Rangers owners plan wage cap and season ticket hikes for share offer

[Ace 3,556]

Rangers' owners are planning to impose a strict wage cap and sharply increase season ticket prices as a key part of their share offering.

Documents seen by STV's Scotland Tonight programme show that the Sevco consortium wants to restrict wages to 33% of turnover, barely half the average ratio for SPL clubs.

The owners also plan to increase season ticket prices by 20% in 2014 followed by a further 15% hike the following year as the club is expected to climb up through the divisions.

Notes from broker Cenkos Securities, seen by STV ahead of the stock market flotation of The Rangers Football Club Ltd next month, reveal the season ticket prices would return to similar levels as last season, prior to the financial collapse of the oldco.

Cenkos’s projections state that although the company will run at a £3.5m operating loss in 2013, it could bring in an operating profit of £10.9m in 2015. Rangers chief executive Charles Green has endorsed the pre-initial public offering notes made by the brokers.

Watch the livestream of Scotland Tonight online from 10.15pm

The severe constraints would put top European players beyond Rangers' reach, but the brokers believe that fiscal discipline will give the club a long-term advantage over "irrational competitors".

The projections by Cenkos claim that the value of shares in the newco club could “more than double in three years”, but this has been described as unrealistic by football finance expert Neil Patey.

According to the brokers, Rangers directors are committed to a maximum ratio of players' wages to turnover of 33%, which is almost half of the 2010 Scottish Premier League average ratio of 61%, while English Premier League clubs sit at a current wage-to-turnover ratio average of 70%.

The notes state that in 2013 the first team payroll is to constitute 26% of all revenues with it currently sitting at around £7.5m, which will reduce to 18% of all revenues in the next two years as Cenkos predicts turnover to hit £46.5m by 2015.

Cenkos states that it “believe that this will be achievable with our growth revenue forecast and the current level of players wages being paid gives significant room for manoeuvre.”

The brokers also believe that the policy would be in line with UEFA’s financial fair play regulations, which stipulate that wage-to-turnover ratio should not be higher than 60%.

Cenkos states: “We suggest that investors should take comfort from UEFA’s reforms which are designed to end financial instability within football clubs.

"We believe the high level of player wage inflation and transfer fees driven by irrational competitors will be significantly reduced and, as one of the 20 best supported teams in Europe, the requirement for clubs to live within their means should work towards Rangers’ competitive advantage.”

Comparisons in the document are made to Celtic and Manchester United’s share market flotations as successes, with the brokers stating: “In our view the old notion that revenues from television are the only driver of value for football clubs has proven to be incorrect and it is the potential for selling branded product on a global, multi-channel, basis that has resulted in the value of the leading football clubs appreciating significantly in the past decade.”

The forecast is based on several assumptions set out in the document, including the season ticket price increase, as well as a £1.5m reduction in unspecified overheads.

According to Cenkos, non-matchday cash, including the £3m-a-year retail deal with Sports Direct, will bring in £17.5m in 2012-13 financial year, out-weighing matchday revenue of £13.5m. For the 2012/13 Third Division season, Rangers raised £8m through selling 36,000 Ibrox season tickets this year and £1m from corporate hospitality sales, according to the document.

The Sevco consortium led by Mr Green purchased the club’s assets from oldco Rangers, now RFC 2012 Ltd, in a £5.5m deal in June after administrators Duff and Phelps failed to maintain it as a going concern.

Mr Green and his group are aiming to raise around £20m through the initial public offering, with payments scheduled to be processed on the scheme by December 17.

Directors of the club are currently involved in road shows pitching the flotation to fans groups and possible investors across the UK.

In 2000, under Sir David Murray, oldco Rangers, now RFC 2012 plc, was floated on the stock market with the aim of raising £53.1m to pay off some of their debts. This resulted in £38m of investment, £32.3m of which was from Sir David's Murray Sports Ltd and the remaining £6m from around 3500 small shareholders.

Four years later Sir David oversaw another share issue which aimed to raised £57m for Rangers. It brought in £51m, only £1m of which was from the fans - the rest being underwritten by the Murray MHL Limited, one of the owner's companies.

This came after the Rangers Bond scheme in 1991, which saw 6700 fans raise £8.5m through buying debentures to construct the Club Deck at Ibrox Stadium. When Rangers went into administration, those who bought into the scheme became creditors.

http://m.stv.tv/news/200640-rangers-plan-wage-caps-and-season-ticket-hikes-to-revive-club/

[nachothelegend 1,932]

Newco oldco.

Fuck off you Bastards .

We are Rangers and you all know it.

Running scared the lot off them.

[Ricky_ 893]

interesting that he is targeting a wage cap at 33% of turnover.

standard for football clubs is about 65%.

but we've seen how successfull that is in the long term.

Our Charles is ahead of the game.

[Thermopylae 15,287]

What a shock a negative story about Rangers

[ForeverBlue_Since91 2,895]

Rangers' owners are planning to impose a strict wage cap and sharply increase season ticket prices as a key part of their share offering.

Documents seen by STV's Scotland Tonight programme show that the Sevco consortium wants to restrict wages to 33% of turnover, barely half the average ratio for SPL clubs.

The owners also plan to increase season ticket prices by 20% in 2014 followed by a further 15% hike the following year as the club is expected to climb up through the divisions.

Notes from broker Cenkos Securities, seen by STV ahead of the stock market flotation of The Rangers Football Club Ltd next month, reveal the season ticket prices would return to similar levels as last season, prior to the financial collapse of the oldco.

Cenkos's projections state that although the company will run at a £3.5m operating loss in 2013, it could bring in an operating profit of £10.9m in 2015. Rangers chief executive Charles Green has endorsed the pre-initial public offering notes made by the brokers.

Watch the livestream of Scotland Tonight online from 10.15pm

The severe constraints would put top European players beyond Rangers' reach, but the brokers believe that fiscal discipline will give the club a long-term advantage over "irrational competitors".

The projections by Cenkos claim that the value of shares in the newco club could "more than double in three years", but this has been described as unrealistic by football finance expert Neil Patey.

According to the brokers, Rangers directors are committed to a maximum ratio of players' wages to turnover of 33%, which is almost half of the 2010 Scottish Premier League average ratio of 61%, while English Premier League clubs sit at a current wage-to-turnover ratio average of 70%.

The notes state that in 2013 the first team payroll is to constitute 26% of all revenues with it currently sitting at around £7.5m, which will reduce to 18% of all revenues in the next two years as Cenkos predicts turnover to hit £46.5m by 2015.

Cenkos states that it "believe that this will be achievable with our growth revenue forecast and the current level of players wages being paid gives significant room for manoeuvre."

The brokers also believe that the policy would be in line with UEFA's financial fair play regulations, which stipulate that wage-to-turnover ratio should not be higher than 60%.

Cenkos states: "We suggest that investors should take comfort from UEFA's reforms which are designed to end financial instability within football clubs.

"We believe the high level of player wage inflation and transfer fees driven by irrational competitors will be significantly reduced and, as one of the 20 best supported teams in Europe, the requirement for clubs to live within their means should work towards Rangers' competitive advantage."

Comparisons in the document are made to Celtic and Manchester United's share market flotations as successes, with the brokers stating: "In our view the old notion that revenues from television are the only driver of value for football clubs has proven to be incorrect and it is the potential for selling branded product on a global, multi-channel, basis that has resulted in the value of the leading football clubs appreciating significantly in the past decade."

The forecast is based on several assumptions set out in the document, including the season ticket price increase, as well as a £1.5m reduction in unspecified overheads.

According to Cenkos, non-matchday cash, including the £3m-a-year retail deal with Sports Direct, will bring in £17.5m in 2012-13 financial year, out-weighing matchday revenue of £13.5m. For the 2012/13 Third Division season, Rangers raised £8m through selling 36,000 Ibrox season tickets this year and £1m from corporate hospitality sales, according to the document.

The Sevco consortium led by Mr Green purchased the club's assets from oldco Rangers, now RFC 2012 Ltd, in a £5.5m deal in June after administrators Duff and Phelps failed to maintain it as a going concern.

Mr Green and his group are aiming to raise around £20m through the initial public offering, with payments scheduled to be processed on the scheme by December 17.

Directors of the club are currently involved in road shows pitching the flotation to fans groups and possible investors across the UK.

In 2000, under Sir David Murray, oldco Rangers, now RFC 2012 plc, was floated on the stock market with the aim of raising £53.1m to pay off some of their debts. This resulted in £38m of investment, £32.3m of which was from Sir David's Murray Sports Ltd and the remaining £6m from around 3500 small shareholders.

Four years later Sir David oversaw another share issue which aimed to raised £57m for Rangers. It brought in £51m, only £1m of which was from the fans - the rest being underwritten by the Murray MHL Limited, one of the owner's companies.

This came after the Rangers Bond scheme in 1991, which saw 6700 fans raise £8.5m through buying debentures to construct the Club Deck at Ibrox Stadium. When Rangers went into administration, those who bought into the scheme became creditors.

http://m.stv.tv/news...to-revive-club/

Sevco Scotland? Was that not just a holding company then when the assest were transferred over it would be Rangers again.

It's alot of shite that they have to do this so people know who their talking about.

[wearethepeople1 3,897]

This the way most teams will go in the future. With the fair play rules coming in and it will put a stop to ridiculous wages in England and the Spanish 2.

[ForeverBlue_Since91 2,895]

Wheres all the negative storys about Hearts? A club that have not paid their PAYE and haven't played their staff on time at least 5 times.

And have been issued with at least 3 winding up orders.

Scotland it a bitter infested shitehole. The media is filled with it.

[The Monk 3,208]

Blackpool have done very well with a 10k wage cap competing with teams able to pay 30k a week in the Campionship. Young cheap players is the way to go to develop and sell for a profit or to keep and become legends.

[ForeverBlue_Since91 2,895]

One thing Rangers should be spending money on is coaches and Scouts.

[falwheel 222]

I didn't think it was necessarily negative, however, why report on a brokers prospectus, lets wait until the official prospectus has been issued.

[ForeverBlue1872 463]

When ever you see the likes of "newco" your best just stop reading, it's the usual Scottish media biased against us, I've read many articles about us from other Countries and they never come out with the newco pish, they always address us as the 54 times champions as we are.

[Redwhiteandblue 3,330]

interesting that he is targeting a wage cap at 33% of turnover.

standard for football clubs is about 65%.

but we've seen how successfull that is in the long term.

Our Charles is ahead of the game.

33% is too low imo. 45-50% should be where we should be operating. Also, £8m season tickets? not according to my maths.

[GrandSuckMaster 1,775]

I can't see how this article is being portrayed as negative. Obviously Charlie is not going to try and attract investors by saying he will spend all the money they put in on wages. Green probably had a hand in getting this out in public through the press in order to show that he is not going to waste any potential investors investments. I know I will be told to fuck off back to OT, but some posters need to get a grip and realise not everything reported in the press is anti Rangers.

[Londonderry_Bear 111]

As far as I can see, the media seem to be jumping on this as if it's a bad thing when clearly it's not. The benefit to the club in having proper wage structures is immense. When Green took over I think one of the very first things he said, if memory serves, is that we must live within our means and this is now it happening.

And as for "hikes" in season ticket prices, I wholeheartedly expected them to rise as we rise from the bottom to the top, I certainly didn't expect or plan to pay 3rd division prices when we are in the top flight, in fact I would have paid top flight prices this season.

[Redwhiteandblue 3,330]

This the way most teams will go in the future. With the fair play rules coming in and it will put a stop to ridiculous wages in England and the Spanish 2.

No it wont. Not to the Reals, Barcas, Chelseas, Man Citys, PSGs, Man UTDs etc...

They can easily get round these rules.

[Getstiffed 8,863]

The fact is we could canter the 3rd, 2nd and 1st division with that wage cap and then go on to challenge for honors in any "top league" with the right scouting and proper coaching. Its do-able and given the state of Scottish football its necessary.

[ForeverBlue_Since91 2,895]

Do Blackpool,Swansea and Wigan not have wage caps. They bring through youth players and buy the odd player. They seem to play good football and can compete against the best in the EPL.

Looks like Green is going to be here for ever because, we won't get into the champions league by playing youth players.

[AlBear. 8,499]

No it wont. Not to the Reals, Barcas, Chelseas, Man Citys, PSGs, Man UTDs etc...

They can easily get round these rules.

Why are you so sure? The reason they are bringing the rules in is to make sure that clubs spend within their means. So teams with big fan bases and big stadiums will be at an advantage due to their increased revenue in that area. Perhaps, owners companies will be able to invest sponsorship into the clubs but surely such blatant disregard will be shot down by those in charge of the FFP.

Shouldn't you wait to see what the affects will be before writing it off?

[AlCapone 7,678]

Blackpool have done very well with a 10k wage cap competing with teams able to pay 30k a week in the Campionship. Young cheap players is the way to go to develop and sell for a profit or to keep and become legends.

Is that some sort of gay league?

[Redwhiteandblue 3,330]

The fact is we could canter the 3rd, 2nd and 1st division with that wage cap and then go on to challenge for honors in any "top league" with the right scouting and proper coaching. Its do-able and given the state of Scottish football its necessary.

What is the other 66% needed for?

[Redwhiteandblue 3,330]

Why are you so sure? The reason they are bringing the rules in is to make sure that clubs spend within their means. So teams with big fan bases and big stadiums will be at an advantage due to their increased revenue in that area. Perhaps, owners companies will be able to invest sponsorship into the clubs but surely such blatant disregard will be shot down by those in charge of the FFP.

Shouldn't you wait to see what the affects will be before writing it off?

Why do you think the man city owner is sponsoring their stadium and shirt? It's so they can put in massive "sponsorship" money and claim it's profit.

[Ricky_ 893]

33% is too low imo. 45-50% should be where we should be operating. Also, £8m season tickets? not according to my maths.

disagree - it's too low because it's somewhat of a shock.

if you spend 65-70% of turnover on wages like most clubs do, how much does that leave for transfers to buy players?

id say close to 0, when you consider operating costs could easily be upwards of 20%. One of the reasons why clubs get into debt. You should read Aberdeens last published figures. Their wage was around 70% - but when they wanted to sack their manager to bring in Brown, the compensation they paid put them in the red.

33% is a great figure if we can make it work. 33 of Rangers turnover will be > 70% turnover of Aberdeen, Hibs, Hearts. If they want to risk bankruptcy to get to our wage level, let them. Leaves us competing with 1 club.

the biggest concern over that wage structure would be losing out on players to championship clubs, but we already were anyway.

[kanjo 26,385]

Absolutley no issue with the wage cap. New legislation means 33% will be around average for clubs the size of Rangers like Ajax, PSV, Porto, Anderlecht etc.

What a wage cap means though is...if we can get some good scouts on the payroll we can afford to invest in some young talents who will bring us some more money.

Charles sounds like he knows what he's doing and when we return to the top table in scottish football things for Rangers will be alot better than they were before, and as Neil Patey suggested we could be worth (easily) between £50-60m with all assets.

[bornabear 6,219]

A "hike" in season tickets ?...... 20% next season then 15% the season after.

Carry on STV, tell us the true story. Even with those increases (not hikes), my season ticket will still be cheaper

than last season and 36,000 fans can't be wrong.

I would ban STV from Ibrox for spouting negative shit like this.

[Ricky_ 893]

Why do you think the man city owner is sponsoring their stadium and shirt? It's so they can put in massive "sponsorship" money and claim it's profit.

how stupid do you think the people enforcing the FFP rules are? That will be regulated.