Business

Murdoch: ‘Returning to our roots’ in Disney deal

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The executive co-chairman of Fox spoke at length about the $52.4bn deal(£39bn) – seen as the biggest shake-up in Hollywood since the 1930s.

He told Ian King it was the right move at the right time though he was particularly sad to sell Sky – the owner of Sky News – assuming the takeover by Fox, which is continuing, is eventually given the go ahead.

The deal confirmed on Thursday will bring together the 20th Century Fox film studio behind hits such as Avatar, X-Men and Ice Age together with Disney’s film assets, which include Pixar, Marvel and the Star Wars maker LucasFilm.

The pair are respectively the fourth and second biggest movie studios in Hollywood and the deal means the ‘big six’ that have dominated Tinseltown for nearly a century will become a big five instead.

Stormtroopers
Image:Disney owns Star Wars maker LucasFilm

When asked how harmful allegations about sexual harassment at Fox News had been for the business, Mr Murdoch dismissed them as “nonsense”.

He said: ‘It’s all nonsense. There was a problem with our chief executive,over the year, isolated incidents.

“As soon as we investigated he was out of the place in hours – well three or four days. And there has been nothing else since then.

“That was largely political because we are conservative. The liberals are going down the drain. NBC is in deep trouble.

“‘There are really bad cases and people should be moved aside. There are other things – which probably amount to a bit of flirting.”

The 86-year-old added that he did not believe those allegations had affected investor sentiment towards his businesses.

Included in the Disney sale are Fox’s prized US cable networks, including FX and the National Geographic Channel, as well as international pay television assets including Star TV in India.

Fox has been trying to buy full control of Sky for the last year and the proposed £18.5bn takeover, which was launched just over a year ago, is currently being scrutinised by the Competition and Markets Authority.

Fox said it expected that deal to be completed by the end of June next year.

Disney would then eventually own the whole of Sky.

Other assets included in the deal are Fox’s 30% stake in Hulu, the US streaming service, in which Disney is also a shareholder.

The deal is expected to take a year to complete and will be subject to approval by competition regulators both in the United States and in the EU.

Bob Iger is both chief executive and chairman of Disney
Image:Bob Iger is both chief executive and chairman of Disney

:: What the Fox/Disney deal aims to achieve

The latter is seen as less likely to have a problem with the takeover but the US, where the US Justice Department has been seeking to block the $85.4bn takeover of Time Warner by the telecoms giant AT&T, may be more difficult.

The combined business will make films that account for two in every five cinema tickets sold in the US – which may raise some concerns among regulators.

Under the terms of the deal, Disney will also take on some $13.7bn worth of debt from 21st Century Fox, making the total deal worth $66.1bn.

Announcing the deal, Bob Iger, the chairman and chief executive of Disney, said: “The acquisition of this stellar collection of businesses from 21st Century Fox reflects the increasing consumer demand for a rich diversity of entertainment experiences that are more compelling, accessible and convenient than ever before.

“We’re honoured and grateful Rupert Murdoch has entrusted us with the future of businesses he spent a lifetime building and we’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings.

“The deal will also substantially expand our international reach, allowing us to offer world-class storytelling and innovative platform distribution platforms to more consumers in key markets around the world.”

Mr Iger, who was due to step down as Disney boss in July 2019, will now continue in the role until the end of 2021.

Mr Murdoch described how the deal evolved following a discussion over a few glasses of wine with Mr Iger, who he described as a friend.

“He rang me back a couple of weeks later and said ‘look let’s (have) this conversation a bit more’.”

Under the terms of the transaction, which will be entirely in shares, investors in Fox will receive 0.2745 shares in Disney for each 21st Century Fox share they currently own.

Shareholders in 21st Century Fox will own 25% of the enlarged Disney once the deal completes.

The remaining assets owned by 21st Century Fox include Fox News, America’s most-watched cable news channel; Fox Business, America’s most-watched business television channel; Fox Sports – which has the rights to broadcast the next football World Cup in the US – and a number of local television stations in the US.

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US Federal Reserve raises interest rates again

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Federal Reserve Chairman Janet Yellen arrives for a hearing of the Joint Economic Committee on Capitol Hill, November 29, 2017, in Washington, DC.Image copyrightAFP/Getty
Image caption Federal Reserve Chairman Janet Yellen has raised interest rates three times this year

The US Federal Reserve has agreed to raise interest rates by 0.25%, the third rate rise in 2017.

Policymakers at the US central bank say the move, which was widely expected, underscores “solid” gains in the US economy.

Officials also boosted their economic forecasts, projecting 2.5% growth in GDP in 2017 and 2018.

The Fed said it expected to make three further increases in rates next year, unchanged from its previous forecast.

The Fed is targeting a range of 1.25% to 1.5% for its benchmark rate.

A majority of officials also said they believe interest rates are on track to exceed 2% in 2018.

The decision to raise rates came at the conclusion of the Fed’s two-day meeting in Washington.

The move marks a further retreat from the ultra low rates that were put in place during the financial crisis to boost economic activity.

Federal Reserve Chair Janet Yellen, who will step down from the Fed in February, is speaking about the decision at a press conference this afternoon.

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Fed hikes rates for third time this year

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It comes as Fed chair Janet Yellen prepares to leave the role after Donald Trump decided to replace her.

The widely-expected hike sees the federal funds rate climb to a range of 1.25-1.5%, as the world’s biggest economy continues its return to normal following the financial crisis.

Central banks across the globe cut rates to near-zero during the crisis and in the UK and eurozone they remain stuck near that level while America has pulled away.

The Fed’s rate-setting committee said, as it announced the latest decision, that economic growth and job gains had been “solid”.

Officials acknowledged that the US economy had gained steam in 2017 by raising economic forecasts and lowering the expected unemployment rate for coming years.

Gross domestic product (GDP) is now expected to grow by 2.5% in 2018, up from the previously projected 2.1%, while the jobless rate is expected to fall to 3.9%, rather than 4.1% as previously pencilled in.

The Fed projected three more rate hikes in each of 2018 and 2019.

That was unchanged from latest forecasts – seen as slightly more “dovish” than expected as the recent uptick in the economy could have seen the central bank consider a quicker pace of tightening.

The US dollar slipped back on the announcement while it cheered Wall Street, where the Dow Jones, S&P 500 and Nasdaq indices were all ahead.

Ms Yellen said at a press conference that she would work to provide a smooth transition when she is replaced by Jerome Powell, who was picked by Mr Trump to succeed her in February.

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Crisis-hit Interserve calls in company doctor

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Sky News has learnt that a consortium of banks have demanded that the company, which manages the Ministry of Defence’s training base on Salisbury Plain, hire a senior executive from AlixPartners, the firm of restructuring specialists.

Scott Millar, a managing director at AlixPartners, is joining Interserve in the role of chief restructuring officer, according to a source close to one of the lenders.

Interserve failed to mention the appointment of the external advisers in a statement to the London Stock Exchange on Wednesday afternoon announcing that it had secured new funding, which expires at the end of March.

The company’s new chief executive, Debbie White, said the deal put the company “on a firmer footing”.

“Whilst there is still much to do, Interserve has significant opportunities based upon a strong client base and our dedicated employees.

“There is considerable potential for business improvement across the group.

“These short-term committed borrowing facilities, together with the ongoing work to clearly define the strategy and commercial structure for the business going forward, will bring further stability and clarity for our clients, our people and our shareholders.”

The company works on major construction and renovation projects, and is one of the UK’s biggest private sector employers, with an 80,000-strong workforce.

Interserve, which also provides support to UK armed forces in Cyprus, Gibraltar and the Falkland Islands, was plunged into crisis in the autumn when it blamed economic uncertainty and weak Government spending for a massive profit warning.

It has seen both its chief executive and finance director resign in the last year.

The lenders to Interserve, which include HSBC and Royal Bank of Scotland (RBS), had already hired EY in the wake of September’s profit warning.

It said soon after that it was likely to breach its borrowing covenants, raising fears that it was facing a crisis as grave as that confronting rival Carillion.

Interserve also warned that costs associated with exiting its energy-from-waste business would be much higher than a previous estimate of £160m.

‎The company now has a market value of less than £100m, reflecting the travails of the wider outsourcing sector.

Interserve confirmed the appointment of Mr Millar, saying it was “to support the group’s ongoing discussions with its lenders”.

The company denied that the appointment was forced on it by the banks.

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DanTDM: the million-dollar jelly bean-eating gamer

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Media playback is unsupported on your device
Media captionDanTDM: “I feel loads of responsibility to my fans”

How much could you earn by eating jelly beans and playing video games? Look at this year’s YouTube rich list and you might be surprised.

British YouTuber Dan Middleton raked in $16.5m (£12.3m) this year, making him YouTube’s highest earner. Known as DanTDM, he’s famous for posting videos of himself playing Minecraft and doing humorous challenges.

Dan started his channel while working in Tesco five years ago and has more than 10 billion views on all his videos.

He’s part of a growing wave of children’s entertainers spurred by rising internet usage and the shrinking popularity of television amongst young people.

His fortune has been made not just from online advertising revenue, but also merchandise and a worldwide stadium tour – including four sold-out shows at the Sydney Opera House.

It’s a rise to fame that’s taught him some important lessons as an entrepreneur.

“If someone’s making a decision on your behalf, make sure you trust them,” said Dan in an interview with the Victoria Derbyshire programme on BBC Two and the BBC News Channel.

He also advised aspiring YouTubers to “make sure you’ve got everything in place so that you’re confident that everything you put out there that has your name attached to it is what you believe in”.

Image copyrightDaniel Middleton

Dan said that, with his growing influence, he feels “loads” of responsibility to his young fans and their parents.

“I feel like I’ve got really good rapport with parents,” he said.

“They always say I’m a YouTuber they can feel safe just letting their kids watch.”

In terms of creative scope, Dan said video ideas “can come from literally anywhere”.

One of his most popular is a video of him eating a pack of jelly beans with unusual flavours (including “blood”), given to him by his mother-in-law.

“If I struggle for ideas, I go online, my fans can ask me questions, there’s so much that can help me.”

“The beauty of the internet is pretty much unlimited,” he added.

But Dan says he is mindful of the dangers young people face on the internet.

“You do have to be careful about what you put out there, regardless of whether you’re a YouTuber or not,” he said.

“If you put something online, it’s essentially there forever. You don’t know who’s kept it, who’s screenshotted it.”

“With anything that’s popular, be it YouTube or just the internet in general, there are people who are going to use it for the wrong reasons,” he said.

“The key thing is just to keep an eye on what your kids are doing online. Let them have their own devices, but don’t leave them to their own devices.”

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How Toni Mascolo gave hairdressing a makeover

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Toni Mascolo with his OBE award in 2008Image copyrightKirsty Wigglesworth
Image caption Toni Mascolo with his OBE award in 2008

Toni Mascolo, who has died aged 75, and his brother Guy revolutionised hairdressing in London at the end of the last century.

The son of an immigrant hairdresser, Toni had initial dreams of becoming a lawyer, but hard times forced him into his father’s business.

Over 50 years, he was the family’s business brain that turned Toni & Guy into an international franchise brand.

They expanded into hair care, training and education, photography and fashion.

Toni, born Guiseppe Toni Mascolo, and Gaetano, or Guy, opened their first south London salon in Clapham, dropping leaflets round the area to advertise their “Italian style”.

But it took 10 years for them to get the capital to move into central London.

Image copyrightToni & Guy
Image caption Toni, (Centre with glasses) at the original Clapham salon in the 1970s

It was a period when the traditional barbers were finding it hard to cope with the lengthening curls of their male clients, while women were demanding ever more elaborate styles, from bobs to bouffants to beehives.

During the 1970s, Guy and Toni expanded outside the traditional hairdressing arena, bringing in their younger siblings, Anthony and Bruno, and eventually many of their children.

Then in 1988, the first Toni & Guy franchise opened in Brighton. Within 12 years, the number would swell to 112, with 27 salons abroad. Since then the numbers have quadrupled.


‘So many jobs for so many people’

Image caption Ashley started work with Toni when he was 17

Ashley Miah started work as Toni Mascolo’s assistant 15 years ago. He’s gone from washing hair to being the manager of one of the company’s biggest salons.

Although the company is a franchise, Toni retained direct ownership of some salons and he returned and worked with Ashley one day a fortnight.

Ashley went to the Toni and Guy Academy for two years to get an NVQ, then did the company scholarship to become stylist.

“So many people owe their careers to Toni, what he and Guy did with the academy has been so influential in training people and raising standards,” he says.

“I learnt a lot from him, he was so passionate, he had a really nice energy that brought people together.

“His influence is there right across the industry, he created so many jobs for so many people.”


Image copyrightPA
Image caption Toni & Guy – on the High Street

A cut above

Richard Ward, Royal and celebrity hairdresser, said: “The main thing is that Toni pioneered the concept of the chain. There had been chains before but not on this scale. Even Vidal Sassoon didn’t have them at this level.

“Back in the day you would have people coming up to London to get their hair done, but by franchising and taking a very high standard out into the counties and the country, it meant that they could find what they wanted on their own High Street.

Image copyrightToni & Guy
Image caption Toni & Guy, 1990s style

“And it changed the life of all hairdressers. It raised the bar for all of us.”

To get the degree of professionalism across the expanding franchise, Toni started an academy in the West End of London in 1984.

In his autobiography, Toni: My Story, he wrote: “I was looking at a building in St Christopher’s Place and as soon as I went inside I knew it would be absolutely perfect for our school. It was ideal.

“I said to myself, ‘God has been good to me.’ Straight away I decided I would take it.”


‘I aspire to his achievements as a businessman’

Image caption Shadi came here from Syria and admires what Toni achieved

Thirty-five-year-old Shadi Mirkham owns a hairdresser’s opposite a Toni & Guy branch in central London.

He owns this salon and another one in Kuwait. He wants to emulate what Toni and his brother achieved in business.

“They showed the way to be a success, like me they came to London because it’s a big city and they knew they could achieve a lot here.,” he says.

“I aspire to achieve what they did as a business. Not only are there the salons, they have their Label M salon hair products and their High Street Toni & Guy product brands which are very successful.”

He said he had a good relationship with the business. “If we are busy, we often send people there and they do the same.

“We are both good at our own things. For example, we do a lot of work with beards, they are very good at other beauty treatments.”


Image copyrightPA
Image caption Making waves: The Toni & Guy style at The London Fashion week in 2011

New products

Toni was also quick to jump on the fashion for new styling products, launching his TIGI brand in 1979 with branded gel, scissors and rollers.

Later his brother Anthony used TIGI to develop a business as a photographer, as well as tailoring hairdressing styles specifically for photographic shoots.

At the same time, the Mascolo family was expanding into America where they had already launched training videos.

Toni wrote of his experience there in his book: “They said we were the Beatles of hairdressing and they screamed and cheered so much, I think they meant it too.”

Richard Ward said: “He was also a very affable guy, very friendly, and you couldn’t help but like him. To have achieved what he did from such a humble beginnings is remarkable.”

In the 2017 Times Rich List, Toni and his family were estimated to have a net worth of £270m ($360m).


‘The end of an era’

Image caption Ellie says Toni was a big influence on the industry

Ellie Rose is a 20-year-old hair stylist from Croydon, south London.

She says the Toni & Guy brand is very successful, as you will see in almost every High Street near her.

“I think his death marks the end of an era, he’s gone but the style will remain,” she says.

“With the franchise business, they’ve become more of a hair and beauty brand now, which I think over-complicates them as a salon, but people will still go there and want to work there because of the name.”


Toni received an Italian Knighthood, the Cavaliere Ufficiale, in 2006 and two years later an honorary OBE for his services to British hairdressing.

In 2002, the business split with Guy, Bruno and Anthony taking on the US business, while Toni, and two of his children, Sacha and Christian took on Toni & Guy Global.

Guy Mascolo died in 2009.

Asked by the Guardian in 2008 if he had ever set a trend, such as Victoria Beckham’s famed bob, Toni replied: “Well, I would honestly say we invented all of the trends. We’ve done more books, more DVDs, more techniques than anyone else.”

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BoE regulator to ditch gendered terms like ‘chairman’

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They include ditching “chairman” in favour of “chair” and replacing “grandfathering” – a term related to exemptions granted under new rules or contract terms – with “conversion”.

There will also be changes in the way individuals are referred to where the pronouns “his” or “her” are currently used.

The plans were set out in an update by the Bank’s Prudential Regulation Authority (PRA) to its Senior Managers & Certification (SM&CR) documents.

They will result in one-off costs, though the PRA said that “these are not expected to be material”.

The PRA said: “The proposals in this consultation paper to remove gendered language in the SM&CR form part of the PRA’s commitment to encourage equality and diversity at regulated firms.”

It comes as the Bank faces pressure over the shortage of women at senior levels – which governor Mark Carney has admitted is “an issue”.

The Bank currently has just one female member, Silvana Tenreyro, on its rate-setting Monetary Policy Committee (MPC), down from two earlier this year.

Nicky Morgan, chair of the Treasury Select Committee, wrote to the Treasury – which appoints MPC members – in October to express concern over the lack of diversity at the Bank.

Figures released last month showed that the Bank of England, on average, pays women 24% less than men, a significantly bigger gender pay gap than the 9% disparity across the UK.

It said men and women were paid equally for doing the same jobs but the gap was created because men were disproportionately represented in the Bank’s higher echelons.

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Anger at PM’s dismissal of Hammond disability row

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Philip Hammond has come under fire for suggesting an increase in the number of disabled people in employment could be partly to blame for the UK’s sluggish productivity.

Theresa May was urged to order her Chancellor to apologise for his remarks, made last week to a committee of MPs, during Prime Minister’s Questions on Wednesday.

Green MP Caroline Lucas told the Prime Minister: “It is disgraceful that he has so far declined to express any regret.

“So will the Prime Minister take back control and order the Chancellor to withdraw his remark and apologise for inaccurate and offensive comments?”

Theresa May
Image:Theresa May dismissed calls to force an apology from her Chancellor

Ms Lucas also cited a written parliamentary question she had tabled calling for the Government to reveal “the evidential basis” on which Mr Hammond based his “extraordinary claim”.

She said: “I tabled a written question to the Chancellor, asking for the evidence behind his extraordinary claim to the Treasury Committee that disabled workers are responsible for the UK’s productivity problems.

“Last night I received his written answer; unsurprisingly, there is no such evidence for that claim.”

But the Prime Minister told Ms Lucas the Chancellor “did not express the views that she claims he expressed”.

“This is a Government who value the contribution that disabled people make to our society and to our economy in the workplace,” Mrs May added.

“This is a Government who are actually working to ensure that more disabled people get into the workplace.

“We have had some success; there is more to do, but we will continue to work to ensure that those disabled people who want to work are able to do so.”

Disability campaigners reacted with anger to the Prime Minister’s dismissal of the row.

A week after @PhilipHammondUK blamed working disabled people for the UK’s low productivity, we learn that there was no evidence whatsoever for his statement. [Image: Written Parliamentary Question on disability and productivity] pic.twitter.com/fES1PVaSMw

— Scope (@scope) December 13, 2017

Mark Atkinson, chief executive of charity Scope, told Sky News: “The Chancellor did explicitly link increased participation of disabled people in the workforce with productivity.

“We wrote to the Prime Minister last week to request an explanation for these unacceptable and derogatory comments. There hasn’t been a reply.

“The Chancellor still hasn’t withdrawn his comments, or offered a full apology.

“He has to do this now, before further doubt is thrown onto the Government’s policy to get more disabled people in to work.”

Susan Daniels OBE, chief executive of the National Deaf Children’s Society said: “Given the right support a deaf person can do anything a hearing person can, yet we know that 56% of deaf people have experienced discrimination at work and 25% have left a job as a result.

“In its words and actions the Government needs to show complete commitment to breaking down the barriers to employment for deaf young people and others with disabilities.

“Anything less is unacceptable.”

Speaking on 6 December in front of the Commons’ Treasury Select Committee, Mr Hammond sought to explain pessimistic productivity growth forecasts within his recent Budget.

He said: “It is almost certainly the case that by increasing participation in the workforce, including far higher levels of participation by marginal groups, very high levels of engagement in the workforce, for example of disabled people – something we should be extremely proud of – we may have had an impact on the overall productivity measurement.”

In response to Ms Lucas’s written question, Treasury minister Andrew Jones said the Chancellor was “extremely proud” of the Government’s record of helping over 600,000 disabled people into employment over the last four years.

He added Mr Hammond’s comments were part of a “broader point” about workforce productivity.

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Bank of England’s PRA to remove gendered language

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Bank of EnglandImage copyrightGetty Images

The old lady of Threadneedle Street may soon lose her moniker under plans by the Bank of England to remove gendered language from documentation.

Under proposals by the Prudential Regulatory Authority (PRA), which regulates banks and insurers, a chairman will become chair.

It also wants to change how individuals are addressed in terms of “his/her”.

The alterations are part of changes to the PRA’s certification documents for people working in financial services.

The watchdog also proposes changing its terminology from “grandfather/ing” – which allows an old rule to be used while a new rule governs future cases – to “conversion”.

It said that the changes to the “Senior Managers and Certification Regime” “form part of the PRA’s commitment to encourage equality and diversity at regulated firms”.

Image copyrightBank of England
Image caption Professor Silvana Tenreyro is the only female member of the Bank’s nine-strong Monetary Policy Committee

The Bank has faced criticism for its lack of senior female managers and the fact that most banknotes feature famous men on the back rather than women.

In March, Charlotte Hogg, who was set to become a Bank of England deputy governor, resigned after failing to disclose that her brother worked at Barclays.

Ms Hogg had failed to reveal the potential conflict of interest.

Pay gap

The Bank has also come under pressure from MPs to close its gender pay gap.

In October, Treasury committee chair Nicky Morgan wrote to the chancellor asking about efforts being made to encourage gender and ethnic diversity at the Bank.

Male staff at the Bank are paid almost a quarter more than female employees, its latest gender pay gap report found.


Chairman could become chair, what other words would you change? Tell us using the form below.

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Sports Direct investors veto £11m payout to Ashley’s brother

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Newcastle owner Mike AshleyImage copyrightGetty Images
Image caption Sports Direct founder Mike Ashley wanted the company to give his brother £11m

Sports Direct shareholders have rejected a proposed £11m payment to the brother of its founder, Mike Ashley.

The tycoon, who abstained from voting, wanted to give John Ashley the cash as a back payment.

However, the vote was more than 70% against John Ashley receiving the sum.

Sports Direct said: “The board respects the views of the company’s independent shareholders, and considers all these matters to be closed. We now intend to move on.”

Investors such as Royal London Asset Management had said they would vote against the plan.

John Ashley, who is Mike’s elder brother, stepped down as the retailer’s IT chief in 2015.

An internal review by Sports Direct legal advisers RPC and accountants Smith & Williamson found that John Ashley had been underpaid since the company listed on the stock market in 2007, and was due £11m in bonuses and awards.

The findings were endorsed by Mike Ashley and the board, but were criticised before the vote by investors because of corporate governance issues.

Royal London Asset Management said in November that there should have been a clear process for paying John Ashley at the time.

Pay package

Sports Direct called a general meeting at its Shirebrook headquarters to ask independent shareholders to vote on the findings of the RPC investigation.

That probe found John Ashley had not been paid in line with other senior executives who helped build the company because of worries about how it would appear to the public.

Mike Ashley said in November he did not expect investors to approve the payment.

John Ashley had a salary of £150,000 a year after Sports Direct floated on the stock market, and got a bonus of £706,502 under a separate employee bonus scheme, RPC said.

The latest showdown between the retailer and its shareholders came after years of clashes.

Chairman Keith Hellawell, who some investors said was accountable for a string of management and governance failures, narrowly survived a vote to get rid of him in September.

Shares in Sports Direct, which will report first-half results on Thursday, were down 2.2% in afternoon trading.

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