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Rangers fans could be paying twice as much as they are now for a game at Ibrox over the next decade, according to Adam Williams.
GRV Media’s Head of Finance and Governance Content has assessed the club’s accounts and Andrew Cavenagh’s decision to levy a 6.5 per cent hike on ticket prices.
He has also analysed the decision to issue new shares worth £16m to help Rangers in the summer transfer window.
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Andrew Cavenagh and co. will have earmarked a specific sum to invest
Williams believes that the owners had three options to raise funds, as the club has been losing money every year.
They could have opted to loan the club money or look for a third-party to lend them money.
Instead, they have opted to go for a share issue, and in his view, Cavenagh and his consortium will have earmarked how much they would want to invest over the next decade.
He told Rangers News exclusively: “When you lose money every year, that excess has got to be funded from somewhere. You have three options, therefore – you can loan the club money, you can go to a third-party lender, or you can issue shares, which don’t cost the club itself anything. Rangers’ owners have gone for the third option, here.
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“When a takeover like Andrew Cavanagh’s consortium and the 49ers’ goes through, there is usually a specific sum earmarked for investment over the next decade or so, or however long they plan before exiting. This new money will be drawn from that fund.
“I expect there will be more investment in the future before they get Rangers to a point where they can stand on their own two feet financially year after year.”
“The aim will be to invest this cash in the playing side of the club because European football is imperative.
“Because Scotland’s coefficient has suffered a bit, Rangers’ odds of getting into the Champions or Europa League have dropped. So you need to invest in the squad because otherwise it will ultimately end up costing the owners more money in the long run.
“Rangers now have an uber-smart competitor in Tony Bloom’s Hearts, as well as Celtic, to contend with every year. If you have the financial muscle, you’ve got to use it at a time when there is clearly a bit of an arms race in Scottish football.”
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Credit: Getty Images Rangers could make £90m in matchday income in a decade
Discussing the increase in ticket prices, Williams addressed Cavenagh’s statement that he did not want the fans to be doing the heavy lifting with regard to helping the club balance their books.
However, the finance expert does foresee a scenario in which the fans will be paying twice for the tickets in the next 10 years.
This would see Rangers raking in up to £90m in matchday income as compared to the £45m they are currently.
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Williams continued: “In terms of the 6.5 per cent rise in ticket prices, you would expect that to be reflected across the offering of matchday tickets, hospitality, premium seating and so on. If you extrapolate that based on their matchday income last season, it’s a rise of about £3m over the course of a season.
“I’d anticipate that they will probably find a way to get to £50m across the whole matchday category, up from £45m at the last count.
“It’s up to fans to decide whether a 6.5 per cent rise is acceptable. What I would say, however, is that if that 6.5 per cent rise is repeated the season after, then the season after that, it’s compounding rather than increasing by a set amount each time.
“Within a decade, you’re at £90m in matchday income, and ordinary fans are paying twice what they were this season. So you need to be wary of that mission creep and ensure that prices don’t dramatically outpace inflation, as we’re seeing elsewhere.”