Dave King has revealed that there has been an investment of more than £30million in the Rangers playing squad in the last three years.
Speaking at the club's AGM this morning, the Ibrox chairman discussed the figures involved in trying to get the club back challenging with Celtic.
King claimed that it was required despite substantial losses of up to £25million across the past two years.
He said: "You may rightly wonder how I can stand up here and express satisfaction about a company that announced accumulated losses of over £25 million pounds for the last two years alone. Frankly, as someone who has spent almost four decades building and operating profitable businesses I surprised myself when the word “satisfied” came to my mind when I was preparing this speech. So, let me explain myself.
During media interviews and at each of the last four AGMs I stressed that our business model required us to get back to our historical success levels on the pitch. That was absolutely the only way to create sustainable value for all shareholders while simultaneously meeting the expectations and requirements of our supporters."
Excess of £30million
He added: "Today, we are not only back in the Premiership but challenging at the top end of that league. That would have been impossible if we had not significantly invested in the playing squad- both with transfer fees and a vastly greater wage bill. Over the last three years alone we have invested in excess of £30 million in our playing squad. This component is by far the largest contributor to our losses.
"This substantial investment in the playing squad was achieved while simultaneously investing heavily in Ibrox and Auchenhowie. We have an improved stadium that is debt free and we have upgraded our training facilities at Auchenhowie, which is also debt free. Many of the largest clubs in the world are financially restricted by the debt repayments on their stadium. We are very fortunate indeed not to be in that position.
In my judgement, the present performance on the pitch and the present condition of Ibrox and Auchenhowie are in themselves sufficient justification for the losses that we have incurred since 2015. But, I have an even more compelling case to make. One that gives me a lot of personal comfort, both as a supporter and as a shareholder.
"Wearing my supporter hat, I can easily rationalise that the accumulated losses are justified solely by the progress of the team from playing in the Championship to a team that is now capable of challenging for the Premiership (whatever the outcome this season) and a team that is the first in the history of Europe to successfully navigate four qualifying rounds for two consecutive seasons. That European achievement is in itself remarkable whether we advance to the knock out stages or not."
The investment in the playing squad has seen the valuation of the team improve, as per estimations from the clubs sporting director Ross Wilson.
King said: "Based on discussions and offers that we have received from other clubs, I have had a personal comfort for some time that the value of our squad is significantly higher than the book value reflected on our balance sheet. I therefore decided, initially for my own comfort, to request the new Director of Football, Ross Wilson, to give me his fair value estimate of the individual players making up the player pool. Ross completed this exercise in consultation with the Manager and provided me with two estimates. The first is the estimate of present market value and the second included a projection as to where some of our players could get to if they continue to progress as expected. The present value of the squad reflects a significant uplift of £55 million pounds over our book value and the projected amount would yield an uplift of £103 million pounds if it eventuates.
"I know that these numbers are not scientific and we are certainly not holding anyone to them. But, they are estimates by two individuals who know the qualities of players and who know the market. "
A share issue is planned for to deal with any shortfall this campaign but going forward a more strict budget will be in place.
He said: "Thereafter there will be no further need for the board to fund on the ad hoc basis that was necessary while we were navigating our way out of the Championship to where we are today. Going forward, the board can re-adopt the traditional method of financial planning. That will mean that commencing with the summer transfer window the managing director, the sporting director and the manager can sit down with the Board and get an approved financial plan covering player incomings and outgoing and then just get on with it."