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Our JJB Sports Deal


corbyloyal

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Hello all, im just wondering whether anyone has any information regarding the deal Rangers Football Club has with JJB.

For my university dissertation as part of a Sports Business Management degree at Leeds Met Carnegie University I am planning on undertaking a investigation to examine the extent to which the retail partnership between Glasgow Rangers and JJB Sports can be deemed as a success.

After reading a number of articles (a few on RM too) I am extremely interested in how successful this partnership has been for us as a club and also whether JJB ever had the intention of trying to promote our merchandise outside of Scotland. It seems as though they have given up on Rangers when you go into most stores (especially in England) and they want to sell Septic shirts more than ours (maybe because they have to pay us more if they sell more shirts)

For my Dissertation I plan to find out whether the deal is viewed as a success by Rangers supporters, JJB management and Rangers Football Club and will

also see whether the deal will be worth continuing for the remaining 7 years, and what may prevent this from fruition, such as JJB’s situation in the current global economic crisis.

What do people on here think about the JJB partnership? Were we better off with our own stores?

also if anyone has any information regarding this I would appreciate a message

cheers

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Better off with our own stores.

JJB did a good job in the first season (under Paul LeGuen) but JJB hasn't sold off Rangers as a brand in the way I'd hoped.

Now it seems that as soon as January comes around you find it very hard to obtain a strip (any of the three) in a decent size like medium or large.

Also 'Gers clothing isn't available at all the stores, only certain ones which cuts back our potential for profit.

The £5 for a shirt printing offer is good but there's too many negatives to make this worthwhile. Better off going back to our own shops soon.

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Way better off with out own stores.

Just before the sell out the Fort had a brand new Rangers store open, it had so much stuff in it was unreal i never knew they made so much Rangers stuff.

Plus you cant beat the shop in Glasgow airport buying stuff bored waiting to get your flight.

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and when they run out of strips it takes months for them to them back in again etc I tryed to get the third top when it came out but it got sold out very quick this was around christmas i Tryed to get mine, and thats them just got them in a couple of weeks ago I eventually got it on sunday there.

i went into jjb in the town about three weeks ago and they said they have all been transfered to the store at Ibrox??? which they have

but why are they not selling them in JJb????

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JJB hasn't been promoting us as much as I thought they would've. Probably lost out a bit as in the run up to Manchester they were no Gers tops anywhere

We probably didnt lose out. JJB ran out of stock because of the number of bears buying tops in what would traditionally be a quiet period for purchasing football tops. Make no bones about it, Rangers shops would have had the exact same problem and it would have been impossible to stock up in time for the final. In effect, they would have only had 8 working days to manufacture and ship new tops and it just doesnt happen that quickly im afraid.........

As for the JJB deal. Financially the deal was a cracker. If anyone can quote any figures and show factually why it wasnt, i will eat :sherlock: hat and pipe.

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i think it shows that jjb's stock is terrible. for manchester every shirt from the english stores was recalled to scotland, surely they must be able to make more when they are needed, its simple supply and demand. we would have sold 3 times as many shirts last season if they did their jobs properly. i agree with the glasgow airport store point too, i think it also worked well at attracting foreign tourists to buy our merchandise.

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i think it shows that jjb's stock is terrible. for manchester every shirt from the english stores was recalled to scotland, surely they must be able to make more when they are needed, its simple supply and demand. we would have sold 3 times as many shirts last season if they did their jobs properly. i agree with the glasgow airport store point too, i think it also worked well at attracting foreign tourists to buy our merchandise.

See when you asked for help with your dissertation, would it not be nice if you read the replies? :craphead:

It is a simple rule of business that you stock according to trends. If you go into Clothes shops in November, you wont have 10 racks of summer short sleeved shirts to pick from because history will have told them the sales are not good at that time of the year. Im sure if you look back in the history of football shirt sales, the peak periods would be July and December and therefore these are the times stock will be at its highest and the lowest points will more than likely be January and May and stock will be lower.

Rangers shops would have run out of stock as well if we still had them and its highly unlikely a manufacturer could turn around a huge stock in 8 working days as per my previous post. (tu)

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sorry mate your reply was not there until i had posted. i do actually agree, but its not just with regards to shirts etc JJB Sports stock system is terrible. i wasnt just talking about manchester, but also a point made earlier that they take months to re-stock shirts such as the third kit.

the difference with the rangers stores would have been that although the rangers store would have sold out, JJB and Sports Direct would both also have been free to sell the shirts too.

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I wrote the following in my review of the 2007 accounts.

A quick recap of the JJB Sports agreement – we received £18m upfront at the end of last season. £3.5m was used to offset the closure costs of the shops and the remainder will be added to profit at £1.45m per year for the next 10 years. In addition we receive £3m guaranteed payment each year.

So was the JJB deal for us from a financial viewpoint? It certainly appears so. The accounts show the expected £4.5m income.

The 2006 accounts, if taken at face value, show around a £2m Retail profit after taking out part of the lump sum that was included to offset the closure costs. The last available profit on Retail was in 2004 when we made £3.7m on a turnover of £18.7m. Turnover for 2005 was £20.6m and although profit was not shown it is unlikely that profit exceeded £4.5m.

The £4.5m would therefore appear to be a favourable deal, particularly if you also take into account the savings in interest paid due to the lump sum received.

There were no additional royalty payments, so it can be assumed that we did not cross the threshold whereby they would kick in. It should also be noted though that closure costs were higher than originally expected and we were hit with a further £955,000, but these are a one-off cost.

The other benefit of this deal is that the amounts received are locked in and the risk of the expected fall in strip prices has been eliminated.

Although the deal appears to have been successful from a financial viewpoint, there are the obvious problems of a lack of brand presence both locally (eg Glasgow Airport) and throughout the UK, with many shops which may have stocked our strips in the past only featuring green and grey from the SPL.

There have been tales of poor customer service, lack of availability of stock and a poor selection of goods (“try HMV if you want a Rangers video”). The medium term impact of this is unknown and is impossible to put a value on, but has to be taken into account when reviewing the success or otherwise of the JJB deal.

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I wrote the following in my review of the 2007 accounts.

A quick recap of the JJB Sports agreement – we received £18m upfront at the end of last season. £3.5m was used to offset the closure costs of the shops and the remainder will be added to profit at £1.45m per year for the next 10 years. In addition we receive £3m guaranteed payment each year.

So was the JJB deal for us from a financial viewpoint? It certainly appears so. The accounts show the expected £4.5m income.

The 2006 accounts, if taken at face value, show around a £2m Retail profit after taking out part of the lump sum that was included to offset the closure costs. The last available profit on Retail was in 2004 when we made £3.7m on a turnover of £18.7m. Turnover for 2005 was £20.6m and although profit was not shown it is unlikely that profit exceeded £4.5m.

The £4.5m would therefore appear to be a favourable deal, particularly if you also take into account the savings in interest paid due to the lump sum received.

There were no additional royalty payments, so it can be assumed that we did not cross the threshold whereby they would kick in. It should also be noted though that closure costs were higher than originally expected and we were hit with a further £955,000, but these are a one-off cost.

The other benefit of this deal is that the amounts received are locked in and the risk of the expected fall in strip prices has been eliminated.

Although the deal appears to have been successful from a financial viewpoint, there are the obvious problems of a lack of brand presence both locally (eg Glasgow Airport) and throughout the UK, with many shops which may have stocked our strips in the past only featuring green and grey from the SPL.

There have been tales of poor customer service, lack of availability of stock and a poor selection of goods (“try HMV if you want a Rangers video”). The medium term impact of this is unknown and is impossible to put a value on, but has to be taken into account when reviewing the success or otherwise of the JJB deal.

is there any chance you could send me your full review to read mate? i would be interested in referencing some of this stuff.

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is there any chance you could send me your full review to read mate? i would be interested in referencing some of this stuff.

Here is the review of the 2008 accounts http://forum.rangersmedia.co.uk/index.php?showtopic=82283

Here is the review of the 2007 accounts as requested. Feel free to PM if you have any questions.

The 2007 Rangers accounts

Here are a few thoughts from looking at the Rangers accounts which popped through the letterbox recently.

The loss

We made a loss of £6.25 million in the year, compared to a profit of £92,000 in the previous year, a year in which we reached the last 16 of the Champions League. As has been widely reported, the loss was due to the fact that we did not qualify for the CL. Although we reached the last 16 of the UEFA Cup it shows what difference in the two competitions and highlights the fact that the only way that Rangers can avoid making a loss is to reach the CL or to have another Boumsong type transfer coup.

Turnover

Turnover fell from £61.1m to £41.8m due to the afore-mentioned lack of CL football and the fact that our retail turnover has been replaced by the cash we receive from JJB. Over the last few years our retail turnover has averaged around £18m whereas it will now be the JJB £4.5m.

Don’t expect us to feature in any so-called Football “Rich” lists in the near future as they tend to be based on turnover, but it should be remembered that turnover is not the most important issue. Although our retail turnover has fallen, our profit from this area has risen as shown below.

The JJB deal

A quick recap of the JJB Sports agreement – we received £18m upfront at the end of last season. £3.5m was used to offset the closure costs of the shops and the remainder will be added to profit at £1.45m per year for the next 10 years. In addition we receive £3m guaranteed payment each year.

So was the JJB deal for us from a financial viewpoint? It certainly appears so. The accounts show the expected £4.5m income.

The 2006 accounts, if taken at face value, show around a £2m Retail profit after taking out part of the lump sum that was included to offset the closure costs. The last available profit on Retail was in 2004 when we made £3.7m on a turnover of £18.7m. Turnover for 2005 was £20.6m and although profit was not shown it is unlikely that profit exceeded £4.5m.

The £4.5m would therefore appear to be a favourable deal, particularly if you also take into account the savings in interest paid due to the lump sum received.

There were no additional royalty payments, so it can be assumed that we did not cross the threshold whereby they would kick in. It should also be noted though that closure costs were higher than originally expected and we were hit with a further £955,000, but these are a one-off cost.

The other benefit of this deal is that the amounts received are locked in and the risk of the expected fall in strip prices has been eliminated.

Although the deal appears to have been successful from a financial viewpoint, there are the obvious problems of a lack of brand presence both locally (eg Glasgow Airport) and throughout the UK, with many shops which may have stocked our strips in the past only featuring green and grey from the SPL.

There have been tales of poor customer service, lack of availability of stock and a poor selection of goods (“try HMV if you want a Rangers video”). The medium term impact of this is unknown and is impossible to put a value on, but has to be taken into account when reviewing the success or otherwise of the JJB deal.

Martin Bain

Martin Bain’s emoluments for the year were £357,000.

Although this is big drop from the previous year’s unbelievably high level of £527,000, it is still well above what a CEO of a £42 million turnover company would normally expect, particularly as he has limited impact on the company’s turnover.

Speculation is that Bain’s salary was so high last year due to a bonus received on completing the JJB deal, and that is why his salary has dropped this year.

It is also above Peter Lawwell’s pay of £291,000, which is even more galling given that Lawwell appears to have a much greater degree of autonomy than Bain, with Murray appearing to still make the major decisions. This is certainly one area where the cost-cutting exercise should be focusing on.

The debt position

The Net Debt rose from £5.9m to £16.5m. This is an area of concern.

The movement in debt was higher than the loss for the year due to the payment of the closure costs of the Retail division which went through last year’s P&L and the purchase of players.

However it should be noted that the purchase of Cuellar, McCulloch, Cousin and Whittaker for a reported combined fee in excess of £8m occurred after the year end and therefore have been excluded. As an aside, I don’t believe for a minute that Murray has financed these players out of his own pocket as was recently suggested in the press by a Murray-friendly journalist. There is absolutely nothing to suggest that this has happened, so don’t be fooled.

Murray is making a big gamble on us reaching the group stages of the Champions League (or the resale value of Cuellar?). If we are not successful against Red Star then we could be heading for another increase in the debt of £8-10 million.

If we are successful and do reach the group stages then I don’t see the net debt falling by much, if at all. Remember when we reached the last 16 of the CL in 2006, we only made a profit of £92,000. If we were to reach the same stage this year, it would appear that profits would be higher than this due to higher CL income and a fall in costs, but it is not going to make a significant impact in the debt which will continue to grow over the medium term unless there is another cash injection into the club.

If the worst happens and our debt does grow to around £25m I hear cries that a club our size can survive with that level of debt. Perhaps we can, but that is not the issue. We have very few avenues of reducing it and it will only continue to grow. We are not yet at the 2004 levels of £74m, but it should be remembered that our net debt position at 30th June is about as favourable as it gets as much of the season ticket cash is in and the major expenditure on players has not yet taken place. If we don’t qualify for the CL group stages, we could be looking at a net debt in excess of £40m around March of next year. This will take us to the limits of our current credit facilities provided by HBOS.

Murray has said that he will not put any further cash into the club. Is he again gambling on a short-term success with a hope that someone will then bail him out by buying the club? It certainly appears so, but with no buyers on the horizon and an ever-increasing debt, the financial prospects look bleak.

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is there any chance you could send me your full review to read mate? i would be interested in referencing some of this stuff.

Here is the review of the 2008 accounts http://forum.rangersmedia.co.uk/index.php?showtopic=82283

Here is the review of the 2007 accounts as requested. Feel free to PM if you have any questions.

The 2007 Rangers accounts

Here are a few thoughts from looking at the Rangers accounts which popped through the letterbox recently.

The loss

We made a loss of £6.25 million in the year, compared to a profit of £92,000 in the previous year, a year in which we reached the last 16 of the Champions League. As has been widely reported, the loss was due to the fact that we did not qualify for the CL. Although we reached the last 16 of the UEFA Cup it shows what difference in the two competitions and highlights the fact that the only way that Rangers can avoid making a loss is to reach the CL or to have another Boumsong type transfer coup.

Turnover

Turnover fell from £61.1m to £41.8m due to the afore-mentioned lack of CL football and the fact that our retail turnover has been replaced by the cash we receive from JJB. Over the last few years our retail turnover has averaged around £18m whereas it will now be the JJB £4.5m.

Don’t expect us to feature in any so-called Football “Rich” lists in the near future as they tend to be based on turnover, but it should be remembered that turnover is not the most important issue. Although our retail turnover has fallen, our profit from this area has risen as shown below.

The JJB deal

A quick recap of the JJB Sports agreement – we received £18m upfront at the end of last season. £3.5m was used to offset the closure costs of the shops and the remainder will be added to profit at £1.45m per year for the next 10 years. In addition we receive £3m guaranteed payment each year.

So was the JJB deal for us from a financial viewpoint? It certainly appears so. The accounts show the expected £4.5m income.

The 2006 accounts, if taken at face value, show around a £2m Retail profit after taking out part of the lump sum that was included to offset the closure costs. The last available profit on Retail was in 2004 when we made £3.7m on a turnover of £18.7m. Turnover for 2005 was £20.6m and although profit was not shown it is unlikely that profit exceeded £4.5m.

The £4.5m would therefore appear to be a favourable deal, particularly if you also take into account the savings in interest paid due to the lump sum received.

There were no additional royalty payments, so it can be assumed that we did not cross the threshold whereby they would kick in. It should also be noted though that closure costs were higher than originally expected and we were hit with a further £955,000, but these are a one-off cost.

The other benefit of this deal is that the amounts received are locked in and the risk of the expected fall in strip prices has been eliminated.

Although the deal appears to have been successful from a financial viewpoint, there are the obvious problems of a lack of brand presence both locally (eg Glasgow Airport) and throughout the UK, with many shops which may have stocked our strips in the past only featuring green and grey from the SPL.

There have been tales of poor customer service, lack of availability of stock and a poor selection of goods (“try HMV if you want a Rangers video”). The medium term impact of this is unknown and is impossible to put a value on, but has to be taken into account when reviewing the success or otherwise of the JJB deal.

Martin Bain

Martin Bain’s emoluments for the year were £357,000.

Although this is big drop from the previous year’s unbelievably high level of £527,000, it is still well above what a CEO of a £42 million turnover company would normally expect, particularly as he has limited impact on the company’s turnover.

Speculation is that Bain’s salary was so high last year due to a bonus received on completing the JJB deal, and that is why his salary has dropped this year.

It is also above Peter Lawwell’s pay of £291,000, which is even more galling given that Lawwell appears to have a much greater degree of autonomy than Bain, with Murray appearing to still make the major decisions. This is certainly one area where the cost-cutting exercise should be focusing on.

The debt position

The Net Debt rose from £5.9m to £16.5m. This is an area of concern.

The movement in debt was higher than the loss for the year due to the payment of the closure costs of the Retail division which went through last year’s P&L and the purchase of players.

However it should be noted that the purchase of Cuellar, McCulloch, Cousin and Whittaker for a reported combined fee in excess of £8m occurred after the year end and therefore have been excluded. As an aside, I don’t believe for a minute that Murray has financed these players out of his own pocket as was recently suggested in the press by a Murray-friendly journalist. There is absolutely nothing to suggest that this has happened, so don’t be fooled.

Murray is making a big gamble on us reaching the group stages of the Champions League (or the resale value of Cuellar?). If we are not successful against Red Star then we could be heading for another increase in the debt of £8-10 million.

If we are successful and do reach the group stages then I don’t see the net debt falling by much, if at all. Remember when we reached the last 16 of the CL in 2006, we only made a profit of £92,000. If we were to reach the same stage this year, it would appear that profits would be higher than this due to higher CL income and a fall in costs, but it is not going to make a significant impact in the debt which will continue to grow over the medium term unless there is another cash injection into the club.

If the worst happens and our debt does grow to around £25m I hear cries that a club our size can survive with that level of debt. Perhaps we can, but that is not the issue. We have very few avenues of reducing it and it will only continue to grow. We are not yet at the 2004 levels of £74m, but it should be remembered that our net debt position at 30th June is about as favourable as it gets as much of the season ticket cash is in and the major expenditure on players has not yet taken place. If we don’t qualify for the CL group stages, we could be looking at a net debt in excess of £40m around March of next year. This will take us to the limits of our current credit facilities provided by HBOS.

Murray has said that he will not put any further cash into the club. Is he again gambling on a short-term success with a hope that someone will then bail him out by buying the club? It certainly appears so, but with no buyers on the horizon and an ever-increasing debt, the financial prospects look bleak.

cheers bluedell thats a great help

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Calling corbyloyal.

Might I suggest you save yourself some time and effort for your dissertation and write the following.

"JJB and Rangers FC - this was a bad deal." The End.

Hand it in then head for the pub. :party:

i cant, thats what i have spent the past 2 years doing!

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