'Rangers in peril' claim rubbished by chairman Murray as scaremongering
22:11 GMT, 9 October 2012
Rangers chairman Malcolm Murray angrily hit out at what he insisted were 'scandalous' claims that the Ibrox club could face administration for the second time this year.
The dire warning was made in an article for respected business publication Forbes Magazine by John Pritchett, CEO of Chicago-based investment firm Club 9 Sports, which acted on behalf of US businessman Bill Miller in his short-lived bid to take over troubled Rangers in May.
Revealing that Miller had come ‘within an eyelash’ of buying the club, Pritchett claimed his friend had walked away because the ‘numbers did not add up’ and warned that was still the case at Ibrox — alleging Rangers would face fresh financial peril unless current Ibrox chief executive Charles Green oversaw a drastic programme of downsizing and cuts at the club.
Warning: An article in Forbes magazine predicted financial peril for Rangers
Pritchett said: ‘Upon full inspection, Rangers was not a “turnaround” opportunity. It was (and is) an opportunity for someone with great wealth and a love of football and/or Scotland to give away tens and tens of millions of pounds … until bold action is taken, the future for Rangers remains in serious jeopardy.’
Tennessee truck tycoon Miller withdrew his offer for the Ibrox club a week after being named preferred bidder amid a hostile reaction to his takeover attempt by Rangers fans, with one banner at Ibrox reading: ‘Truck Off Miller — Yanks No Thanks’ being unfurled at Ibrox.
But Pritchett said the deal breaker was always that the numbers at Ibrox just did not stack up.
‘Revenues were in a freefall,’ he recalled. ‘The most important revenue stream to Rangers, season tickets, was projected to be down by 20 per cent. The club expected to lose nearly 10million in 2012/13.
‘Cash-flow from sponsorships was minimal and the administrators had already pulled out the cash from player wages, kit sponsorship and future payments due the club from the sale of several players.
Angry: Rangers chairman Malcolm Murray
‘Worse, because the administrators had to make a deal to cut player wages to keep the club afloat, the new owner of Rangers would lose a substantial portion of asset value.’
Pritchett estimated that Green’s consortium, which bought the club and assets for 5.5m and transferred them to a newco, saved 3m in wage cuts but lost up to 15m as highly-rated stars like Steven Naismith and Allan McGregor were able to leave without a transfer fee.
The American business expert also warned that Rangers must ‘cut the fat from every department and rebuild an organisation that values every pound and demands a return on any and all expenses’.
Rangers have sold a remarkable 36,000 season tickets since Green took charge, however, while he has also taken back control of club merchandising from JJB Sport and there are plans to float on the stock exchange later this month.
Furious chairman Murray last night accused Pritchett of ignorance of current goings on at Ibrox and vowed Rangers would never go to the wall again under current ownership.
He said: ‘The last time Mr Pritchett had sight of any financial information about Rangers was many months ago and, as a result, his article in Forbes Magazine is ill-informed, misleading and scaremongering.
‘For the avoidance of doubt, there is no risk of the club going into administration and any suggestion otherwise is scandalous and appears written to attract headlines. Projections Mr Pritchett had sight of have not been relevant since May and, from the day I became chairman, I have been committed to ensuring this club lives within its means and never again comes to the brink of collapse.
‘We have already secured significant investment in the club from the individuals and organisations who are part of our consortium and the successful Initial Public Offering later this month will generate many millions in additional revenue.
‘It does not take a genius to work out that costs needed to be cut at the club and this has happened, with the first-team wage bill being reduced significantly.
‘However, we also have a plan to maximise commercial revenues and develop many areas of the club that, historically, were under utilised.
‘It is my understanding that Mr Miller’s plans were based purely on cost-cutting and little additional investment in the club.
‘What is also clear from his article is that Mr Pritchett completely underestimated the loyalty and commitment of the Rangers fans. In addition to the 36,000 season-ticket holders so far this season, the attendances at our home matches have surpassed many of the top clubs in England and the rest of Europe.
‘We have a clear plan to rebuild this great club and believe that, with solid business practices and the ongoing tremendous support from the fans, this will be achieved.’