There are a lot of rumours out there, as everyone is well aware, but you can tell the utter nonsense from the more substantial stuff simply by examining the things we do know about, the stuff which we suspect and is supported by circumstantial evidence and by examining what’s going on in the background.
There’s a particularly interesting story going around just now and as I think it’s probably got more than a few roots in truth I’m happy to share it with you.
This story suggests that Dave King and the Sevco board obtained the loan to pay off Sports Direct by offering part of next season’s ticket money.
If true, this is an absolutely remarkable development … and there’s a lot of supporting information out there for those who want to dig deep for it.
Let’s go back to the start of the “King era”, and the first series of “soft loans”.
Once King was in the Ibrox boardroom, the club’s mutually advantageous financing arrangement with Sports Direct, who were willing to lend the club money until the cows came home, came to an end. That was Ashley’s decision, because King’s campaign against him was one of the key factors in his successful ascension to the chairman’s seat in the first place, that and promises of big spending which are yet to be realised.
With Ashley no longer willing to loan them money (and they asked, that’s pretty well known and generally accepted) they were forced to go elsewhere for it. According to Phil and other sources, they contacted every major lender out there, from high street banks to Wonga style companies with interest rates which would give you a nose bleed.
No reputable lender in the UK was willing to give them a loan, at even the most high-risk rates.
I know Sevco fans will squeal about this, but it is not conjecture.
It is a pure and simple fact, and I’m very sorry if they don’t happen to like it.
The current members of the board were then asked to dip into their pockets, but as the club has no wiggle room to repay these guys they’ve settled for a debt for equity swap when the board is authorised, and able, to do it.
The only other visible avenue for raising the money is via the Rangers Trust organisation, and there are already moves afoot to make sure their next board are on board with a plan to use their members’ dues as working capital for the club.
It was rumoured that Sevco had turned from looking for cash here at home to exploring options in the Far East, and lo and behold that’s where this money has come from.
The lenders have been described as “Rangers men” but then Whyte was described as the same, and it’s not clear that he’d ever been to a football match in his life before turning up at Ibrox with his quid.
These guys are also dodgy geezers in the King mould, so it’s not exactly beneath them to do some spinning … and sure as Hell, we know it’s the MO for the man himself.
This is most clearly expressed in the announcement that accompanied the news of these loans.
It claimed they were not “securitised”, which is one reason their fans are poo-pooing this rumour on social media.
Yet this refers only to the use of property or other assets.
Future season ticket sales don’t come under this rubric, so there is wiggle room for King and others to get away with that definition.
He also claims these loans will be converted to equity; this is an outrageous piece of spin and as close to an outright lie as he’s able to tell. There is no provision for offering equity on this scale to anyone who’s not an existing shareholder, and couldn’t offer it even to existing ones as something of this magnitude would certainly require a major dilution of the existing share capital.
These are clearly commercial loans, and there’s rumoured to be a whopping 20% annual interest – £1 million – on them.
Within very short order, Sevco is going to need to start paying these loans back or they are going to be in a world of hurt.
Sevco fans have had a relatively easy time of it, financially, in the last couple of years. Their club has not charged exorbitantly for season tickets, for example. But the King plan is going to change all that, in keeping with his request that their supporters try to outspend ours.
Ticket prices are set to soar, and so is the wage bill.
The need to raise cash is acute over there, and as I said last night everything depends on it because until their finances are settled properly the club will not get a license to play in Europe, which is the Holy Grail of their ambitions.
I think it’s entirely possible that they’ve flogged off part of their coming season ticket revenues, and it amazes me that they’ve done it for what are, on the surface, purely symbolic reasons and to get Ashley off their case.
The suspicion is that they were simply given no choice; that Ashley was willing to put the club in administration if that loan was not repaid.
Either way, they are in big trouble.
Whether todays rumours are true or not, that £5 million was money they didn’t have, a cost they didn’t budget for, and the repayment conditions are going to be absolutely brutal. If they didn’t actually “securitise” future season ticket revenues those monies are still going to go towards that goal.
Because at Ibrox what happens tomorrow has little importance anymore.
They are focussed solely on what gets them through the day.
That’s not exactly a nice place to be.
On the day after the fourth anniversary of Rangers entering administration, the future looks less bright for the Newco who took their place than ever before.