Saturday, 11 November 2017

Did Rangers' board make a huge mistake?



Back in 2012 Charles Green made a massive announcement, one which bought him a significant amount of goodwill from fans. The-then CEO confirmed season tickets for Rangers’ first season in the-then Third Division would be only £315, a huge reduction on the conventional price as a gesture of thanks to supporters. The problem was it cost Rangers a huge amount of revenue and while appreciated at the time, hindsight has to argue it was a toxic move which damaged the club.

Fast-forward to this summer and the fantastic news about the retail deal finally being quashed. King and the board did an excellent job in finally removing Rangers’ merchandise out of the hands of Sports Direct and back into the club’s own coffers, but it came at a cost – the accounts, recently released, confirm a figure of £3M was exchanged in order to break the contract and finally wrestle control of Rangers’ gear back into our own back garden.

This has made a massive dent in Rangers’ finances, with a reported loss overall of around £7M.

However, this could have been aided a little in hindsight by the reversal of a related decision which was incredibly popular at the time and which everyone applauded including ourselves – but which on reflection was really a dumb move, frankly, and one which has contributed towards Rangers’ finances not being the best.

On 21st of June Rangers confirmed not only had the retail deal been fixed and fans could now buy the club shirt, and that the shirt was to be used for the new season, but this existing shirt was to sell at £20. Nice at the time, right? A bargain. But unfortunately those sold out in droves from all outlets – at less than half the price a shirt goes for these days.

This is why we raised Green – at the time his gesture was widely appreciated, and warmly applauded, but just like him, is it possible King’s shirt gesture has in fact hurt the club financially and contributed towards the losses the account sheet recently reported?

Official shirts now go for the standard modern price of £54.99, and can we imagine what the thousands of shirts sold back then could have done for the club if sold at full price?

It is hard to be critical of the board when the fans benefited to such a degree those months ago, but the bigger picture is the future and health of the club, and financially we have to call that decision a bit of a poor move.

8 comments:

  1. I can understand your reasoning, but have to say that I suspect there was or is a rationale behind it.
    I don't claim to know what it is, but King is not the philanthropic type. They may be clearing the decks of stock for a new jersey, it may be related to the deal with the fat c*ntroller, I don't know. But I suspect there was a reason

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  2. We have to get things into a proper perspective here. Your article seems to make sense but, Green and all his associates at Rangers mismanaged the club, we still are unaware of where revenues generated, pay-offs to directors and other miscellaneous financial deals and arrangements done by Green and other board members at that time. I won’t go into the details of what was none other than a tragedy of gross proportion which our club is still suffering from at this time.
    Where would the added revenue gone, had the board not reduced the season ticket price?
    Would Rangers actually have been allowed to retain the prices, remember we were on the 4th tier of Scottish football and, although few in numbers, would we have been allowed to charge full Premier league prices for the away support of the likes of Queens Park, East Stirlingshire, etc. ?
    It is an interesting article and one to ponder over; What If? but we just have to accept where we are, look ahead, look forward in hope and faith that Rangers will once again rise to be THE team in Scotland.
    Keep up the good work Ibrox Noise.

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  3. It makes sense to run rangers at a loss, so as to allow you (king & co) to load up the club with soft loans which they can then convert, at a later date, into equity... diluting the common and increasing their stake.
    Not sure that that is what they are doing, but if you want to become the majority shareholder outright, or at the very least secure your current position, increasing your % ownership of the debt (which ranks about equity) is a good way of going about it. The question is not how much of the equity the three bears own, but how much of the capital.
    Any investigative journalist worth his salt would be looking all over the details of these loans, what they were back by (asset wise) and whether they could be converted.

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    1. A great comment, and one which deserves to be investigated. All the more reason why they are not too keen to float the shares too soon, as the peasant fans like ourselves would be able to buy shares--but never enough to have anywhere near control--even if we had a spare couple of million.

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  4. The Rangers Board have made many bad decisions as well as the one those that you have mentioned. (re. cheap shirts etc.) They have appointed TWO VERY POOR MANAGERS, they have FAILED TO MONITOR A VERY HIGH RISK INFLUX OF POOR PLAYERS, and, despite many promises to the contrary, they have STILL FAILED TO GET RANGERS LISTED ON ANY STOCK EXCHANGE. That could be a souce of much needed money, as I personally know many people who are waiting to buy shares in Rangers and want to own them themselves--and NOT VIA CLUB 1872, which is very secretive about its annual accounts and balance sheet. Has any fan out there seen such a thing, or even a sight of the Rangers Supporters Trust Accounts and Balance Sheet. No transparency--so not very enticing to let them hold shares for us. (the last criticism is not at the Rangers Board--it is at those who run the various Rangers Supporters Organisations--now all under Club 1872--and still secretive.

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  5. It is, indeed,very suspicious that those in power seem to prefer soft loans to making the proper share issue that was promised many times. I agree with the questions posed by JM Profile about what the true intent is in making those soft loans. I personally am ready to buy shares, as I have done TWICE in the past, and I do not want to buy them through Club 1872, who do not publish Annual Accounts and Balance Sheets. (likewise, I never received that from the Rangers Trust prior to its merger under Club 1872.) Lots of money has been wasted on TWO very bad Manager and countless poor signings, some of whom we still have, and whom the new manager will have to get rid of ASAP.

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  6. I dread to think who's pockets would have been lined if the ST's were sold at a higher price under Green!

    As for the £3m to get rid of Ash- strange that wasn't declared at the time! I wonder if that will show in the Sports Direct annual accounts??

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  7. I will stick to the OP's point 3 million to get shot of the SD anchor around our neck which had a minimum of 5 further years to run

    Are you suggesting the board should have sold year old stock that had been sitting in a warehouse for full price ?
    Next year we will have 3 new strips . Which should bring in at least 150k shirt sales. This could generate enough cash to cover the 3 million.

    Do you really think Ashley would have left for any less than 3 million . Do you really think the board didn't try to reduce the cost.

    Even if we count next year as a break even . Going forward the shirt sales will generate well over 5 million a season.

    Why is there so much conspiracy theories. The board did what was needed to resolve the merchandise problem.

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