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Explained: The 49ers’ proposed takeover of Rangers – and the impact on Leeds
The outline of a deal for Scottish football club Rangers to be taken over by a U.S. investor group has been agreed with a period of due diligence to take place before it is completed.
Talks have been ongoing for over three months with the group, spearheaded by healthcare mogul Andrew Cavenagh and 49ers Enterprises president Paraag Marathe.
After negotiations with the current bloc of major shareholders, the parties have agreed on a set of variable routes to acquiring the 51 per cent majority they seek. It is expected to be processed in the next few months.
Rangers would be the second British club 49ers Enterprises has bought a stake in. It purchased an initial 10 per cent stake in English Championship side Leeds United in 2018, gaining boardroom influence, before completing a takeover worth £170million ($213m) in July 2023.
The deal would add to the growing contingent of American investors in Scottish football. Dundee, Dundee United, Hibernian and St Johnstone have been bought in the past decade. Atlanta United president Darren Eales also bought a minority stake in Aberdeen and sits on their board. Las Vegas-based businessmen James Bord and Evan Sofer bought Scottish Championship club Dunfermline Athletic last month, too.
49ers Enterprises has been scouring the globe for investment opportunities in sport and, despite the Scottish Premiership being left behind by its English neighbour since the Premier League’s first season in 1992, Rangers still carry weight as a historic European club.
Scotland’s smaller domestic market means purchasing Rangers will be significantly cheaper than clubs of a similar scale in other countries. In return, 49ers Enterprises gets one-half of the Old Firm derby with Glasgow rivals Celtic and Ibrox, a 50,000-seater stadium. Commercially, the prospective owner can also tap into a large expatriate community in North America, with the U.S. and Canada holding more than 30 supporter clubs among at least 600 worldwide.
Marathe, the president of 49ers Enterprises (Lachlan Cunningham/Getty Images)
The established financial advantage Rangers and Celtic enjoy over every other team in Scotland means that European qualification is almost guaranteed, with the title winners gaining access to the Champions League.
After suffering a financial collapse in 2012 and climbing back up from the bottom division of Scottish League football, they are still playing second fiddle to Celtic, who are on course to win a 13th league title in 14 years, drawing level with Rangers’ record of 55.
Here, The Athletic explains the status of the Rangers takeover, the potential complications with Leeds and what they would be getting by investing in Rangers.
What is the structure of the takeover?
According to sources, speaking on the condition of anonymity to protect their positions, the investment group intends to command a controlling stake in the club, which means owning at least 51 per cent of the shares.
Enough shares have been identified to gain that majority and claim the seats on the board necessary to steer the footballing decisions.
The investors will be buying through a separate vehicle that will encase both Cavenagh and 49ers, but the former will be the larger party within the bloc.
That could be pivotal given the Scottish Football Association’s (SFA) barrier to entry for investors who already have control of another club — in this case, Leeds. Article 13 states that, unless given prior written consent, no person can be a shareholder in a Scottish club while holding shares in another club.
There is precedent for the rules being relaxed, however. In February last year, the SFA permitted Bournemouth owner Bill Foley to buy a £6million stake in Hibernian, provided his shareholding did not exceed 29.9 per cent. The argument was that the investment by Foley, who also owns ice hockey’s Vegas Golden Knights, was positive for the Scottish game. It had to be offset against the potential for dual ownership to affect the integrity of the competition if the owners started exchanging players between their clubs to gain an advantage.
Brighton & Hove Albion owner Tony Bloom is still in talks about investing up to £10million for a minority stake in Hearts. Hearts signed a deal with Jamestown Analytics — an off-shoot of Starlizard, the data firm owned by Bloom — which has helped bring success to Brighton, Belgian club Union Saint-Gilloise and Como, who play in Italy’s Serie A.
There was also a belief that if the investors were to pass the 30 per cent threshold at Rangers, they would have to make a compulsory offer to all other shareholders at the same share price, in line with UK Takeover Panel rules.
The code previously applied to public companies incorporated in the UK, Channel Islands, or Isle of Man, irrespective of whether their securities were traded. But this month, the scope narrowed to only companies with securities admitted to trading on a UK-regulated market, such as the London Stock Exchange — which means it will not apply to Rangers.
Jordan Campbell
Who is selling?
Rangers have a wide shareholder base comprised of seven individuals who own between six and 13 per cent, which means any potential investors have to strike deals with multiple individuals.
Former chairman Dave King, the largest shareholder at 12.6 per cent, has been looking to sell for some time. Another former chairman, John Bennett, who owns just over seven per cent, is happy to sell too. So, too, is former director Barry Scott who owns around 1.5 per cent.
Investor fatigue is not widespread but the deal hinged on the preparedness of the other major shareholders — Douglas Park (11.54 per cent), George Taylor (10.22 per cent), Stuart Gibson (9.53 per cent), Julian Wolhardt (6.69 per cent) and John Halsted (6 per cent) — to each sell a significant part of their shareholding.
They have agreed to do so because they know that a deal is dependent on the incoming investors reaching 51 per cent, and they view the partnership with Cavenagh and 49ers as being based on a shared vision for the club.
To make the numbers add up has required intense negotiations. They have been led by Taylor, who owns 10 per cent and is Morgan Stanley’s lead banker in Asia, and Halsted, who owns six per cent and was a founder partner of private equity company Pamplona Capital Partners.
Letham, who owns around five per cent and has invested millions of his own money into the club, has also been influential in making the numbers work when it comes to the price, board structure and planned investment post-takeover.
Jordan Campbell
Who are the investors?
Philadelphia-based Cavenagh is executive chairman of ParetoHealth, a health insurance company. It manages over $8billion in assets and covers more than one million lives across thousands of businesses.
49ers Enterprises is the more glamorous name and was estimated to be worth $5.97billion by Forbes in 2023. It has big-name backers from the world of sport and entertainment. The valuation pegged them as the 11th-wealthiest multi-sport owner group.
Jed York, the CEO of the San Francisco 49ers (Steph Chambers/Getty Images)
Some of the famous faces to have invested in 49ers Enterprises include actor Will Ferrell, golfers Jordan Spieth and Justin Thomas, nine-time NBA All-Star Russell Westbrook, Stanley Cup winner Gabriel Landeskog and the most decorated Olympian of all time, Michael Phelps.
The investment company is looking to unload 10 per cent of its stake in its NFL franchise, the San Francisco 49ers, but investment in Rangers is not dependent on that sale. 49ers Enterprises has backers willing to put more money in who are excited by the prospect of being involved in British football.
Jordan Campbell
