UNEASY lies the head that wears a crown. As the coronation of Dave King at Rangers moves ever closer, the South Africa-based businessman must begin to wrestle with the daunting challenge of restoring the club to health on and off the pitch.
The apparent inevitability of King’s victory at Friday’s scheduled general meeting of shareholders at Ibrox saw another member of the incumbent plc board fall on his sword yesterday when David Somers resigned as chairman, following the course of action taken by James Easdale last week.
As King bullishly predicted during his media conference in Glasgow a month ago, the end game has arrived for a regime whose disapproval rating among Rangers supporters reached an unprecedented low point. Now only Derek Llambias and Barry Leach remain as directors and it is a question of how, rather than if, Mike Ashley’s two close associates will also be deposed. Victory is clearly in sight for King and his fellow nominees as new directors, Paul Murray and John Gilligan.
But if there will be cause for satisfaction among those who have battled for three years to end the boardroom chaos which has reigned at Ibrox since Craig Whyte led Rangers into insolvency, there will be no time for celebration. For King, the real fight to repair the damage done to the club he unquestionably loves will begin immediately with a range of issues to be confronted. Among the first of those will be whether he is able to formalise his role at Rangers. King is confident he should not be blocked, either by stock market regulations or the Scottish FA, from becoming a director of the club again, despite having agreed a £44 million settlement with South African Revenue Services in 2013 for 41 charges of contravening tax laws in his adopted homeland.
If King’s assessment of his ‘fit and proper’ status is not shared by the relevant authorities, however, he simply intends to appoint an alternate director in his place and play his part as a major shareholder from afar.
From a strategic point of view, one of King’s priorities will be dealing with Ashley’s influence at Rangers which will be far from wholly diminished by the removal of Llambias and Leach from around the boardroom table. Newcastle United owner Ashley will retain a shareholding of just under nine per cent in Rangers and, far more significantly, has security over the Murray Park training ground and other club property through the terms of the £10 million loans his Sports Direct company agreed with the current board.
Billionaire businessman Ashley is not a man renowned for accepting defeat lightly in any of his ventures. But King is banking on pragmatism being the trump card in his dealings with Ashley, whether or not SportsDirect’s favourable retail agreements can be re-negotiated.
“I certainly don’t see Ashley being a complication in this process whatsoever,” insisted King last month. “If he has advanced money to the club, presumably he would like to get it back. He can get it back – we will just re-finance it in friendly hands and he gets his money back. Ashley is a commercial guy and one I think I can do business with. He’s not got a passion to control Rangers, have a club tie and sit in the boardroom. He’s about SportsDirect and whatever he has done has been in his commercial interests. It has got to be in his interests for us to succeed – the fans are disconnected at the moment and he needs them to come back and start buying retail.”
The ongoing financial problems facing Rangers must also be addressed as a matter of urgency by King. He believes it will take at least £25 million to “normalise” the club, his definition of circumstances which would see them again able to compete with Celtic for domestic supremacy in Scottish football. How the desperately required funding is sourced is unclear.
King spoke of it being subsidised in the shorter term by an amalgamation of wealthy Rangers supporters like himself, presumably including the ‘Three Bears’ consortium of Douglas Park, George Letham and George Taylor who have a sizeable shareholding. Seeking fresh support from institutional investors in the City of London is not regarded as a viable route by King, given the poor condition of club and its failure to build properly on the success of its last IPO under Charles Green.
There is the possibility of a new general share offer, although that would require 75 per cent backing from existing shareholders and could therefore still be blocked by Greenock businessman Sandy Easdale, the current football board chairman, who controls around 26 per cent of the votes. External investment may also be sought from Robert Sarver, the American banker whose takeover attempts were rejected by the existing board in January this year. King has been in contact with Sarver who has indicated he may be willing to come back to the table once regime change has been achieved.
It is not simply off the field, of course, where problems lie. A return to the top flight next season is far from certain as the team struggle unconvincingly in the Championship where they are 24 points behind champions-elect Hearts and facing a real threat from Hibs and others in the play-offs.
The appointment of a new manager will be a crucial decision ahead of revamping a first team squad which has 13 players out of contract at the end of the season. If there is to be light at the end of what has been the darkest of tunnels for Rangers, it may take some time yet before King can guide them into it.