All hail Rangers after they secured a ‘banking facility’ for the first time in their short history. If you believe the articles splashed across the media today it seems that Rangers have taken another step towards financial recovery.
Off the back of the club refusing a mouthwatering £8 million fee for Alfredo Morelos from Beijing Renhe, it seems that the ‘overdraft facility’ afforded to them by Close Brothers really has put Rangers firmly back on the map.
Well that is what they will have us believe.
More debt is good it seems
Close Brothers have handed Rangers around £3 million in ‘bank debt’ to add to the £29 million-plus debt built up by the directors over Dave King’s reign to bolster the club’s finances [as the media’s articles would tell us] at a time of year when clubs are traditionally stretched.
The overdraft facility looks set to be ploughed into the refurbishment of Ibrox stadium which is reportedly £3 million and will start next week. A timely injection of much needed cash it seems – secured against Edmiston House [a derelict building that used to house David Murray’s call centre business] and Albion Car Park.
Rangers Managing Director Stewart Robertson, claimed: “It’s general working capital, because finances are stronger in the summer when season ticket and SPFL money comes in.
“There’s lots of work going on around the stadium, which lifts the morale of people who work here, as well as the supporters who can see what’s going on.
“We’ve put out all the fires and now we can put the foundations down to take Ibrox back to where it should be as a stadium.
“Close Brothers would not have come to us if they thought there were still issues with the club in any shape or form so it’s a vote of confidence in the way Rangers are moving forward.
“They can see the investment already made and there’s a share issue coming down the road as well. Step by step we’re beginning to make progress.”
Robertson further added that the facility afforded to them by Close Brothers was further evidence of the credibility of the current board among City moneymen.
He added: “It’s another positive step in the club moving forward. We turn over more than £30 million a year and there are very few businesses with that level of turnover that don’t have a banking facility.
“Some folk take pleasure in winding us up because we don’t have a bank facility but this is the next stage in moving the club forward and getting it onto a sensible business footing.
“As trite as it sounds, the money is almost incidental. it’s about someone having belief in the club and the way it is being run as we move forward and normalise operations.
“Dave and the other investors remain firmly behind the club. The contingency is still there if we need money for a particular project or to head into the transfer market in the summer.
“We need to get to the position we’re a self sustaining football club. That has always been the target. We can’t keep going back to the well.
“A £30 million business with no bank facilities is very, very unusual. It’s another step and it’s about doing it within the realms of financial prudence.
“We’re not going daft with it, we’re doing it within the framework of what the business can afford and it involves modest millions, which are sustainable and serviceable.
“We must operate at a sensible level and the banks aren’t going to throw silly sums of money at clubs going forward. There is a check and balance on the whole thing.”
Close Brothers deal gives Rangers credibility in the city?
Close Brothers are no strangers to Ibrox after they bought £2 million of future earnings from match day catering at the liquidated club – under Craig Whyte.
It is strange that Whyte would be labelled disgraced in the same article highlighting the sale of match day catering revenue to Close Brothers and yet the new club are rolling out the plaudits for themselves selling off the security to a derelict building and a pot holed car park which is seen as credible to the same company that dealt with Whyte – a man that the SMSM label as disgraced and who helped to hammer the final nail in the coffin of the old Rangers.
Does their deal with Whyte prove that his tenure was credible just as it does with King & co because they have afforded them an overdraft facility?
Surely the fact a company like Close Brothers – a company that willingly did business with Craig Whyte – arriving at Ibrox is a sign that the financial aspect of the club is much more precarious than what the media would have us believe?
After all if they could afford to knock back £8 million from a mega-rich Chinese club that were set to pay Morelos £27,000 a week, then why did they need to do a deal with Close Brothers for a mere £3 million?
Lessons are not being learned
While Dave King panders to the mob with his PR rhetoric and his puppets in the press like Gary Ralston peddling laughable stories to whitewash over a club that is debt ridden, you have to wonder when they will learn the lessons of their predecessors?
Rangers latest accounts released at the end of last year highlighted a club that was making a loss to the tune of £6.7 million, that needed further funding of £4 million to see out this season and £3.2 million next season.
Debt rose to around £29 million thanks to ‘loans’ from Dave King and other directors who are looking for this debt to be turned into shares in the near future – which will dilute the shareholding overall including those of Club 1872, the fans group that is supposedly independent from the Rangers hierarchy.
Rangers cannot match Celtic with the financial might the Parkhead side has at their disposal – in part thanks to Champions League revenue but for the most part a sound and strict business plan. Something that is missing at Ibrox.
Are Rangers going into administration? I very much doubt that but one thing is clear though, unless Rangers win the title and secure a place in the Champions League group stages they will continue to build debt up to those with links to the club and outside parties like Close Brothers who can smell easy money a mile off – that is not a sustainable model.
And with the takeover panel ruling going against Dave King – despite him appealing the decision – if the South African-based businessman fails to adhere to the court order demanding he offers 20p per share [roughly £11-12 million in total] then the club under King could be blacklisted and finance companies across the country [including those moneymen they want to woo so much] will refuse to do any business with them.
So while Rangers and their puppets in the media boast about how they knocked back £8 million for a player with no European football experience and how they have secured a £3 million overdraft facility from Close Brothers which showcases them as a credible business – everyone needs to remember that when Craig Whyte sold off the match day catering revenue to Close Brothers it was followed four months later with the club going into administration.
An overdraft facility secured against a derelict building and a car park is not a sign of credibility, a banking facility afforded to a club with a business plan which is sustainable is a sign of credibility and Rangers can only dream of that. Just like they can dream about securing Champions League revenue to plug the massive unsustainable hole in their finances.
One wonders what the SPFL and the Scottish FA think of all this? Although they are a basket case of their own making also.