RIFC Annual Results

[Stevie - 4lads Blog 922]

I appreciate someone as clever as @Bluedellwould be fantastic at writing something on this

 

I had to write something on my blog as people were asking & I didn’t want to ignore it 

 

I also appreciate my blog isn’t in depth & perhaps I have missed bits but my blog has always been about a normal punters view from the stands and how he sees it 

 

So I hope my blog on it is recognised as such & folk aren’t too hard on me if I’ve misinterpreted something 

 

A standard Grade Math only goes so far ?

[BEARGER 1,830]

6 hours ago, JohnMc said:

Have to say I expected there to be more chat about this thread. While I accept the board have the club's best interests at heart and are very different from past boards an £11 million pound loss is somewhat worrying. Without wishing to sound morbid what happens to Rangers if something happens to Dave King? King is in his mid 60s, that's not 'old' by today's standards, but it's not young either. 

I'm grateful for the money the directors have put in and continue to invest, but that's surely not sustainable for much longer. I'd like to know what the plan is for the short to medium term though. I assume it's 'sell players', which is fair enough but has proved harder than it sounds so far. I'd be very concerned if our plan for profitability is based on qualifying for the Champion's League. 

I'd also be interested to hear the current board's exit plan. What's the long term plan for the club? An open share issue? Private sale of shares to other high-wealth individuals? New investors? 

While we're all enjoying having a high profile manager again and playing some decent football while challenging properly for honours I'm nervous about what's next. What happens if we don't win the league this season, do we twist and gamble again next year or sell our best player(s) and balance the books? We all want to stop Celtic winning 10 in a row, but we also want a club for the long term.  

That's why fans buying shares is not a waste, either through Club1872 or not.

[JFK-1 1,693]

7 hours ago, JohnMc said:

Have to say I expected there to be more chat about this thread.

Think we have all become somewhat burned out by it. I'm leaving the obsessed from the usual sources which is pretty much every other clubs fans to get in a lather about it.

[cooponthewing 1,139]

I actually thought it was the right time to release those figures. If someone comes in with good money for Morelos (£25m+) in January he must go with our best wishes. We will have to get someone in and balance the books. We need to accept that.

[BEARGER 1,830]

https://www.forbes.com/sites/mikemeehallwood/2019/11/03/steven-gerrards-rangers-announce-11m-lossin-a-manner-designed-to-hide-them-from-the-media/amp/?__twitter_impression=true

53,228 views|Nov 3, 2019,11:45 am
Steven Gerrard’s Rangers Announce £11m Losses, In A Manner Designed To Hide Them From The Media
Mike Meehall WoodContributor
SportsMoney
I write about sports, politics, money and the points where they meet.
Rangers FC announced accounts at 6.45 p.m. on a Friday, conveniently after the majority of people have stopped looking at the news. This, too, before a huge weekend of Scottish football, with two League Cup semi-finals as well as a full English Premier League program to distract attention.

It’s not quite releasing them 15 minutes before kickoff in a crucial league match, as they did last year, but it is certainly not releasing them in a way that makes life easy for anyone in the media who might want to report on them. This is, of course, not an accident. 

I wrote a piece for this very site last year that questioned quite why Rangers might have chosen such timings to release vital information to their supporters, and posited that good news is rarely proclaimed in such a manner. That is as true now as it was then. Last year, the headline news was that the club had lost £14 million, and in a sense, the news this year shows an improvement, as this season Rangers only lost £11 million. 

Rangers’ Alfredo Morelos celebrates his second [+]
SNS GROUP

Hidden deeper in the report was that the club needs £10 million to keep going to the end of the season, the sort of thing that Rangers fans—who saw their club liquidated in 2012 and relaunched as a new club in the fourth tier of Scottish football—might want to know about. That the club’s Twitter account was silent on the issue, and one would have had to have been perusing Rangers’ website at an unusual hour to be made aware of this, should trouble fans tremendously.

Tucked away in the second to last paragraph of the report, it reads that: “The Board acknowledge that the uncertainty over the level of additional funds that will be required and a lack of a binding debt facility indicate that a material uncertainty exists which may cast doubt over the Group’s ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.” Worrying stuff.

The big positive is the increase in turnover by 63%, which is unquestionably a good thing. More cash going through the club represents more opportunity to make cash, and turnover is now close to what it was in 2011, the last year the club filed accounts before going bust in 2012. Back then, the major issue hanging over the club, and the one that ultimately led to its demise, was their tax problems and mammoth list of creditors. Now, it is their ongoing losses and continuing reliance on share issues and generous benefactors to merely keep the club going.

Revenues jumped, as increased sponsorship and UEFA Europa League qualification boosted the coffers. Crucially, however, Celtic also qualified for the Europa League, and generate plenty of sponsorship themselves, as well as player sales, meaning that the competitive edge of such growth is blunted. Football is unusual in that the success of the business is judged on other factors than a balance sheet. As Rangers fans will tell you, making money doesn’t matter if that means watching Celtic win their record-equalling ninth title in succession, or even worse, a record-breaking tenth. 

The simple reality of the matter, however, is that the funding gap to Celtic is essentially insurmountable within the time required to stop the ten unless someone is willing to consciously and deliberately lose tens of millions of pounds to do so. Dave King, the major benefactor of Rangers, is currently losing upwards of £10 million a year to watch Celtic win every trophy, and no matter how big a fan of the club he claims to be, that is completely unsustainable. Now, he must find another £10 million to keep the club solvent until the end of the season.

In the pursuit of Celtic, the Ibrox club have nearly tripled their staff costs in three years. That is way too much for a club that loses as much as Rangers do to keep up, unless they qualify for the Champions League, which would require winning the Scottish league. If they did that, it would justify it, but that is a huge if. Gamblers are plentiful in football—both Rangers and Celtic are sponsored by bookies, as is the Scottish Premiership itself—but currently the odds are 2/1 against Rangers winning the league. Should Rangers not win the league this year, or next year, Dave King would be well within his rights to question the point of it all. Without him, there is nobody else.

The club also spent an estimated £9 million on legal fees, largely on battling Mike Ashley’s Sports Direct for the control of their own merchandising rights. Without going into the incredibly complex details of the case, Rangers lost and now must stump up. That is unusual for most clubs, and Rangers will hope that the worst is now behind them. The inward investment into the club has come via share issues, with the club admitting that the cash was designed specifically to purchase players. Buying players is nothing out of the ordinary for a football club, but for clubs in the Scottish Premiership, it is vital to sell to maintain a healthy balance sheet.

Rangers cannot realistically generate much more revenue from sponsorship, TV broadcasting, match day revenue or merchandising. The only route open to the club—well, the only one other than a wealthy benefactor losing money hand over fist—is to make up the shortfall via player sales, which cannot be squared with their stated goal of winning the Scottish Premiership. Titles are not won by selling your best players halfway through the season, but there is a legitimate threat that the club might not make it to the end of the season without someone departing for cash.

Celtic’s financial figures, for example, reflect the reality of Scottish football in 2019. They turn a profit based on the sale of players or qualification to the Champions’ League, which in turn allows them to reinvest in the squad. Kieran Tierney was brought through the club’s youth academy and sold at a huge profit, while Moussa Dembele, Virgil van Dijk, Victor Wanyama, Stuart Armstrong and others have come through the club and then left at a profit. Next summer, Odsonne Edouard or Kristoffer Ajer could move on to keep the wheels in motion. Rangers fan media, in response to their poor accounts, has played heavily on the line of “if Celtic hadn’t sold XYZ, they’d be losing £10 million too,” without countenancing that selling players is an essential part of the business plan.

Currently—and despite investment similar to Celtic’s—Rangers lack anyone who might represent any significant sell-on value to the club. Alfredo Morelos, their most obvious cash generator, is seen as toxic due to his horrendous disciplinary record, while Ryan Kent, the club’s record signing, has barely featured since joining three months ago. James Tavernier, club captain, is touted as an asset, but has been found out consistently at a higher level than the Scottish Premiership and a significant portion of the Rangers support would question his place in their team, let alone an English Premier League club’s. Throw in that all three are older than Odsonne Edouard and Kristoffer Ajer, Celtic’s most sellable assets, and the outlook becomes yet bleaker.

Inexplicably, in the time since the announcement of their financial reports, stories have appeared that suggest that Rangers will offer new contracts to Allan McGregor, Jermain Defoe and Steven Davis. Parking for one second the irony of McGregor and Davis’ situation—they were also offered new long-term deals in the summer before Rangers were liquidated in 2012—it makes absolutely zero financial sense for a club that should be predicated on selling young talent to the riches of the Premier League to invest valuable wage expenditure on players aged 37, 37 and 34 respectively. The youngest member of their first team squad is 22 and the average age is 27, while Celtic’s is 25 and includes the likes of Jeremie Frimpong (18), Ajer (21) and Edouard (21). The obvious tribal rivalry and pressing need to stop ten-in-a-row aside, Rangers fans could probably better stomach their team coming second if it looked like the club was growing sustainably. This current team needs to win now, or else.

[Bluedell 5,679]

Do we really need a Celtic fan's view on here?  I'm sure we could go into the Celtic forums if we want to read how we're not going to make it to the end of the season but there's no need for it here. 

[Doc 280]

6 hours ago, Bluedell said:

Do we really need a Celtic fan's view on here?  I'm sure we could go into the Celtic forums if we want to read how we're not going to make it to the end of the season but there's no need for it here. 

I agree and that article above does nothing to acknowledge the fact that we are much closer to Celtic than they would like us to be, despite the funding gap. This is going to be a close run championship, not the stroll that they are used to.

 

We await your assessment and analysis of the figures with interest Bluedell.

[26th of foot 6,119]

Really, ra Sellik View from Mike Meehall Wood?

 

A twitter account lionising Phil McFournames, screaming in capitals, 'FCUK THE H-U-NS'. proclaiming TAL, mocking the deceased Sandy Jardine, hinting at FARE membership, and a disgraceful comment reference the Manchester bombing.

 

Well, he has had his piece published in Forbes and it is now on our screens. That will be enough objectivity for BBC Scotland to reward him with a senior position.

[Gaffer 1,665]

I've read the accounts and there's nothing in there that worries me at all.  The debt is converted to equity so there's little to no debt funding required.  Even if King decided to pack up and leave, all we need to do is cover that loss with the sale of a player and we are break even.  Obviously, if King went we would need to either to continue to fund the gap with the sale of players or cut our cloth accordingly.  However the main difference now is that we would continue to survive.

 

I must admit that I am quite happy that the focus is on our board and our accounts because we need to maintain a healthy level of scrutiny.  What that lot across the city will find (if they bother to scrutinise their own accounts rather than ours) is if they fail to qualify for the group stages in Europe, they will see their bank balance wiped out very quickly.  Their spending is all balanced against an expectation of doing well in Europe.  To be fair, this was a sensible model while they were given a crack at the Champions League each year (without any domestic challenge), but one season of failure can quickly result in their house of cards collapsing.  That would be a shame!

[JohnMc 2,802]

8 hours ago, Bluedell said:

Do we really need a Celtic fan's view on here?  I'm sure we could go into the Celtic forums if we want to read how we're not going to make it to the end of the season but there's no need for it here. 

I'd never heard of that guy until yesterday and clearly he isn't someone to take seriously on matters Rangers. However nature abhors a vacuum and, 4 Lads aside, I didn't see much written about our results by our supporters. If we've learned anything in the last few years it's that Tims enjoy nothing more than writing about Rangers.

JFK-1up the thread has possibly summed up how too many of our support feel and that apathy has the potential to ruin us, again. That's probably my biggest concern.