Stock listing makes risky investment
17 October ~ When Rangers owner Charles Green announced plans to list £20 million of the club's shares on London's AIM exchange last week, one statement caught the eye. During his wooing of investors and supporters Green said: "I want to take money off the fans. But I don't want to run off with it, I want to put it back into the club and make more money." This sentiment appears to have been well received by many supporters. Capita, the company handling share registrations, reported higher-than-expected interest 24 hours after the announcement.
Green's apparent motives – he wants to make money from the club and ultimately sell at a profit – is, for many supporters, the best they can hope for. Chairmen happy to lose fortunes on the club of their childhood are on the wane, aided by UEFA's insistence on breaking even. A businessman with a plan for growth – and possible dividend payout for those investing in it – will have to do. Green certainly has plans; a footballing policy under Ally McCoist focussed on promoting youth and a fiscal one including redevelopment of Ibrox's entertainment facilities. He is also convinced the club will join a European super league in the future.
The listing itself is contentious. According to Green the share issue to institutional investors and supporters, which values the club at around £33m (a similar market capitalisation to Celtic), is to be used for strengthening the playing squad and providing more working capital.
But as the Financial Times noted last week, little has changed since Green bought the club's assets for £5.5m this summer to suggest the club is now worth as much as Celtic – who are in the top flight and Champions League. The club's league position is still unsteady, having drawn three and lost one of the first seven games in Division Three. Other obstacles include a judicial enquiry, a criminal investigation into its previous owner and a transfer ban, which makes squad strengthening difficult.
Green has said that if there is a shortfall in take up on the listing, he will buy the remaining shares himself. The loyalty the club commands – they have sold 36,000 season tickets – means this is unlikely but Simon Denham, CEO of Capital Spreads, thinks investors should be cautious: "Just because you're the best team doesn't mean you will win the league and Rangers need to win three leagues before the riches kick in again. It's one for the optimists." Tom Young @TomYoung17