Terminological Inexactitude

The accounts are out, and several other bits of bad news were dumped on our lap on the same day which I have commented on over at CRO http://www.thecoplandroad.org/2013/10/a-good-day-to-bury-bad-news.html . We have already had a detailed look at the accounts here at TRS http://www.therangersstandard.co.uk/index.php/articles/current-affairs/288-an-analysis-of-the-rangers-accounts  and they don’t make for good reading. However, you would be forgiven for thinking everything is rosy in the garden if you had watched the performance of our executive directors Craig Mather and Brian Stockbridge over the past couple of days.

Let’s start with Mather because he’s made a few fairly odd claims in the press, the first regarding the sky high level of the IPO costs. Normal costs are around 5-7%. The costs of the Rangers IPO are sitting at around 25%. Mather had this to say:

“Nobody can shy away from the fact that the IPO cost was high and the cost of raising money was high.

“But if you go into the detail, there was no football security (at that time), no membership to a league, the club didn’t know what league they would be playing in.”

Now the last time I checked “the detail”, the IPO took place in December 2012. At that time we had been playing in the old Division 3 for five months. I think it’s fair to accept that the work for the IPO, in terms of fund raising from institutions, commenced some months before the actual date of December 18th 2012. However you cut it though, the statement that the IPO costs were high because people didn’t know what league we were playing in is total nonsense. People knew exactly where we were and what was facing us. We were also told at the time that they were sold on Rangers because the shares had huge potential for growth as we worked our way back to the top - not that this would “expensive money”.

Neither Mather nor Stockbridge, who also accepted the high costs in his own interview for the Rangers website, has given any reasonable explanation of why the costs were so high. They just seem to think we should accept it and that’s that. Well sorry, but I don’t accept it and neither should any other shareholder. We should be asking where our money has gone.

Mather also claimed that the protests and language used at games was putting families off from attending Ibrox. This may or may not be true, although frankly it sounds far-fetched, but what I found interesting was that Mather was quoting selected correspondence from concerned fans which tried to paint the protests in a bad light. What he failed to mention was the correspondence he has received asking him exactly why the ‘mini report’ he said would be forthcoming on the actions of Jack Irvine has not yet been produced.

Mather also told the Scotsman that he “had an email from some of the fans groups asking if I’ll meet them ahead of the AGM and I’m happy to do so”. That is good news but somewhat disingenuous as he has already postponed meetings with these groups and requested to meet them separately rather than together. The simple fact is they have been chasing him for weeks to have a meeting which he still hasn’t scheduled.

Now I appreciate that banging on about some of this stuff is tiresome, and I accept I’ve being doing it for some time especially in terms of this ‘mini report’, but the problem is that people in charge of our club keep promising things they don’t deliver. Put simply, it’s important. Mather was under pressure on the issue of Irvine’s behaviour on Twitter and his disgraceful comments about John Greig. He managed to relieve that pressure by stating publicly that he was dealing with it. He has failed to deal with it. He’s making out his door is open to the fans at all times yet he’s been putting off meeting the fans groups for weeks. He’s also using correspondence from fans to make points he feels will assist him and ignoring the stuff that’s considerably more awkward to explain.

In an interview with the Telegraph he claimed that executive salaries were the fault of Malcolm Murray. Now that seems to me like an odd coincidence coming a few days after Murray was named as a nominee director by shareholders who wish to remove the current board. Why have we not heard about this before? He was questioned on the same topic at a recent fan meeting and at no point did he raise Malcolm Murray’s name. Nor did Stockbridge who also suddenly decided to mention that Murray was to blame in his interview on the Rangers website.

Malcolm Murray’s response was robust. Claiming that the remuneration committee never met and that he actually had to fight to get salaries lowered to the still ridiculously high level they now sit at. The board have in turn responded to that with the type of venom with which they turned on their own support last week. I wonder if Malcolm Murray is now ranked alongside the "so-called supporters" that our board saw fit to refer to in their statement about the protests?

Mather is starting to get a reputation for inconsistency, and for making claims he can’t or won’t back up. After a start in which he appeared to be straight forward and reasonable, he’s now slowly morphing into Charles Green minus the charisma.  

Having received legal letters threatening me with court action for comments made on Twitter about him (althought nothing to do with any police action despite rumours), I have to be careful what I say about Brian Stockbridge. That said, I’m not going to sit and watch his performance in a video posted on the Rangers website without comment http://www.rangers.co.uk/news/headlines/item/5199-video-stockbridge-on-results. He makes a number of claims which are either weak or fail to stand up to any scrutiny.

His claim that results are in line with expectations is dealt with extremely well here and I would urge any Rangers fan who listened to Stockbridge to read this.


The jist of it is that claims made by Stockbridge that these results are “on track with our financial plan” are not remotely accurate. Unless of course there is a financial plan which nobody else is aware of and which involves losing considerably more money than was forecast. If this plan exists then it wasn’t in the document used by Cenkos to raise IPO money or in the previous forecasts by Stockbridge himself, both of which are referenced in the above link.

Stockbridge also refers to raising more money for specific projects. He cites one of these as being the development of Edmiston House. It was my understanding that we had already raised money for this but apparently I was wrong. Let’s allow ourselves a look at this in more detail. The following was in the IPO Prospectus. 

“6. Use of proceeds and effects of the proceeds

The Company plans to use the money raised from the Placing to improve the infrastructure of the Club.

In particular, the Directors have identified:

• upgrades to Ibrox Stadium (approximately £5.5 million);

• acquisition and development of land assets adjacent to the stadium (approximately £4.5 million);

• other identified projects which could result in additional revenue generating activities

(approximately £3.0 million); and

• general working capital purposes.”

Here is what actually happened from the accounts released.

“The Group has invested a total of £5.3m in property and other fixed assets during the year. Heritable property acquisitions consists of the purchasing of the Albion car Park from Lloyds Banking Group for £1.6m and Edmiston House from MIH Group for £0.8m,with a further £0.1m being incurred on internal works on the property. The Fast Food refurbishments and Stadium PA systems were purchased from the RFC 2012 plc fixed charge holders for £1.6m and £0.6m respectively. Initial instalments of £0.6m were made towards the replacement of the stadium Jumbo screens and trackside perimeter advertising boards with LED technology. The total cost of this investment will rise in season 2013/14 to £1.1m”

So in total on Ibrox, and I’m generously including the full cost of the stadium advertising boards (some of which still has to be paid), we have spent £3.5m of the £5.5 million forecast in the IPO prospectus.

You’ll note in the prospectus we are told that there would be “acquisition and development” of land assets. It would appear only the acquisition has been achieved. A total of £2.5m out of a forecast £4.5million has actually been spent. These land assets were rightly identified as potential revenue generators. They are not that yet though because you can’t generate revenue until they are developed.

Out of £10million set aside for property renovation, purchase and development in the IPO it appears that only £6m has been spent. That is not in line with my expectations from the IPO. This is actually particularly serious because unless the club can clarify matters then we appear to have used money set aside to develop new income streams for working capital. If that is the case then I consider that to be a complete waste of millions of the IPO money and that is before taking into account the lost revenue from actually developing those assets. Stockbridge however makes no reference to this in his interview – he just seems to take it as read that we’ll have to raise more money for projects which should have been covered by the IPO cash.

So let’s move on to our five year business plan. Now I often hear criticism of the requisitioning shareholders on the grounds that they haven’t made their plans for the future of the club clear. I think these criticisms are valid up to a point and I would like to hear more from them on that score. So it was with great interest that I listened when Andrew Dickson asked Brian Stockbridge what the current board’s five year plan for the club is. His answer was, verbatim, as follows.

“The plan is to, you know, ensure that the club is financially secure, move back to the top of Scottish football as quick as we possibly can.”

And that was it. Not exactly a detailed plan I’m sure you will agree and one which I would suggest could be easily trumped.

Finally, I’ll admit I laughed out loud when Stockbridge stated that he was “not going to complain about the fans” but I suppose in some ways that is true. Rather than complaining, he just goes straight to lawyers. If he’s taking advice from Jack Irvine on threatening to sue Rangers fans with absolutely no grounds to do so then it’s typically bad advice. If not, then the next time he doesn’t like something I say, which I suspect might be most of this article, then he could try answering some of the points raised because, again, they are important to the fans he claims he doesn’t want to complain about.

All in all the round of interviews from both men has left an uncomfortable feeling of déjà vu. Plenty of sound bites, plenty of statements which appear to make sense until you actually delve a little deeper and all delivered with a certain uniformity which makes you feel there was some coaching involved. Like I say, déjà vu and I’m sure it will come to me at some point where we have heard it all before….