22 November 2013

Exclusive: CRO talks with Paul Murray

Former director Paul Murray chats with CRO's Ross McAdam about the current board, the pending AGM, moving forward and fan ownership.

Plans for the Club

Will the organisation make structural changes to improve the commercial revenue at the Club? 

Most importantly we would need to appoint a top class CEO, although one has been announced so we will have to have a look at that. Apart from the team manager the CEO is the most important person at the club as they run the club on a day to day basis and are responsible for the financial performance of the club. The problem at the club is that over the last two-and-a-half years there hasn't been a proper Chief Executive at the club, notably being on our third Chief Executive in 12 months which doesn't help in maximising commercial revenue.

Do you have any comment on Graham Wallace being appointed ?

I know who he is and have looked at his CV. We said publicly that we had discussions with Christian Purslow who had agreed to take up a position depending on the outcome of the AGM.

What is the proposed structure of the Exec Committee? Will there be an Executive position for the Marketing/Communication function?

The board has to fill out and cover all the various functions. The two main functions at a football club is Chief Executive and Finance Director. Other functions that need covered in no particular order are maximising commercial activities at the club, the whole media area in terms of controlling the media and ensuring the right messages are being relayed to the various stakeholders, interacting with the governing bodies and dealing with the brand. We need people on the board who cover these areas and have experience and skills in them. I think the four nominations, Christian and the Finance Director we have lined up go a long way to covering them.

Can you name the Finance Director?

We are talking to two individuals and both have agreed to take up the position. When we first made the requisition Craig Mather was CEO and Brian Stockbridge the FD and as he is still an employee it isn't fair to disclose at this time. We believe both candidates are highly credible for the position.

The most important person at the club is the CEO and it is critical we get that right and we haven't had that person for the last two years. I think a lot of problems we have had at the club stem from not having sufficient quality in that area. Look at any organisation, if you don't have an effective CEO then you really are rudderless and I think that is what has happened to Rangers.

How important do you view the cycle of buying young talent and selling at a profit? If so, why is it important.

The way Scottish football has moved over the last 20 years it's lagging behind the English league which is largely down to their TV revenue dwarfing Scottish clubs. The whole landscape has changed. Look at the early part of the David Murray regime when we signed players such as Butcher and Woods, which could not happen now financially.

We have got to as a matter of urgency get a strategy in place whereby we obviously want to try and buy players but we need to be a lot smarter about how we identify these players. Key area is having an effective scouting network which is something we again haven't had in the last two years. The fact there isn't one single scout at Rangers at the moment is incredible. Dare I say it, but compare our position to Celtic's position: they have an effective scouting policy and it works. They've had the benefit of some good players and sold them on at significant profits. This makes good football sense but also good business sense. We've got to counter that and hopefully better that. Until we get on a level playing field with other big nations we have to find other ways of getting the best team on the pitch and maximising revenues and scouting must be high up on the agenda.


You spoke about a domestic break-even model when you headed up the Blue Knights group. Would you look to impose this starting now or is that unrealistic?

When I was on the board of Rangers for four years we implemented that policy and down to Walter Smith and the team and the success they had brought the debt down by almost £20 million whilst keeping a championship winning team on the park and reaching our first European final in 36 years so we weren't compromising quality on the pitch.

Our model based its budget on the domestic revenue so whatever happens you can cover your costs. By getting into Europe, preferably the Champions League, that money is used as an investment fund, used to strengthen the team, the infrastructure, invest in the stadia or personnel. That has got to be our model going forward. In the absence of somebody writing blank cheques, which got us into the problems in the first place, we have to have that policy.

The problem we have at the moment is that we aren't in the top flight and we are going to have to strengthen the squad and we are going to run out of money in the spring so we are going to have to raise money to put the most competitive team on the pitch.

The announcement of the BT deal last week makes it even more imperative that we are in the Champions League. Going forward we are going to have to have a competitive team, we can do that by being smarter on the players we identify and buying players. We will have to spend money next summer to get the team in the best shape we can to compete in the top flight the following season. Once we get there I do fully believe that the best model is the break even model.

What is the proposed wage to revenue ratio?

A Deloitte report based on the EPL, which in the backdrop of the new Financial Fair Play rules, suggests it should be around 50 percent. Charles Green last year in the prospectus was talking about a 33% ratio and I think the right answer is somewhere in the middle. To be sustainable you have to have a break even at worst. If you have £40 million revenue and other costs are £25 million then your wages have to be £15 million, it is as simple as that.

Funding going forward is one of the key issues facing whoever emerges victorious at the AGM. Are you confident your group can raise the required cash? And will it involve Dave King coming in?

We are representing a significant number of the large institutional investors who put the money up last December and what they've said to us almost to a man is that they will put more money up as they still believe in Rangers.

What has annoyed them is the lack of corporate governance and the amount of money that has been spent since they invested. They've said that if we can go in and clean the place up then we will follow with more money as long as the proper people are involved. On top of that we have been having conversations with a number of other people who would invest in the club on the condition that there is a clean-up of the board. The problem at the moment is who is going to put money behind the incumbent board as there is so much uncertainty over where the money is going. What person of any standard is going to put money behind these guys? The most important thing is to get a proper board in place, a proper business plan, a proper Chief Executive and on the back of that I am very confident that we can raise the necessary funds to take the club forward.

Do you think the focus on the individuals involved is distracting the attention away from the pressing issues at the club?

The obvious answer must be yes. However, it is impossible to have this discussion without talking about the individuals. It is like an election campaign. Who are the candidates that you trust here? I think it is quite simple now. Do you trust the incumbent board with your club or do you trust us? There is no real middle ground. People might not like me or might not like Malcolm Murray but it has got beyond that.

You have to look at both groups and say which group do you trust to look after the Club's interests? The bottom line is the club over the last two-and-a-half years is that people have come in here and have looked after their own interests first of all and the clubs interests secondly – in some cases a very distant second.

Now the Club's interests must come first and then your own interests second, or third or fourth. One thing about me and Malcolm Murray and our group, we can guarantee that we will put the Club's interests first. We aren't doing this for money; I have never taken money out the club. You either trust us or you trust them.

Can you see a compromise occurring?

Those discussions are taking place and people have made those proposals before. It is common knowledge that people have made compromise offers in the past on a number of occasions. Something that can't be established is who is behind Blue Pitch Holdings and Margarita. I have asked that question consistently, lawyers have tried to get to the bottom of it and Daniel Stewart (Rangers' NOMAD) say they have done the same thing but to date no one knows who the real shareholders behind those two companies.

They collectively vote for about 15 percent of the shares. If David Somers as Chairman, if he is, as he says, truly independent, then what he has got to do is disclose to everyone, in particular the fans, who these people are. Once we know who they are then people can form a view. As long as that is surrounded in mystery and confusion then it is difficult to be trustworthy.

We don't know who Sandy and James Easdale are representing. It could be anyone, even Craig Whyte. I would have thought from their point of view they would want to come out and say these are the people who are supporting us then fans and shareholders can form a view. The longer that people don't know who these people are then it just doesn't seem morally right to me. As an independent Chairman, one of David Somers' first acts should be to disclose who those shareholders are.


You've had to deal with a lot personally throughout this process. You and your group have been consistently attacked and smeared in a toxic PR war. What keeps you going when it could be so much easier for you to walk away?

I've been on this on and off since Craig Whyte. I and all of the Rangers board said at the time that it was obviously the wrong thing to do. It was quite clear at the time that the Whyte deal was going to be a disaster and I don't take any credit for forecasting that it was just obvious at the time. I pleaded with David Murray at the time not to do it but I think he did it because the bank forced him to.

Rangers’ problems now stem back to that decision. As a Rangers man for many years, I had a season ticket for many years and I've never taken a penny from the club. My only interests are the Club's interests. I'm a supporter first and foremost and I just know what has happened is wrong and it all stems from Craig Whyte. I still maintain that the various parties are related in some shape or form and I'm sure once the police and BDO get to the end of their investigations then I'll be proved right.

I’ve been fighting for the Club's interests over that period of time. I have been criticised by the other side and some fans and that is fine – I'm a big boy I can take all that. I can look myself in the mirror and say that everything I have done has been done in the Club's interests and that is what keeps me going. I've said many times that if someone took over the Club with Rangers' interests at heart and I wasn't involved then I would be delighted. All I want to see is the Club in safe hands, looking after the Club's interests and move it forward.

Unfortunately in the last two-and-a-half years that has not been the case. You can see that by the amount of money that has been taken out of the club. I've put a lot of my time and a lot of my own money into this. Anyone who loves the club should not waste their vote at the AGM; come along and vote for what you think is right.

What are the plans if the AGM goes the way of the current board?

I will have to accept that. The company who owns the Club is owned by shareholders and it is them who will decide who is to be on the board at the AGM and if I'm not voted onto the board I have to accept that. I'll be disappointed but I have to accept that.

The reason I went to the Court of Session to force this board to put up nominations is to have a democratic vote of the shareholders, give them all the options and if they chose to vote everybody else on and not me then I have to accept that. If that was the case I would say that is the end of it: the shareholders have spoken. I wish the club well and we can move on. Both parties have to accept the democratic vote of the shareholders.

Are you still confident of success even after the recent appointments to the board?

Yes, we are confident. We think that shareholders will do the right thing. The recent appointments say they are independent and will do the right thing for the Club so we have to look at that and assess things for ourselves. As I have said I think they could prove their independence by disclosing some of the things that are unclear such as who is behind Blue Pitch Holdings and Margarita. What we all want is to have a board in place that we can trust, respect and have faith in. It doesn't have to be me or Malcolm Murray it just has to be the right board.


Your group are representative of a large percentage of institutional shareholders. What do these institutions make of Dave King's much-publicised plan to launch fundraising via a share issue thereby diluting their investment in the club? Are they supportive? Are you supportive?

It isn't guaranteed that the institutional shareholders will not invest as well. With proper people on the board with a proper plan then these people will invest. It isn't a mutually exclusive situation.

I think there is a possibility of having a structure where you've got one or two high worth individuals such as Dave King and others alongside the fans who have a share and institutional shareholders. I think that model is quite effective.

I don't think the institutions see Dave King as a bogey man who they don't want to get involved with. They see him as having a positive effect. I am fully supportive of Dave King getting involved and he will wait to see how the AGM goes before making his next move.

Jim McColl has stated he cannot become anymore involved with Rangers at this present moment. What role do you believe McColl has played thus far? And do you view McColl becoming more involved in the future?

Jim McColl has played a really important role. He has been pretty consistent from day one on his position. He is obviously a very credible business man and he didn't have to get involved. He wasn't a Rangers shareholder but he knew the thing was wrong. He knows the importance of Rangers to Scottish society and he grew up as a Rangers supporter. He contacted me and said we should do something about this. He has credibility with the shareholders and has does a lot in this campaign to expose what has been going on.

Since we started this back in July the board has changed substantially so we have been pretty successful in bringing to everyone's attention the issues. Most of the board have left so in some ways we have achieved much of what we sought out to achieve, which was to shine the light on what was happening at the club. He doesn't want to be on the board as at the moment he just physically can't do that due to his various other business commitments. He would be a very wise council to us if we get on the board in terms of his experience and contacts. I can see him being involved just not to the same extent as me and the other nominations.


Supporters have been left largely isolated while the club has been enveloped by boardroom battles. Do you intend on allowing supporters a more active role going forward?

There would need to be a discussion about fan representation. We would canvas supporters, firstly season ticket holders, to see what they want. There is obviously a whole range of models and we would need to see what is most applicable to Rangers.

Would it work? There would need to be genuine interaction with fans, making a change from the last two-and-a-half years. We will let fans generate ideas. The events of the recent past have helped galvanise fans and the three recognised bodies have put their own groups' positions aside to work together. They are united in wanting change.

How much thought has been put in to a membership scheme for the support? Has a scaled 'buy the club' initiative (through membership fees) been considered? Is there a genuine interest to facilitate a long term supporters purchase of the Club?

Again we will need to canvas fans' opinion. There are two specific issues: fan ownership and fan representation. It will depend on what the fans want and if there is an appetite for some form of involvement. The fans own around 12 percent at the moment so that would suggest there is.

What is really clear is that, after the events of the last two-and-a-half years, the supporters have to be properly represented and more closely involved in the running of the Club. Our group are committed to seeing that happen.