Rangers in safe hands - Johnston

[pete 2,499]

Why should he lie ? He has no financial gain by lying. In fact i don't see any gain at all. If we do sell all our players now because we have to, he is going to look a right numpty in peoples eye's. I don't see him wanting that to happen.

[Frankie 8,150]

Herald interview in writing - reads very well actually...

 

Hugh MacDonald

 

Published on 13 Nov 2009

 

He may have been dealt a difficult hand but Alastair Johnston is playing it with some forcefulness.

 

The Rangers chairman yesterday announced a loss of �£12.7m in the financial year to June 30, 2009, with the net debt of the club now standing at �£30.1m.

 

But Johnston insisted there was no doubt about the survival of the club, claiming “nobody wants to play poker with the future of Rangers”. He also said Walter Smith, the Rangers manager, would not be forced to sell players in the January window.

 

He would not comment directly on speculation linking Rangers to specific buyers but the chairman was adamant that the club needed someone who would supply them with a substantial, regular and reliable influx of cash. “We need an owner or an ownership that is willing and able to fund the ambition of Rangers football club on an ongoing basis,” he told The Herald in an interview yesterday from his base in the USA.

 

So how bad is the financial situation?

 

These are the figures through to June 2009. I knew the figures before I took this assignment. I am not surprised by them. More importantly, I under*stand why the figures are where they are. And what the significance of European qualification is to this club. That was the big difference between the year endings of 2008 and 2009. This is a club that is built for playing in Europe. That is its cost structure. If you do not play in Europe, the business model is compromised. And that is when we have to withdraw our appetite for expansion and for improving the product.

 

QUOTE

 

I do not need the job. I do not need it from an ego standpoint. I certainly do not need it from a monetary perspective.

 

Alastair Johnston

 

But how does the club stand amid all this debt and speculation?

 

The survival of the club is not in doubt. There is no question about the club going into administration. Nobody involved in the discussions I have had over the last three months wants to play poker with the future of Rangers Football Club with Rangers being the stakes. One of the things we have done in the last three months is extended our relationship, our credit facility, with the bank. They have been quite collaborative with respect of moving forward. We have had clean audit opinion as a going concern so we can move forward.

 

How is the relationship with Lloyds Banking Group?

 

We had to come up with a mutually acceptable business plan. That is what it is, it is acceptable to both parties. The ambition that the board has for the club, representing the ambition of the vast bulk of the fans, is to put a better product on the park. That is our mission. The bank is basically saying, and I get it, that this ambition should be fuelled by equity, ie the owners, rather than by the credit providers, ie the bank.

 

What is the way forward?

 

The bottom line is that we are working within the constraints of a business plan. The product we will be putting on the park will be grown more organically as opposed to by acquisition. We have to develop our own players rather than acquire them in the marketplace. That is not to say that we won’t have the ability to do that, but that is the way the business plan works. On a more positive basis, we do not have any obligation to pay off this debt. So in terms of being forced to sell players, we are not in that position. If we get rid of players in the January window it will be at the volition of the board and the management of Rangers Football Club. It will not be the decision of the bank.

 

So players won’t be sold in January?

 

That is really is more of a football decision that Walter [smith, manager] and Martin Bain [chief executive] will get into. Football clubs are in the business of trading players. We have to buy and sell players as part of our business model. It is very much a football decision.

 

But your player costs are at more than 70% of turnover where most clubs are trying to get it below 60%. So Smith will not be asked to bring that down?

 

No. We are not asking him to bring it down. We have a business plan that doesn’t force him to make that type of decision. That is not to say he will not make that type of decision to get rid of players, but we are under no obligation or pressure from the bank to do that.

 

It will be Walter Smith’s decision?

 

Yes.

 

Have you had any contact with anybody looking to buy Rangers over the past weeks?

 

You are probably aware that because of the speculation in that regard we have been cautioned by the regulatory authorities to what we can say. We are governed by the City code on takeover and transfers, so I have to be careful. I can say that one of my primary ambitions is to replace the bank as the external source of financing. That was manifested in the frustration Walter expressed a couple of weeks ago in respect of his inability, or his ability being compromised, by the business plan we had worked out with the bank. There is a lot of speculation, there are a lot of people inquiring, there are a lot of people expressing interest, but at the end of the day the Rangers board, and I as the chairman, is less concerned about the price of the club and much, much more concerned about the ability of the new owners to continue to finance the ambition of the club. That is where we are going to have a very strong opinion with respect with what we think we need from a new owner on an ongoing basis. This is not just about buying and selling a club. We do not want to be in the same position where we were before when we were obliged to somebody to service the debt. We need an owner or an ownership that is willing and able to fund the ambition of Rangers Football Club on an ongoing basis.

 

Are you optimistic?

 

We have progressed in the last three or four months because we did not have the credit arrangement in place when I took over the assignment. I am optimistic based on the fact that we have a funding source that is reliable and committed. It is just not enough to fuel the ambitions that we have for the club. I am optimistic with respect to survival and the continuing ability, within a limited perspective, that we will continue to be competitive. It is not what I want or what the fans ideally want in respect of how successful or how entertaining we are going to be.

 

Personally, though, you have been involved in bigger companies but not surely in such a closely scrutinised one?

 

I think that is fair. The media environment, the passion and the culture of Scotland and the nature of football and football fans all converge to make you need your daily tonic.

 

How is it being in the USA, some way from the storm?

 

It’s easier for me to deal with this on a rational, very objective basis as opposed to being exposed to headlines on Tuesday as to what I do on Wednesday. From that standpoint, it is beneficial. On the other hand, I do talk to Martin Bain every day and I have been back in Scotland or Europe on Rangers business probably on average every three to four weeks.

 

How big a challenge has it been?

 

I would like to think that redefining the course of Rangers’ business structure was something I knew was going to take a lot of time up front. And it has. We will proceed into an era when I would look forward to dealing with more constructive issues such as new ownership. I do not anticipate the personal burden will get any less in the near term. But in the long term, hopefully, we can put a little bit more cruise control into the gears.

 

The English Premier League has rejected any possibility of the Old Firm going south. Is this a blow?

 

The EPL decision was not surprising. The winds of change that are blowing through UEFA will be fuelled by a lot of issues, not the least of which is UEFA’s concern about lack of parity in football. It is not necessarily issues such as change of league that matter as much as rule changes such as roster sizes etc which would be beneficial to Rangers Football Club in making better players available for our budget. The bottom line is that I believe the landscape of football – the organisation and structure of it – will change in the next five years. I would like Rangers to be considered as part of the attractive options in that change. I want Rangers to be continued to be invited to the party so that we can contribute in an environment that is more lucrative for the club. This would give us more of an ability to meet the fans’ ambitions and objectives.

 

Are you disappointed with the merchandising deal with JJB?

 

JJB, because of their own troubles, have been concerning to us. However, they seem to have been working that [financial difficulties] out positively so we have been encouraged by that. One of the challenges is that is that we opted to take a lot of cash up front. So we are not dealing with the annual cash flow we might have had. I am not in any way criticising the decision that was made at the time but what it means is that the support of the Rangers fan is our primary source. We rely on the supporters to fuel our primary revenue channels much more than any other sporting institution, candidly. That is why our link with the supporter is very important to going forward.

 

The property valuation of Murray Park and Ibrox is �£122m, more than �£50m more than the historic valuation. Are you comfortable with this?

 

Yes. The bottom line is that the stadium and Murray Park were valued last year – independent valuation accounts – and that valuation was higher than the book value of the assets. The directors felt it would be inappropriate to increase the book value. We feel that carrying the value that has been set is justified.

 

How do you view the future?

 

It is certainly challenging. But I have always looked at challenges in a positive light. From a personal standpoint, the good news is that I do not need the job. I do not need it from an ego standpoint. I certainly do not need it from a monetary perspective. I enjoy the fact that my independence and my ability to evaluate things – and I do not mean this in a patronising way – in the best interests of Rangers Football Club is refreshing. I am not beholden to anybody. David Murray was beholden to his board, his executives and the Murray team. At the end of the day, in all honesty, he did a lot of things for Rangers that his board and his family were less and less supportive of. He really did a fantastic job. A lot of people were telling him he was continuing to spend money in ways that may have been imprudent, if you will, at the time. He had the passion of doing that and he has had to pull back a little because of circumstances in his own holding company with the world position in respect of the recession. I am in the position, and I do not mean this flippantly, of being in this job as long as it takes me to pack my briefcase and walk out.

 

But what is there in the job for you? Is it an adrenaline rush, a challenge, a matter of duty as a supporter?

 

It is all of the above.

[Yieldshields loyal 0]

I feel sorry for the guy tbh, he's sat on the board and watched whats happened to our club over the last few years and has been man enough (as a lifelong fan) to stand up and take on Murray's role.

I watched his face etched with dissapointment in Bucharest at both the scoreline and fan behaviour. Im sure he will help us out this mess and i for one am happy that we seem to be getting less smoke and mirrors (at the moment). Time will tell.

[Frankie 8,150]

I feel sorry for the guy tbh, he's sat on the board and watched whats happened to our club over the last few years and has been man enough (as a lifelong fan) to stand up and take on Murray's role.

.

 

Very good point there actually.

 

Like Bluedell and others I am cynical regarding AJ's comments because of past indiscretions by the board under SDM - a board AJ was part of.

 

However, that doesn't mean he agreed with previous policies or strategies so it will be interesting to see what he can achieve now he's in charge - well once you factor in MIH/Lloyds.

 

No matter, it does take a brave man to follow SDM so hopefully this courage is genuine. We should give him the benefit of the doubt for another few months at least.

 

December and January will be fascinating months.

[Tannochsidebear 2,314]

It is hard not to like the interview given by our new chairman, and I can understand some bear's cynacism regarding the content, given the last decade at our club.

 

And of course, he is not operating freely at the club either, with banking restrictions, and still a 90% shareholder to satisfy, and the knowledge that a new buyer will have to happen before the 2010 AGM, it does not really give him the tools to run the club in line with his personal ideals.

 

But what has ben significant since Murray ws "sacked" by the bank, is that not only has AJ came out with some clever statements that dont quite stick the knife into Murray, but can certainly be viewed as strongly critical of Murray's running of the club, we also appear to have seen a new Martin Bain being unleashed since Murray's departure.

 

Read any of my posts on Bain while Murray was in charge and you will know I am not a fan, but I have been impressed with the change in him since Murray has left, he has been more visible and vocal, more supportive of the fans, and his aggresive defense of the club against the bank's position a couple of weeks ago which did not get much attention, but I hear was worthy of high praise.

 

It just may be that we are starting to see the post-Murray era at Rangers bring in a new era of openness and honesty, which is after all the very least we deserve.

[Frankie 8,150]

Yip, agree with most of that TB.

 

But is Bain acting this way because he wants to or because his income is under threat? Either way, I'm not going to look a gift horse in the mouth.

[Tannochsidebear 2,314]

Either way works for me Frankie.

 

As long as the end product is a CEO that does the job properly, I dont really care what his motivation is.

 

I suppose that just reflects the rest of society, where employers are looking for good workers, not fans of the company.

 

The reality with Bain is that, like with Murray, time will tell. You can only polish a turd for so long!!

[Frankie 8,150]

If we get a new owner I'd be surprised to see Bain still here this time next year anyway...

 

Like SDM he's arguably had his time and the club have not done all that well under his CEO tenure - no matter if his hands were tied or not.

[Tannochsidebear 2,314]

If we get a new owner I'd be surprised to see Bain still here this time next year anyway...

 

Like SDM he's arguably had his time and the club have not done all that well under his CEO tenure - no matter if his hands were tied or not.

 

Agreed:thup:

[Bluedell 5,329]

My comments are in bold

 

Hugh MacDonald

 

Published on 13 Nov 2009

 

 

 

But how does the club stand amid all this debt and speculation?

 

The survival of the club is not in doubt. There is no question about the club going into administration. Nobody involved in the discussions I have had over the last three months wants to play poker with the future of Rangers Football Club with Rangers being the stakes. One of the things we have done in the last three months is extended our relationship, our credit facility, with the bank. They have been quite collaborative with respect of moving forward. We have had clean audit opinion as a going concern so we can move forward.

 

Given that there was apparently no credit arrangement in place for several months then you could argue that poker was being played with our future. Obviously there was some doubt about us getting a clean audit report, which i presume would not have been given without the arrangement in place.

 

How is the relationship with Lloyds Banking Group?

 

We had to come up with a mutually acceptable business plan. That is what it is, it is acceptable to both parties. The ambition that the board has for the club, representing the ambition of the vast bulk of the fans, is to put a better product on the park. That is our mission. The bank is basically saying, and I get it, that this ambition should be fuelled by equity, ie the owners, rather than by the credit providers, ie the bank.

 

What is the way forward?

 

The bottom line is that we are working within the constraints of a business plan. The product we will be putting on the park will be grown more organically as opposed to by acquisition. We have to develop our own players rather than acquire them in the marketplace. That is not to say that we won�t have the ability to do that, but that is the way the business plan works. On a more positive basis, we do not have any obligation to pay off this debt. So in terms of being forced to sell players, we are not in that position. If we get rid of players in the January window it will be at the volition of the board and the management of Rangers Football Club. It will not be the decision of the bank.

 

So he is saying that the business plan does not allow for us to buy anyone, even though we may have the ability to do so.

 

 

Have you had any contact with anybody looking to buy Rangers over the past weeks?

 

You are probably aware that because of the speculation in that regard we have been cautioned by the regulatory authorities to what we can say. We are governed by the City code on takeover and transfers, so I have to be careful. I can say that one of my primary ambitions is to replace the bank as the external source of financing. That was manifested in the frustration Walter expressed a couple of weeks ago in respect of his inability, or his ability being compromised, by the business plan we had worked out with the bank. There is a lot of speculation, there are a lot of people inquiring, there are a lot of people expressing interest, but at the end of the day the Rangers board, and I as the chairman, is less concerned about the price of the club and much, much more concerned about the ability of the new owners to continue to finance the ambition of the club. That is where we are going to have a very strong opinion with respect with what we think we need from a new owner on an ongoing basis. This is not just about buying and selling a club. We do not want to be in the same position where we were before when we were obliged to somebody to service the debt. We need an owner or an ownership that is willing and able to fund the ambition of Rangers Football Club on an ongoing basis.

 

It appears from this that the bank are unwilling to continue to grant us a facility in the medium term.

 

Are you optimistic?

 

We have progressed in the last three or four months because we did not have the credit arrangement in place when I took over the assignment. I am optimistic based on the fact that we have a funding source that is reliable and committed. It is just not enough to fuel the ambitions that we have for the club. I am optimistic with respect to survival and the continuing ability, within a limited perspective, that we will continue to be competitive. It is not what I want or what the fans ideally want in respect of how successful or how entertaining we are going to be.

 

Being competitive within a limited persepctive may be sadly realistic but it doesn't fill me with joy.

 

The property valuation of Murray Park and Ibrox is �£122m, more than �£50m more than the historic valuation. Are you comfortable with this?

 

Yes. The bottom line is that the stadium and Murray Park were valued last year ââ?¬â?? independent valuation accounts ââ?¬â?? and that valuation was higher than the book value of the assets. The directors felt it would be inappropriate to increase the book value. We feel that carrying the value that has been set is justified.

 

Interesting that he didn't say that the directors did not feel it appropiate to decrease the book value. The carrying value may be justified in respect of the valuation, but it doesn't mean that it's correct. I take this as him strongly disagreeing with the valuation.

 

How do you view the future?

 

It is certainly challenging. But I have always looked at challenges in a positive light. From a personal standpoint, the good news is that I do not need the job. I do not need it from an ego standpoint. I certainly do not need it from a monetary perspective. I enjoy the fact that my independence and my ability to evaluate things ââ?¬â?? and I do not mean this in a patronising way ââ?¬â?? in the best interests of Rangers Football Club is refreshing. I am not beholden to anybody. David Murray was beholden to his board, his executives and the Murray team. At the end of the day, in all honesty, he did a lot of things for Rangers that his board and his family were less and less supportive of. He really did a fantastic job. A lot of people were telling him he was continuing to spend money in ways that may have been imprudent, if you will, at the time. He had the passion of doing that and he has had to pull back a little because of circumstances in his own holding company with the world position in respect of the recession. I am in the position, and I do not mean this flippantly, of being in this job as long as it takes me to pack my briefcase and walk out.

 

I fail to understand his comments about Murray being beholden to his board and then doing things that the boardwere less and less supportive of. Was he beholden to them or not?