|Huns Financial Crisis|
|08-09-09 12:04 AM|
|Author:||Phil Mac Giolla Bhain|
Hun financial chaos.
Phil Mac Giolla Bhain
Now that this transfer window is closed there are some facts that can be discerned about what is going on at the Reichstag.
Firstly is that by only bringing in one loan signing is that this the most straightened circumstances that RFC has found itself in for decades.
Most of their second string has been shipped out from the first team squad. They were also willing (as they were last January) to sell their top scorer.
Boyd wasn't for moving. This is either for club loyalty or because he can walk on a Bosman in the summer-perhaps it is a bit of both.
Because of the craven nature of the Scottish press it has been necessary to burrow behind the scenes to find out what has been happening at Rangers.
The following facts can be established.
In the autumn of 2008 agents who represented players employed by Rangers were told that their clients were up for sale.
When the last transfer window closed in January 2009-RFC had failed to raise any funds-the Bank of Scotland moved in a “Project Team to deal with the problem of the debt at the club.
The BOS team were given a a three year timescale to bring down RFC debt to “ a manageable level”.
A source from within MIH told me that the situation at RFC was, towards the end of last season, “getting grim”. There were weeks when salaries were paid, just paid and no more.
Last season Celtic were within two games of,in all probability, putting Rangers into administration.
The past is past.
However even with guaranteed group stage Champion's League football the bank needed more,much more,from Rangers this summer.
As this transfer window opened the club was given a task by the bank-to make £5 million of savings.
I have been told the figure was as high as £8 million, but £5 million seems the more likely figure.
This entailed CEO Martin Bain having to get the Bank's OK for any new spending.
What happened with Celtic's exit from the Champion's league was that the extra TV money to RFC meant that the tourniquet on their hemorrhaging financial crisis could be eased, but just a little.
The expenditure of Jerome Rothen's wages were allowed.
This very fact means that the wolf is no longer at Ranger's door, but has been forced back a few steps.
The current RFC squad now enter the Champion's League group stages effectively fighting to keep the bank from demanding further savings.
We will know if they have earned enough CL cash if players and staff at the club start to be given new contracts.
I know of one SPL employee who had applied to work at the Reichstag who had his application “frozen” earlier this year.
It is in the public realm that Walter Smith will not have,at time of writing, his contract renewed. His contract runs out in January and he has agreed to work on without a contract.
The elephant in the room is the fact that Ranger's parent company Murray Inter national Holdings (MIH) is in the business equivalent of intensive care.
MIH's last published accounts showed that their debt was £750 ,million..
That was two years ago.
That debt is rumored among business journalists to be around £1 billion.
MIH owner and then Rangers chairman Sir David Murray gave an interview to the News of the World (NOTW) last November where he stated that Rangers needed “ the benefactor element”
In other words an owner who would bankroll the operation at a loss to maintain a standard of playing staff at the club to ensure success.
In the absence of that benefactor Murray stated that, if reduced to existing on its own revenue,the Ibrox club would have to be downsized by up to 25%.
This, I think, is what we are witnessing now.
Anyone who disputes that the Bank of Scotland put a Project Team into Rangers earlier this year is in denial.
Denial is sturdily resistant to evidence.
The evidence is that RFC shipped out a third of their first team squad and brought in ONE loan deal-and then only at the 11th hour when the bank re-assessed the club's finances as they got then entire TV pot from the CL.
The current RFC squad as they go into the CL group matches are,quite literally, playing for the financial future of the club.
The BoS project team are not finished with Rangers.
The club's accounts later this year will not make good reading.
Should RFC fail to make the Europa league-that is should they finish bottom of their CL group-then the bank will have to set knew targets for savings to be made.
If they do progress in Europe then players and staff who are nearing the end of their contracts will have some hope of being offered new contracts.
Were this happening to any other football club in Scotland then you would know every detail, every crisis meeting with bank officials at the chairman's offices.
You would have a very clear picture of the almost daily strain that the CEO was under as his requests for extra spending was met with demands for more savings.
Instead all you have is the facts that the 1st team's entire second string was shipped out and,for the second window in a row, they were willing to sell their top goalscorer to anyone who would bid near his market value.
Against that they brought in one loan signing.
The bank, for now, is demanding no more savings from Martin Bain.
What happens now for the remainder of this season depends on how much RFC generate in the CL this year as to whether or not the bank will be back for more.
Despite guaranteed CL money due to their SPL win last season RFC was forced by the bank to undergo an austerity programme.
The first phase of that downsizing is now over.
The Bank remain in charge,there should be no doubt about that.
The next barometer of RFC's current financial health will be when players and staff have their contracts renewed or not.
If, for example, Boyd or Walter Smith are offered new contracts it is because the bank has approved that outlay.
The bank remains in charge, sanctioning all new spending.
The Dave King story that was broken in the NOTW today is from a very solid source in a position to know.
It is,by no means, a done deal.
However King is a Rangers supporter and is interested in buying Murray out.
By his own admission King is, regarding his business dealings, “not squeaky clean”.
If RFC have found another sugar daddy to bank roll their operation then the relative weakness of Rangers in the past few years will be a thing of the past.
The “benefactor element” is the only way that RFC will financially keep ahead of Celtic.
In fact only an emotionally attached sugar daddy would buy the Huns.
Murray has attempted and failed three times in recent years to sell Dignity FC.
Each time the sale fell through at Due Diligence stage.
Basically only a Hun willing to lose lots of money would be willing to buy RFC.
The Ibrox club is many things, but a going concern it is not.
Until a new sugar daddy is in charge of Rangers and he is willing to run the club at a loss from his own resources then the banks will continue to tell Martin Bain what he can and can't do.
No one should be in any doubt about that.
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