The deal
On May 30, an investment consortium led by US insurance magnate Andrew Cavenagh, and backed by 49ers Enterprises, the investment arm of the titular American football franchise, purchased a majority stake in Scottish soccer giants Rangers FC.
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Cavenagh, who stepped in as club chair, said in an open letter co-signed by 49ers Enterprises president Paraag Marathe (who became vice chair) that the group aims to implement a “foundation of financial sustainability for the future” on the side, which has struggled to maintain a financial balance in recent years.
The pair continued: “While we recognise the importance of resources, we believe that thoughtful, disciplined investment, guided by a clear strategy, is the path to enduring success. Every decision, whether sporting or business, will be made with the club’s long-term success and sustainability in mind.”
Why it matters
One half of the history “Old Firm” rivalry, Rangers boast a storied history both in Scotland and in European competition. In recent years, however, domestic glory has been in short supply, despite winning the top-flight Scottish Premiership in the 2020-21 campaign.
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By GlobalDataThe knock-on effects of Rangers’ 2012 administrative relegation to Scotland’s fourth tier, itself brought on by administration after years of financial mismanagement, precluded the club from both top-flight and European revenues for close to half a decade, allowing rivals Celtic to establish a financial stranglehold on the league, and a domination of its singular UEFA Champions League place.
Since Rangers’ return to the top flight, besides two seasons when it finished third in the Premiership, the club has been a consistent fixture in European competition, reaching the final of the UEFA Europa League in the 2021-22 campaign.
This has marked a return to investment viability at the club, which has subsequently notched record revenues in consecutive years, backed by those European revenues.
That the club is free of litigation for the first time in over a decade illustrates the degree to which the turnaround has improved the operation of the club, although further improvements will be necessary if the consortium is to make good on its investment.
Since the title triumph in 2022, the club has still struggled for profitability, a factor it has put down to the necessity of first-team investment to keep pace with Celtic.
Despite this, the consistent growth in commercial revenue (multiple consecutive record returns also) indicates that commercial businesses are once again ready to support the club after its malaise.
In recent years, the club has often utilized shareholder loans (converted to shares) and public share issues to bridge funding gaps.
The economic circumstances that necessitated such moves will need to be eliminated under the new ownership, but the growth in revenue despite these gaps, added to the fact that the annual losses have primarily been within the low seven-figure range, means there is space to even out the club’s finances into a more sustainable model, especially given the prevalence of player sales at the forefront of that strategy going forward.
Important too is the ability of the consortium, particularly 49ers Enterprises, to eat those losses to power the club through a growth period. Though the club made a loss of £17.2 million in the 2023-24 season, before planned transfer spending, that loss was £2 million.
By comparison, in the 2023-24 campaign, Leeds United, 49ers Enterprises’ other club, made a pre-tax loss of £60.8 million, up from the £33.7 million a year prior.
Naturally, the owners will not want to suffer losses for long, but it remains that achieving European competition qualification and a top-2 finish in Scotland comes at a considerably smaller cost to the owners than even gaining entry to the English top flight does for Leeds.
On the logic behind investing in a soccer side that competes in a relatively smaller European league, GlobalData Sport analyst Peter Scrimgeour commented: “Rangers are an attractive proposition for the American consortium as they are an iconic football club, with a proud heritage, an existing stadium that had multi-million-pound upgrade works in 2024, and a large, passionate fanbase.
“They are also one of the world's most successful clubs. And it is on the back of this historical success within the Scottish Premiership that almost guarantees European football each season, with the top two tiers – UEFA Champions League and Europa League – having become very lucrative.”
In the 2024-25 campaign, Rangers will enter the UEFA Champions League in the second qualifying round, and if the team manages to qualify for the competition proper, it would instantly release a revenue boost that the new ownership can use to invest in the team.
If not, the move from UEFA to turn both the Champions League and Europa League into a league-phase format with eight games minimum may still prove beneficial, as it has done to many other participants that lie outside Europe’s elite domestic competitions.
“Additionally, the club is a relatively cheap investment compared to other clubs within Europe’s top five leagues, existing sports franchises in North America’s Big Four leagues, or the expansion fee for a new club to join MLS.”
Cracking Celtic’s domestic domination, especially when that club succeeds at banking an annual profit, will be the most difficult task for the new ownership, but it remains that for a club with a considerable fanbase and access to the riches of elite European competition, Rangers may prove to be a shrewd investment.
When 49ers Enterprises undertook its majority takeover of English side Leeds United in 2023, it purchased then-owner Andrea Radrizzani’s stake for £170 million ($211.1 million), valuing the club as a whole as just north of £300 million, despite the fact that relegation to England’s second tier had been confirmed by that point.
The purchase of Rangers values the Scottish club at around half of that £300 million, and although Leeds United has return to the top-flight (and the significant riches that the Premier League entails), it remains a club on the league’s lower end, in a competition where promoted sides have struggled to maintain a position in the competition over recent seasons.
Rangers, on the other hand, while playing in a league that is financially dwarfed by the Premier League, are practically guaranteed by the nature of the club’s stature to never finish lower than second place, meaning some sort of European revenue is all but confirmed.
On the pitch, the sharing of players between Leeds United and Rangers may take place, but off-the-pitch the sharing of sponsors may too, with the owners now able to offer expanded sponsorship inventory across two well-supported and visible UK soccer teams, in essence opening up the possibility to grow the commercials of both sides in tandem.
The Details
The consortium has roughly paid a fee of around £75 million to acquire the 51% stake in Rangers, taking Rangers private at a valuation of £150 million, and buying out four prominent shareholders in the process.
Following the purchase confirmation at an extraordinary general meeting, the group will immediately inject a further $20 million into the club via a private share issue that will further dilute the minority shareholders while injecting fresh funding into the club, which will be split across operational costs and the player-transfer budget.
Douglas Park, George Taylor, and Stuart Gibson remain as three major (over 5% each) shareholders of the club outside of the consortium, while board member John Halsted (reportedly a driving force behind the purchase) also holds shares via the minority stake owned by Perron Investments.
Halsted will remain on the Rangers board, as will interim chair Fraser Thornton, non-executive director George Taylor, and chief executive Patrick Stewart, who joined the club in November.
Other members of the investment consortium that have joined the board include US real estate mogul Eugene Schneur, health insurance industry executive Andrew Clayton, and investment firm director Mark Taber of Great Hill Partners.
Meanwhile, Graeme Park (son of Douglas Park), Julian Wolhardt, and Alastair Johnston all depart the board.
With the purchase of the club, the consortium also acquires its 51,700-seater Ibrox stadium (which had expansion work conducted on it ahead of the 2024-25 season and has been a concert venue in the past), the Edmiston House multi-purpose venue (which includes a club shop and museum), and the club’s training center.
