Season ticket uncertainty puts Rangers at risk
The club’s interim accounts yesterday spelled out their position with auditors Deloitte confirming that season ticket income is crucial to Rangers’ future business plan, forcing chairman David Somers to stress the need for fans to pay in advance as normal.
“Since the founding of the club in 1872, supporters have, year after year, provided the working capital of the club through ticket sales,” Mr Somers pointed out in his chairman’s statement.
He added that the proposed withholding of season ticket money had caused “material uncertainty”.
This was a view endorsed by Deloitte. “The company has made key assumptions in relation to the timing of season ticket monies,” the club’s accountants stated, adding that uncertainty over the receipt of season ticket income indicated “the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern”.
Last year, Rangers had generated just under £7 million in season ticket sales for the 2013-14 season by June – accounting for almost half their annual revenue – which demonstrates how reliant they are on pre-paid ticket income.
Supporters are planning to set up a trust fund for the season ticket renewal money after becoming disillusioned with the performance of those occupying positions of power at the Ibrox club.
This course of action was backed by South African-based former director Dave King, who was in Scotland last week for discussions about possible investment following a prolonged war of words with the current board.
Mr Somers stressed how damaging it would be if supporters diverted season ticket payments away from the club.
“If this were to happen then there would be a negative impact on short-term cash balances and it is possible that the club may need to seek alternative additional short-term financing,” he warned.
Rangers reported losses of £3.5m in the six months to 31 December last year – down from £7.2m for the seven-month period to the end of the previous year.
Revenues are up to £13.2m from £9.5m reported in the comparative period.
However, the interim accounts show cash reserves of just £3.5m – down from £21.2m the previous year. This fall is one reason why fans remain hesitant about providing the current board with further funds.
Chief executive Graham Wallace described the results as “encouraging” as the club continued to cope with what he described as “legacy issues” from previous regimes. Rangers signed nine new players when the club already had the second highest wage bill in Scotland whilst playing in the third tier of Scottish football.
Mr Wallace admitted operating costs which exceeded revenue generated by more than £3.5m was proof that more cost-cutting measures were required. The results of a 120-day business review conducted by Mr Wallace will be made public towards the end of next month.
A Union of Fans (UoF) statement yesterday questioned why Mr Wallace felt in a position to claim “there was sufficient cash in the club to fund the ongoing needs of the club in the near future” at the AGM in December.
The fans’ group described this as “misleading” given the information contained in the interim accounts. They also stressed fans had no wish to withhold money from the club.
“We are certain that not a single one of the 6,500 fans, and counting, who have so far shown interest in the idea of a season ticket trust have any wish to withhold any money from the club,” said the statement.
“However, it would be foolhardy for fans to once again commit their money without any kind of transparency or security.”
The UoF called for the club to grant security over “vital club assets” such as Ibrox in return for season ticket money.