#RangersFC recently published 2017/18 financial results, covering a season when they finished 3rd in the SPFL Premiership and reached the semi-final of both domestic cups, but crashed out of the Europe League in the 1st qualifying round. Some thoughts in the following thread.
#RangersFC pre-tax loss doubled for the second year in a row from £6.8m to £14.4m, despite revenue rising £3.4m (12%) to £32.7m and £1.2m profit on player sales compared to a £0.4m loss in the prior year. This was due to high cost growth, as the club invested in the first team. 
All three #RangersFC revenue streams were up. Gate receipts and hospitality grew £1.4m (6%) to £23.0m; commercial increased by £1.3m (34%) to £5.3m; and broadcasting was £0.7m (20%) higher at £4.4m. Also no repeat of £3m 16/17 payment to terminate Sports Direct retail agreement.
However, #RangersFC wage bill climbed £6.6m (37%) to £24.1m; player amortisation & impairment shot up £5.8m to £7.4m; other expenses rose £1.0m (8%) to £13.2m; net finance costs £1.4m higher; and £1.2m reduction in share from associated companies.
8 of the 12 SPFL Premiership clubs are profitable after tax, though only Celtic made a sizeable profit of £15.4m (Hearts were next highest at £2.3m). 4 clubs lost money, but #RangersFC £14.3m loss was by far the highest (others: Aberdeen £1.2m, Dundee £0.4m & Motherwell £0.1m).
One reason Celtic’s profit was so large was £16.5m profit on player sales (mainly Virgil Van Dijk sell-on fee and Stuart Armstrong to Southampton). In contrast, #RangersFC only made £1.2m from this activity (largely Martyn Waghorn to Ipswich & Barrie McKay to Nottingham Forest).
#RangersFC have consistently lost money since their return from liquidation, aggregating £40m of losses in the last five years. Worryingly, their losses have been growing since promotion to the Premiership. The picture is unlikely to improve this season after the Gerrard spend.
#RangersFC did report a small profit of £1.2m in their first season as a new company in 2012/13, but this was only due to a £20.5m release of negative goodwill, though there were also £4.3m exceptional expenses that season.
#RangersFC have made very little from player sales, producing only £2.1m profits from this activity in last 6 years. In fact, club actually lost money in 2 of those seasons. No obvious potential big money sales in squad, though accounts note £3.9m received after accounts closed.
#RangersFC EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), which can be considered as a proxy for cash operating profit, fell from break-even to £(4)m, though this is better than the minus £7-12m between 2013 and 2015.
Since their promotion to the Premiership in 2016, #RangersFC revenue has grown by almost 50% (£10.5m) from £22.2m to £32.7. Over half of this growth has come from gate receipts & hospitality (£5.6m), but there were also increases in commercial (£2.5m) and broadcasting (£2.3m).
As is the case for most Scottish clubs, #RangersFC are very reliant on match day income. This accounts for 70% of their revenue, though it was actually as high as 78% in 2016. Commercial is 16% and broadcasting 13%.
#RangersFC £33m revenue is less than a third of Celtic’s £102m, underlining the magnitude of their challenge to get back on top. That said, it is more than twice as much as Aberdeen £15m, followed by Hearts £12m and Hibernian £10m, then a big gap to Kilmarnock £5m.
In fact, the revenue gap between #RangersFC and Celtic has never been wider with the difference in 2017/18 being a massive £69m. In the last 6 seasons, Celtic have benefited from nearly £300m more revenue than their Glasgow rivals.
European competition is one of the main reasons for the hefty revenue difference between #RangersFC and Celtic, who have earned £102m in prize money alone, particularly from the Champions League. Rangers will hope to further advance in the Europe League in 2018/19 for extra funds
In stark contrast, even though SPFL chief executive Neil Doncaster described the latest domestic TV deal as “the highest prize fund in the history of the Scottish game”, #RangersFC third place in the league was only worth £2m. Champions Celtic only got £3.2m.
For some perspective, the Premier League winners received £150m, while the last placed team got £95m. Even Championship clubs (£7m) get more than twice as much as the Scottish champions (£3.2m) with those in receipt of parachute payments getting £44m.
#RangersFC match day income rose £1.4m (6%) to £23.0m, despite hosting 4 fewer games at Ibrox, as average attendance increased from 48,893 to 49,173. This was £9m below Celtic’s £32m, but nearly 5 times as much as Aberdeen £5m and Hearts £4m. Only surpassed by 7 clubs in England.
#RangersFC average attendance of 49,173 is around 8,000 lower than Celtic’s 57,588, but is significantly higher than other Scottish clubs: Hearts 18,163, Hibernian 17,964 and Aberdeen 15,633. There are around 45,000 season tickets at an average price of £328.
#RangersFC commercial income rose by £1.3m (34%) to £5.3m, miles behind Celtic £36.6m and even below Aberdeen £6.4m. Despite a new retail agreement with Sports Direct, there are still issues with the relationship.
#RangersFC shirt sponsor 32Red improved and extended their deal for 2 years until 2018/19, while club signed Utilita as first back-of-shirt sponsor. Hummel replaced Puma as kit supplier in a 3-year deal from 2018/19, also renaming the training ground as Hummel Training Centre.
#RangersFC wage bill grew by 37% (£6.6m) to £24.1m, mainly due to a £4.7m rise in first-team salaries and one-off costs in replacing two management teams, thus increasing the wages to turnover ratio from 60% to 74%. Wages have nearly doubled since promotion in 2016.
Despite the increase, Celtic’s £59m wage bill is still 2.5 times as much as #RangersFC £24m, which should allow them to buy much better players. However, Rangers’ wages are in turn more than three times as much as Aberdeen £8m, Hearts £6m and Hibernian £5m.
#RangersFC wages to turnover ratio of 74% is the second highest (worst) of those clubs that divulge wages information in their accounts, only behind Ross County 83%. It is a lot worse than Celtic 58%, Hibernian 56%, Hearts 51% and Aberdeen 51%.
#RangersFC player amortisation, the annual expense to write-down transfer fees, has risen five-fold from £0.8m in 2016 to £4.1m in 2018, reflecting recent investment in the squad. They also booked a £3.3m impairment charge to reduce the values of certain players in the accounts.
As a rule, Scottish clubs do not pay big money to sign players, meaning that their player amortisation charge is normally very low. In fact, #RangersFC and Celtic are the only clubs booking more than £300k a year, though Celtic’s £8.8m is more than double Rangers’ £4.1m.
#RangersFC had £10m player purchases in 2017/18, which is more than the previous five seasons combined (£8m). Including purchases made in 2018/19, the club has spent over £20m on bringing in players in the last 2 years. Still less than Celtic: £17m in 2017/18.
The last two seasons have seen a big increase in #RangersFC transfer activity with average annual gross spend up from £600k to £10m. Sales have also grown from £500k to £3m, so net spend is up from £100k to £7m.
#RangersFC gross debt increased from £14.5m to £22.5m, which means £21m growth since 2013. Interest-free loans provided by New Oasis Asset Ltd (chairman Dave King’s company), directors & other related parties, including £7.5m in 2018. Loan facilities extended to July 2020.
#RangersFC £22.5m debt is more than all the other Scottish Premiership clubs combined (£17m). Next highest Celtic £6.8m, Hibernian £4.0m and Hearts £2.3m. They also owe £11.4m in transfer fees to other clubs.
#RangersFC cash balance decreased from £2.8m to £1.5m. Not only is this a lot less than Celtic £42.6m, but also lower than Hearts £5.5m, Hibernian £4.2m, Aberdeen £3.5m and St Johnstone £2.7m.
#RangersFC required £7.5m loans from their investors in 2017/18, which helped cover a £4m operating loss and fund £4m on players (net) and £1m infrastructure investment. The board stated that the club will need as a minimum further funding of £4.6m in 18/19 and £3.0m in 19/20.
This led to the auditors warning of a “material uncertainty which may cast significant doubt as to the club’s ability to continue as a going concern”, especially if shortfall is higher than projected. However, directors confirmed they will provide financial support as required.
Since 2013 #RangersFC available cash of £55m all came from external funding: (a) £33m from issuing share capital; (b) £21m from loans. Half of this has been used to cover operating losses £29m, £8m on players (net), £7m purchase of trade & assets and £7m on capital expenditure.
Directors provided #RangersFC with £54m up to close of these accounts. Since then club issued £12.6m of new shares, but £11.1m of loans were converted to capital, leaving just £1.5m additional cash (though debt was effectively halved). Investors also provided another £2m loan.
Although Dave King said the financial year was “on balance a positive one”, #RangersFC are not yet out of the woods. Directors must continue providing funding to meet the ambitions of new manager Steven Gerrard, but even that may not be enough, given Celtic’s financial advantage.
