06/06/2011 39 Comments
Let me just say thank you to the contributors to this board.
The work by readers of this blog on the previous thread (New Rangers Mystery) has been fantastic. A complex problem involving contradictory data was posed and I am increasingly confident that through our discussions, we have gone a long way towards figuring out what is happening regarding Rangers’ financial structure. (See below).
In particular, Don Dionisio & JohnBhoy deserve special mentions for their finds and their contributions to the analysis. [Great work is also being done on some messageboards as well. We all stand on the shoulders of giants when trying to tackle a problem like this.] As always, our resident Rangers supporters keep us grounded by challenging every assumption and providing alternative hypotheses that fit the data. Their patience in dealing with what can be a pretty overt desire to see their club fall into a quagmire is commendable. Their reward in co-operating on here is that we all get a clearer picture of what is happening than if this board was an exclusively Celtic fan operation. What might be mere schadenfreude for Celtic fans will be a source of considerable discomfort to those who want the best for Rangers. To be able to acknowledge that there are real concerns and questions takes no small measure of character- even on a blog. Lest our friends in Edinburgh accuse us of Glaswegian myopia, easyJambo is also providing high quality informed opinion and analysis. Thank you to every one. There are so many others who deserve mentions, but I will spread my gratitude over a number of posts. This blog is certainly exceeding my wildest hopes for what might be achieved. The ‘wisdom of a crowd’ is certainly at work in this case. Our collective output is of a higher standard than any one person can produce working in isolation.
In the information vacuum, I see a role for this blog in uncovering the facts. It does not matter if the truth is favourable or damning for Rangers (or Celtic for that matter). We should not be afraid to follow the data to its logical conclusion. Given the heavy media manipulation operation of recent months and the spineless, brainless reporting of the Scottish media, it is left to interested hobbyists to uncover what is being deliberately obscured.
Follow up to the MG05s Document released:
Despite a poorly (or deceptively) written MG05s document that disclosed the release of assets from a floating-charge, it looks like Rangers are preparing the ground for a credit facility worth about £30-35m . Such a credit line would be secured by a large percentage of Rangers’ season ticket revenues over the next four seasons. My personal suspicion is that the credit line would be in place to cover an adverse finding in the current First Tier Tribunal process (with the possibility of using some of it for squad enhancements). While such an approach would saddle Rangers with a very large debt burden, and would drain much of the blood supply that sustains any football club, such a strategy at least allows Rangers to live and to fight another day. At a club that would likely have gone bankrupt had it not managed to play in the Champions’ League group stages three years in a row, who is to say that they cannot continue this streak? Few would have given short odds on Rangers winning the SPL thrice in succession three years ago. Yet, no discussion of Rangers just now would be complete without mentioning probability and gambling. Unless one of Craig Whyte’s backers antes up cash to make borrowing unnecessary, the club’s viability depends upon many random variables. Two more Champions’ League group rounds in a row and the club will have traded itself into a safe position pretty much regardless of what else happens. However, if Rangers lose their appeal against the tax bills in their possession, and if Rangers fail to qualify for the Champions’ League in the next two seasons, it is hard to see how the club can operate at its current scale if it has surrendered close to 70% of the revenue from its season ticket sales for the next four years. Of course, if the club wins its tax appeal, then there would be no need to draw so heavily on debt.
It is hard to understand Craig Whyte’s motivations for obsessive secrecy and determination to avoid admitting to the serious risks facing Rangers. This story could be spun in his favour easily. OK- so some ‘whyte lies’ were leaked during the takeover to the media. Even an admission that some tough decisions had to be made to ensure that the ownership transfer took place would be understood by most. By playing the role of “Honest Craig” now and levelling with the fans, a store of goodwill and trust could be built up. This would be essential in the event that a public share offering is part of the plan to deal with such a debt burden. Every day that goes by where Whyte fails to make good on apparent promises and continues to prefer nuanced wordplay over plain speaking, he undermines the trust that will be required if fans are to be asked to dig deep in the future. The failure of Sir David Murray’s last share issue can be largely attributed to the suspicion of Murray that had developed among the club’s better heeled supporters in the years following Y2K. The flim-flam and absurd PR placements might temporarily assuage the ordinary FollowFollower, but real confidence in the club’s ownership will be built on the opinions of the accountants, lawyers, and other professionals within the fan base. Until those who are able to understand a credible business plan are convinced that Whyte is being open, word of mouth will ensure that a cloud will remain over his stewardship.