First of all I suppose it’s worth mentioning that I won’t be contributing to this current IPO. This is mainly because I’m a young man with little control over my own finances currently and I already have a season ticket very generously paid for. £500 is not cheap for most people so it’s unlikely to be happening for myself this time, unless I win a something on a scratch card or lottery tomorrow!
However, that is personal circumstance and something we all need to consider. What I have considered, because this share issue is very important for the club, is the prospectus. The aim of the prospectus is of course to sell the idea of buying shares in Rangers and answering pertinent questions. My own conclusion is that 122 pages manages to do that very well.
First of all, there is a definitive list of shareholding that shows as promised and hoped for (by many anyway) we aren’t under any huge majority control from one owner. The mention of ‘trust’ and ‘holdings’ may possibly be something to put people off. However, the shareholding of these investment groups is not big enough for there to be any huge influence, and frankly some individuals will not want their name in the public domain for the sake of a small stake. I consider such a stand understandable when you look at the amount of obsession there is surrounding Rangers out there.
Further shareholders and investors show that there are some very reputable and serious names in there, testament to the long attempts by Charles Green and co to encourage investment and very good proof in my opinion that this is not just some con.
The prospectus also provides transparency about questions over loans and dividends. There have been short term loans which I assume were to help with the funding shortfalls when the club was initially purchased, after all it must be remembered season tickets did not start selling until August and under administration the club had run of money. Dividend policy is also outlined and shows that it is not guaranteed at the moment but will be considered for shareholders in the future. To my mind this is just evidence of the successful attempts to attract institutional investors. We need to face reality and accept that unless these people are fans of RFC then they are unlikely to want involvement without good opportunity of return. There is possible rise in their share values but that will depend on many factors, even simply that they can’t know who will necessarily buy them. Dividends will provide a decent form of security for them and of course, how much they get will depend on how well the business is going. For the business to thrive Rangers need to keep on progressing on the park, where we are can only work for so long especially with our very demanding fan base. But at the same time we have to be run with much greater financial prudence than we have been in the last decade or so, it may not be liked that businessmen can benefit from that but it’s also the only way we can assure Rangers are around for the next 140 years.
The prospectus has a very important line as well on page 15 that outlines, if the SPL title stripping farce goes ahead, “the legal basis for any such sanctions” will be “strongly challenged by the RFCL Group or the Rangers Group.” Green has talked about this before but to see it confirmed further in the prospectus is very encouraging. The whole idea of honours being taken away is important to us as fans because it’s what our club has achieved but clearly it is also important to the business side as it devalues the product that RFC is. If the whole thing is as much a kangaroo court as we all expect I look forward to the response.
The size of our club has always been known and acknowledged by anyone with a fair mind and the prospectus further outlines just how good the Rangers brand is and can be. The size of our wonderful worldwide fan base is out lined by the high number of supporters clubs, online users and subscribers. The media opportunities are talked about through more figures of things such as the facebook page and mentioning the broadcasting of all matches live abroad. As the prospectus says it seems clear that there is much revenue to be created through further use of online media, and investment in the share issue can help develop this. The same section mentions the potential of our magnificent stadium; I talk more about this in the next paragraph.
Arguably the most important section in the prospectus outlines where the IPO money is in fact going to go. There have been some fears so I find it very encouraging that the money is all going to go into the club, even if there are some dividends much later down the line that will only happen if this share issue cash can help Rangers thrive. The first part mentioned is upgrades to Ibrox stadium, which seems to come to around £9 million. This may seem to be rather a lot of money but I think it is absolutely essential for us to maximise the potential of our biggest asset. Now I love Ibrox, we all do. But over the last few years, most likely due to our lack of spare cash, it has been neglected badly and in many ways fallen into a shoddy state. As well as upgrades there are plenty of repairs and licks of paint that need done, as I said Ibrox really should be our biggest asset so money spent on it is money well spent. There is of course the planned moving of the ticket office into the current club shop and Edmiston House being used as the new location for the shop and other things, most likely bars and/or restaurants. These plans are excellent and will provide much easier use of these facilities for fans as well as bringing in yet more revenue. Just think how great it’ll be to just be across from Ibrox having a bite to eat rather than in Govan somewhere, or having to get something inside the stadium? The use of the share issue cash in these projects is spot on to help develop the club in the long term. Further uses are shown to be “other identified projects” which shows that we are not standing still in ways to improve the club; details of these will no doubt come out when further on. “General working capital purposes” is another place where the money will go and this will relate to an inevitable increase in our wage bill and need for transfer fees as we aim to get back to where we belong. The club being back at the top and in Europe is outlined in the prospectus as the aim, our lower league journey should be over before we know it and cash flow situations at football clubs can be interchangeable, so working capital is vital, the IPO will provide extra to go along with the usual sources such as season ticket sales.
The wages of our board staff as well as team manager are also outlined. The wages are rather basic with some good bonuses added in, a positive for me as this will continue to motivate all the people concerned to keep working as hard as possible for Rangers. The cash paid to people like Green, Stockbridge and Ahmed to manage Rangers as a proper business will be well worth it in comparison to packets that have been dripped out to average and/or injured players the last few years, and of course you’re going to have to help motivate with decent wages. Ian Black wouldn’t be here if we had not offered him much more money than he would likely get elsewhere, same for likely most of our summer signings. And when you think about it, can Green be begrudged a happy retirement if he leaves Rangers in a healthy state having come in with us at our lowest ebb?
The prospectus outlines the visions and plans for Rangers going forward and they will see the club thrive on and off the park. It’s an exciting time, I outlined at the start of this article why I won’t be investing right now but I certainly hope to in the future. The opportunity to be a further part of the adventure going forward is fantastic one.
[icon class="info"]Site admin note: Earlier today we also published a more sceptical critique so hopefully that will deliver the kind of balance this site always strives for. Obviously, if anyone else would like to take issue with the above then please feel free to use the comments section below or join our popular forum.[/icon]