"Why The Boy David Had To Go"
There are supporters out there who think that David Murray has done a great job for Rangers. He brought us nine-in-a-row, he brought us Laudrup and Gazza, he gave us a stadium to be proud of, he built us Auchenhowie which the Board (excluding him they claimed) decided should be renamed Murray Park.
All true to a point, but the money which funded all of this did not come from David Murray's pockets, it all came from Rangers FC. Which is why the claims that all he did was be too ambitious do not impress as much as they might. Yes he gambled on success, speculated to accumulate; but he gambled with other people's money, he speculated with our money and as a result the club is in financial straits which means that Barry Ferguson will not be the last to leave the club and any replacements will not be like-for-like.
Spending money on players is not the main cause of the problem as far as I'm concerned, far worse is allowing the business to run up a wage bill which the club's revenue could not support, probably even with regular Champions League participation. It is this wage burden which saw a £24m cash outflow in season 2001/02 and another £16m in 2002/03 - two seasons where transfers in and out were close to zero. If he ran his other businesses in the same way - paying bigger salaries than they can afford - then they too would be in a mess.
Why go now?
It seems to me that if new investors are to come into Rangers, then it will only be when Murray goes. And make no mistake, to make any meaningful dent in the debt, we need to get new money in. Where would we be without Joe Lewis's £40m, or Dave King's £25m, or any other money put in over the past five to ten years? But having seen how that money has disappeared down the black hole of David Murray's ambitions for the club, no serious money will come in without a degree of control over how the money is spent. That control cannot be exercised while David Murray owns 66% of the club.
It is well documented that David Murray bought his controlling interest in Rangers for £6m, although it should not be forgotten that he also put in more money during the 2000 rights issue. At that time Murray Sports, which holds most of Murray‚s shares through a subsidiary, agreed to buy its entitlement to over 9 million shares at a cost of £32.3m - in fact less than 500,000 other shares were bought by the other shareholders at that time. This is a point worth noting.
ENIC did not subscribe for its 25% but of the remaining shareholders, less than 1 in 4 put their hands in their pockets at 345p per share - good call there! In addition the board also sold a further 1.3 million shares (at 345p) to raise an extra £4.5m. It is not disclosed who bought those shares but it could not have been anyone connected with David Murray.
But back to the Murray Sports holding. Of the £32.3m, only £9.3m came from the Murray Group, £20m was from Dave King who invested in Murray Sports at that time, the other £3m presumably from other minority shareholders in Murray Sports. This means that 15% of the shares controlled by David Murray were bought by Dave King at four times the current price, a fact which may complicate any sale. So David Murray's own investment is probably more like £15m (£6m + £9m).
At the recent share price of 87.5p, Murray Sports' holdings are worth £33m, against a total investment of £38.3m. If he sold now, he would not be accused of making a fortune. In fact, he would need around £1 a share to get his cash back ˆ but this would be ignoring any money that his other companies have made through doing business with Rangers FC over the years.
£38m - not much to buy a controlling interest in Rangers - and then have a further share issue to raise new funds, bring in other shareholders, and reduce the debt to more manageable levels. Ideally a consortium of investors would be involved so that no one person could again dictate what happens.
Why sell at the bottom of the market?
With Rangers shares as low as they have been for years why should David Murray sell now? Well, if this was totally a business decision he wouldn't. He'd wait until Rangers joined something other than the SPL and sell out then at a higher price. But if he did, then he'd be consigning the fans to a diet of gruel and water, because of his lofty ambitions for our club.
What about the recent treble I hear some say? That's not gruel and water. Yes we won the treble last season, but that says as much about the quality of the rest of Scottish football. It's like the bully beating up the little kids in his own school, but running for cover when the might of Victoria Zhizkov come around. We could win a treble again, but that does not change the fact that because of our burden of debt we cannot afford to compete with the Boltons, Birminghams and Portsmouths of the EPL, far less Chelsea and Manchester Utd.
We all enjoyed the highs of nine-in-a-row and the likes of Laudrup and Gazza gracing Ibrox, but now it's hangover time. That hangover will last until the club finances are on a more sound footing, and this observer firmly believes that will not be until David Murray sells out and leaves - or unless David Murray cares to give the club a gift (not a loan or revolving credit facility) which wipes out a large chunk of the debt at a stroke. Over to you Mr Murray.
BROCK STOKER
(Brock will be on the FF messageboard most of today so if you have a question to ask him about the club accounts stick up a post)