The Bank, financial doping and moral hazard

Dundee United chairman Stephen Thompson’s comments to yesterdays’ Herald are worthy of attention.  During the summer, when United received a £1m bid from Rangers for David Goodwillie and Blackburn Rovers were hovering, Bank of Scotland, took an active part in the deliberations.  Thompson told the Herald, “The bank wanted me to take £1.2m for him, but I said no to that. I had to stand up against the bank.”

Thompson more than doubled the money on offer for Goodwillie, allowing him to shave over £2m off their bank debt, but this exchange took place only a few months after the same bank told former Rangers chairman, Alastair Johnston, to accept the bid for the club from Motherwell born thousandaire Craig Whyte or the bank would demand same-day repayment of Rangers borrowings.

Bank of Scotland, part of Lloyds Banking Group (LBG), are significantly exposed to Scottish football and required a taxpayer bail-out two years ago, so although their interference in the running of clubs could seem overbearing, we shouldn’t be surprised at it.  It’s business, and if you are employed at LBG with a responsibility to your taxpayer-shareholder, it’s necessary business.

Fortunately, Celtic are free from such interference, as are Rangers, thanks to their aforementioned benefactor, but if a liquidation event at a large club threatened income streams to the league I would be amazed if the Bank didn’t use the ‘Vote Newo FC  into the SPL or repay your borrowings immediately’ line.

Stephen Thompson, who sits on the SPL board, might not have a choice on whether or not to vote a Newco FC into the SPL ahead of 30 Scottish Football League clubs, but he and his fellow board members will be able to set the tariff on any exceptional league entry to what would become a financially privileged football franchise.

12 seasons of cumulative benefit from financial mis-dealings should result in 12 seasons of penury at whatever points rate the league calculate benefit was accrued.  For one scenario I have in mind, around 15 points per season sounds fair, with an expunging from the records of any trophies ‘won’ by Financial Doping.

This is measured, deliverable, is in the power of the SPL board to impose, and sets a minimum moral hazard to inhibit future mis-deeds.

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955 thoughts on "The Bank, financial doping and moral hazard"

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  • philvisreturns

    She came from Greece she had a thirst for knowledge (thumbsup)

  • iBhoy (i is also Neil Lennon)

    Celtic’s fifth-round Scottish Cup tie in Inverness or Dunfermline will kick-off at 12:45pm on Saturday the 4th February.

  • TheOriginalSadiesBhoy

    And SadiesBhoy puts the ball into the empty net.

  • dirtymac

    philvisreturns says:
    12 January, 2012 at 12:33

    For money surely?

    topicalCSC

  • The Spirit of Arthur Lee

    She studied sculpture at St Martins College

  • Awe_Naw_No_Annoni_Oan_Anaw_Noo

    Zbyszek says:
    12 January, 2012 at 12:30

    Thanks bud … is that Birthday Lorry present in the post ? ;-)

    Hail Hail

    share

  • voguepunter

    Paul67

    Looks fair to me.

  • philvisreturns

    dirtymac – For money surely?

    Or handsome podium winners. (thumbsup)

    The Spirit of Arthur Lee – I can’t hear that song now without thinking of Bill Shatner’s definitive version. (thumbsup)

  • Folly Folly

    Paul

    I was taken by your suggestion that you ‘would be amazed if the Bank didn’t use the ‘Vote Newo FC into the SPL or repay your borrowings immediately’ line.’

    You may be proved right, but would the bank be prepared to face the political fall-out from such a move, all for the sake of a relatively paltry sum for a bank of its size?

    Or are you inferring something else … ?

    FF

  • Kayal33

    If Newco becomes reality then there is absolutely no doubt whatsoever that they will be given access back into the SPL, and with minimal punishment.
    I would accept 15 points per season for 12 seasons and removal of all titles won in period of financial doping, but there’s not a hope in hell of that happening.
    25 points for one season max., 10 points if they can spin it as being positive for the game.

  • Ten Men Won The League

    This from KDS yesterday. Made me laugh

    Apologies if posted earlier

    ergusdaddy Yesterday, 8:44 PM Post #122

    Dignity (F.C)

    There’s a man you’ll meet
    On a Govan Street
    He’s a shyster and a conman
    Has been 20 years

    And he takes no bills off nobody
    His morals in the gutter
    He’ll buy your company
    And then pull down the shutters

    He’ll pre-pack your club in a body bag
    The children call him Googly
    He never lets on
    But then again why should he?
    He won’t tell you the secret
    Of the black hole in his kitty
    He’s waiting for a tax bomb
    Then he’ll shut down Dignity

    And all along the west coast
    In villages and towns
    They think he’s the Whyte knight
    But they’re effing clowns
    They don’t ask about his billions
    I say, he’s got no money
    It ain’t gonna be pretty
    The end of Dignity

    And we’re telling this story
    And it isn’t a dream
    It’s not in the papers
    Just here and RTC
    And I think of them gone
    And all that that means
    There’s no place in the future
    For Dignity

    And all along the west coast
    In villages and towns
    They will all be raging
    The place will get burnt down
    They’ll ask “how could this happen?”
    We’ll say, “give Liz her money!”
    And isn’t it funny
    The end of Dignity

    Wind them up, wind them up, wind them up,
    wind them up, wind them up, wind them up!
    Don’t come back again, don’t come back again,
    don’t come back again, don’t come back again!

    And I’m thinking about pub
    And I’m thinking about beer
    I’m not thinking about work!
    And I’m thinking, how good it will be
    To be here some day
    Without a team called Dignity
    A team called Dignity
    That team.

  • philvisreturns

    Paul67 – 12 seasons of cumulative benefit from financial mis-dealings should result in 12 seasons of penury at whatever points rate the league calculate benefit was accrued. For one scenario I have in mind, around 15 points per season sounds fair, with an expunging from the records of any trophies ‘won’ by Financial Doping.

    What if castle-owning billionaire Ibrox supremo Craig Whyte rejects that penalty? (thumbsup)

  • Serge

    LiviBhoy

    I hope your right! Although as much as i want him we never seem to get things done quickly & i reckon he will end up at an EPL Club. HH

  • brimmer ‘kano 1000′

    Awe naw

    I see we share a birthday.

    Have a good day old bhoy

    brimmer

  • pedrocaravanachio67

    Joe Filippis Haircut

    I havent looked at the stats but seem to remember hearing prior to Christmas that he was out of favour and on the bench quite a bit. We could take him on loan till the end of the season with an option to buy. This would be a win/win for Celtic, as it would give us a quality striker and more time to scout somebody else for long term purposes.

    My prefered choice would be Rhodes, but the fact that there were 8 EPL clubs watching him bang in 5 last week, tells me we wont be able to compete with transfer fee and wages.

    PC67

  • Aipple

    that’s where I, caught her eye.

    @Ten Men Won The League – Funny, that song came on my iPhone yesterday.

  • mickthetic

    Just got the CQN magazine through the letter box.

    Quality Paul67

    Keeping the faith

    Mtt

  • philvisreturns

    Folly Folly – would the bank be prepared to face the political fall-out from such a move

    Yes, I believe they would.

    Most of Scotland wouldn’t be too upset to see Huns Reunited ushered into the SPL anyway. (thumbsup)

  • The Bhoy from the Village

    Paul67 I understand where your coming form on this issue, your hypothesis is a pragmatic approach. For myself emotion takes preferance for pragmatism, if Rangers Newco enter immediately into the SPL, then I would want Celtic to resign immediately and make application to any other league in Europe who would take us even if it means starting at the bottom of the pyramid

    If the SPL has a finacial collapse due to no Rangers the effect of no Celtic would be equally devastating. The option of not admitting Rangers Newco maintains the sporting integrity. If the other teams elect to vote for Newco they should be aware of the intent for Celtic to walk away

    In the unthinkable scenario that Celtic vote for Newco, then sadly I will walk away

  • The Honest Mistake loves being first

    Paul67,
    It sounds like a stitch up.
    What if the banks demand that a three season (or even a one season) penalty is enough? What do we do then?
    Its dawning on me that the only way is out. Who will take us?

  • bournesouprecipe

    Beyonce Beyonce

  • RogueLeader

    Paul67 – Only in Scotland would there be a debate regarding whether cheats should prosper or not.

  • brimmer ‘kano 1000′

    Blatant re-post but it is funny..

    Dring Dring: “Bonjour ..Sochaux’s General Manager speaking…
    ‘ow may I help you”….
    Glasgow Voice: ” Aye hello…dae ye speak English an’ at “?
    G.M. : “Mais ouis..and better than you I am thinking”…
    GV: “Great…listen ah’m fae Glasgow Rainjurs an’ ah wonder if ye could do us a favour”…
    G.M.: ” What are you after please “?
    G.V.: ” Could yous kid on that ye want to sign Maurice Edu” ?
    G.M.: ” Maurice …who”??
    G.V: “E…D…U…”
    G.M.: “Never heard of him..but go on please”..
    G.V.: ” It’s like this..we’ve nae dosh and nae prospects either…but tae keep the Bears happy we’re trying tae put oan a face that says we can refuse offers fur oor players”.
    G.M.: ” Zeez Bears you are keeping ‘appy…will they believe this”?
    G.V.: ” Listen..efter the pish we’ve fed them …they’ll believe anything…honestly”…
    G.M.:” Purely in the interests of Scottish/ French relations I will agree to this madness..So we will offer..say.. £2 million to begin with…
    G.V.: ” TWO MILLION…??…Naw fur feck’s sake naebody will believe that. Start oaf at £500, 000…we’ll knock that back..
    then you can come back again wi’ an increased offer..which we wull knock back again…and ra Bears will be chuffed tae feck”
    G.M. : “Oh very well…but I have to say …if zis is how you conduct your business ..I can’t see you being in business much longer..Au Revoir..”

    brimmer

  • ernie lynch

    greenjedi says:
    12 January, 2012 at 12:34

    ‘My Fiancees cousin is a Farmer and I know how hard a Farmers life is. They still make a comfortable living, but have to try and come up with different income streams and work long hours in the dark and cold weather.’

    Ask your fiancee’s cousin how much he is paid under the SFPS.

    The information used to be available on line but the farming lobby put a stop to that.

  • bournesouprecipe

    philvis

    In order for me to win this podium thing it’s seems I need to be taller, darker and
    handsomer.

  • Bawsman

    No. I don’t agree with you Paul.

    Re-application to the lowest tier, with ‘fit for purpose’ people at the helm of any newco is required.

    Automatic entry should not be a foregone conclusion either. Many HONEST clubs seek entry and should not be gazumped.

    As Huns newco visits every ground in Scotland twice on the climb back to the summit they will be giving some payback to ALL who were denied by their lack of integrity.

    Titles won whilst financial doping should be expunged and the record books anotated as to why.

  • The Battered Bunnet

    Paul,

    I’m not sure that the bank would react in that manner, although perhaps one might asks them. My instinct is that any market which provides advantages to a player for failing corporate governance requirements would be dead in the water commercially. LBG might very well adopt the line you suggest, but commerce more widely is more likely to react in the opposite way. Providing an alternative to LBG might the ticket.

    On the Newco penalties, I strongly disagree with you (and RTC who shares this view).

    Football, as with all sport, is competitive at heart. It is the very essence of sport. The reason we are drawn to it and the reason it captivates us.

    When competition is removed you have nothing more compelling than a pre-season friendly or Auld Firm type spectacle. The very worst thing the crisis torn SPL can do is to remove competition from their league at the same time as removing corporate oversight and accountability.

    (Just considering that last sentence is quite unsettling.)

    If some Newco Rangers are to prosper in a future top league in Scotland, the right to compete, and the means to compete, must be earned.

  • Celtic_First

    GourockEmerald on the last thread.

    That’s sad news about your sister, and a long way for you to travel for such a sad occasion. May God rest her soul. May the road rise to meet her.

  • philvisreturns

    bournesouprecipe – In order for me to win this podium thing it’s seems I need to be taller, darker and handsomer.

    Also you need skills… like nunchuku skills, bow hunting skills, computer hacking skills… Girls only want boyfriends who have great skills. (thumbsup)

  • Folly Folly

    Philvis, of course I may be wrong, but I don’t agree with you.

    A few short years ago, when the MSM called the shots through being the only serious source of news and views, then yes.

    But today? When we (the general public) are far better informed and able to shape the debate … Not so sure.

    FF

  • Awe_Naw_No_Annoni_Oan_Anaw_Noo

    brimmer ‘kano 1000′ says:

    Many Happy returns Brimmer

    Hail Hail

  • RogueLeader

    philvis – NapoleonDynamiteCSC

  • DownForSam

    Bhoys.
    Have any of you been a corporate guest at Ibrox on derby day. Been offered a ticket. Not sure what to do. Will be with blue noses.

  • philvisreturns

    Folly Folly – There wasn’t much outrage from supporters of other clubs when the huns and their media and SFA partners were lobbying for a second extension to the 2008 season. (thumbsup)

  • voguepunter

    DownForSam says:
    12 January, 2012 at 12:52

    You will be tainted for life,don’t do it.

  • pintaguinness

    For me too many of the strikers we are linked ith are “same as” we have. What we need is an alternative. Tall, physical,decent technique,can hold ball up – a la Chris Sutton

  • saltires en sevilla

    Paul67

    Ye ye and thrice ye to that …

    ongoing points penalty and expunge the records

    tho’ there remains the not insignificant issue of hooky euro entry -I expect some individuals to go after thems and sfa for ‘lost’ income due to champions league dosh

    HH

    M

  • St Martin’s Bhoy

    The Bhoy from the Village says:
    12 January, 2012 at 12:44
    Paul67 I understand where your coming form on this issue, your hypothesis is a pragmatic approach. For myself emotion takes preferance for pragmatism, if Rangers Newco enter immediately into the SPL, then I would want Celtic to resign immediately and make application to any other league in Europe who would take us even if it means starting at the bottom of the pyramid

    If the SPL has a finacial collapse due to no Rangers the effect of no Celtic would be equally devastating. The option of not admitting Rangers Newco maintains the sporting integrity. If the other teams elect to vote for Newco they should be aware of the intent for Celtic to walk away

    ———————————————————————————————————————————————————————————
    I agree TBFTV.

    Paul knows one of my wishes is never to have to play them again, whatever guise they appear in.

    If newpoundland fc is allowed straight in, there is no competition. It would make the injustice and unfairness on the field over the last 124 years seem a mere irritation.

    To paraphrase Paul himself – and one of his finest lines – Any part of my Club that needs newpoundland is a part of my Club I’d be happy to lose.

    KiberaCelticCSC

  • Awe_Naw_No_Annoni_Oan_Anaw_Noo

    LBG favouring one customer over another customer …nowt new here of course but it shouldn´t be allowed within the sporting arena

    Hail Hail

  • McNair is the greatest

    Paul67,

    Apart from the multi year points penalty the newco should also have to forego any SKY/ESPN money for the £80m 5 year deal as the price of admission – each of the other 11 teams would get small but welcome extra tv money. Any director, player or management who was part of the scam or was paid with EBT’s to be banned for life from Scottish football – how many legneds would that entail?

  • fanadpatriot

    Down forSam
    Go,have a great time,oh and order Eggs Benedict for starters.Slan

  • up_over_goal

    DownForSam

    Don’t know if I could endure the Nuremberg pre-match show, although perhaps worth it for the chance of a (sotto voce) evilgasm should they lose.

  • Joe Filippis Haircut

    Could it be true? I have no idea of the legalities or otherwise of this situation I heard last night from a Rangers fan that there is a consortium of 6 orc fans each is prepared to put in 500.000 of there own money making a total of 3 million.They are prepared to buy the Spanish striker that Rangers have been linked to.The player will belong to the consortium and they will lease him to Rangers but the interesting bit is the consortium are prepared to pay the players wages as well .Now if the orcs go belly up the consortium will still own the player and will then lease him to Newco Rangers is this fact or fiction? H.H.

  • The Battered Bunnet

    Why don’t we simply insist that Newco Rangers may only field 8 players at any time, 4 of whom must have been born before David Weir.

  • philvisreturns

    RogueLeader – Vote for Pedro. (thumbsup)

  • Celtic_First

    Mr Thompson is to be commended on having the courage of his convictions. Perhaps the bank will take the lesson on board and show him a modicum of trust when the next big decision comes up for discussion.

    The bank will say, ‘Come on, you know it makes sense to have the Teddy Berrrs in the SPL. Think of all those exciting games against them in which your eight players tried so valiantly …’.

    Stephen Thompson just needs to think about the increase in United’s chances of getting European football and what that might mean to his club. More power to him (after Saturday).

  • RogueLeader

    Joe Filippis Haircut – that is against FIFA rules. Cannot happen. Tevez burst the baw with that wheeze. Players must be wholly paid for by the clubs

  • ernie lynch

    Paul 67

    If, (and I’m yet to be convinced), the decision to allow a newco huns into the SPL is a matter for the board of the SPL rather than the members of the SPL then those directors have to vote for what is in the best interests of the SPL.

    That is one of their fiduciary duties as directors.

    They are not delegates for their respective clubs (which they would be if they were voting as members).

    If they were to allow their vote to be influenced by what was best for their club, or sucumb to pressure from their club’s bankers, then they would be in breach of their statutory duties.

    Are you suggesting that the directors of the SPL might be prepared to breach the fiduciary duties they owe to the The Scottish Premier League Limited?

  • Folly Folly

    Philvis: I don’t think the events are even remotely comparable.

    The consequences of the league extension would have been minimal, in the grand scheme of things, and could at least be argued on the grounds of helping a Scottish club compete in Europe … with only 1 potential loser.

    The case in question is of an entirely different scale, affecting, as it does, almost every level of professional football in the land.

    FF

  • Moonbeams WD. Kano 1000 \o/ Supporting Neil Lennon 100%.

    Paul67

    I don’t often comment on your articles generally because I agree mostly with what you say and they are of a high standard. When I do comment its generally due to something I disagree with.

    Your article today is superb and counters a viewpoint often posted on CQN that the bank holding most of Scottish Football SPL debt would not be happy to back an unfair decision to allow a Newco back in the SPL.

    Excellent work.

    MWD

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