As Rangers ready a big summer of change, the club’s finances will naturally come under scrutiny.
The likes of chairman John Bennett and manager Philippe Clement have been clear that the so-called fourth pillar of player trading must be reinforced.
But in the ruthless world of football transfers, one always has to speculate to accumulate and Rangers fans expect some cash to be spent (wisely) this summer.
With FFP, player wages, outstanding retail court cases and the dangling golden carrot of Champions League qualification, there are a number of factors which will shape Rangers’ decision-making.
We’ve spoken to TBR football finance expert Adam Williams about the current state of play and how Rangers’ finances will impact a monumental summer at Ibrox.
Rangers transfer ‘room to manoeuvre’
Rangers have cut their record-breaking wage bill ahead of the new season.
Whilst the club lost several high earners last summer, another five have just joined them with as much as £4.3m freed up from the wage bill already.
Factor in the high profile exit links surrounding the likes of Jack Butland, James Tavernier and Connor Goldson and suddenly the figure could shoot up as high as £9.5m.
Explaining that a failure to reach the Champions League last season will have already brought the final figure down, Adam Williams has been analysing the situation.
Claiming that as as things stand Rangers are on track to meet UEFA’s squad cost control ratio, the shifting plates at Ibrox look set to give more ‘room to manoeuvre’ in the transfer window.
“Rangers’ wage bill was £64m last season, a new club record which was almost 20 per cent higher than the previous campaign,” said Williams.
“That was due largely to step-up clauses in player contracts after they qualified for the Champions League group stage for the first time in over a decade.
“That £64m figure will likely fall when the club releases their 2023-24 accounts. The lack of Champions League football combined with the departures of some of the club’s biggest earners last summer will have seen to that.
“If Rangers do get a further £9.5m off their wage bill in the summer, however, that could effectively increase their playing budget by 25 per cent.
“Their wages-to-turnover ratio will likely stay steady around 75 per cent.
“That means they are well on track to comply with UEFA’s squad cost control ratio, which is being phased in and stands at 80 per cent in 2024-25.
“I would therefore expect Rangers, who have more or less broken even in terms of player trading over the last five season, to have some room to manoeuvre in the market this summer – if their owners are willing to bankroll the spending.”
Champions League fortune awaits
We don’t need to tell you that qualification for the Champions League is a big deal.
But this campaign in particular, where the tournament upgrades to a special revamped format with more matches and more money, the cash is more important than ever.
Rangers’ European exploits have guaranteed a Champions League spot for the Scottish Premiership winners for the last three seasons.
But years of domestic failure means the club has failed to feel the benefit even once.
With Old Firm rivals Celtic guaranteed the riches of Champions League football it makes qualification all the more vital.
Rangers will be seeded in the competition’s non-champions path all the way to the Playoff stage, entering at QR3.
And if the Gers can overcome prospective ties against the likes of Jose Mourinho’s Fenerbahce, then Williams reckons there is a pretty penny to be made this summer.
“Champions League group stage qualification will be worth a minimum of £14m next season, based on 2023-24 distribution data,” said Williams.
“However, the expanded competition format will likely nudge that figure up by around £2.5m, so Rangers are looking at £16-17m all told.
“They’ll also get a cut of the UK broadcast market pot and a payment based on their 10-year coefficient, although that will only be a modest sum as the system favours elite teams with impressive recent histories in the competition.
“UEFA will revise this system slightly in the coming weeks to reflect the new Champions League format, but the changes are not expected to move the dial hugely.
“The two extra group stage games also provide Rangers with more scope for prize money and matchday income.
“Each group stage win is worth about £2.4m, while a draw is worth around £800,000.
“One extra matchday at Ibrox means they could also expect to rake in approximately £8m in total in that department.
“All in all, I’d expect Rangers to trouser somewhere between £25m and £30m if they can navigate the play-off rounds and progress to the Champions League group stage in 2024-25.”
Rangers plan for ‘worst case scenario’
One thing which is hanging over Rangers is that troublesome Elite/Hummel retail court case.
Amid fresh Mike Ashley embarrassment last week, the outstanding action was back in the headlines with the Danes before forced to lodge potential legal costs as they chase Rangers for £9.5m.
Adam Williams knows that this is a frustration for Rangers and given Elite has entered administration, bosses will be confident that they have a strong case against the Ibrox side.
But urging calm amongst supporters, Williams suggests the club will have already budgeted for a worst case scenario.
More than that, the football finance guru reckons any Rangers payout won’t quite reach the alarming £9.5m figure touted in the press.
“Rangers’ ongoing legal issues will be frustrating for the club, who would much rather focus their corporate firepower elsewhere,” said Williams.
“But they will have budgeted for a worst-case scenario in the Elite Sports case and anything else will be a bonus for the club.
“That is not because they are expecting a negative verdict but rather because the money men at Ibrox need to be responsible and ensure the club will be financially robust in any eventuality.
“Elite Sports are in administration and the interim managers would not have taken this measure if they didn’t believe it was an efficient use of their time and resources, so they must be relatively confident.
“But in any case, these matters will often end with an out-of-court settlement, so the headline figure of £9.5m may not be as daunting as it initially seems.”
Adam Williams is Head of Football Finance and Governance Content for GRV Media, focusing on the behind-the-scenes dimensions of the sport. He spent several years in his previous role with Breaking Media attempting to demystify the occasionally bewildering world of football finance. Adam is an expert in his field and provides in-depth coverage of key areas impacting clubs across the Premier League and EFL including Financial Fair Play, TV deals and agent fees.
