Despite winning the SPL title, the Homecoming Scottish Cup and reaching the final of the Co-operative Insurance Cup, the club showed a loss for the year of £12.7million, against a £7.2million profit for the previous year.
The turnover for the club decreased by a massive £24.8million to £39.7million.
Martin Bain, chief executive, claimed defeat by FBK Kaunas in the qualifying stages of the Champions League, which eliminated Rangers from Europe altogether, was to blame for the dramatic decrease in income.
In a statement released to the stock exchange he said: "The early elimination from European competition together with the reduced number of games resulted in turnover decreasing to £39.7m from the record high of £64.5m achieved in 2007/08.
"In total 49 games were played in all competitions in 2008/09 as against 68 in the prior year.
"This had a detrimental impact on ticketing and hospitality income, whilst the commercial area of the business suffered due to the lack of income from UEFA for European participation.
"Ticketing and hospitality income decreased by £11.7m to £24.2m due to the reduced number of home games both in European and domestic cup competitions.
"Ticket sales bore the brunt of the decrease with only 22 home games played in 2008/09 in all competitions as against 32 in the prior year."
New Rangers chairman Alastair Johnston reiterated the blow that the lack of European football dealt the Ibrox club but promised to address concerns at the AGM next month.
He said: "Net operating expenses decreased by £8.6million to £48.2million, reflecting the reduced costs of non-progression in European competition, including player incentives, in comparison to last year.
"Clearly, costs at this level cannot be sustained without Champions League income.
"Amortisation of player contracts amounted to £8.8million following the £11.8million additions in the year.
"The gain on disposal of player registrations, primarily for Carlos Cuellar and Daniel Cousin, of £6.2million, represents a reduction of £1.5million on the prior year and resulted in a loss after tax of £12.7million.
"By the time of the AGM, which is scheduled to take place on December 7, 2009, I will have been chairman of the club for just over three months.
"At that time, I plan on personally delivering an address on the current financial status of the club, the activities in which the board have been actively involved during this period, and a prognosis as to the challenges that will be encountered as the directors and the senior management team attempt to navigate Rangers Football Club during these very challenging times."