Mike Ashley allowed to continue Rangers damages claim
Fans were upset to learn that the club was only making 7p in every £1 spent.
Bosses at a company within Sports Direct are seeking damages from Rangers after they say directors wrongly terminated their contract.
The deal allowed the sports shop to sell branded products, including kits.
Rangers' directors dispute their claim and wanted a judge to call a halt to the litigation.
Deputy High Court Judge Richard Millett has decided Mr Ashley should be allowed to continue with the damages claim.
He announced his decision in a written ruling on Friday after analysing competing arguments on whether litigation should stop at a High Court hearing in London.
The judge gave no date for the next hearing. In May, Rangers' directors said they were going to rip up contracts held with a merchandise company, Rangers Retail, they ran with a Sports Direct firm.
The deal had been agreed by former chief executive Charles Green. Rangers chairman David King, who took control nearly two years ago, and other directors were unhappy with the arrangement.
William McCormick QC, who led the Rangers' legal team, told Judge Millett supporters were also upset. He said fans became angry after learning the club only got about 7p of every £1 spent and had staged a merchandise boycott.
Mr McCormick said fans thought Mr Ashley pocketed too much of their money. He said there was a widespread view that no "self-respecting" Rangers' supporter wore a replica shirt.