Adam shakes Ibrox pillars with warning of bankruptcy

THERE are licensed premises in Glasgow where the regular patrons will consider the recent deeds and utterances of the former Rangers director, Hugh Adam, to be nothing less than acts of treason.

This should be regarded as a natural, almost understandable, reaction from immovably devoted supporters of the Ibrox club to the decision by Adam to unload his 59,000 shares in Rangers on the basis that they were heading towards worthlessness, thanks to the unsatisfactory business methods of the chairman, David Murray.

Almost certainly viewed as an even more heinous offence would be Adam’s claim that Celtic are run much more competently and that investment in the Parkhead club would be a much sounder proposition for anyone wishing to purchase shares in a football institution.

It would be tempting for many to dismiss Adam’s action as merely a gratuitous attack on Murray by a disillusioned, 76-year-old ex-employee carrying a grudge. But Adam has been a candid critic of the way Rangers have operated for years, ever willing to voice his unease - indeed, his incomprehension - at losses he has always insisted were unsustainable.

He also has impressive credentials, having been chairman and managing director of Rangers Development and Rangers Pools since 1971, raising the millions which built the modern Ibrox. Adam’s efforts brought the club around 18million, about 60million at today’s values.

To say that his final severance with Ibrox, after three separate terms as a director amounting to about 15 years of service, was done in a fury would be inaccurate, but in conversation this week it became evident that his decision is underpinned by unmistakable disgust.

Not given to sensationalism, this essentially conservative disciple of prudent forward planning and low-risk business principles did, however, cause something of a shock by observing almost matter-of-factly that, if Rangers continue on their present track, their ultimate destination will be bankruptcy.

"That’s the logical conclusion to a strategy that incurs serious loss year on year," said Adam. "In the past five years - and it’s all there in the last annual report - Rangers have lost 80million.

"Now, the banks are well known for being a bit more tolerant of companies whose core business is a popular pursuit like football. But there is a limit to how far backwards they can bend to accommodate you.

"David Murray has always had an amazing persuasiveness when it comes to getting people to put money into his businesses, but the signs are that those sources have dried up.

"The 40million worth of shares that ENIC (English National Investment Company) bought a few years ago are now worth about 15million, with no evidence to suggest that they will recover. The money itself, that which was actually invested, was lost some time ago.

"Now the latest investor, Dave King from South Africa, will know that his 20million shareholding is worth around half, or even less, of what it was when he bought. No proper businessman will want to buy into that kind of loss."

ADAM sold 12,000 of his 59,000 shares last year and the balance of 47,000 just recently. For the latter, he got 1.15 each; three years ago, they were valued at 3.45. He is convinced Rangers cannot trade their way out of trouble, unless they gain access to a league that will attract higher-bracket income from TV. He was in favour of the proposed Atlantic League, involving the Old Firm and clubs from Holland, Portugal and other countries, but is extremely sceptical of their chances of joining the English Premiership.

He is adamant that Rangers do not have the customer base to improve their financial standing through merchandising. "Rangers’ so-called global appeal is a myth," he said. "When I was there, we did an exercise which involved asking 50,000 fans on the database to recommend a friend or a relative abroad.

"A big response was expected - some were even talking about getting 100,000 names - because everybody in Scotland seems to know somebody abroad.

"We got back 2,800 names and three-quarters of them didn’t know they had been nominated. It’s no surprise that Celtic are officially the best-supported football club in North America, with more official clubs than anybody else. The difference is the Irish connection.

"Many Irish people may support Manchester United, Liverpool or whoever, but they all - every one of them - have an affection for Celtic. And, of course, Celtic also have a great Scottish following.

"The difference is that, while the Irish all have an allegiance to Parkhead, there are millions of Scots who not only don’t support Rangers, but actively dislike them.

"Despite the claims of international appeal, Rangers are, essentially, a West of Scotland club. They talk of supporters’ buses leaving from all parts of Scotland, but if you look closely, you’ll see there aren’t many from each area and they are not all full.

"This doesn’t mean that even Celtic will earn fortunes from emigrant supporters. There may be more of them than Rangers fans, but it doesn’t mount to the kind of income necessary to fund their ambitions. But Celtic have been, since Fergus McCann’s arrival, much the better-run club.

"Fergus was the most unjustly maligned man in the history of the game, when you consider that he took the club from bankruptcy into the mainstream and built that stadium along the way.

‘NOW, the Celtic board have more financial heavyweights than Rangers, with people like Brian Quinn, Dermot Desmond and Sir Patrick Sheehy.

"It’s only in the last couple of years that Celtic have sustained losses, but over the five-year period they break even. But Brian Quinn and his board are taking steps to warn people that they are not in the business of heading towards bankruptcy.

"For their pains - for doing their job properly - they get crucified in the media, accused of penny-pinching. I don’t understand it.

"They are determined to keep Celtic properly managed, while Rangers, with Murray, is a one-party state and the man in power has an allergy to any form of personal criticism. But he’s not a businessman in the long-term sense of planning and prudence, he’s more of an impresario.

"But what has been happening is unfair on shareholders, and they’re being short-changed.

"It’s a nonsense, too, to say that Rangers’ shareholders are all supporters who aren’t interested in dividends or profits.

"That’s okay for the man with 50 shares, framed and hung on his wall. The number of shareholders in that category would amount to a minuscule percentage of the equity.

"But I’m 76 and haven’t had a dividend in years, so what’s the point of me keeping shares until they dwindle to nothing? And I’m certain the people at ENIC won’t be too pleased with their investment."