The bigger the takeover costs are the more danger the Ibrox club is in.

In the last piece that I’m going to do for a while on the Ibrox takeover—because I know it’s a tiresome subject for a lot of people, myself included—I want to cover something big. Something important.

I’ve seen a lot of chatter on the Ibrox fan forums, and I’ve seen a lot of commentary in the mainstream Scottish media, and as per usual, it all boils down to a gigantic misconception. And one that’s about as reckless, dangerous, and downright stupid as anything they’ve ever been involved with.

It relates to the reputed size of the deal.

Now this is where I have to get a little bit technical, and delve into some online reports I’ve mentioned in previous pieces—namely, the one about what their club is supposed to be worth: an estimated £156 million.

That’s the number to keep in mind here. One-five-six. That’s the figure it would take to get total control at the 20 pence a share price that some people are claiming interested parties would have to pay.

But there are two reasons why we need to be a bit more realistic about that price. First, no one is going to pay £156 million to take total control of the Ibrox club.

That would be incredibly difficult for a start, as it would mean acquiring every single share. That’s not going to happen, although – and take note of this – at some point they will be legally obligated to make a buyout offer to all existing shareholders, probably not too far above the price they’re already paying.

But the present objective seems to be reaching around 51% of the shareholding and proceeding from there. I’m going to be honest—I’m not sure how that’s going to work. If they hit anything like that number, then, as I said, they will be obligated to make that share purchase offer to all the other shareholders.

And who knows how high the price could go?

They won’t get them all, but it could send the bid soaring—over the wall, above and beyond what they are currently willing to pay.

I think the idea of them paying 20p a share is fantasy. The shares aren’t worth that. They’re not worth anywhere near that. I don’t think the club is worth anywhere near the £156 million it’s supposedly valued at either.

And there’s no way for them to avoid having to make a tender offer if they reach a certain shareholding. Dave King and his little cohort tried to pretend they were all separate entities—just so happened to be in the same place at the same time trying to do the same thing—and the City of London Takeover Panel didn’t buy that for one second.

The Ibrox club, and anyone willing to buy it, would have to be a lot smarter than that. And they would be—because these guys aren’t Dave King and his fly-by-night group of shysters.

There’s a lot of money being talked about, regardless. Some insane millions. Under the wrong set of circumstances, that number could be in the high eight figures. If it gets really ridiculous, you might even be looking at a nine-figure sum—and the media seems awfully excited about the prospect of this so-called takeover reaching nine figures. But in fact, that should scare them all to death.

A mid-eight-figure deal could make sense as a business move. High eight figures starts to look silly, and nine figures looks ludicrous. But at anything in that vicinity, it also looks dangerous. I cannot believe that there are people in the media who are excited about the idea that it might reach nine figures, and I cannot believe there are people on the Ibrox fan forums who think that’s anything like good news.

Nobody is buying a debt-ridden, scandal-hit Scottish football club for a nine-figure sum using their own cash. They will find financing for that outside of their own personal wealth. They will find ways to bring all sorts of rogues and wonderful people on board to their little consortium. That’s why the word “consortium” has been used here, of course. We have a couple of obvious front men, and behind them in the shadows are the real big money boys.

It’ll be those money men who put up the financing, and they’ll do it the way American companies always do deals of this sort involving football clubs. They’ll do it via a leveraged buyout—whereby the front men essentially borrow the money and then transfer the debt to the club’s own books. Any deal that approaches a nine-figure sum is almost certainly going to be done that way. I cannot conceive of any circumstances under which it would be otherwise.

One of the big boasts the Ibrox club has made over the years is that it does not have any external debt. And there is indeed a way they could dress this up as having no external debt. But one way or another, that money will be owed to people who won’t give a damn about foot-stamping in the stands or anywhere else.

Their only interest will be getting their money—and a profit. And with debt that size, even moderate annual interest payments are going to be crippling, and they can pretty much set their own mark for that. That club could spend more just servicing the interest on the debt every year than on signing footballers.

One of the reasons why Leeds brought in £150 million in the transfer window last summer and only spent £30 million is because the bulk of that cash went to paying off debts incurred in taking the club over. It’s in their interests to get that debt off the books as quickly as they can, because of the interest payments.

The Ibrox club is not going to realise £150 million in player sales—not in the next ten years, probably not ever, not the way they’re going about their business.

And bear in mind, even if they did, the likelihood is that money would go towards debt—not reinvestment in the team. I can’t put it any plainer than this—the more it costs the investors to buy the club, the greater the club’s long-term problems with debt, and the servicing of debt, are going to be.

Every penny they sink in, they’re going to want back. Every penny they invest, they will want repaid at some point. And the higher the initial cost, the bigger the millstone around the club’s neck.

The most amazing thing about this takeover business is the number of people who expect these buyers—if they get in at all, if they buy this club at all—to play Santa Claus with their own money.

They’re so used to hearing the word “investment” in the context of people just throwing good money after bad that they don’t understand how it actually works.

At the level these people operate, they want a return. They’re not just going to pour it down a black hole, and they’re not going to chase it either. In short, they’re not going to take stupid risks like spending £50 million on the off-chance of getting to the Champions League and progressing in that competition.

I would gladly never write another piece on this deal until it’s either done or it collapses. The media’s coverage of this has been astonishing for the lack of quality in their reporting, the lack of scrutiny they’ve given to glaring holes in the plan and glaring questions they don’t even seem to want to ask.

Even Graham Spiers—who I rate very highly and think is a proper journalist—didn’t really want to look too deep into what he called the boring subject of due diligence. Not when people are having so much fun indulging their imaginations.

So from now until something concrete breaks, I say let them indulge themselves. They’re overlooking dozens of issues here. They’re ignoring many, many potential problems. But this one is a beauty.

They seem very excited at the prospect of a very high purchase price. But the higher the purchase price, the more trouble they’re in—and the fact they don’t even understand that reality is staggering to me.