Glasgow Rangers - The Lehman Brothers of world football?

Few people interested in football have missed the recent financial problems relating to Glasgow Rangers. Football clubs tend to spend more money than what they actually generate. From that perspective, this latest report on Glasgow Rangers maybe shouldn’t come as a surprise. Some experts even fears whether Glasgow Rangers could become 'the Lehman Brothers of world football'. 

The other week Glasgow Rangers were put in administration with a debt that in worst case could be estimated up to £80 million pound. In the short term, they faced a 10 points reduction in the league. In the long term the problems ahead of them are of course even worse. That is, if they even survive in the long term to begin with.   

No need in pointing out the obvious consequence in spending more money than one generates. However, this is something that is common in football due to the intense competition for talent and (consequently) success. Because of this financial climate the news on Glasgow Rangers shouldn’t come as a surprise, bear in mind the ongoing negative news over a couple of years now. One who’s certainly not surprised must be Michael Platini. In fact, this supports his massive focus for a healthier business climate in football.

It’s always a shame to witness such an old and historical club (Rangers are celebrating their 140^th anniversary this year) rot from the inside. The only positive thing that comes out is the passion, with all the fans showing the support in hard times and all pulling their weight to help out. Football clubs are indeed run like businesses nowadays, but this aspect is why surprisingly few football clubs actually goes bankrupt if one compares with companies on the stock market. What there would be called a great intangible asset is here supporter ship. This fan base is in most cases a lifelong commitment with a “brand loyalty” not remotely comparable even to Apple-fans.

That is likely the reason to why it’s possible to hear a quote like this from the joint administrators who claims to have received 'several expressions of interest' in Rangers adding that 'we do not think that liquidation and the closure of the club is a likely outcome at all'. This reason is also what makes football clubs less likely to fall into administration... and is also the reason to why I don’t believe that Glasgow Rangers are ‘The Lehman Brothers of world football’.   

/ Alexander