Wednesday, October 29, 2014

Mike Ashley: What's the cost of a £2 million loan?

Tough times at the Ibrox at the moment, will Mike Ashley be the saviour?
As news was announced that Mike Ashley would be providing Rangers with a £2m crisis loan, the magnate's first order of business was to cull Graham Wallace from the chief executive's position. Wallace, who had been at the club for 11 months, will most likely be replaced by Mike Ashley's good friend Derek Llambias, who has been a long-term associate of the Sports Direct owner and has already been installed as a consultant at Ibrox.

Mike Ashley, the current chairman of Newcastle United, played the hero last Saturday and provided the struggling Rangers with a £2m interest free crisis loan. Not only does he own a 9% share of Rangers, but he also has naming rights to the stadium and will propse replacements for two members of the board who are set to move in.

Does that seem like a pretty fair deal? What's the true cost of this £2m interest free loan?



Well, according to an agreement with the Scottish Football League, Mike Ashley cannot own more than 10% of Rangers while he owns Newcastle United. With other shareholders having more voting rights (as they own more of the club), Mike Ashley needed a way to swing power his way. The loan, presented as an act of generosity, is more likely a political move. The club now has this loan swinging over its head like a weight and Ashley, if needs be, can threaten to drop it when he pleases.

Furthermore, Brian Kennedy, who offered a similar package worth £3m, was quickly met with stern words from Mike Ashley's solicitors. Mike Ashley seemed hell-bent on pushing this deal through and he did, using any means possible.

So, what does this mean for the financially struggling Rangers?


With all this political nonsense going on in the background, it cannot be easy for Ally McCoist to concentrate on what's important: the football.

Rangers currently sit second in the Scottish Championship, seven points behind current leaders Hearts and with a game in hand. A recent 3-0 win against Dumbarton, with goals from Boyd, Wallace and Miller, kept Rangers in touch but Hearts remain undefeated while the Ibrox side have slipped up against both the leaders and fellow promotion contenders Hibs.

It may show that, although things were falling apart in the background, Rangers, who should be up there at the top, can manage with the pressure of their current financial climate. It can't make easy viewing at the moment for Rangers fans, who don't know whether or not their club is going to plummet into administration at any time. This loan from Mike Ashley should be quash those fears for now but raises even more questions about the future.

They next face Dumbarton again, this time in the Scottish Cup. Although on paper it looks an easy game for the Glasgow giants, but that it doesn't make it easy when it comes to football betting.

Could the recent changes create a real stir in the Rangers camp?

St Johnstone couldn't capitalise on any financial fallout on the pitch at Ibrox as Rangers progressed in the League Cup quarter final last night night.

Will a Scottish Cup trip to Dumbarton be trickier? It probably shouldn't be. But you just never know.

Written by Gordon Milligan for the Scottish Football Blog.