Christmas may be just around the corner, but Mike Ashley clearly isn’t taking a holiday just yet as he executes his convoluted takeover of Rangers football club. The Sports Direct founder and Newcastle United owner has manoeuvered ally Derek Llambias into the chief executive’s chair, less than two months after ‘rescuing’ the struggling club with a £2m loan.
Rangers announced the appointment of Llambias to the stock market this morning. The former managing director of Newcastle United only joined the board on November 3rd, as part of the strings attached to Ashley’s interest-free loan, which was increased by £1m on November 12th.
Ashley’s lifeline coincided with the ousting of his opponents at Rangers: chief executive Graham Wallace and finance boss Philip Nash. Alongside his alliance with other major shareholders Sandy Easdale and hedge fund Laxey Partners, the loan effectively handed Ashley control of the club, despite his agreement with the Scottish Football Association not to increase his 8.29% stake to more than 10% because of his ownership of Newcastle.
The Scottish FA is not best pleased with Ashley’s conniving, though, and has summoned both him and Rangers to a disciplinary meeting on January 27th, alleging they have broken the rules on dual ownership of clubs and haven’t acted ‘in the best interests’ of football.
MT wouldn’t put it past Ashley to outwit the FA – particularly as Rangers is in desperate need of more cash. Three weeks ago it reported an £8.3m loss for year to 30th June and said it needs £8m more in debt or equity finance to get it through the next 12 months.
Rangers' share price. Source: Hargreaves Lansdown
Given that a share offering in September didn’t exactly work out and its share price hasn’t recovered since, that money will probably have to come from Ashley’s pockets. But then again Scotland’s clubs did vote to relegate Rangers from the Premier League to the fourth tier of Scottish football when it went bankrupt in 2012, so the FA may not be too concerned about it going bust again.
Rangers is also having trouble on the football front – it’s currently nine points adrift of Scottish Championship leaders Hearts and manager Ally McCoist resigned on Monday, although he’s going nowhere for now as the club can’t actually afford the payoff he wants.
Ashley will probably come to some sort of agreement with the FA to keep the club afloat, though. Sports Direct controls Rangers’ shirt sales and retail division for another five years and if there’s one thing that seems to motivate its maverick founder it’s money.