THE shares of glamour soccer clubs like Manchester United, Tottenham Hotspur and Celtic have as much star status on the stock market as on the field of play yet selling a slice of the business game plan to investors is no guarantee of an end to money problems.
Take, for example, the somewhat less-than-fashionable Millwall football club. The business, which floated in 1989 with the shares pitched at 20p, quickly ran into trouble with an unprofitable diversification into public houses. Latterly relegation from the First Division and its poor record in domestic competitions has severely affected cash flow and disappointed both supporters and bankers. Latest available figures show that losses have sprinted from £584,000 to nearly £3 million.
This week its main banker, National Westminister, flashed the yellow card in the boardroom leading to the suspension of the shares and the appointment of an administrator. A £6 million rights issue is being proposed as part of a general refinancing package. The shares, at a pre-suspension 4p, value the club at £14 million.
But it is the clubs that have the silverware in the display cabinets that attract the big money. This week Glasgow-based Rangers announced that it had secured a £40 million private investment, described as the biggest-ever single investment in British football. Joseph Lewis, a Bahamas-based entrepreneur has bought 25 per cent of the enlarged equity, the deal diluting the 82 per cent controlling interest held by Ranger's chairman David Murray. For Millwall, desperately in need of silverware, such investment windfalls remain in the realm of fantasy football.
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