegan will be responsible for the training, coaching, selection and
    motivation of the Team”.
    13. The first question which arises, therefore, for our determination is as to what were, at
    the time that the Contract was signed, “the duties as may be usually associated with
    the position of a Manager of a Premier League Football Team”.
    14. The Club does not contend that Mr Keegan was expressly told at the meeting on
    16 January 2008 that he would not have the final say. As we have pointed out above,
    the Club’s case, ultimately, was that this was implicit (Mr Ashley said “blindingly
    obvious”) in what Mr Keegan was told at the meeting on 16 January 2008 about the
    structure of the Club (the model being used) and the various scenarios which were
    explained to him, that the words in the Contract must be construed against this
    specific background and this specific structure/model and thus that the “duties usually
    associated with the position of a Manager of a Premier League Football Team” as
    used in this Contract did not include the Manager having the final say. For the
    reasons set out below, we reject the Club’s case on this issue.
    15. We readily accept that at the meeting, Messrs Ashley, Mort and Jimenez told
    Mr Keegan about Mr Ashley’s plans and vision for the Club, in particular his plan to
    find and bring in younger players some of whom might later be sold on at a profit and
    we accept that Mr Keegan was told something of the proposed structure of the Club,
    in particular that there would be a Director of Football who was likely to be
    8
    Dennis Wise. (Mr Keegan’s evidence was that Mr Wise was one of the names
    mentioned in connection with this post). We also accept that these discussions may
    have included reference to a number of scenarios. However, we do not accept that it
    was implicit from these discussions that Mr Keegan would not have the final say.
    16. First, we do not consider that it was implicit in the proposed structure of the Club, or
    the model being used (the Continental model) as it was explained to Mr Keegan and
    as it was explained to us, that Mr Keegan would not have the final say. On the
    contrary, we note that Mr Keegan’s successor, Joe Kinnear, asked for and was given
    the final say yet the structure and the model remained the same and Mr Wise
    continued in his position as Director of Football without any change to the terms of
    his contract. Moreover, the evidence which we heard shows that the Director of
    Football and his responsibilities can come in many guises and those responsibilities
    may differ from one club to another.
    17. Secondly, none of the Club’s witnesses were able to identify any of the scenarios
    relied upon, let alone identify a scenario from which it would have been implicit that
    Mr Keegan would not have the final say.
    18. Thirdly, we do not believe that Mr Keegan would have accepted the job as Manager if
    it had been implicit in what he was told that he would not have the final say and we
    unhesitatingly accept his evidence on this point. Indeed, it seems to us to be
    inconceivable that he would have done so having been told, according to the Club’s
    witnesses, that it was likely that Dennis Wise would be appointed as Director of
    9
    Football given his inexperience as top flight manager. (Mr Keegan had picked him as
    a player in the England team when he was its Manager).
    19. Finally, the Club’s own witnesses themselves seemed to be unclear as to what was the
    position as to who would have the final say and we had, and continue to have, real
    difficulty in understanding the Club’s position on this point. The Club repeatedly
    stated that Mr Keegan did not have the final say but in the letter dated 4 September
    2008 from Mr Llambias to Mr Keegan setting out the Club’s proposals for trying to
    dissuade Mr Keegan from resigning, Mr Llambias stated:-
    “It will continue to be the position that no player will be bought for the first team
    without your approval, save of course for commercial deals (which we refer to as
    financials) which will remain within the sole discretion of the Board”.
    20. This was repeated by some of the Club’s witnesses (i.e. that the position was that
    Mr Keegan had the final say save for financial or commercial deals) but some of those
    same witnesses then asserted later in their evidence that Mr Keegan never had the
    final say and Mr Wise was not prepared to accept that Mr Keegan ever had the final
    say, even apart from financial and commercials deals. This lack of clarity, indeed
    confusion, in the understanding of the Club’s own representatives as to this critical
    issue makes it, in our view, even less likely that it would and should have been clear
    to Mr Keegan from what he was told at the meeting on 16 January 2008 that he would
    not have the final say.
    21. We turn, therefore, to consider what were the duties usually associated with the
    position of a Manager of a Premier League Football Team. On this issue, the
    10
    evidence was effectively all one way. Mr Keegan’s own evidence was that these
    duties included controlling the players that come into (and out of) the Club (subject,
    of course, to the financial restraints set by the Board) and significantly he was not
    cross-examined on this evidence (in other words, it was not suggested to him that he
    was wrong about this). Evidence to the same effect was given by three of the Club’s
    witnesses, Mr Mort, Mr Charnley and Mr Vetere. We heard no evidence to the
    contrary effect. This also accords with both the understanding and long experience of
    the non-lawyer member of the Tribunal, Mr Merrett, and, for what it is worth, the
    understanding of the two lawyer members. Accordingly, we have concluded that the
    duties usually associated with the position of a Premier League Manager included the
    right, indeed duty, to have the final say as to transfers into the Club and thus that was
    the position under this Contract.
    22. We should add that very late in the day the Club sought to rely on the definition of
    “Manager” set out in paragraph 1 of Section A of the Rules of the Premier League
    under which “Manager” is defined as meaning “the Official of a Club responsible for
    selecting the Club’s first team”. However, in our view this takes the Club nowhere.
    True it is that paragraph 1 of Schedule 1 stated that he would be responsible for the
    training, coaching, selection and motivation of the Team but Clause 3.1.1 expressly
    provided that his duties would include but not be limited to the specific duties set out
    in Schedule 1. It follows that the definition of “Manager” to be found in the Premier
    League Rules does not assist in the proper interpretation of the Contract.
    23. As it happens, this was also what the Club itself and its representatives (and
    Mr Keegan) were saying to the public in various interviews and press statements
    11
    beginning soon after Mr Keegan’s appointment. In a report in the Times of
    29 January 2008, which Mr Charnley confirmed as having been accurate, it was stated
    that “Wise and Vetere will make the initial assessment before calling in Jimenez to do
    the deal, though Newcastle insist that Keegan will have the final say”. Two days
    later, on 31 January 2008, Mr Wise gave an interview in the Chairman’s office at the
    Club which was intended to be and was published on the Club’s website (and reported
    in the national Press) on the following day. In the course of that interview he stated:
    “I’m not here to be involved in the first team. I am not here to manage. I am here to
    help Kevin as much as possible in bringing young players through and also
    recommending certain players to him and he’ll say yes and no. He has the final word
    and then no one else. I’m not gonna do things like bring players in behind his back.
    I’m not into that and everything that happens will be run past him and he’ll say yes,
    as I say, or he’ll say no”.
    24. Two days later, in the Club programme for 3 February 2008, the website interview
    was included with the headline:
    “Dennis Wise
    “I’m here to help Kevin – he has the final word””
    25. On 23 February 2008, Mr Mort gave an interview with “The Mag” (published
    independently by the Club’s supporters) in which he stated:
    “Everything that sits below Kevin, everything associated with the first team is his
    responsibility … Dennis and Jeff will help identify players and Kevin will then say yes
    or no”.
    12
    26. The Club’s explanation for these statements, which, on their case, were simply untrue,
    was that they were nothing more than an exercise in public relations carried out so as
    not to undermine Mr Keegan’s position and made necessary, in the first place, by
    statements made by Mr Keegan himself to the press. We found this explanation to be
    profoundly unsatisfactory.
    27. First, the Club did not, we find, explain in any way to Mr Keegan that they felt
    compelled to make these statements notwithstanding that they were untrue or to
    clarify and confirm with him that despite what the Club was saying publicly in these
    statements, he did not have the final say. Nor did the Club speak to him in advance
    and explain to him what they were proposing to do and the reasons for it. If the
    Club’s explanation were true, we fail to understand why they did not do so.
    28. Secondly, we do not understand why the Club could not set out publicly and truthfully
    what they maintain was the true position. After all, Mr Ashley’s vision for the Club
    involved a change to a Continental structure and it is clear from the evidence that
    there are managers of some Continental clubs who do not have the final say. We do
    not understand why the Club felt unable to make this clear publicly from the outset,
    regardless of what Mr Keegan himself may have said.
    29. Thirdly, for the Club to have made these statements, when they were, according to the
    Club, untrue, was, in our view, simply to store up trouble for the future.
    30. Finally, we do not accept that these statements were made as a result of anything that
    Mr Keegan himself had already stated publicly.
    13
    31. The Second Issue:
    What was said and agreed at the meeting on 16 January 2008, if anything, as to
    whether Mr Keegan would have the final say/final approval as to transfers into
    the Club?
    As we have noted in paragraph 4 above, Mr Keegan’s alternative case is that at the
    meeting on 16 January 2008 he was expressly assured by Messrs Ashley, Mort and
    Jimenez that he would have the final say. This was denied by all three in their
    evidence. In view of our conclusion on Issue 1, it is unnecessary for us conclusively
    to determine this issue but we consider that it is probable that although when he left
    the meeting Mr Keegan reasonably and genuinely inferred that he would have the
    final say since the Contract provided that he should perform the usual duties of a
    Premier League Manager, nothing was said expressly to that effect by the Club’s
    representatives.
    32. The Third Issue:
    Why did Mr Keegan leave the Club?
    We are satisfied that Mr Keegan left the Club (i.e. resigned) because the Club sought
    to impose upon him a player, namely Gonzalez, whom he did not want, in breach of
    the term in his Contract which we have found entitled and required him to have the
    final say. This was his evidence, which we accept, and it is supported by the timing
    of his resignation.
    33. True it is that he was plainly unhappy with some aspects at the Club, in particular the
    small size of the squad and the lack of signings which he believed were required to
    14
    bolster its size, both of which were making him frustrated, and true it is that he plainly
    had a difficult relationship with Mr Wise and Mr Jimenez but we are satisfied that
    what triggered his resignation was the Club’s signing of Gonzalez notwithstanding
    Mr Keegan’s strong opposition to it. Both at the time and to us he described the
    Gonzalez signing as the final straw and the evidence shows that the Club appreciated
    that proceeding with it against this wishes might well lead to his resignation.
    34. It follows that we do not accept the Club’s case which is that Mr Keegan resigned
    because he could not continue to operate within the structure of the Club and that the
    Gonzalez deal may have represented a convenient excuse for him to do so. First, he
    told us, and we accept, that he wanted to stay at the Club. Secondly, there were very
    good reasons for him to want to do so. He had a valuable Contract worth £3m for the
    first year, £3.2m for year two and £3.4m for year three, plus benefits and he was
    managing a Club about which he clearly felt passionately and whose fans supported
    him no less passionately. Thirdly, the Club had had an encouraging start to the new
    season: in the Premiership, they had drawn away to Manchester United and then won
    at home to Bolton and in the Carling Cup they had since won away at Coventry. True
    it is that they had just lost away at Arsenal but that cannot have come as any great
    surprise. And the atmosphere in the dressing room was described as excellent.
    Finally, as we set out in more detail below, he was being told by the Club that they
    wanted him to stay.
    35. The Fourth Issue:
    Was Mr Keegan justified in leaving the Club?
    We have concluded that he was for the following reasons.
    15
    36. First, it is settled law that if one party to a contract is in fundamental breach of that
    contract, for example, by breaching one of its fundamental terms, that breach can
    amount to a repudiation of the contract entitling the other party to resign. This is what
    is known as constructive dismissal. In the present case, we have no hesitation in
    accepting that the Club’s breach of contract in signing Gonzalez contrary to
    Mr Keegan’s wishes amounted to a fundamental breach of his Contract. We have no
    difficulty in understanding how, in a case where he has been given the final say, a
    Manager’s position, for example, his authority over the players, would be undermined
    if a player whom he did not want was brought in by the Club over his head.
    37. Secondly, as Mr Wise accepted in his evidence, Mr Keegan had made it clear how
    strongly he opposed the signing of Gonzalez, yet the Club nonetheless went ahead
    with the deal.
    38. Thirdly, we do not accept that, as the Club has argued, “the taking of a minor player
    on loan (without a fee) for the purposes of cementing commercial ties with agents was
    not a repudiatory breach”. Not only was this inconsistent with the emphasis which
    the Club placed upon the fact that Gonzalez was a Uruguayan international, but it also
    misses the point. Gonzalez was a signing which Mr Keegan had opposed, in breach
    of what we consider to have been a key term of his contract.
    39. Fourthly, the Club also argued that he should have discussed the matter further with it
    and “taken up the olive branch which was offered” but the difficulty with this
    16
    submission is that what the Club were offering was not what had been agreed under
    the Contract.
    40. Finally, we do not accept that Mr Keegan either waived the Club’s breach of contract
    or affirmed it by confirming on 1 and 2 September that he had not resigned and
    releasing a statement to the press on 3 September to the same effect. His willingness
    to see if the position could be resolved could not, in our judgment, involve any waiver
    on his part. In any event, it is clear that the “final final straw” occurred on
    4 September when the Club handed to him the letter to which we have referred above
    in which it made it clear that were he to remain at the Club he would still not have the
    final say.
    41. In view of our conclusion on this issue, we do not need to address Mr Keegan’s case
    as to the propriety or otherwise of the Gonzalez transfer and we do not propose to do
    so save to note that although it was suggested on Mr Keegan’s behalf that the
    arrangement was improper and irregular, it was not suggested that it was in breach of
    any of the Rules of the Premier League or any other applicable or relevant rules.
    42. The Fifth Issue:
    Would the Club have been entitled, at the time when Mr Keegan left it in
    September 2008, to dismiss him if he had not resigned? If so, on what grounds?
    The Club raised a number of grounds upon which they submitted they would have
    been entitled to dismiss Mr Keegan had he not resigned on 4 September 2008. We
    reject them all. Moreover, it is clear on the evidence that the Club had no intention of
    dismissing Mr Keegan either then or in the foreseeable future. On the contrary, they
    17
    wanted him to stay, they believed that he was doing a good job and, as was recorded
    in the letter of 4 September 2008 and in evidence by Mr Llambias, they believed that
    he was crucial to the future of the Club. We consider that the grounds relied upon
    should never have been raised and it does the Club no credit for having chosen to do
    so.
    43. For these reasons, we have concluded the Mr Keegan was constructively dismissed by
    the Club. We turn, therefore, to assess the compensation to which he is entitled. The
    Club contended that under the Contract, specifically Clause 14.8.1, Mr Keegan’s
    damages are limited to £2m. Mr Keegan contends that this clause does not apply,
    alternatively that it is unenforceable, with the result that he is entitled to damages
    assessed on the basis and in the sums which we have set out in paragraph 1 above. It
    follows that we need, first, to determine the issues which arise in relation to Clause
    14.8.1 of the Contract.
    44. The Sixth Issue:
    Is Clause 14.8.1 applicable to the circumstances of this case and, if so, is it
    enforceable?
    Clause 14.8.1 provided as follows:-
    “In the event that the Club terminates this Agreement or requires Kevin Keegan to
    cease being the Manager of the Club at any time during the Term, other than where
    the Club has grounds to dismiss Kevin Keegan pursuant to Clause 14.1, the Club
    shall pay to Kevin Keegan pursuant to Clause 14.8.4 a sum of £2million …(“Payment
    in Lieu”)”.
    18
    45. It is also necessary to set out Clauses 14.8.3 and 14.9:
    “14.8.3 The parties agree and declare that the Payment in Lieu is a genuine
    pre-estimate of the damages that Kevin Keegan may suffer as a result
    of the Club terminating this Agreement and takes into account the
    provisions of Clause 14.9 hereof and shall be in full and final
    settlement of all claims in respect of such early termination…
    14.9 If this Agreement is terminated by the Club other than pursuant to
    Clause 14.1 and Kevin Keegan receives the payment specified in
    Clause 14.8 then, in consideration of such payment, Kevin Keegan
    agrees and warrants he will not work nor be employed in any capacity
    for any other United Kingdom Premier League Football Club for a
    period of six months from the Date of Termination.”
    46. Mr Keegan contended that Clause 14.8.1 did not apply because he left the Club not
    because the Club had terminated the Agreement but because he had been
    constructively dismissed. We reject that argument. We consider that, properly
    interpreted, Clause 14.8.1 is wide enough, and was intended by the parties to be wide
    enough, to include constructive dismissal. We do not consider that the parties
    intended that in the event that as a result of a dispute such as this Mr Keegan left the
    Club the financial circumstances would depend on whether he was constructively
    dismissed or whether the Club terminated his Contract. Nor do we consider that the
    parties intended that he should be in a better position financially were he to be
    constructively dismissed by the Club than were the Club to have terminated the
    Agreement which, we note, the Club would have been entitled to do either for a bad
    19
    reason or for no reason at all. Indeed, we can see no good reason why the parties
    should have so intended.
    47. We also reject the argument that the clause does not apply because the Club has not,
    in fact, paid to Mr Keegan the agreed sum of £2m. In our judgment, the effect of this
    part of Clause 14.8.1 is merely that that sum is now owing to Mr Keegan thereby
    creating a debt which he is entitled to recover.
    48. Next, Mr Keegan contended that Clause 14.9 was unenforceable on the basis that it
    was an unlawful restraint of trade and that because the two were inextricably linked,
    Clause 14.8.1 was unenforceable also. Specifically, Mr Keegan argued that the
    restriction in Clause 14.9 on Mr Keegan working or being employed for any other
    United Kingdom Premier League Football Club for a period of six months following
    the termination of the Contract, was unreasonably wide because it would prevent him
    from working or being employed for such a Club in any capacity, for example, it
    would prevent him from carrying out any journalistic, administrative or corporate
    hospitality work for any such Club. In our judgment, there are two answers to this
    contention. First, we consider the prospect of Mr Keegan accepting work for another
    Premier League Club in such a capacity (rather than as the Manager, Coach or
    Director of Football) to be more theoretical than real but, secondly, we do not
    consider such a restriction to be unreasonable. We can well understand that
    Mr Keegan may have been of value to another Premier League Club to the detriment
    of Newcastle United in some capacity other than as Manager, Coach or Director of
    Football and he would have taken with him, of course, his knowledge of the Club, its
    players, their salaries, details of their contracts and their position at the Club (for
    20
    example, whether they were unsettled there or not) all of which might have been of
    value to the other club. Even his association in some capacity with another club may
    have given that club a boost which might be reflected by the performance of its team
    on the pitch.
    49. We also note that the restriction applied only to working for or being employed by
    any other United Kingdom Premier League Football Club (and thus excluded foreign
    clubs and international teams and, of course, Championship clubs) and that it applied
    for only six months. Moreover, the restriction did not prevent Mr Keegan from
    looking for another job as a United Kingdom Premier League Club Manager during
    those six months, only from taking up such employment. Accordingly, he would have
    been fully entitled to enter into negotiations to take up such a position provided that
    his employment with such other club did not begin until after the six months had
    expired.
    50. Finally, Mr Keegan contended that the sum of £2m to be paid under Clause 14.8.1
    was unenforceable because it was a penalty in that it was not a “genuine
    pre-estimate” of loss, notwithstanding that by Clause 14.8.3 the parties had agreed
    and declared that it was. We reject this argument also. In our judgment, it would
    have been impossible to provide anything remotely approaching a precise
    pre-estimate of loss in this case. For example, Mr Keegan might have begun
    employment with another club immediately after the expiry of the six month period
    but he might not have done so for, say, a further year or two in which event his loss
    would be very different. However, on analysis, what the parties in substance agreed
    was that in the event that Clause 14.8.1 applies, Mr Keegan would receive the
    21
    equivalent of six months’ salary (i.e. £1.5m at least in year one) plus a further
    £500,000 to provide a cushion in the event that he did not take up other employment
    as soon as the six month period expired. In our view, the parties were entitled to
    assume that, if he wanted to, Mr Keegan would be likely to find further employment,
    if not immediately after the expiry of this period, then within a reasonable time
    thereafter, given his experience. In view of the near impossibility of estimating
    precisely what his loss would be, we consider such an approach to be reasonable and
    to represent a reasonable pre-estimate of his loss to the extent that it was possible to
    carry out this exercise at all. It follows that, in our judgment, Clause 14.8.1 does not
    amount to a penalty clause. We note, although we do not base our conclusion on this,
    that when cross-examined, Mr Keegan very fairly accepted that Clause 14.8.1 was fair
    and reasonable.
    51. We conclude, therefore, that Clause 14.8.1 applies and is enforceable and thus
    Mr Keegan is entitled to damages in the sum provided for in this clause, namely £2m.
    52. The Seventh Issue:
    Is Mr Keegan entitled to any further damages, that is to say, over and above
    Clause 14.8.1 and, if so, why?
    In view of our conclusion on the Sixth Issue, it follows, as was accepted on behalf of
    Mr Keegan, that he is entitled to no further damages. However, if we had had to
    address this issue, we would have decided that the publication of a finding by us that
    Mr Keegan had resigned because he had been constructively dismissed by the Club
    and not because he had decided to walk away, would restore his reputation and in
    evidence he agreed with that proposition. Moreover, he also accepted that he did not
    22
    know whether or not anything that happened at the Club was going to stop him
    getting a job. Thus, even if he had been entitled to seek further damages (i.e. stigma
    damages), which we have found he is not, they would have amounted to very little.
    53. An eighth issue would have arisen as to the Club’s counterclaim for damages against
    Mr Keegan but this issue does not arise given our finding that he was constructively
    dismissed.
    54. Conclusion
    As recorded in the award, we, therefore, assess Mr Keegan’s damages for his
    constructive dismissal by the Club at £2m subject to determining whether there should
    be any discount for early receipt or for earnings received since Mr Keegan’s
    constructive dismissal about which we have yet to receive the submissions of the
    parties. To this must be added interest which we will assess if it cannot be agreed by
    the parties. It has been agreed that we will determine the question of costs once the
    parties have been notified of our award and have had an opportunity to make written
    submissions about costs to us. We will also determine the questions whether there
    should be a discount for early receipt and/or any deduction for earnings received since
    Mr Keegan’s constructive dismissal once we have received written submissions on
    these issues.
    55. Publication
    As indicated at the outset, we agree that both our Award and the reasons for it should
    be made public. To that end, we direct that both the Premier League and the Club
    should publish both on their respective websites. It also follows that the parties are at
    23
    liberty themselves further to disclose and publish the Award and our reasons for it as
    they choose.
    PHILIP HAVERS QC (CHAIRMAN)
    LORD PANNICK QC
    KENNETH MERRETT
    1 October 2009

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  • geordiehammer

    Oct 2, 2009 at 1:00 PM

    Comment #31

    Good for keegan i say! he’s proved his point and can move on now.
    Just need Ashley to feck off, his idea of a public relations exercise is to lie to the fans, he’s shown himself up to many times for me.
    I’ve just read through it all, and it seems Ashley will say anything to the fans to apease them.
    He’s in it for the money, theres no way hes gonna sell up now, why would he when theres a good chance we could go back up.
    At the moment he’s only made a loss on paper, if we get promoted the clubs value will more than double over night.
    Is he really that stupid? probably!

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  • NorthernPaul

    Oct 2, 2009 at 1:02 PM

    Comment #32

    Well well well.

    It is now proven in the courts that our club is being ran by a bunch of liars.

    And doing favours for agents sounds very very dodgy to me.

    I’m not surprised really, the lies have been obvious from the start.

    If anyone supports Mike Ashley now, they are truly not a fan of our club.

    Get out of toon now, you fat dodgy cnut.

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  • batty

    Oct 2, 2009 at 1:04 PM

    Comment #33

    ASHLEY OOT you fat lyeing c@nt

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  • sahota

    Oct 2, 2009 at 1:07 PM

    Comment #34

    Atleast we now know the truth that Keegan was fed up by what was happening. Although it was wrong decision for club but if you place yourself in Keegan’s place, you can see it would have been hard to work in Ashley’s regime. You can not handle this for long.

    I think if Ashley and co have little bit mind, they should now simply hold keys to new buyer and run away. Although I am very happy that NUFC need not to pay huge amount of £10 m as claimed by Keegan.

    Also this public decision made another thing clear:

    MOST PAPERS TALK RUBBISH. Just don’t give them damn shit.

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  • lacedaemonian

    Oct 2, 2009 at 1:21 PM

    Comment #35

    We need owners who are here for the journey. A strong chairman who always clarifies the clubs vision, so that there can be no crap spun in the media. We need to have ambassadors and coaches who are at the club for decades. A youth system that is better than any other. We need to have a hall of fame and our legends recognised inside and outside the ground with statues, murials etc etc etc. The seating needs to be revised, with the Millburn stand almost empty every game due to the plastic cack munchers deserting us in our inglorious moments. Lastly, not many have it but we need it – a manager for ten years plus………

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  • bro56

    Oct 2, 2009 at 1:24 PM

    Comment #36

    soz Ed, i think ive killed your site with that cut n paste.. 🙁

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  • toonluvva

    Oct 2, 2009 at 3:04 PM

    Comment #37

    Well at least KK didn’t take us to the cleaners, best of luck to him.
    Now, can we just get on with moving the club forwards off the pitch, that means good-bye MA and your sidekicks, and hello to someone with the money to buy the club, and still have funds to bring in players in January, and also before we (hopefully) return to the Premiership.
    If we can that part sorted out, I believe that the Toons future will look at lot more settled.

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