RANGERS are back on a life support machine.
There may only be enough money in the vault to keep them breathing until the end of next month and that’s with the help of the Elastoplast treatment the current board is attempting to apply in the shape of a £4million share issue.
The truth is this business is broken again and if those in charge of it are not running around the Blue Room with their underpants on their heads they should be because the time has come for complete and all-out panic.
Even if they can somehow scramble enough spare cash to repay £1.5m worth of emergency loans to George Letham and Sandy Easdale and to cover the next wage bill at the end of this month their gravy train is clattering towards the end of the line.
The smart money says they’ll just about avoid the horrors and ignominy of administration by the skin of their teeth until, at some point in October, they press the big red button at an AGM and pass a resolution on the urgent release of even more new shares. At which point the game will change for good.
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As things stand this morning, two men are currently jostling for position as this club’s potential saviours.
There are others tapping their toes on the sidelines and some of them are making all the right noises but the fact remains the duo at the front and centre of this dance are Mike Ashley and Dave King.
One of them plans to make as much money out of the club as he possibly can. The other insists he wants to gift it £30m.
You’d think it would be a straightforward choice but then this is Rangers we are dealing with – a club that abandoned good logic and sound reason when it disappeared through Craig Whyte’s looking glass.
My information is that both Ashley and King were asked (perhaps even pleaded with) to underwrite the latest begging-bowl approach to the city of London. Both declined but for different reasons.
And yet, intriguingly, both remain sitting at the table with a stake in the game at this late stage.
Ashley’s motivation is simple. He smells an earner.
On the one hand he has to keep Rangers alive – and away from the clutches of administrators – in order to protect a retail contract that was generously handed to him by Charles Green and which has since been described by those who have seen its content as a licence to print money.
Green’s generosity with other people’s cash knows no bounds. He was so delighted to take Ashley’s £1m he invited this crafty Cockney to name his terms on a seven-year shirt deal which is worth its weight in gold. To Ashley’s Sports Direct, that is.
Even Craig Mather, who subsequently replaced Green in the role of CEO and seemed not to have the first idea of what he was doing there, was bright enough to identify the flaws in this particular arrangement.
“It’s the worst, most one-sided commercial contract I’ve ever seen,”was how he described it to Walter Smith’s board.
Rangers have tried hard to find a way out of it but Ashley’s lawyers left them no wriggle room. Reluctantly, the current chief executive Graham Wallace has branded it “unbreakable”.
No wonder then that Ashley is ready and willing to shore this thing up as, if Rangers were to be tipped back under, the first thing to be ripped up would be this deal which still has five years left to run.
The numbers involved, although unclear, will run into millions of pounds a year. Put it this way this revenue stream is so important to Ashley that just last week he saw the value in fuelling up his private
helicopter and sending it to Greenock to collect Sandy Easdale from a bus depot and flying him
down south for an urgent face-to-face talks.
This pair have formed something of an alliance in recent weeks and months and if Ashley is to push for control of Rangers he will do so with Easdale’s full backing.
His problem is the SFA jurisdiction which, because of his position at St James’ Park, forbids him from owning more than 10 per cent of a Scottish club.
Couple of likely lads that they are, Ashley and Easdale may yet attempt to circumnavigate this in some
way but certainly not by doing something as blatant as underwriting this latest share issue.
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My information is King was also asked to pony up £4m after being approached by the club’s nomad Daniel Stewart. His initial response was to ask if they were being serious as it is King’s belief four million quid will not touch the sides of the problems faced by this basket case of a football club.
Those close to King maintain that – despite an extended period of silence from his South African bunker – he remains deadly serious about pumping as much as £30m into Ibrox.
In fact they suspect he is now closer than ever to getting his way and obliterating a chunk of his children’s inheritance as the Rangers saga enters this next crucial phase.
But, even so, King declined to put his name to the share issue because his requests for information about the true state of the club’s financial health were turned down by Stewart. He was told any such disclosures would be a breach of stock market regulations.
King was then stunned to learn that a third party – another who was approached and asked to underwrite the issue – was given full sight of the documents he had asked to see.
That third party, by the way, having looked under the hood, ran for the hills with £4m wedged in his pocket.
It is now King’s view he was been deliberately blocked by the Rangers board from getting involved although the truth of the matter is the current regime is split down the middle.
In fact, CEO Wallace is very much on King’s side. He has clashed personally with Ashley over that
ridiculously onerous retail deal and has grave concerns about the diligence in allowing him to carve himself another even bigger portion of the Rangers pie.
It’s just a pity for King that Wallace is effectively powerless and at the head of a PLC board which doesn’t have the authority to chose its own underwear never mind decide when the time has come to place pants on heads.
King will have to find a way of convincing Big Sandy his is the only way out of this gathering crisis and his money will have to do the talking if he is to win the argument.
Easdale is the man who continues to call the shots on the inside as a result of his alliances with Green’s people in Blue Pitch Holdings and Margarita Holdings. And he sees Ashley as some sort of kindred spirit, albeit a far more wealthy and successful one.
And while all this infighting is going on auditors from Deloitte are now just weeks away from signing off on the latest accounts which must be completed by no later than the end of this month. With
season tickets down and cash running out they will have little choice to confirm in writing what the rest of us already know to be true.
Rangers are on a life support machine and life-saving surgery is required.
The only question now is a simple one: Who do they want holding the knife?
