RST Statement on Sports Direct Following 2015 Annual Report

[Frankie 8,820]

http://www.therst.co.uk/news/rst-statement-on-sports-direct-following-2015-annual-report/

 

Following the release of Rangers accounts for the year ended June 2015, we feel it is important to highlight the ongoing disgrace of the Sports Direct merchandising deal - facilitated through a clearly dysfunctional Rangers Retail joint venture.

 

As has become customary, there has been a degree of misinformation spread in the days following the release of the accounts. Those who seek to talk up this deal with inaccurate analysis are no friends of Rangers Football Club.

 

In the year ended 27th April 2015, Rangers fans spent £4.262m on merchandising. Rangers’ accounts for the year ended 30th June 2015 show only £301k profit attributable to the club. This means that for every £10 spent by fans, the club benefited by only 71p. If we were to use only the 7 month figures shown in the accounts then the club benefited by only 50p per £10 of revenue.

 

The figures flag up serious issues with the Sports Direct stranglehold over profit distribution from Rangers Retail. Sports Direct, having failed to pay out any significant amount in 2013 or 2014, decided to pay a dividend following the deal put in place by Derek Llambias and Barry Leach which saw the Sports Direct share of those dividends raised to 75%. This meant Rangers received only £300k when, if the dividend had been paid prior to that deal when funds were available, the club could have received £600k.

 

Whilst this would still have been a paltry amount, the timing of this deal and the subsequent dividend payment are highly questionable and in our view demonstrate more appalling business practice from Sports Direct. Any dividend payable to the club from merchandise profits is entirely at the discretion of Sports Direct. They have failed to pay out any significant dividend to Rangers since the inception of the deal.

 

The Sports Direct arrangement remains terrible for Rangers and fans should be aware that any official merchandise purchase, from any retail outlet, is simply strengthening the ability of Mike Ashley to hold our club to ransom.

 

We would urge fans not to buy any official merchandise until there is a comprehensive revision of the existing deal.