It wasn’t supposed to be this way. Craig Whyte would not have expected Champions League football when he worked on the deal to buy Rangers last spring, but, by his own admission, income from the Europa League group stage was in the budget.
Winning the league came as a surprise late in the process and may have fuelled some summer transfer bids but income was about to fall well below expectations. Ally McCoist won only one game in four cup competitions, against Arbroath, season ticket sales didn’t bounce and with no serious income streams open, Rangers were set for a seriously low income season.
In addition, the injury to Steven Naismith robbed Rangers of what I understand would have been a £5m sale in January.
People have tried to assert that Whyte’s plan for Rangers was to liquidate the company all along, this is clearly not the case. Rangers were moribund while the First Tier Tribunal (FTT) was yet to report but Whyte planned to run the company, without reverting to administration until and perhaps beyond then.
As well as having to deal with the income shocks resulting from multiple on-field failures, Rangers were hit with an expenditure shock. The FTT was delayed from November to January. If it had proceeded as planned in November it would have reported in January. The delay was crucial, Rangers were going to spend a lot more money before the verdict was announced.
If the verdict arrived as expected in January, and Rangers won, it was game on. They would have been in a position to borrow like any other club and could have raised fresh share capital. There would have been no administration. This was the preferred outcome, Whyte would have emerged with his reputation intact and with a valuable football franchise for the outlay of exactly £1.
If they lost, Whyte could have presented a fait-accompli to the world.
He could have explained to the Rangers support that the total tax liability was “likely to be around £75m” and that there was no point putting fresh investment into a black hole, which was inevitably going to lead to liquidation – all for misdemeanours that occurred before his time. The support would have been distressed at the death of their history, but, crucially, they would not have blamed Whyte, whose reputation would still be intact.
He would immediately have applied for the 10 day grace period to consider appointing an administrator and used that time to tell the SPL and SFA that he could re-emerge with Newco FC within days and allow the league programme to complete as normal. He had security over the stadium, would be in a position to re-employ the players and would be able to honour financial commitments to other clubs, while securing the television and sponsorship contracts.
Public sympathy would have been behind him, Sir David Murray would have carried the blame (perhaps correctly) and I believe only Celtic would have voted against him. Newco would have been back in the SPL and, if the Daily Record’s reporting of Whyte’s thoughts on penalties are anything to go by, he expected to be docked a comfortable 25 points.
HMRC forcing Rangers into administration this month created enormous problems. Administrators Duff and Phelps are now in control and opened the club’s finances up to scrutiny.
As soon as it became evident that he securitised season ticket money from future years, three days after buying the club, placing the money into his own bank account, not that of the football club, Craig Whyte’s methods were subject to derision and outright disgust from many angles, most importantly from the Rangers support.
As things stand, Whyte cannot slip away. He has to stand with Ticketus, who will hold a security on Ibrox through one of Whyte’s companies, and he stands to gain an enormous amount of money for a year’s hard work. Ticketus are also in for the long haul, they have coughed up over £20m and will need a sizeable commercial return.
Many observers have noted that this has not progressed as a normal administration. It’s not a normal administration. The secured creditors (Craig Whyte and Ticketus) need to sell a lot of tickets beyond administration, either as Rangers, if they are successful in the FTT, or as Newco, if they lose the FTT. Selling a lot of tickets is a really tough challenge right now and will be made considerably more difficult if there are swingeing cuts made to the club staff and infrastructure now. Their interests are considerably best served by keeping Rangers as buoyant as possible.
Even if they manage to feed enough cash to the administrators to keep Rangers playing football until the verdict is delivered, the opportunity to present the league with a fait-accompli has gone. Everyone expects Rangers to fold and will have been busy working on a contingency plan.
Any goodwill that Whyte hoped to harvest has also gone, he is seen as a pariah, without friends within the game, in the political world, the media or the Rangers support. When he looks to build a consensus, there will be no advocates for his position. Quite the opposite, people want rid of him.
The on-going police enquiry and his interesting relationships with the Insolvency Service and HMRC will only cloud matters further. For all the bluster on these subjects, no one has been able to explain to me any illegal activities, in fact, most of the illegal activity he has been accused of are either perfectly legal or simply did not take place as described, but there is enough potential in this mix for many years of civil legal challenge, if not more serious issues.
Whyte and Ticketus now have decisions to make on how much extra skin to invest. Ticketus are in the game for a lot of money already and will be keen to protect their cash. It remains to be seen how much cash Whyte has in the client account at Collyer Bristow, but it’s clear that between them, Ticketus and Whyte were prepared to guarantee the administrators full wages and costs for the club for February.
The fact that the tap has been turned on 100% for the last two weeks suggests they have enough cash to run at a lower percentage for a while yet. Duff and Phelps will know how much money is available and will have an expected date for the verdict. It would be enormously bad judgement if they exhausted cash reserves before the verdict arrived.
As long as Ticketus investors hold their nerve, and the police don’t spike the process, Rangers will survive until the verdict. If they lose the verdict, and all expectations are that they will, what are we looking at?
As I said above, Whyte’s chance of presenting a fait-accompli has gone. He would need to go for a prepack liquidation but there are likely to be legal challenges to him making off with the assets of Rangers. At best, this would delay him for anything between weeks and years. Any police involvement would make matters even more difficult. If a negative verdict is delivered anytime soon, Rangers will cease.
Even if this happens, Whyte will still owe Ticketus a lot of money and will try to phoenix as a Newco. He will have the stadium and will be in pole position to apply for membership to the SPL or Scottish Football League.
A route back into the SPL in these circumstances would be difficult to achieve. The SPL board have the authority to accept a club into the league but I hear it is likely that, due to the importance of the matter, they would refer the decision to a vote of the entire league. Back in October I thought the fait-accompli was certain to be voted into the SPL, now I can’t see a Newco being voted in.
You would expect an application into the Scottish Football League to be accepted but there may be a rival bid. The ‘Blue Knights’ bid would not include Ibrox but have a number of options. They could ask to rent Hampden or Firhill, or could adopt a struggling lower league club, like Clyde. These notions are likely to be progressed but establishing a new club, without players or a stadium, would be an enormous challenge.
All of this would play out against a great deal of uncertainty. Whyte’s ability to sell tickets to Rangers fans must be in doubt. If a rival club wanted back into Ibrox in the future they would need to give the ultimate floating charge holder – Ticketus – the same kind of return Whyte has committed to. There is also the possibility of a lot more to come out about the old regime at Rangers, some of whom are behind the Blue Knights bid.
Even if someone gets a phoenix off the ground at Ibrox, keeping it alive will be difficult. The cost of running football games there every second week is considerable. Doing so, while repaying Ticketus, and competing against lower league (or SPL) opposition, will cut any football budget to levels not known in 30 years.
For now, everyone connected with Rangers needs to make confident noises but even if they die, their ghost is already in enormous peril.
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Auldheid,
cheers
Craig Whyte on Clyde right noo. Well it must be Craig Whyte otherwise it’s someone attempting to reach his upper intestine. {:-)))))))
MWD
Well done to PL for putting the DR in its place.
Knew on here but reading between the lines Kojo is spot on. Having worked in this ” best wee country ” since the mid 70’s I have been subject to the what church question. If I am on the right lines 17th century calvinism is alive and well in 21st century.
Hail Hail Kojo am with you mate.
HH
STV with great sympathy for hun players. And as a wee afterthought the Dunfermline players get a mention.
Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha
Daziel with another cracker there saying journalists have investigated this.
Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha
Jabba sticking by his story re tickets,and saying we should give them money up front ffs.Wee Chick saying give them nothing.
Jabba wanting a square go with PL. do him PL.
Still getting 4.7/1 for Hearts at the weekend well worth a punt.
brimmer:
I wouldn’t disbelieve Dalziel, some players will even pay Rangers to play for them.
For a Motherwell fan, Dalziel is getting rather too upset about the Rangers situation :)
Been working all afternoon and missed this – what great piece Paul67
A few years in the wilderness might help the rankers with their rehabilitation.
Evening bhoys from a tranquil hun free mountain.
Paul67
Cracking artical.
……………………………….
I have thought long and hard about before posting this, but I don’t feel sorry for the people at the bigotdome losing their jobs.
They must have known for long enough what was round the corner, giving them plenty of time to find other work, the players will be ok, they will be picked up by other clubs.
I just can’t find it in my heart to feel sorry for anyone who willingly works for a sectarian club like the hun.
Been thinking more on an analogy for what CW did.
Football is an addiction right? Not a harmful one, though wives might not agree.
So a “user” has £10 in his back pocket to buy his fix and is on his way to buy it.
CW picks his back pocket, buys up the market and then sells the fix back to the same guy he knicked the £10 from for £20.
The guy, needing his fix finds the £20 and is now £30 down on the deal.
Given the fix is legal and picking pockets is not, has a crime not been committed?
The plan to me has been savaged due to the Ticketus deal being considered a sale and not a loan. Something that you I imagine would be the first matter for due diligence. If Craig Whyte overlooked this fact early on then those that structured this deal and investment vehicle would have known from early on that it was a goer. I.e that Craig Whytes position was not bulletproof and that large unexpected tax bills would help two fold as your stuffing Whyte and the taxman hopefully.
I presume and am desperate for correction that both the big and small tax bills don’t need paid yet because both are under appeal. It is interesting that so far only the VAT on the Ticketus sale has been paid and via the ring fenced funds that were arrested for the wee tax bill. A double whammy for Whyte but good news for Murray then again good news as David Murray can be described as relieved that the FTT was delayed even further. Again bad news for Whyte.
But he has paid all tax ues incurred by him apart from PAYE the deal is cleaner by having the taxman pick up the VAT or given it voluntarily by Whyte????
Whyte appeals to taxman if what’s been reported who is not going to believe that what he offered hadn’t been penned by David Murray and Dave King? Whytee made the final bidding of the old regime and keeping their history at arms length for them ?
So the stakes are raised Whyte considers admin HMRC force it.
HMRC are not getting a penny cause pre pack admin is about to be attempted by those that appointed Whyte.
Unless HMRC are going to go after the NEWCO that they are going to attempt to raise up from the contractual ashes not much will change if we are relying on the rest of Scotland or and UEFA.
I fear ??
Someone put me straight and start knocking holes in these thoughts please ?
HH
Some people on here today wouldn’t have employed Stein. Toe curling stuff.
Just logged on,what this sectarian stuff that appears to upset some on the blog.Slan
Dunfermline seem strangly reluctant to slag ranglers for ripping them off for £80,000??
They almost seem to be honoured by having money owed to the by the wonderful glasgow ranglers!
Bamboo
Look at Yorkson for that!!!
I see the BBC are reporting on a hero named Hector!! So there is more than one then :-)
Awe Naw
What are you scared of ?
A couple of knowns.
They will be liquidated.
There will be court cases.
They will have no euro football for 3 years minimum.
That should keep them busy for a while.
The pressure needs to be kept up re the players contracts, it’s the only way there is a chance of bringing down the sfa, if the sfa are seen to be complicit in registering hun players, uefa will have no choice but to act.
A brit league is looking more on the cards, both uefa and fifa want rid of the sfa anyways.
Talk of 50% wage deferment until the end of the season, more chance of them winning the treble…not a realistic option, Why:
Where are they going to get the 50% wages at the end of the season?
Keep the Faith!
Hail Hail!
oh well..
if that mob survive I’ll blame Lawell….
Jim (Tim) Spence is tonight Bitch Slappin’ Chico and Jabba live on air.
Jabba is now the toast mister, chico the cheese monkey of succulence ….a double spread of nextday fakeover 24 hour and counting administration layoff lies.
Spread the market…it beats butter hands down.
Huns are gullible.
HH
Lennybhoy
Are you able to answer my questions near the bottom of the last page?
“I expect Celtic to be extremely insistent that appropriate retribution meets past improper registration of players.” Paul67
For me that’s the best bit of news today.
Great article Paul. And to think I used to buy bundles of papers.
It’s not just the blue room that’s bare, the blue bin is empty now as well!
So we are supposed to feel sorry for people who work for TFOD getting the sack?
The same company that sacked some poor bugger not all that long ago for getting his picture taken in front of certain political murals in Norn Irn, yet were quite happy to have their goalie having his picture taken with Adair?
A kit man who turned his back during the applause to probably the best player this country ever produced?
NAW THANKS!
Hector the hero.
http://www.youtube.com/watch?v=A1i97Tvy2yc
Thicko on snyde saying 300,000 in manchester, where do these clowns get this from.
HH
BTW
I am unable to mobilize 50metres without being in severe pain and discomfort…
wish my boss would realise that I only drink cider to ease the pain…
I thought there was 2m in Manchester with 300,000 arrest-a minority!
Awe Naw.. 18.31
They’re stuffed..look at Portsmouth And Pompey owe a lot less.. This is the last gasp of a dying beast…
The denial of Murrays hand is incredible…
Pass the parcel… Feel good Friday soon..
HH
Where do they find these stupid clowns that think the English will allow them into their leagues?
The worst damage caused to an English city since WWII not ring a bell with these redneck clowns?!
theweegreenman..
we are non judgemental…. don’t forget…
I wish we could go back to supp ben days when Stonehouse cases went behinnd Larkhall ones…
Great article Paul, a very informative walk through of the likely outcomes. Thanks.
Anyone who loses their livelihood through redundancy has my sympathy. If it were a question of only working for organisations with high integrity, very few of us would be employed. Most folk work to feed their families. When this is taken away from them, they deserve sympathy and support, regardless of who they are or who they work for.
Lubo.
Thanks,
Lubo.
In my line of work I never celebrate anybody losing their job, but in the case of the thug who ended Beram Kayal’s season, the big diddy who can’t poach an egg, the flute playing “striker” and the bigot who wouldn’t applaud Jimmy Johnstone, I will make exceptions.
I look forward to singing
Lee McCulloch’s on the dole, hallelujah
at Pittodrie this Saturday, and adding Kirk Broadfoot, David Healy and Jimmy Bell to further verses
Mighty Tim
Aye but 299,000 of them were Chelsea casuals!!
this Rangers saga just gets better and better
oops, did I say Thanks enough times.
Thanks,
Lupo ;-)
and nother gripe, why isit so hard to find jabba and the clod, using the bbc website