Across social media recently and on Gersnet earlier today some questions have been raised as to why the board never invited fan groups to put up funds in October to cover any financial shortfall. This ultimately was funded by the board.
Let’s not beat about the bush. Club 1872 to the best of my knowledge has circa £900K in the bank? The group have also made a few purchases over the last few months; tactical it would seem to help ensure, subsequent to any share issue and dilution, that their initial stake would not be significantly reduced.
The board appear to have a good working agreement, where matters are handled in house, and those with the money are happy to provide any funds required. It is worth remembering that fan-related income alone is not enough to run the PLC and in turn the football club - we are therefore relying on these funds coming from somewhere. And, personally, I would rather the devil I know than from a bank facility.
Similarly, it is understandable that, in return for such loans, wealthy board investors (themselves fans of the club) will want to protect their investment and retain a level of self-control over it. Yet, I suspect that in the new issue Club 1872 will be given the opportunity to increase their stake.
Is it wrong that the board fan investors shareholding does not face the same dilution as other investors? I can’t lie, I am torn. On one hand I see the unfairness and I feel initial anger, but on reflection, and if I put myself in the fan board investors shoes. I don’t think I would put anything in to this PLC, there are far better investments out there. I think often “if they never put up the funds they would not have got it from elsewhere?” Should they be rewarded for it, yes I feel this is very much an issue of give and take.
An Evening Times article today quotes Ken Pattullo, a Managing Partner at Begbies Traynor, who oversaw a survey of the financial health of Scottish clubs last year and believes wealthy fans will once again have to stump up as he sees no appeal from institutional investors. Hence, if the AGM resolutions are passed, and any new issue goes ahead, we will be counting on those already involved putting money in to the club.
Right now I don’t see a plan B. No multi-millionaire is sitting in the wings ready to buy out a majority shareholding and pump vast cash in to the club. There are simply too many revenue issues still to be assessed before the PLC will be an attractive investment for institutional investors. Club 1872 have some funds but not enough run a club the size of Rangers or to yet cover the short-fall in operating funds. Yes we can hope they can play a part in this going forward but, for now, we can't afford to throw out the baby with the bathwater when it comes to Resolutions 10 and 11 tomorrow. As such, this bear will be voting 'Aye' to both until genuine alternatives are put in place.
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