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.
856 Comments- Pages:
- «
- 1
- ...
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- ...
- 23
- »
So potentially, games played with players improperly registered will have those game results overturned, how does that affect fixed odds coupons, could anyone who kept old slips return them and demand they are honored
jude
lovely Isla Negra special reserve…l
hamiltontim on 10 March, 2012 at 21:52:
So, you made your way home okay? Hope you blamed me for your lateness with the grub, pass on my apologies and regards to Mrs. ht…
Keep the Faith!
Hail Hail!
Jude – we’re not disposed to temperance, more likely intemperant dispositions….especially BT. Grumpy bassa! :-)
T4
Lennybhoy,
And likewise.
On San Miguel at the moment …£1.69 a bottle from Coop …on 2nd bottle !
Lennybhoy…Supporting Neil Lennon and CFC until I die on 10 March, 2012 at 22:00 said:
No I told her I went to confession :-)))))
Thanks again for the extra briefs mate.
Watched the rugby earlier, cannot believe how much dead time there is. Football has got much better at increasing the actual time the ball is live e.g. pass back rule but rugby has gone so far backwards in that respect, scrums and referees going to 3rd umpire for tries are just eating time during a game.
bt
You on the sauce the night again? Cheers btw.<(:)0)
If the other 10 clubs want a bigger slice of the tv money then I’m all for it-as long as the cheating scum are nowhere near the league.
intemperate….DOH !
Young Jimmy bought a donkey from a farmer for £100. The farmer agreed to
deliver the donkey the next day.
The next day he drove up and said, ‘Sorry son, but I have some bad news.
The
donkey’s died.’
Jimmy replied, ‘Well then just give me my money back.’
The farmer said, ‘Can’t do that. I’ve already spent it.’
Jimmy said, ‘OK, then, just bring me the dead donkey.’
The farmer asked, ‘What are you going to do with him?’
Jimmy said, ‘I’m going to raffle him off.’
The farmer said, ‘You can’t raffle a dead donkey!’
Jimmy said, ‘Sure I can. Watch me. I just won’t tell anybody he’s dead.’
A month later, the farmer met up with Jimmy and asked, ‘ What happened with
that dead donkey?’
Jimmy said, ‘I raffled him off. I sold 500 tickets at £2 each and made a
profit of £898’
The farmer said, ‘Didn’t anyone complain?’
Jimmy said, ‘Just the guy who won. So I gave him his £2 back.’
Jimmy has now been engaged by the administrators of Rangers Football Club.
pggtips2
Agreed a good fight but no more PA will be wary of giving Ormond a re-match.
HAIL HAIL
@RichardGordon48 Out of interest Richard do all football clubs have to abide by the rules? Yes or No with no special cases @CQN
@Pjbruce @cqn As far as I’m aware, yes they do
Peter Bruce @Pjbruce Close
@RichardGordon48 thanks for the response Can it be that all rules of the game are assigned to a newco rangers apply to sfa for 3rd div place
I have asked Tom English.Graham Speirs, David Begg and Stuart Reagan the very same question with no answer yet to receive an answer for 2nd question
Had two bottles of Lindemans shiraz last night from ASAD’s @ £3.33 per bottle well worth it and no memory of going to bed…………
PS 13.5 %
An Irishman moves into a tiny hamlet in County Kerry, walks into the pub and promptly orders three beers. The bartender raises his eyebrows, but serves the man three beers, which he drinks quietly at a table, alone.
An hour later, the man has finished the three beers and orders three more. This happens yet again. The next evening the man again orders and drinks three beers at a time, several times. Soon the entire town is whispering about the Man Who Orders Three Beers.
Finally, a week later, the bartender broaches the subject on behalf of the town. “I don’t mean to pry, but folks around here are wondering why you always order three beers?”
“Tis odd, isn’t it?” the man replies. “You see, I have two brothers, and one went to America , and the other to Australia .
We promised each other that we would always order an extra two beers whenever we drank as a way of keeping up the family bond.”
The bartender and the whole town were pleased with this answer, and soon the Man Who Orders Three Beers became a local celebrity and source of pride to the hamlet, even to the extent that out-of-towners would come to watch him drink.
Then, one day, the man comes in and orders only two beers. The bartender pours them with a heavy heart. This continues for the rest of the evening.
He orders only two beers. The word flies around town. Prayers are offered for the soul of one of the brothers.
The next day, the bartender says to the man, “Folks around here, me first of all, want to offer condolences to you for the death of your brother .You know-the two beers and all.
The man ponders this for a moment, then replies,” You’ll be happy to hear that my two brothers are alive and well. It’s just that I, me self, have decided to give up drinking for Lent.”
Ricky Burns fight about to start on Box Nation.
jude
just a wee glass of red wine to wash down the indian from earlier…
my body is a temple….
and you don’t get many small temples….
i am sure DD would take them to task if they attempted to get half of our gate and i am sure clubs like hearts, hibs and aberdeen dont want to be sharing half their gate in return for half of st mirran, dumfermline etc… gate.
i think we should as a club who play in front of 30,000+ fans give clubs back 50% of all revenue received for tickets sold to away fans to encourage more away fans and a better match day environment which further improves income for the smaller clubs.
sharing of t.v. money, i have no problem with and in fact i think its a good idea, but:
if its t.v and participation of European football then i should think 50% of all income, after expenses, be kept by the participant, before all such money is put into a put and distributed equally to every league members, no matter if they participated in Europe or not at the end of each season.
i also believe that a fairer distribution of t.v. money for domestic games should be evident in the league.
we should have a larger league and more playoffs
3 points for win
2 points for score draw
1 point for no score draw
0 points for defeat
i think such a set up would generated better football/ football players and competition throughout the league with several clubs at the top, but with less chance of a monopoly as has been the case for the last 25 years.
BT
How are you ?
blantyretim on 10 March, 2012 at 22:08 said:
Buddist temple??
HT
Are you going tomorrow ?
If we can’t rely on the Scottish football authorities to do the honest thing we must pursue justice through EUFA, FIFA or through the criminal courts.
NO NEWCO!
Glad were getting back to to watching Celtic play tomorrow. Twas a rollecoaster of a week watching the goings on over at Ayebrokes.
Is there anyone doubtful to play tomorrow? I heard Broony should be fit and if so he should make the difference.
Onwards and upwards Celtic
Hail Hail
Cristiano Ronaldo makes it Betis 1-2 Real Madrid, six minutes into the second half.
Pint of The Pure for me barman.
http://www.youtube.com/watch?v=NcKdnkGBSgA
G64
Life is good, the days are getting warmer, the wine is as good as ever.
Faustino V is acceptable :>)
……………………………………..
prestonpans bhoys
I know I have a problem, not the easiest vice to get rid of though, I try to minimise it by only doing single bets, seems to work for me, gone are the days of chasing big money for little outlay.
G64
no bad big man, hows yerself… ?
tigertim
I have the stomach for it…
The Exiled Tim
I hope you keep winning.
2-2.
TET
Hope you are well mi amigo.
This has been the best of times.
Huns wont like this at Braehead.Both boxers with rosary beads round their necks.
Watching the Ireland v Scotland match with my son and he couldnt believe that the timer stopped when the scotland player was injured ” Dad why dont they do that in football as it would stop all the cheating referees giving the incorrect injury time against us”. He also said ” Why do they not let us hear what the refs are saying to the players or explaining their decisions as in rugby is it because they are cheats”. I think football is behind the times and not rugby.
bt
Good man. Mines a tenement!!
Gordon64
Yes buddy 11am departure time.
BT
Heard you ventured into hostile territory in Cambuslang.
tigertim-Very good mate :}
From BBC sport website…
SPL 10 not pursuing shared gate money
By Jim Spence
BBC Scotland An upcoming meeting of the 10 non-Old Firm Scottish Premier League clubs will not discuss a return to the sharing of gate money.
While a more even distribution of income is on the agenda, the sharing of gate receipts has never been discussed, according to one chairman.
“That is not what we want,” he told BBC Scotland.
“We want money to be distributed better and money going into the division below for the benefit of all.”
Around £1m is the figure the clubs have in mind to pay to the 10 clubs in an SPL2, should such a second tier be established.
Asked why Celtic and Rangers had not been invited to the meeting, the chairman said: “It’s not all about Celtic and it’s not all about Rangers.
“They have wanted out of the league for the last five years.
“Its not all about them. We need to look after all of us. I want change for the rest of Scottish football to benefit.”
The same source also admitted that he thought that the top league could survive without Rangers, who are currently in administration.
Referring to the SPL’s current television deal and the possibility of only one half of the Old Firm on offer, he said: “I think everyone knows that they [Rangers] will exist.”
But he added: “All deals are negotiable. I think we can survive with one of them on a lesser TV deal.”
Another SPL source pondered the likelihood of a top flight without Rangers next season.
“It’s difficult to imagine it,” he replied. “But if they were applying as a ‘newco’ we would need to see a very robust business plan for the future and we would need certain assurances.
“There would also probably have to be penalties for a few seasons.”
Great reception for Ricky, he fought great v Katsidis, hope he does it against another tough opponent.