Foreword to Fergus McCann v David Murray by Stephen O’Donnell

A generation ago British football clubs were British owned. Owners tended to be local butchers, bakers and candlestick makers. Turnstile income was all that mattered and the larger the population of the town, the bigger the club tended to be. Banks did not lend to football clubs and, consequently, everyone lived within their means.All of that changed in the 1980s following the elections of Margaret Thatcher and Ronald Reagan. Both promoted de-regulation of financial markets and culturesof easy money and increased corporate activity.

A generation ago British football clubs were British owned. Owners tended to be local butchers, bakers and candlestick makers. Turnstile income was all that mattered and the larger the population of the town, the bigger the club tended to be. Banks did not lend to football clubs and, consequently, everyone lived within their means.

Football clubs started to change hands and in 1988 David Murray acquired a controlling interest in the old Rangers which valued the club’s share capital and bank debt at £12.5 million. The club’s new parent company Murray International was already carrying bank debt of circa £40 million meaning the whole Rangers enterprise was entirely dependent on bank borrowing from the outset and well before it was liquidated twenty odd years later.

Across the city at Celtic the financial climate change passed unnoticed until it was almost too late. The directors lacked vision, commercial acumen and money and were eventually forced out after a two year war of attrition with shareholders and supporters. Fergus McCann arrived and acquired a controlling interest in a deal that valued the club at £13.5 million before the share issue to supporters at the end of 1994.

In late 1992 I had flown to Montreal to meet Fergus McCann. The purpose was to try and persuade him to support my plan for removing the Celtic board and supporting a substantial capital investment. In his apartment his first words to me were, “ Hello, Mr Low, who are you, why are you here, and what do you want?”. I loved that, straight to the point, no bullshit and a characteristic that was not always appreciated during his time in Scotland.

Fergus had always been adamant that any investment he made would go straight to Celtic and that he was not prepared to buy shares from the outgoing directors given their mismanagement of the club’s affairs. However, on 4 March 1994 he was confronted with that very dilemma; the old board had no choice but to surrender control if the club was to avoid receivership. The change in control would not take place without acquiring their shares. Protracted negotiations ensued over the course of the day and Fergus eventually agreed to set aside some money to buy the directors’ shares. It was the only time I can recall getting him to change his mind about anything. That deal sealed the change of control. It was a momentous day in Celtic’s history. The game was over and the rebels had won!

This book deals with two contrasting styles of personality and management; Rangers under the control of the risk taking and bank financed David Murray, always living on the edge and pitted against Celtic, now controlled by Fergus McCann and with a business plan that promoted financial stability, steady improvement and operating within its means.

The Murray model was always going to be popular with fans as it appeared to provide limitless amounts of money to buy better players, greater football success and never ending football domination over their oldest rivals. McCann’s plan was more difficult to implement and required focus, discipline and patience.

Rangers dominated the 1990’s and won nine league titles in a row. Celtic supporters, manipulated by a Rangers leaning media, became increasingly agitated at the Celtic board’s refusal to pursue the risky ‘buy now, pay later’ policy of their rivals. Despite this and against the financial odds Celtic managed to win the league and prevent Rangers from winning its coveted tenth in a row League title. However, that didn’t stop a section of the Celtic support booing McCann when he unfurled the League Championship flag at the start of the following season.

The other major and oft overlooked difference between the two clubs was in the calibre of experience of their boards of directors. Unlike Rangers, Celtic was listed on the London Stock Exchange and had a board of directors that understood the importance of good governance and sound financial practice. These characteristics were important in providing the continuity of management needed after McCann’s departure in 1999. McCann’s real legacy was a management structure and ownership profile that provided continuity of philosophy to this day.

Under Murray, Rangers fared less well. During his ownership the Bank of Scotland continued to lend Murray’s companies seemingly endless amounts of money but all that changed with the financial crash in 2008 and the takeover of Bank of Scotland by Lloyds TSB the same year. The lending stopped and the club had to start downsizing and paying off bank debt. The whole debt fuelled orgy had lasted an exceptional twenty years. Financial profligacy and greed had dominated the sporting landscape, distorted on field performance and ended with a trail of insolvencies and in the case of Rangers, liquidation. Ironically, it wasn’t the bank debt that finally brought about the death of the club but unpaid taxes due to HMRC and accrued under Murray’s ownership.

The Murray years should have been recognised as exceptional and the current more stable financial landscape as the norm. Lessons should have been learned but that was not be in the case of Rangers. A new club was formed in 2012 with the assets of the liquidated club and it successfully applied for membership of the SFA and the then SFL but after a difficult birth the new club has inherited the worst financial attributes of the old one and continues to live out with its means and is financed by directors loans.

Celtic now has a considerable and embedded economic advantage over Rangers and everyone in their domestic league. This can all be traced to the structures put in place by Fergus McCann in 1994 and followed by successive boards since. However, at the time of writing a new and unforeseen financial threat was emerged that is indiscriminate in nature. The coronavirus is a human tragedy and a financial catastrophe for spectator based sports that has the capability of redefining the whole professional sports financial model.

David Low

May 2020

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