Perspective is difficult to find in these times, when information floods in from all angles on a daily basis. With this in mind, The Battered Bunnet put a day aside to give you a detailed summary (below) of how we go to where we are today. He pays particular attention to some of those who plan to be part of the game’s future, with a nod to those currently in control of the game.
It’s a fascinating read:
Scottish Football is in crisis, a crisis that has been 15 years in the making by the Directors of Rangers Football Club plc, compounded by a chronic lack of Governance and Oversight by the cronyistic SFA through the years.
Let’s revisit the cause of the crisis for a moment:
When David Murray bought Rangers in 1988, the club had won but 4 league titles in 20 years, and prior to the arrival of Graeme Souness, had been a Scottish League also ran for a decade. Souness, with David Holmes as Chairman, started the reversal of fortune and effectively restored Rangers as a player in British football.
Murray, giving credit where it’s due, transformed Rangers both as a football club and a business. Between 1988 and 1996, Rangers’ turnover increased by a factor of 5, double double and then some in only 8 years. During this time, the club became dominant in Scotland and competitive in Europe, while considerable sums were invested in the stadium and infrastructure, providing Rangers with a (comparatively) vast commercial resource to fund its football operations. While the club carried £9M of debt at this point, it was profitable, posting £2M surplus in 1996, and breaking even over the period of Murray’s tenure to that point.
By 1996 Murray had a valuable football business on his hands, and perhaps the smart play would have been to sell it. Football was in an expansionary phase, and there would have been a queue of interested and well bankrolled investors at the door. Instead, Murray chose to redouble his efforts, and taking Rangers ‘to the next level’ became the mantra adopted by the man and his increasingly fawning press.
Highlighting that Murray was not alone in thinking that Rangers could indeed become one of Europe’s top clubs, the following year Joe Lewis invested £40M in return for a 20% share. One wonders what Murray might have walked away with had he sold the lot to Lewis at that time, but he kept his hand in the game, and went all in over the following 6 years.
Between 1997 and 2003 Rangers lost an eye watering £152.6 Million. Joe Lewis’ £40M was gobbled up in jig time, followed by £20M of Dave King’s tax efficient stash, plus a £32M investment by Murray’s business, £6M from smaller shareholders, and a further £15M of NTL’s investment in the hopeless Rangers Media venture. At its nadir in 2004, Rangers net debt was a staggering £83 Million, a monument to the ego of David Murray and his ‘dream’ for Rangers.
Unfortunately, burning shareholders’ and creditors’ cash at such a breath-taking rate was not sufficient to fund Murray’s project, and the club embarked upon a series of schemes to pay players and reduce costs. A Discount Option Scheme saved over £2M between 1999 and 2003, while an Employee Benefit Trust framework saved £45M of payroll tax and gross wages between 2000 and 2010. It is worthwhile noting that the cost savings alone from these schemes gave Rangers a financial advantage equivalent to the total payroll of every other SPL team excluding Celtic.
We know now, thanks to the admissions of former director Hugh Adam, that ‘off the books’ payments to Rangers players had started as early as the mid-1990s, and the DOS and EBT schemes were simply formalising a by then established practice.
By 2005, with Rangers reduced to little more than a financial basket case, Bank of Scotland insisted that the club be brought back into balance, and following a failed public share issue, Murray’s holding company swapped £50M of Rangers’ debt for increased equity. The following year JJB paid £15M cash as a future royalty for a 10 year solus agreement on Rangers merchandise. Murray might very well have sold the jersey, but Rangers at long last had gotten rid of all but £6M of debt, and a new ‘sustainable’ plan was implemented, a plan that endured no longer than Paul Le Guen’s 26 games in charge.
When Walter Smith replaced Le Guen, the new plan was binned and Rangers once again embarked upon a ‘front loaded’ business model, with debt increasing on the back of player purchases and wages that the club could not sustain. By 2009 Rangers had £33M of bank debt and Murray’s companies, so long the guarantor of the funding, had utterly collapsed in the property and construction crash of 2008. It is worthwhile remembering that some £70 Million of Rangers’ losses through the years remains on the Murray International Holdings Ltd balance sheet, unpaid to the part-nationalised Bank of Scotland/Lloyds Banking Group.
Early in 2010, following an unusually long Tax Enquiry, Rangers received a Tax Assessment from HMRC for their use of EBTs in the preceding 10 years. The Bill for £24M, had a further £12M of accrued interest attached, and the promise of penalties to come.
Alastair Johnston, who had replaced Murray as Chairman of Rangers following the crash of Murray’s business empire, had a decision to make. In the summer of 2010, £36M tax demand in hand, and an appeal against which scheduled for October, Johnston was planning the coming season’s business. He could have chosen to sell the top footballers which would have brought in around £20M of proceeds. He could have chosen to run the club on a reduced cost model, one that was profitable on domestic football alone, thereby banking a further £20M from their participation in the Champions League. Had he done so, and ring fenced the cash, Rangers would have been in a position to withstand losing the Tax Case Appeal without bankrupting the club.
Alastair Johnston and his Board chose not to. He chose instead to spend money increasing the size of the squad, with £4M spent on Jelavic alone. Whatever else you hear about Rangers’ sorry plight, remember that in the summer of 2010 Alastair Johnston and his Board decided to prioritise football results ahead of the very existence of the club. That was the last time that Rangers’ fate was in the hands of the Club. From the moment the decision was taken not to act, Rangers’ fate was sealed.
Craig Whyte’s bizarre 9 month tenure of course is attracting all of the headlines, and Murray’s reckless disregard for shareholders and laws have precipitated the crisis, but Alastair Johnston, along with Paul Murray, Martin Bain, John McClelland and the rest doomed the club by their inaction in the summer of 2010.
We are now aware that Rangers’ use of unlawful tax strategies had a consequent impact on the proper Registration of their players. I won’t pour over the relevant rules here, suffice to say that in making payments to players via undisclosed agreements that were not provided for in the football contracts lodged with the authorities, many of Rangers top players have been ineligible to play in official matches for a decade or more.
As if it couldn’t get any more damning, the very Directors of Rangers who conceived, implemented and administered these contractual arrangements, were simultaneously Directors of the SFA and the SPL, the bodies responsible for Governance and Oversight. Step forward John McClelland, Martin Bain and Campbell Ogilvie. That Ogilivie is currently President of the SFA simply beggars belief. It appears as though Football in Scotland has been bent for 2 decades, and the people responsible were running the game.
There is a current SPL Inquiry into this issue, and perhaps that will reveal the true extent of the breaches of rules, but from the information now available in the public domain, there is a prima facie case for voiding the results of hundreds of matches in which Rangers have participated over the years, and stripping the club of any titles won during the period. The expulsion of the club from the game is talked of. In terms of athletes and duration, it represents a bigger sporting fraud than the Balco case, and is on that basis, the biggest scandal in the History of Sport.
Did I say a ‘moment’? Forgive me, but it has taken a little while to describe 15 years of malfeasance and deception.
In summary, in the 15 years from 1996 to 2011, Rangers have spent a staggering £168 Million more than they have earned. They have saved a further £47 Million of payroll costs via the use of questionable tax strategies. They have corrupted the rules of the game from the inside. And now they are bankrupt, with the very real prospect of £100 Million of creditors being turned over in one of the biggest corporate failures in Scottish business history.
Against this backdrop, Scottish Football has to divine the way ahead. We have to figure a way out of this mess and build a new future. Everything must be on the table, everything that is except narrow self-interest.
Following a Liquidation, if a group of supporters of a dissolved Rangers get together and start a new football club, one that looks like and sounds like Rangers, playing in blue shirts at Ibrox or elsewhere, I say good luck to them. Of such like-minded people are Football clubs are born. There is clearly a business opportunity given the size of the support for the old club. The pathway is straight forward: Put a Business Plan together; Invest the necessary Capital; and Apply for membership of the Scottish Football League. If the club prospers on the park they will be rewarded with promotions and will emerge into the top flight in their own merits, self-respecting and respectful. Such qualities does Meritocracy provide.
That is a decision though for Rangers supporters. The rest of us need to figure out a new plan. Without Rangers there will inevitably be less money in the top league, fewer fans perhaps, less TV and sponsorship money. We need to accept that reality and respond to it.
I suggest we look towards Cooperation, Collective Interest, Inter-Dependence.
The hardest hit will be those clubs most reliant on the money lost. Redistribution of TV income should be considered. No question.
Youth Development should be looked at again, not least because for most clubs it will define their future. Closer cooperation amongst the clubs can yield benefits for both clubs and players. A modified Draft system might be appropriate, whereby players graduating from Under 19/20 are available to be signed by other clubs in a predetermined sequence, perhaps with the developing club having a first option on 2 players, the remainder co-opted into the draft.
Considering Celtic’s worldwide scouting network, is there potential to share information on overseas prospects with the other clubs? An easy thing to implement.
Looking at income, the huge imbalance created by the participation fees paid to clubs qualifying for the Champions League distorts domestic competition. Can we consider a distribution to all clubs of Marketing fees and likes from UEFA for our clubs’ participation in UEFA competitions?
Finally, what other means do we have, given the collective talent and resources of the top clubs in Scottish Football, to generate new opportunities, new market share, new income? If necessity is indeed the Mother of Invention, we are not short of need. Let’s get innovative.
Of course, all of this is based upon a consensual approach to the crisis we face. It is widely reported that the other 10 clubs in the SPL are meeting next week to consider an appropriate response to the problems we all face. Celtic have not been invited to attend. This in itself is a concern, as it draws something of a line in the sand between the interests of the 10, and the interests of Celtic. One SPL chairman told BBC Scotland: “This is a once-in-a-lifetime opportunity to change things.” Such change, hatched by the 10 other clubs and forced upon Celtic is not a cooperative approach.
Moreover, Celtic are by a distance the biggest box office in the league. This season attendance at Celtic Park equates to 72% of the total attendances at all other grounds excluding Ibrox. A series of decisions on restructuring the SPL and redistributing the proceeds from the competition that excluded the stakes of almost half of the fans in the league is surely invalid.
Quite what will these clubs do with their self-acknowledged ‘once-in-a-lifetime opportunity to change things’?
Perhaps the 10 SPL Clubs will come up with some truly radical and forward looking ideas that are at face value, innovative, imaginative and laudable.
Perhaps though they won’t. Perhaps their ideas will be a little more self-interested. That is certainly the form book in Scottish Football.
Redistribution of SPL TV and Sponsorship income that excludes the Champion team from the divvy? Why not eh. The 10 Clubs will have the SPL voting majority to do so.
What would the implications be should the 10 Clubs decide that gate sharing was the way ahead for the SPL? Certainly, in the absence of Rangers, they would carry the voting rights to approve such a decision, irrespective of any objections from the fans whose money would be redirected.
And indeed, the admission of a New Rangers directly into the SPL, bypassing all meritocratic and long established practices in the game worldwide.
Establishing a new business is a challenging activity. Doing so in the midst of the financial chaos enveloping Rangers is utterly fraught. Those considering such a move need to have confidence in revenue projections and market. In the case of a New Rangers, the arbiter of revenue is the League they will participate in. It is reasonable to assume that informal soundings have been taken by those considering a New Rangers project from those with the power to determine which market they will operate in.
I have no problem with Stephen Thomson of Dundee Utd picking up the phone and chatting to Stewart Milne of Aberdeen. Indeed, I would expect it in the ordinary course, never mind the crisis we all face. However, given the likelihood that those behind a New Rangers are right now making their initial pitch to each of the 10 clubs, it is somewhat distressing that those same 10 clubs should in short course arrange a meeting to discuss and plan the way ahead, excluding Celtic and the interests of half the remaining fans of the SPL.
Paul Murray, Martin Bain, John McClelland, Alastair Johnston, Dave King: The men who brought this disaster down upon the game in this country, who corrupted the game from the inside for a decade or more, who burned £100 Million of creditors money, who are responsible for ripping off the Tax Payer and the Football Fan alike, who failed to act on Rangers’ crisis when action was most needed, these men and their likes are currently negotiating with the 10 Clubs the conditions for the entry of New Rangers directly back into the SPL.
The very essence of Sport, the history of Football, and the future of the Game in this country is to be decided in the coming weeks by the chairmen of just 10 Clubs. In the hands of these men is the legacy of the game accidentally entrusted, and its future precariously placed.
At our moment of crisis, when wisdom and consensus are most needed, what direction will they take? Where will Scottish Football go from here?
To a new, mature, responsible and progressive place? Or to Hell in a Handcart.
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Off to The Red Hot Ball with Mrs 67 shortly, so will be off duty from now.
bournesouprecipe, the ire today is all from The Battered Bunnet.
Lisb\o/nbhoy, indeed.
Steinreignedsupreme, we sure are.
leftclicktic, agree.
James Edward McGrory, it is time to think outside the box.
lynott67, cheers.
Kojo, me and you both.
Celtic Mac, correct.
jackie mac, you’re very welcome.
Barcabhoy, I first suggested to TBB that we run this one in the magazine, which I still think we should do, but he correctly suggested time was off the essence, and we should publish.
Agree on the idea to build a formal document on the subject. I’ve been intending to write the book, maybe batter into it over the Easter holiday.
TinyTim, without betraying confidences, I have been in touch with the club in recent days and know for a fact they are alarmed and prepared to act.
I have a spare ticket for tannadice if anyone is looking for one.
Might actually have 2 spare, but I wont know until late tonight / tomorrow.
If anyone is interested in either or both email my cqn name at gmail – i can drop off the ticket(s) tomorrow anywhere in Dundee.
QB
brilliant
Danny Baker @prodnose Reply Retweet Favorite · Open
Spurs are currently performing like the other members of The Police did once they found out Sting was leaving at the end of the tour.
It beggars belief to think these incompetents could be considiered viable partners in product by the 10
there are times when you wanna have your in put to whats has been going,
i dont need to as that article from the battered bunnet says it as clear as it could possibly be, BB you have truly come up with a piece that should settle all arguments, end off.
Bravo, TBB.
Hail, hail
I pointed out in the Aberdeen programme how their attendance was actually greater than at Ibrox. As the leader above also points out they massed four titles in 20 odd years.
They will go back to what they were, an insignificant sectarian/bigoted club, occasionally winning honours aka Dundee Utd style.
From the previous article. theweeproclaimer.com blog about m.dingwall.
Anything that happens to him on account of this blog, he deserves. He is a scumbag of the highest order. A truly horrible, odius individual. A sub-human being.
He is the architect of the defaming character campaign against our greatest manager.
Remembering it is the feast day of St.John Ogilvie, it is the likes of dingwall who would have been around at the time conducting the searches for Catholics in Glasgow.
And now, because of the religion I believe in, I have to go and pray for the likes of him!
Not easy this Christianity thing.
SPF
Paul 67. You and the rest of the Bhoys on CQN are doing a great job the battered Bunnets post should be read by every football supporter in Scotland as its a great summary of why the huns are where they are today.H.H.
Fantastic article from The Buttered Barnet. Can’t wait to shake your hand next Sunday. A tour de force indeed.
Just back from the golf so I haven’t read any posts so apologises if this already said.
Bhoycott.
Paul67 wrote that heartfelt article yesterday. I believe if the other 10 try to stitch us up and allow the new Huns into the SPL we should definately bhoycott all away grounds but like a Jim Bowen Bullseye way, we should travel to the away ground and stand outside singing our support of the Hoops from outside their gates, in a “look what you could’ve had” way.
More so we should do it now.
After the split we will get Murderwell away.
We bhoycott that game but all travel and shout ourselves daft outside.
It is a win win situation. The league will be won so we would not affect our team’s success. They always liedown to the Hun so they deserve to be the first hit. Every other one of the 10 get the message we are serious in that we will not accept rules to be changed to allow a cheating new version of the Huns into the SPL.
I don’t go to away games but I promise, if we were to bhoycott and get our message across to everyone concerned, I would travel to every away game to bhoycott outside.
The massive plus would be that it would be International news, so SFA, Uefa and FIFA would all be forced to act.
Bhoycott Muderwell away after the split.
Who else is in?
EC67
TBB
See that ole battered bunnet. Take it. Bin it. Buy a new one. You deserve it. Even Fergus bought a new one occassionally.
Hail! Hail!
MWD
Hi all,
Frequent lurker who rarely posts.
Been stirred by Paul67’s lead yesterday, and would like to contact him off-line first.
Can someone advise?
celticquicknews@qmail.com
TBB
Great thought provoking and intelligent article.
What else should i expect from you.(;-)
TT
http://www.saveranjurs.con
celticquicknews@gmail.com
Jim (Tommy from Glasgow) strikes again on Jabba.
Hard work. Being a Tim. Hard work
Great article Battered Bunnet.
The extent of their cheating needs to be flagged up internationally.
BT
Many Thanks!
Paul67: I must say this is by far one of your best, but after giving this current situation that RFC has now put Scottish football in and with the possibility of them being stripped of previous SPL titles, I have a question for you or any CQNers, should biggot dome be stripped, what happens to the winners medals that players receive would they be returned to the SPL office. If so and as we say in the BBC story about life without Rangers: as in 100 M race where Canadian Ben Johnson took steriods was stripped and his medal given to American (Second Placed) Carl Lewis, would this indeed happen with these medals.
I have two thoughts/feelings on this
1). Great to see the second place team and their players receive medals for a league title they were cheated of….
2). What about the young Scottish players that worked hard at Ibrox to make a future for themselves, only for their owner to bring in illegal forgein players that not only took their positions in the team, but were playing illegally, and now 10-12 yrs on these no longer young Scottish players now need to say to their offspring, yes that medal on the mantelpiece, daddy needs to send back, cause no matter all the hard work and training daddy done all those seasons ago, the SPL wants their medals back cause Daddy cheated….Thats quite a story out of all this….
Maybe some will deserve it, but I am sure not all…
Finnharp
Hail Hail
2nd one the icicle…
Fabulous article, Battered Bunnet.
In view of the facts you have laid out so clearly, and the sinister maniplation that is currently going on in the background, the only conclusion has to be:
Direct entry of any NewCo to the SPL is Non-Negotiable!
I am going to ask something daft.
was anyone at Overlee Park last week watching Busby in the green hooped socks playing Rangers SA BC.
and did anyone see the very well dressed olcer gent wearing a long trench coat, black leather troosers, black pointy boots ,
and an olive green beret.
was almost going to ask the man who he was , but didnt want to pry.
my feeling was surely a tim, surely a CQNer, but I didnt.
anyone identify this guy ?
I was wondering how many Bitcoins (http://bitcoin.org/) would it take to buy rangers…
FinnHarp
Hail Hail
Following a Liquidation, if a group of supporters of a dissolved Rangers get together and start a new football club, one that looks like and sounds like Rangers, playing in blue shirts at Ibrox or elsewhere, I say good luck to them. Of such like-minded people are Football clubs are born. There is clearly a business opportunity given the size of the support for the old club. The pathway is straight forward: Put a Business Plan together; Invest the necessary Capital; and Apply for membership of the Scottish Football League. If the club prospers on the park they will be rewarded with promotions and will emerge into the top flight in their own merits, self-respecting and respectful. Such qualities does Meritocracy provide.
Whenever I read stuff like that, I can’t help thinking of that scene in Gangs of New York where Walter ‘Monk’ Mcginn believes democracy has won, and fatally turns his back on Bill the Butcher.
Democracy and fair play are alien to them. All they believe in is supremacy and their own entitlement to it. Don’t trust them, don’t give them any quarter, and whatever you do, don’t turn your back on them!
Europchamps
Agree a bhoycott of motherwell would be great……
Sadly we have too many record / sun reading halfwits who claim to be celtic supporters but want ranjurs to come out of this just as strong who would prevent such an initiative succeeding…..
Actually ideally we want about 50 celtic supporters to buy tockets for this game to ensure the home side had to pay for maximum policing of the event…
Paul67
Thank you for your response.
I do understand that you cannot betray confidences.
Your reply gives me great hope.
If we are forced to share season ticket income.I will not buy a season ticket.
I will support Celtic financially,but refuse to support other clubs in such a way.
Celtic must be made aware that staying in Scottish football and being forced to share gate money will be the end of season ticket sales for many fans.
I spend around £4k a year on season tickets ,my close friends another £4k.
All of us are in agreement that should this be forced upon us we will not renew.
This will decimate our club,and take us back to 20,000 gates.
Celtic need to force open the door to English football.As TBB says “get innovative.”
TT
An excellent piece by the Bunnet. I have shared on FB and twitter. IMHO this is the kind of message we should be sharing on the new media at every opportunity. We have a vast voice that can get this message through to the rest of Scottish football fans and way beyond our shores. This story has to be told, and re-told through this medium. We all need to do our bit.
Dan
Paul67: On yesterdays article, not only should we bhoycott away games, we should go to Parkhead if possible and watch on beamback to the stadium at a fiver a head with all funds going to charity….
Just a thought..
Finnharp
Hail Hail
TBB
Thunderous applause, not bad for an Internet Bampot ;)
The agenda needs to be wrested from Traynor , who looks more and more if he is in someones pocket if not pay, and is ilk.
As things stand a club licence should be refused by the SFA on 1st April because no acceptable accounts have been submitted and the SPL told Rangers will only be allowed to continue to fulfill their fixtures if the SPL hold up any decisions until the SFA sift through all the evidence and a way forward that embraces Cooperation, Collective Interest and Inter-Dependence is agreed. The SFA have this power and need to be encouraged to use it..
Celtic’s voice is still silent because the jury has not yet declared on EBT’s nor have the various enquiries reported back, but had they spoken I’m sure they would have echoed your sentiments.
This is too big to contain and Rangers in whatever form will never again occupy the position they have enjoyed in the last 15 years. The emperor’s clothes have been seen through, they stand naked in the public eye and its not a pretty sight.
An article like yours would have been dismissed only a year ago as the ravings of an internet bampot but no longer. The war may not yet be over but us bampots are winning.
Eurochamps67/Burnley78,
i would love to hit the motherhuns in the pocket,
just not sure how keen the old bill would be for thousands
of our support to be outside the ground for 90 mins
Superb article. Deserves a wide audience.
St Stivs…..
‘Older gent, black leather strides, long trench coat, black pointy boots and a green beret’…..
:)
It was either Lionel Blair or Steven Segal but I doubt either post much nowadays.
Still looking for machiavellian machinations in everything
What if the positive slant is a desperate attempt to placate them until the game on 25th is out of the way, to prevent things getting really ugly?
Does the clock go forward tonight in the UK…
Finn
bankiebhoy1 on 10 March, 2012 at 18:44 said:
St Stivs…..
tal.
he was a very cool lookin fella.
just wonderin if anyone knows him.
Burnley 78
I know some would try to go but an old fashioned peaceful picket line might dissuade them. No?
yip 1 hour Finnharp