Friday 24 January 2014

A big welcome to the New Institutional Investors...........the Fans

A post in which i show that if a Club needs new investment it should come from a Fan owned vehicle


The one thing we know for sure is that the Fans will always remain, the problem is that the owners of Clubs know this to.

As has been reported in several quarters there is a belief that Rangers FC will at some point soon need a capital injection.

I do not want to comment on the truth or otherwise of this i merely want to suggest a way, if it is true, that this should be handled.

When a Club has Cash Flow problems there are generally Three ways of dealing with it.

1. borrow money from a Bank

2. Borrow money from a Director/senior associate

3. issue new shares


Option 1.To virtually all Clubs in Scottish Football option 1 is no longer available.

Option 2. requires generally the directors on the board of the company to be wealthy enough to do this. You need to be really careful that this is not a back route to Directors taking Security on Club assets knowing that the Club is going to fail and as a route to keep those assets either out of an Administrative process or as a way of wiping out the other shareholders and taking full control of the Club without an Administration process.

Please do not make an assumption that I am suggesting a second Admin for Rangers, i do not think this is very likely at all....really really unlikely in fact.

Option 3. Issue new shares, this is by far the easiest way to raise capital. The failure of your clubs current board to pass a resolution that allows them to issue new shares but limit who they are issued to at the recent AGM means that if this route is both necessary and chosen that everyone should be on an equal footing to buy shares.

I am sure another appeal will be made to buy shares, just like happened at Hearts and the fans will check their collective brains in at the door and spend more money again on the club they love, but that is what happens when you are devoted to someone or something like your Team.

The current shareholders that control the current board will seek to buy some more shares themselves, i am sure, and sell enough to the Fans to raise whatever cash they need, but this will likely just produce the Status Quo (not that there is anything wrong with Three Chord Rock and Roll) and nothing will change except the same board will continue to spend the money you have raised for them

The individual fans will all own a bit more but still have naff all influence on what is going on.

Simple solution.....if the Club needs Investment let the Fans Invest Collectively for New Shares and get a proper transparent say on what is going on.

Simple, a Fan CIC can either buy Existing Shares or if offered it can by New Shares all goes to bringing OMOV transparent Coop Fanownership to your Club.

So what you waiting for the Fans can be the solution no matter what the question is.....you are all going to end up paying the bill somehow no matter what happens why not get some bona fide authority while you are at it.


@rchrdtknsn

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