Arsenal News » Rangers face financial meltdown

In terms of English clubs that are facing financial disasters we are used to discussing WHU, Liverpool Beachballs and Manchester U.  To that list we can now add Portsmouth.   Their new owner in September turned out not to be the billionaire Sheik Yermoney but a guy who borrowed £50 off a bookie’s runner and placed it all on Portsmouth to go down.

So he was then bought out by Sheik Yerbooty who turned out, amazingly, not to be a billionaire but a guy who borrowed £50 off the bookie who took the original bet.   Sheik Yerbooty told a paper all this, and Portsmouth said the story was a fake, and said they would sue the paper.

The paper said, don’t worry sunshine, we’re suing you, because the story is true and we’ve got the tape.  You have besmirched our good name.

And would you believe it, for the first time in the history of the press, the story was indeed true.  Portsmouth are owned by a guy who isn’t even a paltry millionaire, but someone who openly admits he bought the club without knowing anything about football, and now wants to flog it again.

It couldn’t get sillier could it?  Well, yes, in Scotland it can.   You don’t need to know the ins and outs of Third Lanark and Gretna to know that Scottish clubs go down the drain faster than… well, beach balls with a pin stuck in them I suppose.  Nor that for the past 24,000 years the league has be won by either Celtic or Rangers.

Now Walter Smith at Rangers has agreed what the world has been whispering for months: the club is bust and being run by 
the banks who have people on the board.

The club is up for sale but no one wants to buy – although they say they have “tentative offers”.  No new players have been bought for 18 months, and none can, nor are existing ones being offered new contracts.  Everyone is for sale. The backroom staff are out of contract in ­January and have not been offered new contracts.  The bank is owed £30m.

Now we all know that Scottish football is small in comparison with EPL – obviously so because the population is much smaller than in England.  But even so, when one of the two giants of the game goes bust, that shakes the whole fabric of the league.

Rangers have been hammered twice at home in the Champs League and are bottom – as incidentally are the financially much more sound Celtic in the Europa League.

So there you are – you could buy a Champions League team for £30m – although what you would do with them who knows.  Maybe the century of sectarian rivalry between the two clubs is finally having its payback time.

I’ve only seen Rangers play in Scotland once – away to Aberdeen – so I would never claim to have a proper understanding of the club or indeed of Scottish football.  But on that one occasion even I, with my north London upbringing was shocked at what I heard.  Maybe no owner really wants to be associated with that.

While on matters financial here’s a piece that Gordon Driver sent me from the NY Times.

It is about a bedding manufacturer called Simmons. It has debts of $1.3b and is about to go into bankruptcy. Replace “private investors” with Glazer and Simmons with Manchester U and you begin to see a pattern.

“How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times and an example of a growing phenomenon in corporate America.

“These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Then, not long after, they often borrowed even more money, using the company’s assets as collateral — just like home buyers who took out loans on top of their first mortgages. For the financiers, the rewards were enormous.

“Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, thus recouping all of the cash it put down, and then some.”

So Manchester U can rest a little easier.  They were not the only ones to be destroyed by this con.

(c) Tony Attwood 2009

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