Rangers – Europa sings the blues

RANGERS may have looked out of their depth in the UEFA Champions League group stage this season, but the club’s financial position continues to gradually improve, so much so that they enjoyed record revenues in 2021-22 and posted an operating profit of £ 5.9 million and an overall pre-tax loss of just £ 2.2 million.

Rangers reached the UEFA Europa League final in 2021-22 but were beaten by Eintracht Frankfurt. This made up for losing the league title they won in 2021 and the loss of manager Steven Gerard, who defected to Aston Villa in mid-season. The club received more than £ 4 million in compensation and also settled their dispute with Sports Direct, which cost them £ 6 million.

Rangers’ overall revenues totalled £ 86.8 million versus £ 47.7 million in 2020-21. The increase was attributable to Rangers’ Europa League run, which allegedly generated close to £ 30 million, and a return to near normal conditions on matchdays. Income from matches totalled £ 41.9 million compared to £ 18.2 million in 2020-21 and higher than the previous best of £ 35 million in 2020. Earnings from broadcasting, again boosted by the Europa League, rose from £ 18.9 million to £24.5 million. Rangers’ commercial revenues almost doubled to £ 20.5 million.

Rangers have moved closer to Celtic in terms of turnover. In 2018, Celtic’s income was £ 102 million while Rangers’ was £ 33 million but the gap has now almost completely closed.

While turnover was at an all-time high, wages also went up by 15% to £ 54.8 million, representing 63% of income. Rangers also showed a healthy profit on player trading, some £ 11.2 million, the highest figure in the past decade. Rangers received £ 11.5 million from Everton for Nathan Patterson and since the end of the 2021-22 financial year, they received £ 19.6 million from the sale of Calvin Bassey to Ajax. Player trading will form a key part of Rangers’ financial model going forward and the latest financials indicate that they have moved a step forward in this direction. This is a priority for highly-rated sporting director Ross Wilson and his team.

Football finance expert Kieran Maguire said Rangers’ Glasgow rivals Celtic, for example, have become adept at producing £ 15-£ 20 million players that can turn a good profit for the club. In 2021-22, Celtic’s profit from player trading was £ 29 million. Record player sales of £ 11.2 million meant Rangers were able to reduce pre-tax losses from £ 24.7 million to just £ 2.2 million. Nevertheless, the club has made a loss for nine consecutive seasons, although the board anticipates making a profit in 2022-23. But they reminded the Rangers fans that when the current administration took over in 2015, they envisaged a 10-year recovery period.

The club’s net debt has reduced to £ 3.9 million, a £ 5 million improvement on the previous year. Cash has increased by almost £ 10 million to £13.1 million, while borrowings total £ 16.9 million, some £ 4.5 million higher than 2020-21. The club said that in raising £ 10.1 million of new equity and taking on £ 3.6 million of new debt, Rangers’ financial position has been strengthened. They have also repaid £ 15 million of loans to Dave King, John Bennett and George Letham.

Although Rangers will benefit from their involvement in the UEFA Champions League this season, it is unclear how their financials will look in 2022-23. On the evidence of the latest report, revenues were outstripped by costs and the current wage bill may prove to be far too high. Rangers will be back in Europe next season, but it probably won’t be in the Champions League as they are currently lagging behind another Glasgow side.

Dundee United look forward rather than backwards

IT HAS been a long time since Dundee United were referred to as part of the “new firm”, but the club’s management are confident the hurdles of the pandemic may soon be consigned to the past. The Tangerines’ finances took a hit in 2020-21, but the club managed to limit their losses to £ 2.5 million for the campaign. 

Dundee United aim to be a top six Premiership club and qualify for European football. In 2021-22, they are currently in a Conference League position and are still in the Scottish Cup, their objectives look realistic at the moment.

The club’s turnover in 2020-21 was down by around 2.5% to £ 3.8 million, while their deficit was an improvement on 2019-20 when they lost £ 3 million. Like all other Scottish clubs, the lack of matchday income decimated turnover, but Dundee United fared better than some – Hearts saw their revenues drop by 38%, Aberdeen 22% and Celtic 13%.

With revenues dropping, the wage bill became more of a drain on the club’s finances. In 2020-21, the wage bill was up by 7% to £ 4.9 million and this represented 132% of income. In 2019-20, the wage to income ratio was 120%. Ideally, the club would like to see the ratio closer to 80%, still high but much more manageable.

Scottish football benefitted from the government’s relief measures and Dundee United secured £ 2.8 million from the debt facility which has a zero interest rate and is repayable over 21 years. The club estimates it has lost around £ 4.2 million from the pandemic.

In addition, the club’s owner and chairman, Mark Ogren, a US-based businessman, has made interest free loans of over £ 9 million to the club since taking over in 2018. He is committed to the club in the medium to long term and is aware that success on the field is the best way to get a return on his investment. 

Covid has got in the way of his plans and his claim the club is “going places”, and he has received some criticism from a section of the fanbase. However, Dundee United won the Championship in 2020 and returned to the Premiership.

The club expects to return to profit in 2022 partly due to income from transfers involving Lawrence Shankland (who was sold to Beerschot for £ 1 million) and youth product Kerr Smith (£ 800,000 to Aston Villa, rising to £ 2 million), and also a return to normal income streams. 

There is also considerable upside to match attendances. In 2019-20, they averaged 8,500 at Tannadice, but the 2021-22 gates are around 6,500. There is potential at Dundee United, although the gap between the “old firm” and the rest of Scottish football is enormous and growing all the time.

The fans have played a major role in assisting the club during the pandemic, with most of the 3,000 season ticket holders waiving their refunds and the Supporters Foundation donating £ 100,000 towards the development of the academy site at Gussie Park. 

Dundee United could end 2021-22 in a better financial state and bound for European football, that would certainly be a case of going places, to quote the club owner.