Rangers Football Club recently released its 2013 annual report for the period ending June 30, 2013 (the “Annual Report”), which is the first opportunity the public has to review the financial effects of administration in 2012 and the team’s placement for the 2012-13 season in the Scottish Football League’s Third Division (the fourth division of Scottish Football). In particular, the Annual Report demonstrates the negative impact of administration and what was effectively a four-division relegation on the club; and for a club of Rangers F.C.’s stature, the impact was significant.
Although Rangers F.C. claimed the 2012-13 fourth division championship by 24 points, thereby securing promotion to the now Scottish League One of the Scottish Professional Football League (the “SPFL”), Ranger F.C.’s emergence from administration under new ownership and as a new entity has not meant business as usual.
Among the most significant changes for the club heading into the 2012-13 seasons included the arrival of nine new players to the club, with eight of the players not requiring transfer fees, and the reduction of season ticket prices by 33%. The combination of all factors resulted in overall income at the club being down by over 50% as compared to the previous year. The club reported revenue of USD $30.6 million for the period and the club raised just over USD $35 million from institutional investors through an equity financing in December 2012, but the club reported a nearly USD $23 million operating loss due in part to the decrease in revenue associated with relaunching operations in the Scottish fourth division and reductions in ticket prices, among other reasons.
Rangers F.C. has been buoyed by its pedigree and global reputation, however, and the news out of the Annual Report was not all bad. In addition to establishing and strengthening sponsorships with PUMA, Blackthorn, SportsDirect.com and Coca-Cola, the club boasted strong fan attendance at Ibrox Stadium (averaging 45,744 per game at home) and limited indebtedness being repaid to just over USD $2.5 million in finance leases, with no other loans or borrowings.
Thus, with continued sponsorship and fan support, and a conservative approach to its finances, Rangers F.C. is reestablishing itself on and off the field. And for that, the Rangers fans should feel fortunate. For every positive sign of recovery and for every story of overcoming administration (for example, Crystal Palace F.C.’s most recent promotion triumph), there are numerous tales of the ruinous effects of administration and poorly run clubs (for example, Portsmouth’s continued drop through the English Football League.) In that way, the Scottish Football Association’s contentious decision to require Rangers F.C. to relaunch its club in the lowest division of Scottish football may have been a blessing in disguise: starting from rock bottom with a strong network of support, the club is well-situated and sufficiently financed to maintain its new-found financial stability while rising through the ranks of the SPFL.
* Currency conversion calculated at 1 GBP = 1.6015 USD.