'Truths Must Be Grasped': The Current Situation At Rangers

Fans of Rangers, the football club, must wonder when their immense loyalty and commitment to the Club's very best interests will be matched by those with responsibility for the wider ownership, management and operation of the Club.

Another week has ended after more revelations which are bizarre in any corporate context, far less in the context of a publicly listed, publicly scrutinised organisation such as Rangers. New signings are announced, not cheaply engaged, to fight the cause of winning Scottish football's third tier championship. Duff & Phelps, the ill-starred firm from which Paul Clark and David Whitehouse came as Joint Administrators in February 2012, has been cleared of the very serious professional complaint of acting whilst under conflict of interest by its professional regulating body, the Insolvency Practitioners Association. This does not absolve them from allegations of ‘crookery’ on social networking sites from Rangers fans who cling doggedly and irrationally to some conspiracy mythology. Claudio Reyna has taken a new post with a new major league soccer team in New York City, giving further evidence that the development plans outlined within the AIM listing document lie in tatters.

Where do, where can, we go from here? Instinct says sharply backwards in a decline into the financial difficulties in which the Club was recently enmeshed under the rank bad management of previous owners. Reason says there is a way forward, provided that certain truths are grasped, myths dispelled and realities confronted. This will come as no surprise to persons whose crust is earned in the fields of insolvency, restructuring or turnaround - not always the same thing.

Turnaround projects often suffer from setbacks. Commonly, a new chair, new chief executive, new chief financial officer and new chief operating officer are appointed. The clear turnaround remit is accompanied by specific milestone targets, so that the progress of the turnaround project can be measured. In the case of Rangers three appointments were made, one of whom has departed from his post as Chief Executive, one is continuing as lame duck Chairman and one's judgement is in question over leaked video footage. The curious appointment of a fourth person has been terminated in controversial circumstances. The football operations area remained unchanged, with the return of a highly distinguished former manager of the Club reinforcing the old guard notion at Board level. Uncommonly, this turnaround has been undertaken within the context of the Scottish football industry which itself is in seemingly constant turmoil, league restructuring plans adding confusion to financial havoc.

Truths must be grasped. Key amongst those truths is who owns the Club and how the several voices of influence can best be applied.

The ownership of the Club is an emotive but complex subject. Where would the Club be without fans? Extinct. Where would the Club be without financial investors? Extinct. Where would the Club be without a legendary manager? Looking for a replacement. Where would the Club be without legends in the Board Room? Just as unstable as it is at present. Where would the Club be without players of high reputation, earning substantial remuneration? Seeking to emulate the rebuilding process of a club like Cardiff City which, under Malcom Mackay as manager, has reorganized from top to bottom all aspects of operation.

Ownership comprises ‘stakeholders’, each having different purposes in being involved but all of whose interests are ultimately served by the Club's success. It is the imbalance of stakeholders' interests which has led to the current difficulties, and caused them to be so difficult to resolve. Perhaps by taking the interests of each in turn, a way forward embracing all can be found. Others may offer a different analysis but for the purpose of this article stakeholders are:

  1. Financial investors - keen to earn best long run returns on their investment but wary of holding too long, particularly when real loss is likely due to operating or other problems.
  2. Shareholding fans - those who bought directly into Rangers International Football Club as individuals, seriously disenfranchised when polarised voting blocks      begin to form.
  3. Season ticket holding fans - the lifeblood of the Club without shadow of a doubt, even more so if they are also shareholding fans.
  4. Fans who occasionally attend - inability to attend may include affordability, health or otherwise; still a stakeholder constituency of great importance.
  5. Board members - persons who are jointly custodians of the legacy. No one director has more or less responsibility than any other. All must act in the best interests of the Club, period. They need not be shareholders and may or may not even be fans.
  6. Fan groups, of which there are perhaps too many. Rangers Supporters Trust does a great job, not least in building the fans' shareholding in Rangers      International Football Club Plc. The contribution of other groups is harder to measure. The Rangers Assembly for example seems often to offer bland comments after the event, often with little impactful purpose.
  7. Football management - persons who carry the greatest responsibility for the success on the pitch without which nothing can be achieved. This requires a      balance of football knowledge, commercial astuteness and budgetary  awareness. Closer to home than the previously-mentioned Malcolm Mackay at Cardiff is Allan Johnston at Queen of the South, although Allan has more  to prove as he rises higher in league competition.
  8. Football players - responsible for delivery of results on the pitch. No hand-wringing excuses need be made when performance is dire. It may fill radio phone-in or social network capacity but that kind of apology we can  live without
  9. Operating employees - the behind the scenes die-hards who prepare the Stadium and Murray Park's facilities, who operate the ticket office, who keep the      match day experience working.

Now, taking a step back for the sake of perspective, two stakeholder groups dominate the headlines with only one dominating the action.

  • Firstly, the fans - shareholding fans, season ticket holding fans, fans who occasionally attend. The fans preserve the legacy, revere the legends and clamour for stability, preferably under the control and direction of ‘real Rangers men’. The ‘real Rangers men’ notion may actually be a press-driven misinterpretation. Many fans I speak to favour fan ownership in principle but would not be overly bothered if the Club could again show stability and enjoy competitive opportunity at the highest levels. Fans can influence much but execute little in practical terms.
  • Secondly, the Board. The current Board may be amongst the most dysfunctional ever to have control of affairs anywhere. It is the juvenile stuff of school leaving dances to video colleagues who are tired and emotional for whatever reason. Therein lies of course the reason for dysfunction. The absence of a strong authoritative figure leaves the Club vulnerable to the consequences of anarchy. In these stages of turnaround, a strong determination to achieve the turnaround objectives is required and a measure of discipline simply has to be enforced. Mr Malcolm Murray is not apparently that figure.

 Each of those two stakeholder groups is fundamental to the way forward.

The best way forward for the fans is two-pronged. Support the Club through thick and thin as before - buy season tickets and encourage others to do so. Continue to support the efforts of Rangers Supporters Trust in building fan ownership with the long-term objective of control. Leave the tyre kickers to kick tyres and let those high- net worth individuals who have a real love for the Club show their financial hand or clear off. For the fans, that's truly the best they can do.

The Board is a different story. Here is where financial investors have a role to play. Both as influencers and in brutal voting terms they have the ability to bring about effectual change, and that means facing rather than running from responsibilities.

Change at Board level is imperative. A strong Chairman, willing to listen to the views of his fellow directors but equally willing to keep them in corporate line, is essential. A strong vice chairman to assist the Chairman in this role, perhaps taking responsibility for specific areas of corporate governance, is desirable. A chief executive with a proven track record in sports-related business / commercial development is essential. A director of football with sound management, coaching and playing knowledge, charismatic rather than divisive, would help.

Out of respect for those currently in position, no named changes are proposed here. If Cenkos or Zeus or anyone else representing shareholders wishes to discuss any aspect of this in greater detail, it can be done.

The changes described above would then set the stage for the real operational changes which are required. The Club had a huge opportunity when emerging into new ownership to grasp a whole new model of working. A leaner organisation was in prospect, coupled with a new footballing philosophy which could begin with youth development onwards. That opportunity has not been grasped fully. Old habits die hard.

A head coach committed to highest standards of sports science and fitness, and to modern methods of player development and team coaching, would be great. Players who understand what it means to be thoroughly professional in physical and other game preparation would be terrific. It would help to break the notion that big-spending is somehow a guarantor of success, rather than a frittering of funds on questionable signings.

This forthcoming Extraordinary General Meeting provides the chance for shareholders including shareholding fans, to air relevant issues, provided that statutory notice obligations have been complied with.

As Rangers people, let the intent be to go forward, building upon legacy but not bound by the past, drawing upon the immense wealth of talent which lies within the Rangers community of stakeholders.

David Kinnon is a Chartered Accountant and licensed insolvency practitioner. Views expressed are entirely his own

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