Why Charles Green’s Financial Plan For Rangers Won’t Work – Guest Post by Niall

Niall has been one of the many welcome commenters on my blog, and was gung-ho about the prospects of a CVA being agreed when many thought otherwise. He stuck to his guns, putting forward a number of reasons why a CVA would be approved. Now of course he has turned out to have been incorrect.

Fair play to him – he has sent me the following as a comment, but I think it is worth putting up as a post, and I welcome comment on it and analysis of it as always.

I now leave the stage clear for Niall, with many thanks.



It’s bust and I was wrong; it seems Mr Whyte’s governance breached the conditions for agreeing to a CVA.

I think you may find Mr Green will find some excuse within the next 48 hours to drop out altogether, no newco, just like Miller.

Rangers’ fixed assets are only worth something to a commercially viable football club called Rangers. These fixed assets are worth nothing to a loss-making football club called Rangers.
The potential return for any investment is in the club’s profitability and not its fixed assets.

Bill Miller ran a country mile when his financial advisers estimated it would cost £30 million to bankroll the losses Rangers would occur in the first 3 years. They added up the cost of a 3-year Europe ban, possible further point deductions, loss of playing assets and the almost inevitable drop in attendance income.

Mr Green has committed £5.5 million plus the transfer of various secured creditors totalling £9.5 million, add this £15 million to the projected £30 million loss and you have a grand total of £45 million.

£45 million to break even in 3 years and then the slow climb to profitability. Have a look how much Celtic’s profit is, and it has a bigger turnover, it is washers without Europe.

The most optimistic projection is Rangers will earn £10 million every 4 years for CL group stages. Bearing in mind they will have an affordable but average team ( just like Celtic).

Rangers is SIMPLY not worth £45 million, it would take 20 years to get your investment back. Celtic and Rangers are marginally profitable businesses if they are run at their best.

If this deal goes through, Rangers (newco) will be in administration by August 2013. The season ticket sales will be horrendous and the losses will be too great for Mr Green’s greedy little group.

I simply do not believe Rangers attendances will not drop significantly in years 2 and 3. They will be unable to win the league and there is no European prize for winning the dogfight for 2nd, 3rd or 4th. Add to this the loss of fans who don’t accept the newco and glory hunters.

Ticket sales are approx £25 million for 46,000 average, each 10% drop is 2.5 million loss. A 30,000 average crowd would lose £8.5 million, Bill Miller’s projection of a £30 million loss in 3 years is feasible when you add in ground repairs.

Rangers are too big to downsize to a small turnover, this saga has a long way to run. I fear the worst.




Filed under Administration, Charles Green, Football, Guest Posts, Rangers

43 responses to “Why Charles Green’s Financial Plan For Rangers Won’t Work – Guest Post by Niall

  1. Nigel

    You seem to have omitted the possibility of them having to start in League 3 using the Youth team.

    • Niall Walker.

      I do not believe this is a commercially feasible option nor is it likely, there are 80 million reasons why Rangers will be invited back into the SPL..

      Think of the average attendance and ticket price in div 3, it would be a fraction of 25 million but the running costs of Ibrox and MP would remain the same. No Sky money and no major sponsors etc etc, Rangers would go into a death and debt spiral.

  2. Carntyne

    Well Niall,

    In spite of all your protests I did tell you liquidation was the only possible outcome.

    Can’t say you weren’t warned.

    • Niall Walker.

      I stupidly assumed that Craig Whyte( Insolvency expert) had sufficient nonce to disguise his obvious intent from HMRC, he underestimated their hostility and I over estimated his business acumen.

      Whytes email to D&P expressing the hope that Rangers exit from administration ” IN HOURS “, convinced me he was certifiable, having just warned them to expect a hostile HMRC.

  3. Gerry

    The question has always been why any investors would put money in to a busted football team that plays in the SPL (or perhaps not!). The SPL model just doesnt work – as Murray failed to come to terms with in his ever desperate attempts to finance glory – and I cannot see what Green and his investment group see as a way forward that stacks up as making money.

    • Niall Walker.

      I agree, what people do not realise is why SDM or CW did not downsize Rangers, the answer is they could not risk the average attendance income falling, the Field of Dreams had to be maintained to keep them coming.
      I ask you, would you pay 45 million for Celtic to make money ?

  4. reilly1926

    Green was apparently involved in a massively over subscribed share issue while at Sheffield Utd. If this is his plan for RFC(IA) then it’s a massive gamble. Murray got his fingers burnt (Tax payer eventually) when tried something similar about 8 years ago. The paltry amount raised in thheir recent “Fighting Fund” is another indication that they “Don’t do paying their way”.

  5. Carntyne

    Niall, Niall,

    You just can’t help yourself.

    You say Rangers will have an affordable but average team ( just like Celtic).

    You got the Rangers part right, the other is just supposition, or as the rest of us know it, wishful thinking.

    Celtic are well run financially, and have aspirations in Europe.

    That doesn’t mean winning the CL of course, just being able to negotiate the group stages successfully, but Celtic have no need to downsize from a financial standpoint, and as for profit, that is not a priority although breaking even is something they have managed to do regularly, unlike Rangers.

    • Niall Walker.

      Evening Cartyne,

      I did not mean average in a detrimental way, Celtic has an affordable team that has not reached the group stages for some years, despite it being run on a financially sound footing. This simply demonstrates the level of football that is now affordable to Rangers, look at this way, would a businessman for business reasons only, buy Celtic for 45 mllion ?

      What would the return on this investment be ?

      • Carntyne

        It’s true Celtic haven’t qualified for the CL for three year but Lennon had to re-group after Tony Mowbray’s disastrous year in charge.

        The team is stronger now and will give the CL qualifiers a better go this time around.

        Suggesting Rangers will have an affordable and average team…just like Celtic…is well off the mark, because what Celtic will be able to afford will be well outwith of the reach of Rangers for many years, whether Rangers are in the SPL or the third division.

        In the SPL they will not be able to compete.

        Even in the third division, I am not convinced, unlike a lot of others, that Rangers will go racing throught the divisions and be back in the SPL in a flash.

        That would be the case if they kept their current squad which is what Green has been telling us will be the case, but although that may be desirable from Rangers point of view, the fact that the wage bill was unaffordable and reduced to 25% from 14th February, will mean the club will not be able to afford the 100% wage which has been restored since 1st. June.

        Not paying the unaffordable wages means a breach of contract, the release clause of being able to move for smaller fixed sums will be redundant, and all of the players can walk for free.

        The twelve month player signing ban is just like the £160,000 fine, and like the fine is meaningless, because Rangers will not be able to afford signings for the foreseeable future.

  6. JimBhoy

    doomed they will buy another team, them being Rangers fans consortium thing when Green leaves…

  7. mick

    thanks for the post a other great read from you lot a think its curtian time and cant see how the new co can be formed surly the taxman will want to sell to the highest bidder and maximise return for creditors the d&p valuation is well low and seems to me a con just like the 5.5mil they have racked up in fees

  8. mick

    wit about the big tax case wit happens to that ?

    • Niall Walker.

      The oldco is still in administration and the BTC amount will be added to the creditors quantum, HMRC seem optimistic of getting something out of various litigations.

  9. duggie73

    Oy veh, there’s still someone taking a venture capitalist’s numbers in their publicly announced business plan seriously.

    The plan is to make money quickly for investors, not run a profitable business over an extended period.

    So you’d expect asset stripping of real estate to pay back the initial investment, a sale of the shares for profit to those desperate to keep a club running, and an extended period of being held hostage by a landlord with an inescapable monopoly and thus the ability to charge a cripplyingly high level of rent.

    It’s capitalism ffs, is anyone really expecting anything else?

    • Niall Walker.

      They paid the real estate value of 5.5 million plus transferred 9.5 million security on these assets, if you think they can sell them for more than 15 million,then I do not for the reasons given, theyaint worth nowt to a loss making Rangers.
      . As for selling shares in a business that is going to lose 30 mllion in the next 3 years, good luck with that one.
      Rangers cannot afford the bills as they stand, tell me how a newco is going to finance paying a high rent ?

      Rangers does not need a capitalist, they need a Santa Claus.

  10. Niall Walker.

    The old Rangers business model needed to shed 10 million in wages to be viable, on top of this the newco must shed another 10 million for 3 years to offset the attendance losses incurred by sanctions.

    Do you know how impossible this is to achieve when the basic overheads of your fixed assets remain the same.

  11. Richboy

    Niall fair dos for your article. I have always appreciated your reasoned comments even though they were often contrary to my thoughts.

    I simply cannot believe that, as things currently stand, it is not possible to run Rangers at break even levels and still survive in the SPL. A massive reduction in wages, say the top ten players and some squad players (plus Hately, Jardine, McCoist and a few others on wages they don’t deserve), would reduce the wage below season ticket funds with a bit to spare.

    Rangers could then sell off Murray Park and other assets. When Motherwell went into liquidation they trained between pitches at Glasgow Green as they couldn’t afford to rent even a single pitch. Rangers could employ such methods and save millions.

    As Rangers are now liquidated other streams of revenue will be available such as merchandising, catering etc. Also did Rangers costs (30M) include any repayments of debt?

    The main thing I see against Rangers surviving is that they will have to sell their rights to 100% of home gates and a smaller slice of the SPL prize money and TV pie in order to gain entry to the SPL. This will be financially severe for a club like Celtic but will sound the death knell for Rangers.

    • Ardee

      Are there any thoughts of paying their football debts?
      Celtic, Dundee United, Hearts and other clubs abroad should be paid as a condition of retaining their SFA license.

      • The Roon

        Very Good point Ardee, especially if the future transfer money from Everton is going to the Newco. I don’t know if it will or not but under the rejected CVA proposal that transfer money was not ear-marked for the Creditors, which I could not understand.

        If the Newco are to take Rangers place (in footballing terms) then surely the football authorities would make it a condition that their other members were paid all outstanding money due from Rangers? If the Newco wants Rangers footballing history (in terms of titles etc) then it surely must also inherit Rangers outstanding debts within the football kingdom.

        As a minimum, the Scottish clubs should be paid what they are due but as Rangers aim will to compete in European competitions in the future then a condition of the Newco being allowed back into Scottish football (SPL or SFL) then they should be made to pay Rapid Vienna and any other non-Scottish club.

      • Niall Walker.

        Since HMRC have blocked the CVA, there is nothiing stopping the newco coming to some ” preferential” arrangement with football creditors, especially since they are asking them to invite them back into the SPL and SFA. The 5.5 million may be 8p in the pound at the moment but once the EBT amount is added to the creditoes quantum, it will be nearer 2 or 3p. I wouldn’t hold out much hope on the old Rangers recovering substantial funds from litigation, in my opinion HMRC are more interested in going after Craig Whyte to get him permanently disqualified as a director in the UK,. Trading while insolvent and orchestrating an administration at the expense of HMRC or any other creditor is in breach of a directors responsibility.

    • Niall Walker.

      Rangers assets have been up for sale for 4 months,and as D&P stated yesterday, 5.5 million was the highest offer, I personally believe MP is worth next to nothing.
      The newco is adopting the same name, this does not cancel previous merchandising agreements, the intellectual property rights are untouched by a change of company details.
      As for sponsorship, I do not see a wealth of sponsors queuing up to be attached to the name Rangers for sometime to come.

      I am not saying it is impossible, but is it worth the financial risk ?

  12. Jim Harkins

    Compliments, Niall, for having the moral fibre to poke your head over the parapet.
    If I may say so, you are still hung up on the view that Ibrox and the other property assets are only of interest or value to a football club; that simply is not so.
    Your figures indicate clearly that the base costs associated with SPL football (players, ground of a suitable level) are beyond any new RFC. The logical conclusion is to start again from scratch – and I mean from scratch. This , however, will require a quality of leadership that no-one associated with the present club has. This might be the silver lining.

    • Niall Walker.

      Morning Jim,

      If Ibrox-MP has some real estate value outwith football then I cannot see it, there has been no interest expressed except by footballing parties.
      What is a plot of land ( less demoliton costs) or a run down( falling apart) concert facility in Govan worth in 2012 ?

      I see it more as a whte elephant.

      • Carntyne

        A few years ago Rangers annual accounts showed a valuation of £140mill of Ibrox stadium alone.

        If the stadium and Murray Park combined are now valued at £5.5mill, it means Rangers at that time were much more in debt that they admitted.

        The debt before Murray launched a £50mill share issue was claimed to be £80mill, but if you take the false valuation of the stadium into account, the debt was actually over £200,000,000.

        The claims of Alastair Johnson, and repeated ad nauseum by Rangers supporters, that before Craig Whyte took the club over the board had reduced the debt from £35mill to ‘a managable’ £18mill or so and that what has happened since is all Craig Whyte’s fault, is now shown to be false.

        The actual debt if the inaccurate stadium valuation is taken into account, would at that time have been over £150,000,000.

        Which is why Murray was desperate to get rid of the club to just about anyone who would take it off his hands.

        Enter Craig Whyte, looking to make a fast buck.

      • Jim Harkins

        If the seller limits himself to bids from footballing parties, that is what he will attract. As you can probably quess, I am not in the real estate business and your opinion may well be better-informed than mine; all I am suggesting is that the market should be tested properly.

      • paul

        Carntyne, much as I like your attempt to show an even bleaker picture for rangers under Murray, your figures are wrong.

        The debt was as reported £80M and £35M in those years.

        Where you missed a trick is this: Where was the solvency of the club at this time?
        With Assets at £120M and debt of £80M, the club was ‘solvent’ to the tune of £40M. If the assets were not worth £120M, lets say £50M? then the club was INSOLVENT way back then.
        At this point, there is some serious corporate misgovernance going on, as you are not allowed to trade a company that is insolvent. Step up SDM, the board and KPMG the auditors, who all may have comitted serious offences!

  13. Niall Walker.

    Mr Green or any other newco owner ” MAY ” get one seasons grace from season ticket holders and loyal fans, but 3 years without any real incentives is a long long time for fans weaned on permanent success.
    One must remember there are few sanction options left to impose on RFC for the EBT fiasco, it would not surprise me if the top half of the SPL vote for further point deductions as a condition of re-entry to the SPL..

    I would like to put my Sigmund Freud hat on, not to analyse Craig Whytes mental health but to establish what motivates certain fans. There are only two clubs in Scotland that have a large non-local support, there are not many Aberdeen fans outwith Aberdeen. In my opinion the reasons for non-Glasgow fans affiliating themselves with Rangers are not exactly the same as Celtic. Sayings such as ” We are the People ” and ” Simply the Best ” suggest an important psychological attachment to success and winning.
    Will Rangers fans stay loyal faced with long term failure and losing, or will they walk away ?

    Aberdeen and Motherwell supporters are used to failure and losing, it does not affect their well being, their ambitions are set much lower.
    This is not the case at Rangers, and to a degree at Celtic.

    Regards SF.


  14. mick

    its sad that the rangers suits and pr have done to there fans its like a sporting version of the trueman show good morning good afternoon in case a dont see ya

  15. mick

    am a glasgow man and a would just like to point out most glasgow rangers fans that live in glasgow are less twisted than the ones that live in the surrunding towns and villages they seem to be the extreme types and devote there lives to hate maybe rangers out of site for a while will give these people time to come to terms with scotland fast becoming a universial enviroment

  16. RichW

    D&P seem to believe they have an unbreakable commitment to sell to Mr Green – surely they can’t be so incompetent as to agree a sale deal which binds them but leaves the other party free to walk away?

    Or maybe they are?

    • Niall Walker.

      Mr Green may indeed walk away if he cannot raise the 5.5 million,( enter TBKs and BK), that is the easy part, the hard part is selling to any investor the high risk of Rangers without Europe for 3 years and 46,000 demotivated fans. Rangers needed to cut 10 million off the wages to break even without Europe and now they may need to cut another 8-10 million to budget for 16,000 fans staying at home. If Rangers fans believe they have no chance of winning the SPL for 3 years because of sanctions and budget cuts, then I fear the worst.
      I think a lot of fans will not renew their season tickets this year, and when the gulf between them and Celtic becomes obvious, they will vote with their feet.

    • gerry

      Just tweeted on this point, but asking the question – was this seriously in the best interests of creditors at the exclusion of all other bids – Shocking !

      • Niall Walker.

        The CVA offered more to creditors but HMRC disagreed, 5.5 million was the second best offer and no other bids were excluded.

  17. Niall

    It’s bust and I was wrong;

    It takes a big man to admit he is wrong after promoting the CVA route for so long. I have enjoyed our occasional bouts on the subject over the last few months.

    I recall you once said ‘if there is no CVA you will not hear from me on this site again’. Hopefully you will relent as I am sure your views (which I usually disagree with by the way) are always a welcome view.

  18. Brian Jeffrey

    I cannot get my head around how it can possibly be either legal or ethical for the administrators of a company facing liquidation to take all the positive assets of the company and sell them at a knocked down price to a newco leaving only the toxic stuff left for the legitimate creditors. Surely BDO have an obligation to maximise the potential return on all of the company’s assets for the benefit of all the company’s creditors. Surely they are not bound by an agreement reached by administrators before they were appointed as liquidators. Surely, now that they have been appointed as liquidators with associated specific responsibilities, they will want and be in a position to enforce an enquiry of their own to establish the best deal on offer without being hog tied by what D&P say is the best deal on offer.

    • Niall Walker.

      Evening Brian,

      HMRC does not onsider the sale of the assets to be at a knocked down price, who are you and I to disagree?

  19. p groom

    bdo have stated they will carry on liquidating AFTER allowing d and p to sell assets to green so no problem there for green. though someone else might seek an injunction to stop d and p…..rapid vienna perhaps?

  20. gerry

    Been expecting for this – Smith announces counter bid to D&P + BDO. Expect at least one more soon IMO. Now pressure on CG for transparency as he knows BDO can unpick any asset sale ( whicht as i previously questioned – ‘being in best interests of creditors ???’ ).

    • Niall Walker.

      Green knows he is dead in the water without the fans, average crowd attendance has always been the elephant in the room, the commercial viability of RFC rests on ticket sales.
      If ionly 20% of fans threaten to boycott ticket sales C Green will do a deal, Rangers losss and the risk of further losses would be too high for any investor.

      Maybe they will join consortiums.

  21. Robertson


    McCann had to save Celtic and for some reason I think Charles Green had interest on them at the time they nearly hit the wall . Also no matter how people look at the big named Glasgow Rangers it is Scottish Football that is taking this hit just wait you,ll see all will pay and it has been the part of Glasgow I don,t want to forget .

  22. ecojon

    Charlotte and the tentacles of Octopus reach out.

    October 7th, 2010

    Craig Whyte [address TBC]

    Re: Letter of funding availability

    Dear Craig,Further to our recent meetings, I would like to refresh the overall position of our businessand the relationship we would like to develop with you during and after the proposed acquisitionof Glasgow Rangers FC
    (the “Club”).

    Through our wide range of products, including multi manager and absolute return funds, VentureCapital Trusts (VCT), Enterprise Investment Schemes (EIS), and Inheritance Tax (IHT)investment solutions, Octopus Investments now has over £1.78 billion in assets under management. We use a specialized fund which has £200 million in readily available capital to provide funding for your acquisition and ongoing development of the Club.

    Based on our initial due diligence, we would be comfortable committing a sum in the region of £20M to your acquisition finance package. Going forward we would hope to develop a relationship with you and the Club, leveraging off our experience in the football sector and stablefunding base, to take the Club into its next stage of development under your stewardship.

    Our commitment of funds, as usual, is conditioned upon completion of further duediligence satisfactory to Octopus Investments and definitive transaction documents, outlined at our previous meetings.

    We are excited about the opportunity and I wish you all the best in finalizing andreceiving approval for your acquisition.

    Ross Bryan
    Investment Manager

  23. ecojon

    I can just imagine wee craigie’s eyes when he read this: ‘We use a specialized fund which has £200 million in readily available capital to provide funding for your acquisition and ongoing development of the Club’.

    I think Octopus got off lightly that CW didn’t disappear to Monaco with the lot – probably couldn’t find a big enough warchest 😦

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s