Mike Ashley, the eccentric billionaire owner of Sports Direct, appears to have Rangers Football Club, a Scottish team, over a barrel.
On Wednesday, he called for chief executive Graham Wallace and director Philip Nash to step down, demanding a shareholder vote. Here is the official statement from the club. The board said it supports the pair and opposes Ashley’s move.
Here is why Ashley — who is so private that at one point even his own staff didn’t know what he looked like (he’s been called Britain’s Howard Hughes) — could get his way: Rangers is so financially weak at the moment that as long as Ashley is willing to continue buying bits of it he will be able to do what he wants to the club.
Ashley increased his stake in the Scottish club to almost 9% last week, and is its second-largest shareholder.
Rangers’ problem is that, basically, it doesn’t have any money. Its most recent share offering was a failure, according to The Daily Record, and the club can’t currently make its Christmas payroll:
The open offer was under subscribed by just less than £800,000, meaning the club’s board will now have to launch another share issue before the end of the year in order to meet December’s wage bill.
Ashley appears to be the only person willing to spend money on the club. He increased his stake this year but in September reminded Rangers that he was going to be capricious by declining to increase it further. “I can save you but right now I choose not to,” appears to be his message to the club.
He also has one other sword dangling over Ibrox Stadium: He bought the naming rights, meaning that he could rename the venerable ground “Mike Ashley’s Awesome Sports Direct Bowl,” or anything else he wants, whenever he wants. The Guardian reported:
In September club director Sandy Easdale said that Ashley had bought the naming rights to Ibrox from the former Rangers chief executive Charles Green, telling the Daily Record: “Mike Ashley could call it the Sports Direct Arena tomorrow.”
That will horrify fans, who are already threatening a boycott of Sports Direct stores.
The problem is that Rangers’ finances have been shaky ever since the club went bankrupt in 2011. Now it may have no choice but to bend to Ashley’s will, especially if he sells his stake in Newcastle United FC to fund it.
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