DAVE King has made the remarkable claim that Rangers are one of the financially strongest clubs in the world as he prepares to become chairman of the Ibrox club today.
The South Africa-based entrepreneur will formally take up the role at the first meeting of the club’s board following his approval from the SFA earlier this week as “fit and proper” to serve as a director.
King says that he will make a “substantial” personal investment in Rangers imminently, although did not provide a specific figure.
It was revealed that, in the meantime, King has matched the £1.5 million sum which the “Three Bears” group of wealthy Rangers fans, George Letham, George Taylor and Douglas Park, provided to the club in March to support its short-term funding needs.
Rangers also face a demand by Sports Direct owner Mike Ashley to repay his £5m loan, which carries security over the Murray Park training ground, commercial branding and retail rights. But King remained bullish and is apparently unfazed by Ashley’s involvement with the club and branded his call for a general meeting of shareholders to recoup the loan as “a bit of a nonsense”.
Rangers have also revealed that Ashley’s colleagues Derek Llambias and Barry Leach, who were ousted as directors by King at a general meeting in March, have now had their contracts as chief executive and finance director terminated following an investigation.
How many clubs in the world don’t have debt? Our balance sheet is strongDave King
Three years after King witnessed the club being plunged into insolvency under Craig Whyte’s ownership during his first spell as a director, the 60-year-old now has the authority he has craved to lead the bid to restore them to the forefront of Scottish football.
Despite admitting the club remains in a “fragile” state in terms of its readiness to compete on the pitch, with interim manager Stuart McCall’s side still embroiled in the play-offs for promotion to the Premiership, King was determined to paint his startlingly positive picture of their fiscal health.
“If you look at Rangers, even in terms of the financials, Rangers is in an incredibly strong financial position,” said King.
“It has got shareholders who can fund it, it has got virtually no debt. How many clubs in the world don’t have debt? Our balance sheet is incredibly strong for any football club in the world.
“We have really just got a little cash squeeze where for the first time now Rangers have got people who are coming in to bridge that gap. So, if I look at Rangers financially, we are one of the strongest clubs in the world.
“How many clubs are sitting with £5m of interest-free debt and that is all they’ve got? We’ve got the fans, we’ve got the season ticket money, we’ve got the stadium, everything all paid for. There’s not many clubs in that position. We’re incredibly strong financially at the moment.
“There is a lot happening at the club. It is in a kind of fragile state in that we are only probably five or six weeks away from pre-season and we don’t have an executive team in place. I’m talking about the CEO, the commercial director, the financial director, we don’t have a long-term manager in place.
“We have a short-term situation. We’re not even sure which division we’ll be playing in next year. So it’s quite a challenging period and it was frustrating over the last couple of months in particular to be sitting on the sidelines, knowing that you wanted to get involved and do something about it.
“We don’t know the amount of cash I will be putting in yet. The best I could honestly say would be substantial. We are in the process of going through the budget at the moment. It’s very clear that the club will need fairly substantial funds in the short to medium term to bridge the revenue gap while we get back to the Premiership.
“The exact amount and the time will depend to some extent on what happens in the next week in the play-offs.
“I’ve gone on record before as estimating about £30m. I would still say that would probably be what I think the gap will be, assuming normal commercial activities resume and we can sell the normal amount of season tickets expected.
“A big part of that is going to be the return to the Premiership. Our first year back, we are expecting to compete with Celtic. It’s our natural competition and, hopefully, within the first year there will then be Europa League income.”
King says he has no plans for talks for Ashley but expects the general meeting called by the Newcastle United owner, who has an 8.92 per cent shareholding in Rangers, to take place.
“The general meeting is a bit of a nonsense because the shareholders can’t tell the board how to behave,” added King. “The board will make a decision in the best interests of the club.
“That general meeting will go ahead but, as far as that specific resolution, I regard that as being a non-event. For shareholders to give an instruction to the board, it requires a special resolution. This is not a special resolution, just an ordinary one.
“If the shareholders say they think the money should be repaid, it is certainly something the directors should think about but there is no obligation to do so.
“I would agree our relationship with Sports Direct and Mike Ashley is not great and it has to be dealt with. But I don’t think it is terrible either.
“The Mike Ashley situation is very different from some of the other history of the club. You have got a man who is a businessman. He has been very, very aggressive.
“He has managed to put in place a deal which is very favourable to him. But it is our job to see that the club’s interests are protected. But it’s a commercial relationship. It’s really just business.”
“It’s not something that gets us particularly excited. It’s just about what is right for Rangers. There’s nothing personal about it,” added King.
“I think ultimately he [Ashley] will be out of the picture but right now he has put money into the club and the club should be grateful for that, because without the £5million loan, the club would be in some difficulties.
“The money was important to the club at the time, under the circumstances of that time. Given the changed circumstances of the club – where we are not trying to shrink the club, we are not trying to run it as a minor club in Scotland, we are determined to take the club back to where it belongs – then, in that context we have to change the relationship. On a scale of one to a hundred, it doesn’t get up to one in terms of a threat.”