Clearly one struggling football club isn't enough for Mike Ashley. The Sports Direct and Newcastle United owner has called for Rangers boss Graham Wallace and finance chief Philip Nash to be booted off the plc's board. Ashley sent a note yesterday calling for an emergency general meeting to vote on removing the pair, only one week after he raised his stake in the club to 8.9%. He’s not one to hang around, is he?
The note, formally sent from Ashley’s MASH Holdings, drew an icy response from the Rangers board. ‘The company is currently verifying that the Notice is properly constituted,’ Rangers said, hoping perhaps that Ashley made a spelling mistake. If the notice is proper, the board hopes to have it withdrawn, owing to the costs of holding such a meeting. Fat chance there…
That only leaves the possibility of the meeting and vote taking place, and that’s where it’ll get interesting. While the board has said it is ‘unified in its support of the executive team’, it also surely knows that Ashley holds a lot more cards than his £4m stake would imply.
Rangers has been in dire financial straits. It told the stock exchange in September that it needed to raise £3.9m in a share offering that month or it wouldn’t be able to pay its creditors. The club managed to pull together £3.1m, meaning it may need to hold another share offering or find alternate sources of finance to settle its bills.
Billionaire Ashley declined the opportunity to take part in the share offering, instead purchasing £850,000 worth of stock from brokers Hargreave Hale a few weeks later. Effectively, Ashley could have plugged Ranger’s financial gap had he paid the same sum in the share offering, but elected not to.
This means Ranger’s still needs cash, and Ashley is still the person best placed to provide it. Rangers may not be in a position to refuse his demands, which leaves Ashley in a very strong position. While he doesn’t own anything like a majority in the club, and indeed is forbidden by the Scottish Football Association from owning more than 10% unless he sells Premier League club Newcastle, he might still be able to control it.
Ashley allegedly sought Rangers trademark rights during negotiations for an emergency loan before September’s share offering, the BBC reported, and recently bought the naming rights to Ibrox stadium for £1 (bargain).
Whether or not Ashley can take control of the board, the prospect of an Englishman renaming Scotland’s third largest football venue the Sports Direct Stadium seems to have drawn the ire of the fans. The Sons of Struth supporters group has already raised the possibility of boycotting his stores if he doesn’t return the stadium naming rights. There has been no such threat from shoppers at Debenhams, where Ashley has also been raising his stake.