In the latest instalment of this year’s longest running saga, Charles Green is now offering to sell you some shares. But these are not shares in the old Rangers Football Club (in liquidation). Or even his shiny new The Rangers Football Club of division three.
No, these shares will come from yet another company: the rather grandly titled Rangers International Football Club PLC.
There are now rather a lot of different companies around containing the word Rangers in their name, so perhaps a not-so-short recap is required.
It all started with Rangers Football Club, formed in March 1872 and named after an English rugby club. This club incorporated to become Rangers Football Club Ltd and later became a public limited company as Rangers Football Club PLC. In February it went into administration, ceased to play professional football and is now in the process of being liquidated by BDO. Its name has, confusingly, been recently changed to RFC (2012) PLC.
Then we have the totally separate The Rangers Football Club Ltd, formed in 2012 as Sevco Scotland Ltd. It bought the assets from the former SPL club and is currently playing in Scotland’s third division.
And now we have Rangers International Football Club PLC, founded last month and already on its second name, having started its life as Rangers Football PLC. It is this body that is issuing shares – and hoping to raise £27,000,000 in the process.
Charles Green’s plan is that Rangers International Football Club PLC will become the owner of The Rangers Football Club Ltd. So rather than selling shares in a football club, Green is actually selling shares in a company that will have a football club as a subsidiary. I guess you could call it a Newco owning a Newco.
Green has stated that £17,000,000 of pledges have already been received from business investors, leaving £10,000,000 of shares to be sold. Taking into account the shares already owned by Green himself and others, the company would be worth £50M.
Now why would anyone buy shares in a company that owns a football club? Well, there are two reasons for buying shares.
Firstly, business investors buy shares to make money. That means they think the company will either make a profit, allowing it to pay them a dividend, or that its share price will rise and they can sell at a higher price than they bought for. Will a fourth tier Scottish football club be able to deliver this? Clearly there are some who think that it will – although the need to reward investors can be at odds with the needs of a football club at times.
Secondly, fans buy shares through emotional attachment, the desire to be a part of something. They can own a piece of the club and have the right to be consulted, to attend Annual General Meetings. (Note for fans of the former Rangers – Annual General Meetings, like annual accounts, are supposed to happen each and every year.) Fans don’t expect a return on their investment; they expect any money made to be reinvested in the club.
So there are likely to be two types on investor – and they have very different aims. But then that’s true for most football clubs.
In order to sell shares Green has issued a lengthy prospectus in the form required by law, and that gives a range of information about his plans. There are some interesting things in there.
Apparently a risk to the new company is that it is “financially dependent on the Club’s supporters who are concentrated in Scotland.” What about the 500,000,000 worldwide supporters of The Rangers we have been told about? Where have they gone?
Another risk is that “A weak performance in league and cup competitions could cause revenue to fall”. An interesting statement given that The Rangers have already failed in the Ransden’s Cup and the Scottish League Cup this season. And with an away tie to an SPL club in the Scottish Cup to come, that could become a hat trick of cup exits.
Part 7 of the extensive document is titled Information On The Company. In its introduction it claims that “Having played in the SPL since its inception, the Club was voted out of the SPL in July 2012 and began preparing to rebuild from Division 3 of the SFL.” A somewhat inaccurate statement on several grounds. And, strangely, words like liquidation and newco are entirely absent.
The myth of the Zombie Rangers continues, it seems. Still, we all know the truth:
“No matter how Charles Green attempts to dress it up, a newco equals a new club. When the CVA was thrown out Rangers as we know them died.”
Who said that? Football journalist Jim Traynor. Yes that’s right. The same Jim Traynor who has just been appointed as Director of Communications for The Rangers.
Under Assets, the prospectus states that there are two key properties owned: Ibrox Stadium, valued at £65.2M and Murray Park, valued at £14M. Now given that the new club bought these assets from the old club for a sum of £5.5M, I’m sure that liquidators BDO will be taking note of their reported current value.
We also find out a bit about The Rangers’ key directors and employees. As well as nice little pen pictures of their massive achievements, we learn that CEO Charles Green earns “an annual salary of £360,000 per annum (plus benefits and expenses including accommodation costs)”. Green is also entitled to a bonus of a further £360,000 if the club wins promotion from the SFL. Quite how that might happen given that Green has stated several times that The Rangers will never play in the SPL, I really don’t know. Walter Smith gets £50,000 per annum for his role as a non executive director, as do several others.
We also learn that The Rangers’ manager earns a basic £700,000 per annum, which is apparently “commensurate with his experience and the payment received by people similarly employed in the football industry.” Yes, it really is Ally McCoist they are talking about here. Experience? On Question Of Sport maybe.
And I’m sure that statement will be of interest to all other third division managers. I don’t know exactly how much any of them are paid, but I would be willing to be that none are on anything like thirteen grand a week.
So that’s the current state of play with The Rangers. Investors are now required to raise funds that would allow essential repairs to the stadium, as well as to strengthen the playing pool. Once the current ban on new signings has finished of course.
Well, do you fancy buying shares in a new company that owns a new third division football club? If so, they will cost you 70p per share and you have until 1:00 p.m. on 18 December 2012 to apply.
I think I’ll pass.
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