Uncertainty over the level of additional funds that will be required and a lack of a binding debt facility- Douglas Park’s grim warning over £2m a month Ibrox losses

Douglas Park has warned Ibrox fans about ‘the uncertainty over the level of additional funds that will be required and a lack of a binding debt facility’ alongside losses of £23.5m for the year to 30 June 2021.

Total revenue for the year dropped by £12m to £47.7m despite selling out Season Tickets, selling matchday streams with almost no cost involved and a world record commercial deal with Castore Sport allowing kit to be sold by Sports Direct and House of Fraser.

Despite losing almost £2m a month Steven Gerrard signed up Cedric Itten, Ianis Hagi and Kemar Roofe for fees close to £10m. Roofe is understood to be the highest paid player in Scottish football.

During the 20/21 season a number of loans from mystery investors were converted into shares in a loss making company. When that source ran dry the company attempted to raise £6.5m from fans through a share issue but only £4.5m was raised before costs are deducted.

While other leagues around Europe including the English Championship have struct Financial Fair Play rules to prevent clubs from putting their future at risk in order to gain success on the park Scottish football sees things very differently.

Accompanying today’s grim figures on page 17 of the report Douglas Park issued this grim warning:

At the time of preparation, the forecast identified that the Group would require £7.5m by way of debt or equity funding by the end of season 2021/22 in order to meet its liabilities as they fall due with further funding of £0.4m required by the end of season 2022/23. The first tranche of funding is required from investors before the end of December 2021. However, the final amount required is dependent on future football performance, European football participation and player trading amongst other factors.

The Board of Directors have discussed the Club’s forecast cash flow shortfall and have reached agreement with Douglas Park and John Bennett whereby they will provide additional loan facilities as necessary to meet shortfalls to the above requirements and any further amounts that may be required a result of variances to forecast cash flows.

The Board has considered the level and timing of additional funding that may be needed and is satisfied that any such amounts will be made available as and when required.

The board acknowledge that the uncertainty over the level of additional funds that will be required and a lack of a binding debt facility indicate that a material uncertainty exists which may cast doubt over the group’s ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.

Nevertheless, having secured the offer of further loan funding referred to above, the board of directors believe that there is a reasonable expectation that the Group will at all times have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this report and the statutory financial statements.

Steven Gerrard recently warned the Ibrox board about the problems of not spending any money in the last two transfer windows.

Fees were paid in January for Jack Simpson and Scott Wright, during the summer Fashion Sakala and John Lundstram were added to the wage bill with transfer guru Ross Wilson again unable to bring in a transfer fee above the £185,000 that Hull City paid for Greg Docherty in the summer of 2020.

Last month MD Stewart Robertson told Ibrox fan groups that he expects the company to go into profit next year.