RANGERS are firmly on course to achieve self-sustainability for the first time since the current regime seized control of the Ibrox club back in 2015 despite announcing an operating loss of £23.5m, a leading football finance expert has forecast.

The devastating impact of the Covid-19 pandemic – which resulted in their fans being locked out of the stadium for the whole of the 2020/21 campaign – was laid bare in the annual report that was released yesterday morning.

Income from gate receipts and matchday hospitality fell by £17.5m to £18.2m in the financial year ending June 2021 as a result of the lockout despite 44,957 supporters buying season tickets.

However, Kieran Maguire, a lecturer in football finance at the University of Liverpool and the host of The Price of Football podcast, expects that figure to return to its previous level in their 2022 results.

Maguire also feels that income generated by the 150th anniversary celebrations, player sales and potential qualification for the Champions League – this season’s cinch Premiership winners will automatically go into the group stages of Europe’s premier club competition – will improve Rangers’ off-field situation massively going forward.

“These results have been driven by Covid,” he said. “Whilst their takings from gate receipts and hospitality are down, they still took in £18m. Manchester United’s gate receipts for the whole year were £700,000. So Rangers have done well there. It was still the biggest source of income for the club.

“It will be different story in their next results. I am expecting a significant rebound. It depends on the degree of progress the club makes in the Europa League, but the match day income should return to broadly similar to where it was in 2020.”

Maguire added: “I anticipate Rangers will do well on the back of the 150th anniversary. They have got merchandise lines for that which the fans will be keen to buy up. I would expect their total revenue to be up to over £60m in 2022 (from £47.7m in 2021).

“And I don’t think their costs will rise because recruitment was relatively modest over the course of the summer. The best case scenario is revenue bounces back significantly and costs don’t rise.”

Rangers chairman Douglas Park stated the Ibrox board had targeted “profitability at the ETIBDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) level by year ending June 2022” in the annual report.

Maguire believes the return of supporters to grounds following the lifting of coronavirus restrictions coupled with prospective player sales – and the Scottish champions can cash in on Joe Aribo, Borna Barisic, Glen Kamara, Ianis Hagi, Ryan Kent, Alfredo Morelos and Nathan Patterson – make that an attainable goal. 

“I think it is achievable objective for 2022,” he said. “If you look at their EDITBA loss and add the thick end of £20m from match day revenue you can see it is achievable.

“They have been in a recovery phase for a few years, which is why the board have been putting so much money. Now, having won the Premiership and made an imprint in Europe, they have reasonable control of costs and should now be moving towards a sustainable model.

“And they have got players they can sell. Compare the Rangers model to that of Celtic. Celtic normally sell a player or two every season and bring in an eight figure amount. Rangers now have the talent to sell. They have players who are coveted elsewhere. When they start to sell it will have a significant impact on their financial results.”

Rangers are currently four points clear of Celtic at the top of the Premiership table and will qualify for the Champions League group stages for the first time since 2010 if they are able to protect their lead in the months ahead and retain their Scottish title come May. 

“Winning the title again and getting into the Champions League group stages will have a huge impact,” said Maguire. “For every £1m generated in the Europa League you get £3.5m in the Champions League. That is purely from prize money.

“If they do get into the Champions League group stages they are likely to be a third or a fourth seed. So they are likely to have two big clubs coming to Ibrox which will mean they are able to charge maximum money for hospitality lounges and for commercial activities for those games. That will have an additional impact on their match day income.”

The annual report showed that Rangers had repaid a £5m loan – which they paid £832,000 interest on – to their former chairman Dave King in the past financial year.

Chairman Park and vice-chairman John Bennett have also committed to meeting projected shortfalls of £7.5m by the end of the 2021/22 season and £400,000 by the end of the 2021/22 campaign so the Ibrox club are able to continue as a going concern. However, their loans will be converted into equity.

   “There is no pressure to repay those loans,” said Maguire. “The loans they have received from directors are converted to shares. So the pressure to repay loans that you see at some other clubs doesn’t exist. If you look at the cash flow statement you can see they have borrowed almost £30m during the year. But a lot of that was converted into shares.”

Many Rangers fans have expressed their disappointment that the Ibrox club only banked £4.2m from the first year of their merchandise deal with kit manufacturer Castore. Maguire admitted there was room for improvement on that front. However, he envisages that figure increasing in the next set of results.

“There is scope for growth,” he said. “That figure is Rangers’ share of the profits from the sale of the replica shirts. They will also receive a flat fee. On the back of their Premiership win and with 150th anniversary merchandise now for sale, I would anticipate their income from retail rising.”