Crisis could put gers in celtic's shadow for 10 years

[ian1964 10,409]

By Lorna Smith and Mark Howarth, 14/03/2009

A CRACK team of debt-busting bankers has been put together to claw back millions from crisis club Rangers.

 

The Ibrox giant�s finances have suffered like all businesses in the credit crunch � causing some of the loans bolstering the club to be put under the microscope.

 

Now cash-strapped Bank of Scotland bosses have hand-picked a posse of ââ?¬Ë?asset houndsââ?¬â?¢ to examine how the club can pay back much of its debt.

 

Experts believe the bank could demand repayments of �£20MILLION over the next few years â�� taking the Rangers debt down to around �£5million.

 

Light Blues chairman Sir David Murray has already slashed 12 stadium jobs and ordered manager Walter Smith to axe eight stars in the summer.

 

But last night there were warnings that more cuts could see Rangers facing a DECADE living in Celtic�s shadow.

 

A Bank of Scotland insider revealed: ââ?¬Å?The debt has been deemed too big and it was felt the time had come to start clawing back some of the cash.

 

ââ?¬Å?The credit crunch means thereââ?¬â?¢s no such thing as easy money any more ââ?¬â? we cannot keep loaning companies big money against assets that leave us exposed.

 

ââ?¬Å?We donââ?¬â?¢t want Rangers to suffer on or off the pitch so weââ?¬â?¢ve pulled together some of our best brains to make sure that the club comes down as gently as possible.

 

ââ?¬Å?But the current situation cannot possibly continue. Ultimately, this is big business and, Iââ?¬â?¢m afraid, sometimes it hurts.ââ?¬Â

 

As Rangers face Celtic at Hampden today in the Co-operative Insurance Cup Final, Stephen Morrow, Professor of Sports Studies at Stirling University, warned fans that the bankââ?¬â?¢s crackdown could see their club ââ?¬Å?in the wildernessââ?¬Â for the next ten years.

 

He said: ââ?¬Å?This will make it even more challenging for a club like Rangers to compete. In some ways, Celticââ?¬â?¢s financial basis is different ââ?¬â? theyââ?¬â?¢ve been run in a different way which has left them less exposed.

 

ââ?¬Å?If Rangers have to pay back, say, Ã?£15-Ã?£20million over the next few years, thereââ?¬â?¢s a risk of a big gap opening up between them and Celtic.ââ?¬Â

 

It is believed the specialist lending team of bankers will study the clubâ��s estimated �£25million debt before making a string of recommendations to claw back some of the clubâ��s loans.

 

The options would include selling off assets � such as players � trimming overheads, selling other assets or attracting more investment.

 

Professor Morrow added: ââ?¬Å?What youââ?¬â?¢ve got with a mature business like Rangers is that the business has developed ââ?¬â? thereââ?¬â?¢s only a fixed number of games they can play, theyââ?¬â?¢re playing those games to capacity crowds and thereââ?¬â?¢s a TV deal which is not going to get any better.

 

ââ?¬Å?Once youââ?¬â?¢ve brought playersââ?¬â?¢ wages under control then thatââ?¬â?¢s it, there arenââ?¬â?¢t many more ways to lever huge sums of money into the club.

 

ââ?¬Å?Unless someone comes along and gives you the cash, the only other way is to sell some of your assets and that means players.ââ?¬Â

 

Rangers� finances are tied into chairman Sir David Murray�s complex web of companies, Murray International Holdings � of which the bank owns around 10 per cent.

 

UNDER THREAT: Kris Boyd

 

Sir David gained control of the Ibrox club in 1988 after buying the majority of its shares for �£6million.

 

As chairman, the businessman ploughed cash into the club, building a third tier on the main stand and raising the ground�s capacity by 7,300.

 

Murray�s costly European ambitions for the side, under Dick Advocaat�s management, saw them spend millions. But the club�s debts spiralled as TV revenues failed to make a dent on mammoth transfer fees and players� salaries.

 

By 2001, mounting debts threatened the club�s future and Murray admitted mistakes were made.

 

He said at the time: ââ?¬Å?We got it wrong. We obviously spent far too much money. We canââ?¬â?¢t let it happen again because that would be total mismanagement.ââ?¬Â

 

In July 2002, Murray stood down as chairman but returned two years later in a bid to reduce the Rangers debt mountain.

 

He organised the sale of a new batch of shares which raised �£50million to start paying off the bank and, by 2006, the total owed had dropped from nearly �£74million to only �£5.8million. Since then, the debt has started to rise again at an alarming rate â�� despite Rangersâ�� run to the 2008 UEFA Cup Final.

 

Last year it stood at �£21.6million but is believed to have reached around �£30million before the bank stepped in.

 

Half-yearly figures released in January show the club�s turnover is 50 per cent lower than 2006.

 

And they are facing a 71 per cent jump in interest payments to nearly �£8,000 a DAY.

 

The credit crunch has hit the club hard as Murray International Holdings� huge commercial property assets have plummeted in value.

 

Last night insolvency expert John Shields said: ââ?¬Å?Murray International Holdings is built on steel, property and football.

 

ââ?¬Å?The bottom has fallen out of the market for steel and property, so the football cannot carry on being a loss-making luxury. The Bank of Scotland has specialist lending teams whose job it is to protect the bankââ?¬â?¢s money. Those men in grey suits will be looking very closely at the Rangers balance sheet and may suggest pruning the Ibrox staff.

 

UNDER THREAT: Barry Ferguson

 

ââ?¬Å?The team will probably be three-strong and theyââ?¬â?¢ll spend up to six months poring over Rangersââ?¬â?¢ accounts and working with the club to identify where the savings are.

 

ââ?¬Å?They should have a strategy in place for when the transfer window opens at the end of the season and then guide the club through until it closes at the end of August.

 

ââ?¬Å?Weââ?¬â?¢re in a recession so season ticket revenue could fall, corporate hospitality has been cut, the Murray Park Academy hasnââ?¬â?¢t delivered enough young players. The only way to raise revenue short-term is to sell players.

 

ââ?¬Å?Usually, the fact that the club has a wealthy parent company would be enough to satisfy the banks.

 

ââ?¬Å?But Murray International Holdings has taken a hit as well so Rangers is more exposed than it would normally be.

 

ââ?¬Å?David Murray is a realist ââ?¬â? he is trying to bring a sound business structure to the club which is essential for it to survive but if the bank is now restructuring the debt then there may be even deeper cuts on the way.

 

ââ?¬Å?I think the fans need to rally round the chairman at this time, not barrack him for putting his neck on the line.ââ?¬Â

 

Sir David recently admitted Rangers had lurched deeper into the red, losing nearly �£4million between June and December 2008, with �£1.4million paying off interest alone.

 

An early exit from European football at the hands of Lithuanian minnows Kaunas in the second qualifying stage of the Champions League this season cost the club around �£13million in potential revenue. During Januaryâ��s transfer window, Murray sanctioned the sale of star striker Kris Boyd for �£3.8million in a bid to rake in cash.

 

UNDER THREAT: Allan McGregor

 

Boyd, 25, was on the verge of a move to Birmingham City but a row over his �£20,000- a-week wages saw the deal fall through. Goalie Allan McGregor and captain Barry Ferguson, on salaries of �£25,000 and �£30,000 a week, were linked to a lucrative Newcastle United move which also fell through.

 

Walter Smith�s squad is to be trimmed to only 20 in the summer after failing to offload Boyd in January.

 

But Murray has insisted that long-term loans were keeping the club stable, saying: ââ?¬Å?What Iââ?¬â?¢m doing is not panicking. We have a financial facility with the bank and we must work within that framework.ââ?¬Â

 

Now that strategy has been thrown into uncertainty and earlier this month, Rangers admitted a dozen backroom staff would lose their jobs. John Macmillan, general secretary of the Rangers Supportersââ?¬â?¢ Association said: ââ?¬Å?Itââ?¬â?¢s a pretty bleak picture ââ?¬â? the fans wonââ?¬â?¢t take kindly to this.

 

ââ?¬Å?Most really donââ?¬â?¢t care about who owes what to whom, so we may see a split between the club and the fans over the next few years.

 

ââ?¬Å?But the club must recognise that itââ?¬â?¢s not the fansââ?¬â?¢ fault that Rangers are in such a mess ââ?¬â? thereââ?¬â?¢s been mismanagement and unwise signing policies which continue to this day.

 

ââ?¬Å?The way through this crisis is to put bums on seats, not to penalise the fans. The club should look at lowering prices and even letting in kids for free.ââ?¬Â

 

Bank of Scotland has recently been bought out by Lloyds Banking Group after racking up losses of �£10.8billion as part of HBOS. Both the bank and the club refused to comment.

 

http://www.newsoftheworld.co.uk/scottish/scottish_news/218758/Rangers-pound20m-debt-squeeze-David-Murray.html

[Super_Ally 0]

Both banks and the club refused to comment.

 

So where has this come from? Complete BS?

[ian1964 10,409]

Both banks and the club refused to comment.

 

So where has this come from? Complete BS?

 

What do you mean SA ?...............are you saying you don't believe the NOTW

[Zappa 0]

Probably just some pikey that thinks he's being superfly the night before the cup final. The figures seem a bit odd. 70+% increase in interest rates?

[Super_Ally 0]

What do you mean SA ?...............are you saying you don't believe the NOTW

 

:devil:

 

Ha ha, guess i'm not the only one.

[maineflyer 0]

No doubt the NOTW has chosen its opportunity here but is anyone seriously doubting there is a financial crisis at Rangers?

 

BTW, the article states a 71% increase in interest payments, not interest rates.

[Bluedell 5,329]

The club had a loan of �£21m repayable at �£1m per year. I can't see the bank getting too worried about that as long as payments are mnade on time.

 

They also have a revolving credit facility, or overdraft if you like, of �£15m. We are struggling to remain within that, but it's managable and again I can't see the bank worrying.

 

It's far more likely that we need additional facilities and the bank are refusing to give them to us, and we therefore have to cut our cloth accordingly.

 

The whole thing is a non-story.

[maineflyer 0]

And guess what our fellow member Scotzine has as the latest headline story on his anti-Rangers website.

[Zappa 0]

And guess what our fellow member Scotzine has as the latest headline story on his anti-Rangers website.

 

all can say is -

 

Surprise surprise!!!

[Super_Ally 0]

And guess what our fellow member Scotzine has as the latest headline story on his anti-Rangers website.

 

Did you see the one complaining about the bonuses the players would be paid for the treble and then talking about staff being let go?

 

 

Really, any excuse to have a go. Horrible little scrote.