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Rangers Accounts - Operation Highs and Lows

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01 Oct 2013 14:11:38

Rangers Accounts - Operation Highs and Lows

DMcC gives his first reaction to the club accounts.

 

Highs:

Season Ticket sales remain elevated, and relatively constant. Circa 3k loss this season expected, going by accounts, to be largely reduced by season end. Given the turmoil at the Club, the fans efforts must be applauded.

 

Sponsorship and the Global Brands the accounts refer to; on the face of things, this remains very positive. However, there exists a “low” with regard to this as well, which tempers emotions somewhat.

 

Performances appear to be on the general rise this season, which can only be viewed in a positive light.

 

Increased standard of player available to the manager, as well as increased squad depth. Again, there exists a low here (please also see below,) nevertheless, 43% outgoings on player wages is – as the report intonates – low; in addition, it is sustainable at those levels.

 

Procurement of Edmiston House & Albion Car Park

 

 

Lows:

 

Referring to sponsorship, the exact values of these contracts remain largely undefined. The 70% year-on-year (from last season to this) rise the accounts refer to – how is this broken out? The financial returns referred to earlier in this calendar year by Mr Stockbridge appeared optimistic at best. 

 

If that is what this 70% increment is based upon, I would suggest this is unachievable as a target. The business plan, notably a return to a cost-neutral existence – seems to be largely reliant upon these unquantified sums. 

 

The report states “expected to be much higher than the £1.6M received (last season.) How much higher?

In addition, page 10 of the report states a sponsorship increase of “0.5 million.” To this writer, that is unacceptably low for a year-on-year rise.

 

Expenditure on player wages (previously referred to also in the “highs” section.) While 43% expenditure was the case last season – a figure than is far more representative of a business model that can see the club prosper long-term as a Company – the sheer size of the playing squad this season raises concerns; while obviously a general advantage on the park, the fear would see a shift from 43% to nearer (or, indeed, above) the 50% mark.

 

Given the league Rangers find themselves in, combined with static season ticket sales, one wonders at the levels of prudence behind the sheer size of a playing squad containing certain players on large wages who will be used – at best – sparingly.

 

In addition, at June 30 2013, cash in bank was in the region of £11M, we are assured. Worryingly, this is a mere £1M more than Mr Stockbridge admitted to not so long ago – yet, this contains £4.5M of THIS season’s ST income. 

 

Going by ST sales this season, this leaves £2.8M to come, with the club now reliant on £13.8 million plus unknown revenues from sponsorship and merchandising to survive the season.

 

Operating losses can be expected month-on-month from that point. This is a fact for the majority of clubs, and not a slight against the board per se.

 

Nevertheless, the sum above seems extremely light for the period of July 2013 through June 2014 for the club to survive upon. Disturbingly light for anyone with a calculator to hand.

 

A significant income stream in previous years was hospitality. The figures at present are alarming:

 

Income reduced by a startling 50%, while this year has seen a nominal increase – based against a larger percentage increment spent on promotion of the packages available. 

 

For a club of the size of Rangers, this indicates a bigger problem than simply the league the club find themselves performing in.

 

The report states the “successful” £22M IPO. I am no longer willing to refer to it as that, even as a bit-part mention in the “Highs” section of this report. When one looks at cash in bank, combined with moneys out, it is clear where a substantial amount of this money has gone. Quite simply, it has gone to line the pockets of men oriented around greed, not the club or its fan base.

Source: FollowFollow.com


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