Rangers have published their financial results for 2020/21. For their fans the only number that matters as far as last season is concerned is ‘55’ but some of the figures in the accounts make for less enjoyable reading.

Income

Clubs generate income from three main sources, matchday, broadcast and commercial. Rangers were able to sell season tickets to fans for 2020/21 despite matches taking place behind closed doors. Fans were able to watch matches using a streaming service as opposed to physically attending at Ibrox. This meant that whilst income from this source halved to £18m, it was much higher than clubs in England, (Manchester United, for example, had matchday of just £0.7m). Rangers were however not so fortunate in terms of matchday income from UEFA games, as they could not sell streaming passes for these matches.

Broadcasting

Rangers receive broadcasting money from both domestic and UEFA participation. The domestic money increased by 65% to £7.7m, partly due to 2019/20 being curtailed early following the onset of Covid-19 and fewer matches being available to broadcasters.

UEFA prize money, which is funded by broadcasting deals, increased by a quarter, which might seem strange given that Rangers made the same progress as the previous season in the Europa League. Rangers did benefit from an overall increase in money made available by UEFA, as well as having better results in the group stages of the competition.

Other income

Rangers merchandising income may look low at £4.6m compared to Celtic’s quoted figure of £15 million, but this is more to do with the different ways the two clubs account for sales than a reflection of the number of jerseys sold. Sponsorship income continued to rise, reflecting many new deals generated by the commercial department at the club.

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Overall the income did fall by over £11 million but this is probably as good as can be expected. Celtic’s income gap over Rangers increased by almost £2m to £13m but this is linked partially to the different ways the two clubs account for merchandise.

In addition,Rangers did generate some sundry income as they had the foresight to take out business interruption insurance, which appears to have paid out relating to coronavirus issues, as well as utilisation of government Covid related grants.

Costs

Football is a talent industry, and talent costs money in the form of wages and transfer fees. Rangers total wage bill increased on the back of recruitment, new contracts and bonuses for winning the Premiership, and the club paid out £100 in wages for every £100 of revenue. This is substantially higher than UEFA’s red line of £70, but is likely to be a one-off issue as revenues increase in 2021/22 with Ibrox full to capacity.

In relation to transfers, Rangers spent £16.8 million in 2020/21, the highest sum invested in players for some time. This cost is spread over the life of the players' contracts in what is called amortisation, and increased by 40% compared to the previous season.

Rangers have not been a significant selling club for some time, so profits from player sales were modest. Over the course of the last decade Rangers have made player sale profits of just £8m, compared to Celtic’s £115m. However the Ibrox club do now have some players who can generate substantial income, should the board decide to accept an offer. Overall the squad has a total cost of over £39 million, more than ten times the amount at the end of 2015/16.

Losses

The pre-tax loss for the season was £24.7m, nearly 40% higher than the previous season, and more than double that of Celtic. Whilst this is far higher than anyone connected with the club would like, it is broadly in line with expectations and should be substantially lower in 2021/22.

The losses have been funded by director and investor loans of over £20 million. Whilst loans have to be repaid, but overall debt has fallen due to a significant amount of loans being converted into shares, which have no repayment date. Another advantage of converting debt into shares is that there is no obligation to pay any interest. The board have indicated that further loans of about £7m may be required to help the club fund the present season, but after that it will be reasonably close to operating on a breakeven basis. Should Rangers qualify for the group stages of the Champions League they will be in an even better financial position.