RANGERS will have to pay Newcastle United a further £500,000 if they gain promotion to the Scottish Premiership this season under the terms of the loan agreement which saw five players move to Ibrox, three of whom have yet to play.
This latest financial blow was revealed yesterday in the club’s interim results in which Rangers reported losses after tax of £2.89 million for the six-month period to 31 December 2014. The figures were termed “disappointing” by interim chairman Paul Murray. But it is the detail regarding those players recruited from Newcastle in January that was described as “beyond belief” by one supporters’ representative.
Murray said the mismanagement of the club by previous boardroom incumbents was “simply staggering” in his chairman’s statement. It also emerged that the results have not been officially audited because previous auditors Deloitte indicated their intention to resign in June.
“The previous board chose not to announce this nor did they find a replacement for Deloitte,” commented Murray, who added that the firm Jeffreys Henry performed the exercise as Independent Reporting Accountants, not auditors.
Despite moving up from League 1 to the Championship, Rangers’ ticketing revenue fell by £700,000 because of fans’ disillusionment at the way the club was being run. The capture of five fringe players on loan from Newcastle was just another reason for unrest.
In a development regarded as controversial at the time because then caretaker manager Kenny McDowall claimed he was told he must play them, Rangers made the unusual step of signing five players on loan from the same club. Newcastle owner Mike Ashley’s influence at Rangers, where he is a major shareholder, facilitated the move. The arrangement to sign so many players on loan was already being described as farcical before yesterday’s revelation that the Ibrox club must pay a further lump sum of £500,000 if they earn promotion.
Gael Bigirimana, Haris Vuckic, Kevin Mbabu, Remie Streete and Shane Ferguson were all recruited from the English Premier League club without medicals. But to date, only Vuckic has played a major part in their promotion push. The Ibrox club currently trail second-placed Hibs on goal difference in the Scottish Championship.
Streete has been sidelined since limping off after half an hour of his debut while Mbabu was described by current manager Stuart McCall as being “nowhere” near fit enough for first-team duty.
Ferguson is injured, while Bigirimana is reported to be suffering from a “mystery illness” that has placed a question mark over whether he ever plays again. At the time of the loans deal being struck, Ashley allies Derek Llambias and Barry Leach were in control at Ibrox.
Under the heading “contingent liabilities”, it is noted that the club are liable to pay £500,000 to Newcastle – “as this liability is based on an uncertain future event, the Directors have not recognised this amount in these financial statements”.
Drew Roberton, general secretary of the Rangers Supporters Association, described the situation as “a scandal”. He added that he hoped the current board might be able to contest the payment should McCall’s team succeed in their aim to return to the Premiership. “It is beyond belief that the people running the club before March could conceivably agree to such a thing – did they do anything at all to help the club’s welfare?” he said.
Despite the club earning £1.3m from hosting the Commonwealth Games rugby sevens and Scotland’s Euro 2016 qualifier against Georgia, Rangers’ revenue fell £100,000 to £13.1m.
Also included in the report was the prospect Rangers could go cap in hand to shareholders again this summer to raise additional funds via a rights issue. “Early indications from existing shareholders is that there will be positive support for a rights issue in Summer 2015, and that this is the mechanism by which interested parties wish to inject funds into the company,” it said.
Describing the supporters as “the real heroes”, Murray called for them to back the new regime by “buying season books and match-day tickets”.
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