Rangers’ succession of dodgy owners and increasing amounts of debt is holding the club back as the lack of a sound business plan and balls to stand up to the fans will cause further damage to a club that masquerades as a once great institution.
When the old Rangers were liquidated after years of financial mismanagement and tax avoidance through their 11 year EBT scheme, Scottish Football was told in no uncertain terms that clubs would go to the wall if they did not do as they were told and vote for the new Rangers to enter into the top flight – the clubs and fans made sure that the new club earned their place in the top flight by securing promotion through the leagues, much to the anger of the club, its officials and their supporters.
Since the new club was formed we were told that Scottish football needs a strong Rangers, that without Rangers in the top flight Celtic’s league titles were irrelevant as they didn’t have any competition and that without Rangers then our clubs would fail in Europe.
No clubs went out of business since old Rangers in 2012, Celtic did dominate the Premiership – but they didn’t have it all their own way though with St.Mirren, Aberdeen, Ross County, St.Johnstone, Inverness Caledonian Thistle and Hibernian all winning either the League Cup or Scottish Cup. With Celtic thrown into the mix also.
The so-called Armageddon that Scottish football was set to face never materialised.
Dave King – From a messiah to Dodgy Dave
Jump to the present and after Rangers rid themselves of Charles Green, the Easdale brothers and Mike Ashley’s influence – Dave King was heralded as the man who would take Rangers to the pinnacle of the Scottish game and with it succeed in usurping Celtic as Scottish football’s dominant side.
Despite the second [or is it third or fourth or maybe fifth] coming of Rangers, Dave King has turned out to be another dodgy owner and built up the debt of the new club that masquerades as the once great institution playing out of Ibrox.
With no bank willing to give them an overdraft facility than most clubs in Scottish football have the option to use, King and his board resort to dipping into their pockets or begging rich Rangers fans to loan the club money to see each season out and keep the doors open – this season is no different. But it seems that even King and some of his board have had enough of using their own money to keep the club open as they are now using the credit facilities of Close Brothers – the same company that Craig Whyte used in the final year of the old club to provide some much needed cash. The fact that Dave King is not facing the same hostility and coverage as Whyte did when using the Close Brothers credit says all you need to know about those self-appointed fan reps that reared their ugly heads in the final days of Rangers 1872 and those pundits who lapped up every morsel that Rangers hand to them.
If the continued financial mismanagement at Rangers wasn’t bad enough, the fact that King – deemed fit and proper by the Scottish FA – broke takeover rules after being found to be in cahoots with other soon-to-be-appointed directors says all you need to know about Dave King before and after seizing control at Ibrox.
The Scottish FA have yet to comment on this latest breach of rules at Rangers and on Dave King’s fit and proper status given his desire to ignore UK Law to suit himself. As he has done in South Africa.
What happened to having a sound business plan?
Celtic’s finances took a battering under the Kelly’s in the eighties and nineties which led to the Bank of Scotland calling in the debt owed to them of around £1 million [an amount that pales in comparison to the debt owed to the same bank when Rangers was owned by David Murray], but when the takeover took place with Fergus McCann coming in to save the day the first thing he did was install individuals at the club who could run the club properly from top to bottom.
While Rangers romped to trophy success – thanks to their EBT scandal and spending money they didn’t have – Celtic under McCann rebuilt the club on and off the park. But the most important factor of Celtic’s rebuilding process was having a sound business plan. Long after McCann left as chairman of the club, Celtic continue to work to a sound business plan and refuse to do a Rangers. The fact that Celtic have had so much success since McCann took over is no great surprise now with hindsight – at the time the ‘biscuit tin mentality’ wasn’t popular with the fans but the club and officials stood their ground.
This is where Celtic and Rangers differ.
The two manifestations of Rangers kowtowed to the demands of their fans at every turn. Successive owners were blinded by catching up with their perceived rivals Celtic, but rather than running the club properly with a sound business plan – the debt built up at the new club and they rely on loans rather than the revenue they earn.
Can Rangers continue in the manner they are just now? If they want to usurp Celtic at the top of Scottish Football then they cannot. But under King and the current board that is not going to happen as the latest financial results can testify towards.
Same old story financially for Rangers
This week Rangers reported a £1.1 million operating loss for the final six months of 2017 and revealed that they had received £17.7 million worth of loans – up by around £2 million.
Results published in November saw Rangers report losses of £6.7 million for the first six months of 2017, while revenue increased by £3.1 million to £19.4 million – this was reportedly down to an increase in attendances, sponsorship and commercial revenues as well as negotiating a new retail deal with Sports Direct after paying out of the previous deal.
Despite the increase in revenue by £3.1 million, operating expenses increased by £3.4 million to £19 million after the club spent heavily during the summer under previous manager Pedro Caixinha and while the board claim to be ‘comfortable with this planned level of loss reported’ and ‘are satisfied that the results for the full year will continue to have the club on a sure financial footing’ the real picture is a different story.
You also have to question why the Scottish media is not allowing their business journalists to dissect the Rangers financial reports and publish what they find rather than leaving it to the likes of the partisan Gary Ralston and the inept tea boy Gordon Parks.
Compare Rangers’ revenue figure with Celtic’s £71.5 million and you will see the massive gulf between the two clubs and what a club with a sound business plan achieves in a league where finances are limited.
Even if you subtract Celtic’s Champions League revenue from the £71.5 million figure, Rangers can only dream of earning the amount of money Celtic do. And that is down to the likes of Peter Lawwell and the Celtic board working to their sound business plan and not bowing to fan pressure to spend big every transfer window.
Rangers will never catch up with Celtic financially if they continue on the same path and relying on loans and credit from last chance saloon companies to keep the doors open.
The messiah complex within the Rangers fanbase will forever see them act like little lapdogs for any businessman that comes in playing to the masses with the usual PR rhetoric that Craig Whyte and Charles Green used so beautifully at the old and new Rangers.
Can Rangers fans handle a rebuilding process at the club which sees them fall behind Celtic until they install that strict business plan and a sure financial footing similar to Celtic’s?
I doubt it very much.