It has recently been suggested to me quite strongly by two separate Finance Industry experts that no matter the outcomes of the forthcoming criminal trials into the sale of Rangers and the subsequent disposal of the liquidated assets, it is highly unlikely that the sale will be reversed. In fact BDO (the liquidators of Rangers) see the path of least resistance to any remedy (if guilty verdicts are returned) through the professional indemnity insurance held by organisations involved (I am choosing my words carefully here to comply with the rules surrounding the court case).
There is of course still the dispute between the owners of Sevco 5088 and Sevco Scotland to consider (although depending on the outcome of the criminal cases, that may be moot).
On the face of it, all of this is good news for TRFC and Dave King. After all, one of the main problems they have been facing is the uncertainty over the ownership of the assets, and if BDO are swinging in the direction indicated above, King and his board are free to move forward – you would think.
The recent plans to raise cash from the fans is I think a smart one, but it is still a sticking plaster applied to a gunshot wound. Rangers already have a gate income which is the envy of not just most Scottish clubs, but clubs much further afield. Their problem is their astronomical fixed costs, their dilapidated infrastructure, and possible cash outflow through the fabled ‘onerous contracts’.
Even putting in place a severe austerity package (which may be unpalatable to fans being asked to part with their cash to buy off pesky shareholders who don’t share King’s vision) does not remove the need to capitalise urgently to repair the stadium and build a squad capable of competing in Scotland. So they need to raise cash, and they need it quickly – because soft loans cannot be provided forever.
So the share issue route is the obvious way to go, and to do that effectively, a listing on an exchange is required. However our sources in the financial world don’t think it is possible that this could happen with the current regime for the following reasons (not in order of importance);
- They have absolutely no credible business plan to move forward over the next five years – only a commitment to limping on with soft loans;
- The current chairman is a convicted felon;
- Two directors of the new company were directors of the company now in liquidation;
- They have no line of credit;
- They are already in debt to the tune of at least £12m – increasing as I write;
- They are unable to repay that debt;
- There is still a nominal (even if we accept the BDO position above) doubt over the ownership of assets;
- The football team does not play in the top league – and European income isn’t coming soon;
- The company have astronomical fixed costs which are way in excess of their income.
So even if the doubt over the ownership of assets is removed, there isn’t an easily navigable route for TRFC into calmer waters.
My own conclusion is that perhaps the biggest single thing that is holding Rangers back is Dave King. I really don’t know what his motivation is. There is speculation that he has his eyes on the increasing cash-pot and diminishing creditor list at the Oldco. Some Rangers bloggers are suggesting that a land-grab play is taking place. I think the former is far more plausible than the latter, but if we take his RRM credential at face-value, it seems to me that the Rangers-minded thing for him to do would be to reverse himself out of the position he is in.
That might enable the company to raise some of the cash they need to repair the stadium, rebuild the infrastructure within the club (players, management, youth and scouting etc.).
Are King, Taylor and Park really in this so they can indefinitely fork out £10m per year? Will Taylor and Park continue to ally themselves with King if he is the impediment to inward investment that we think he is? Park will most certainly not, and my information, from sources very close to him, is that he is done.
The fractures in KingCo are beginning to appear, and King himself may come under increasing pressure to do what is best for the future of the club, which is to remove himself from the equation and allow those better placed to take it forward.
It is often speculated elsewhere that SFM is a Celtic blog, and even those who give us credit for being a much broader church than that will still insist that we are anti-Rangers, obsessed with Rangers, and out to get Rangers.
The occasional outburst of Schadenfreude from commenters aside (it IS a football forum after all guys) SFM is quite definitely not editorially anti-Rangers.
I think the evidence shows that we are nothing of the kind, and it doesn’t do Rangers any favours to conflate our position on the corrupt nature of the governance of the game with that of the Ibrox club – new or old. Where we do discuss Rangers (as we have in this article), it is with an acknowledgment that the money flying around in football makes all of our clubs vulnerable to the kind of rip-off merchants who have wandered in and out of Ibrox in the past few years.
There are many areas where the SFM consensus is unpalatable to Rangers fans. But protecting all of our clubs and their fans from mismanagement is hopefully not one of them.
Also, despite the many rivalries within the game, Rangers are an important focus (old club or new) for tens of thousands of fans. As such they are of interest to ALL of us who support football in this country. Anyway, I tend to be more obsessive about my own club – and find it rather easier to be objective about others 🙂
My own preference in moving the debate forward is to get the perspective of Rangers fans on these issues. I am ever hopeful that we can have Rangers fans engage with the blog and look for areas where we have common purpose.
Nobody at SFM wants Rangers fans to have no team to support. Nobody here wants the SFA to stay unregulated and unaccountable. Nobody at SFM wants people to make up rules they go along just for the sake of a few quid. I can’t believe that Rangers fans don’t share those values.
I agree that Rangers fans are victims of this affair to a large extent, but the culprits are quite definitely not us at SFM. They need to look closer to home to find them.