A flurry of activity on the official Rangers website with Charles Green’s reaction to proposed League restructuring in Scotland. I will look at one aspect of it for now. As you will see it indicates how quickly things can move in the business world, and how unforeseen developments can possibly de-rail vital financial planning.
Mr Green is quoted here, under the balanced headline of “Gers Should Quit Scotland” as saying:-
“I haven’t read anything other than what is in the press and if that is what we have sat here eagerly awaiting to transform Scottish football, my advice to the board of Rangers is the quicker we can leave Scottish football the better.
“I can’t see anything that is going to transform the finances, the status or the excitement.”
“On first glance, of course, there is nowhere for us to go because FIFA have made their feelings known on cross-border leagues.
“However, we have noted the comments of Standard Liege recently and what Peter Lawwell said at his AGM a few weeks ago when he discussed the changes in Europe.
“Hand on heart today there isn’t an option but that doesn’t mean we shouldn’t start looking for an option.
“If all we have to look forward to over the next four years is more madness then we would be failing as directors not to explore the alternatives.”
I wonder if he recalls the Share Prospectus, issued as long ago as 7th December 2012 – 34 days ago. What did it have to say about the possibility of Rangers pulling out of Scottish football?
The Prospectus for Rangers International Football Club PLC stated the following:-
There is currently some uncertainty about the financial stability of certain Scottish football clubs and the proposals for the structure of Scottish football in the future
The Company understands that the SPL are reviewing whether the SPL should be split into two divisions and that the SFL are considering a proposal for one league body and three leagues of 16, 10 and 16 teams respectively which would result in the end of the SPL and the opportunity for colt teams to participate in the league. The uncertainty in relation to the financial stability of certain Scottish football clubs and the proposals for restructuring Scottish football present a risk for the Company in relation to the manner in which the league and cup competitions will be structured in the future which may have a material adverse effect on the manner in which broadcasting and other revenue streams can be monetised by the Company.
However, this risk is mitigated by the fact that any restructuring of Scottish football may enable the Club to return to the top division of Scottish football sooner than currently anticipated and to therefore benefit from access to different sources and levels of income.
Following 1 September 2013, the Club will also seek actively to enhance the playing staff in order to maximise the Club’s chances of a return to the Scottish Premier League for the 2015/16 season. Under the current league structure, 2015/16 would be the earliest that the Club could return to the Scottish Premier League, although these timescales could be accelerated should there be a restructuring of the Scottish Football League as described in paragraph 5 of this Part VII.
Recent and proposed changes to structure
There has been significant press speculation regarding restructuring of Scottish football including potential tie-ups with other domestic leagues. The Board believes that the coming years may see some significant changes in the structure of Scottish football and that the RFCL Group and the Rangers Group are well positioned to benefit from these should they occur. However, the Board has no certainty that any changes will take place, nor the form that any restructuring might take.
Now I am sure that Mr Green feels that the change from a proposed 16-10-16 system to a 12-12-18 one fundamentally alters the balance and makes the proposal to leave Scottish football essential.
Is it impolite to ask why no mention of this dramatic step was mentioned in the prospectus? After all, when engaging on a hugely successful share issue, as it was, would investors, rather than fans, want to know that there was a possibility that the new company would withdraw the football club owned by the company which was in turn owned by RIFC PLC from its primary, and indeed for now, sole market?
And bearing in mind the references in the prospectus to a return to the SPL for 2015/2016, surely the proposed restructuring would still leave that goal in place?
It would be unworthy to suggest that Mr Green had gone in a huff. Did he expect, and indeed does he feel he had been led to believe, that restructuring would get Rangers back to the top flight more quickly?
One wonders what might have been said in confidential meetings with prospective investors about the return to the top tier. Clearly Mr Green could not commit to an earlier return, as the decision was one for Scottish football, rather than for Rangers, but might this in some way be damaging to the conditional financial projections laid out to the City investors?
Sadly, not being party to the confidential discussions, one can only speculate.
One feels sorry for Mr Green that he has clearly been let down by the proposed seismic change in the football structure. After all, if there had been no restructuring, then Rangers in season 2013/2014 would have been playing in the third tier of Scottish football, whereas, because of “the fiendish plan concocted only to frustrate Rangers by the Lawwell-Doncaster-Regan cabal” (© Mr Leggat) they will instead be playing in … the third tier of Scottish football!
And, in case anyone wonders, there should be no suggestion taken from this piece that the investors were not made properly ware of this as a potential risk factor, on the basis that re-structuring is mentioned in the prospectus, and there was obviously no inkling that the dramatic change of plans from 16-10-16 to 12-12-18 would take place.
I will have some more comment on some of Mr Green’s observations…
Posted by Paul McConville