The fate of Glasgow Rangers FC is uncertain except for one thing: the fans hate Mike Ashley, the reclusive British billionaire whose money could rescue the Scottish club.
“Nobody likes Mike Ashley. Not even Mike Ashley’s mum likes Mike Ashley,” said a fan called Stuart, rather fervently, to Business Insider.
The survival of Rangers FC still hangs in the balance since it filed for administration after running out of cash in 2012.
From the outside, it’s hard to imagine that a football club that has won more league titles and triples than another other in the world could find itself scrambling for cash. Yet, it is. Rangers — demoted down three leagues in 2012 for failing to follow Scottish Football League rules by going bankrupt — has yet to climb back into the Scottish Premier League.
Stranger still, even though billionaire investor Mike Ashley, the owner of the Sports Direct retail empire, injected £10 million in January as part of a bid that might rescue the club, the fans hate him for it.
Fans say they have endured decades of suffering under the hands of the executives who have brought the club to its financial knees three times since 1988. On top of that, they’re fed up of the way the club has changed hands so regularly that Rangers has ended up being a holding company for other people’s money, and not a football club.
Now, with the infamously secretive billionaire Ashley tightening his grip over the club with a new loan, fans are venting about him.
“He’s a cockney. He’s bald. He’s quite fat. But [the reason we hate him] is mainly because he runs the football club like his own kingdom/plaything/money-making facility/thing, to stick a Sports Direct logo on. I think that has got most people’s backs up,” said one fan, Rob, to Business Insider.
Rangers’ legacy of financial scandals
Rangers’ financial problems stem from 1988, when David Murray bought the outfit for £6 million
In a bid to turn around the ailing football club, which saw fewer and fewer people attending games and only one league win in the previous 10 years, Murray borrowed an undisclosed sum from Lloyds Banking Group. Over the next two decades, Rangers accumulated around £30 million worth of debt to Lloyds by 2009.
After struggling for two more years, Murray sold his 85.3% stake in Rangers to Craig Whyte for £1 in 2011.
When Rangers filed for administration in February 2012, Britain’s taxman, the HMRC, said there were £9 million in unpaid taxes. Since then, police have charged Whyte with fraud for allegedly pretending to Murray that he had the cash to fund his stake in the club.
The club is still in dire straits. While Rangers will report its 2014 financial results later this year, its latest full year figures showed it owed its parent company Rangers International Football Club Plc (RIFC) £16.16 million.
Mike Ashley’s attempts to take over Rangers
Enter Ashley, who also owns Newcastle United.
He personally owns 4% of Rangers but combined with the extra 5% he bought through his MASH holdings company, he is now the second-largest shareholder in the group.
His quest to boost his stake to around 30% of the club was thwarted by the Scottish Football Association, which cited a “conflict of interest” with his Newcastle ownership (the two clubs compete for player contracts and could in theory face each other in European competition).
However, money talks.
Ashley uses one loan to pay back another
Capitalising on Rangers’ ailing financial health, he has managed to take more control over the club by bailing it out.
“He got into football purely to make money. Now he is manipulating Rangers [by using their] dreadful financial situation,” said another fan Alex to Business Insider. “He didn’t even realise players are purchased in long term payments and not lump sum deals when he started.”
Fans are angry over the way Ashley has used the club as a way of generating money through debt.
Out of £10 million he loaned the club in January, £5 million was used to pay himself back from an earlier £3 million loan. Scottish MPs will require Ashley to answer questions about the loans at an as-yet unscheduled inquiry in Westminster.
His loans also allow him to control a lot of the management of the team, even though he is not the largest shareholder.
Another fan, Geoff, told us that fans are angry because the club has become “less about the players” and “more of the backdoor takeover as a means to advertising his Sports Direct brand.“
“He’s also installing his ‘Yes men’ with no real governance,” he added.
Ashley gets rid of Rangers’ fan representation
In December 2014, Ashley nominated his right-hand men,
Derek Llambias and Barry Leach, to Rangers’ board. Llambias was the managing director of Newcastle United until his appointment as CEO of Rangers. Leach is the head of brands at Sports Direct as well as Rangers’ finance director now.
Lambias instructed the football club’s lawyers to disband the Rangers Fan Board (RFB), cementing many fans’ views over Ashley’s desire to not listen to the fans.
The RFB is comprised of 12 elected representatives from the football club’s fanbase. The board presents fans’ concerns interests. The RFB went on to reveal that Ashley hired London marketing firm Boudicca to rally support from shareholders ahead of an extraordinary general meeting on March 6.
The Newcastle conflict
It’s uncertain how the fate of Rangers is going to pan out.
The EGM is specifically asking what business plans Dave King, former Rangers director and major shareholder, has for the club. That may lead to Ashley doling out more cash.
Anger is still rife amongst Newcastle United and Rangers’ fans after his loan of five NUFC players to Rangers.
“This situation wherein Mike Ashley owns Newcastle United and at the same time clearly has total control of Rangers is a bad joke,” said Newcastle United striker Mick Quinn, in column for the Newcastle Chronicle earlier this month.
“For those who haven’t been following events, this is how it works. He loans Rangers money. They then hand back some of that money to in part repay an earlier loan. Newcastle then loan Rangers five players so Rangers are now in Ashley’s debt in more ways than one. It leaves a bitter taste in the mouth.”
The player loans may be advantageous in the short-term for Rangers because it gives a club currently toiling in the second tier of Scottish football access to players on the squad of a team in the English Premier league. But it also looks like Ashley is using Rangers to keep his Newcastle players fit and active. Plus, Rangers has to pay the salaries of players on loan there.
The fans have no choice, Quinn says, “He is the piper so we all need to dance to his tune. He pays the wages and transfers fees, therefore he does exactly what he wants. It feels like Ashley is taking the mickey.”
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