By Paul Nicholson
March 25 – Scottish giants Rangers have begun the process of extricating themselves financially from the influence of investor Mike Ashley with the agreement of a £1.5 million loan agreement with Douglas Park, George Letham and George Taylor – known locally as the Three Bears.
The cash will be used as working capital and, according to the club’s new management, will take the club through to end-December when a longer term funding solution will be required. The new loan was taken up in preference to a £5 million loan from Ashley’s Sports Direct company.
The Sports Direct loan was secured by the transfer of 26% of the share capital in Rangers Retail Limited (the owner of Rangers’ merchandising operations) as well as a floating charge over the Club’s assets and fixed charges over Murray Park, Edmiston House, Albion Car Park, and the Club’s registered trademarks.
The loan from the Three Bears is unsecured and interest free.
The battle for control of Rangers and the removal of Englishman Ashley, owner of Newcastle United in the English Premier League, has been a bitter fight that mobilised a vociferous and committed fan base who were prepared to withdraw their match attendance and spending on club merchandise while Ashley was seen to be calling the shots.
Club home attendance is on average 10,000 below the 2013/14 season when the club were playing in a lower division as they make their way back to the Scottish Premier League after being relegated to the fourth tier of Scottish football for declaring bankruptcy.
Current management and players are imploring fans to return in large numbers for the end of season matches with the message that this is a new regime with traditional club values.
Rangers will not win automatic promotion to the Scottish Premier League this season – Heart of Midlothian have already won the division – but after a run of indifferent results the club are finding some form and are three points behind Hibernian (who they beat for the first time this season last weekend) in third place with a game in hand and in a promotion play-off spot.
Dave King, the South Africa-based businessman who led the shareholder revolt against the previous board and the Ashley influence, is still waiting clearance before he can take his place in the boardroom. The club, which is quoted in London on the AIM market, is still to appoint a nominated advisor (nomad) before its shares can restart trading. Both events would appear to be a formality.
In the meantime Paul Murray is leading the club as interim chairman and has been unequivocal in his criticism of the former managerment of the club, saying there had been years of gross mismanagement.
Speaking to the BBC, Murray said: “We can and we will rebuild the club and this £1.5 million investment is stage one of the process…
“Many of the people who have occupied the Ibrox boardroom…should be ashamed of themselves for the parts they played in dragging this great institution towards near financial ruin.
“It is actually difficult to look closely at the club’s finances and understand the rationale behind some of the decisions taken.”
One such decision is the controlling lock that Sports Direct has over the lucrative merchandising operations of the club through its exclusive rights deal and its position in Rangers Retail Ltd which is a joint venture with the club.
At a time when the club was going to Ashley for loan money to pay player wages and avert bankruptcy, its retail arm (a joint venture with Ashley) was reporting a profit before tax of £1,172,893 for the period ending 27 April 2014. A double win for Ashley.
With £5 million of loans still outstanding to Ashley, his influence and bargaining position at the club will still be a force to be reckoned with. Potentially still a controlling force.
It will take deep and committed investor pockets, a strong board and renewed fan backing with their pockets to turn the latest ownership skirmish into a prolonged revolution and return to former glory.
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