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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Another Stupid Hun on Snyde.
MWD
This guy needs medication.
MWD
Awe jees hun on now am goin to run oot ah jockeys!!!!!!!!!!!!
gie yoursel a shake!!!!!!!!!!1
Good evening friends.
Who’s the absolute looney tune on Clyde at the moment?
jobo
can’t get clyde ont’internet – ah well
Mwd
I’ve heard some belters over the years but the guy on right now is the all time low. Monosyllabic half wit.
Paul, really terrific article, helps a layman like myself understand a bit more.
Once again highlighting the wilful impotence of the jurassic journalists.
Always staggered by the talent pool that exists within the Celtic family, quite aside from football, and CQN is one of the very best examples.
TJ
They may or may not do walking away but going by SSB they sure do greetin.
RanchoFranco on 1 March, 2012 at 16:47 said:
Awe_Naw
The notion that fat boy sally has any sway on events within ibunx is predicated on
the very people who have collectively through decades expenses spent on wet nurse words the growth of a brat beyond succour….no teat too big his grasping gob.
The essence of the farce that is His club remains in crystallised pixal redaction.
Fat Sally in his phony reaction the whispered intent to rile the Timmy nation via Neil is now exposed for the the fastest turn around clown of massive surrendered points in Scottish history.
He’s a walk away, any day the week loser with diapers for jumpers just in case
his lacrymose excretions become so torrential as to be unfixed by any them myriad 24/7 Jabba controlled word plumbers.
Let them Die.
=============================
Superb. The Salvador Dali of CQN.
Snyde = Comedy Gold
The deluded advising the delusional. JCGE
HH
That last guy on Clyde made Dee’ell sound quite erudite.
jackymac at 19:42
I get Clyde through internet on VLC player from this link </a/
Awe_Naw
Where is Bearsden Park ?
TLWIO
You sure he’s that clever? {:-))))
MWD
HMRC adverts on Snyde!
When “just banter” becomes real life
its not funny,it can be deadly
http://www.bbc.co.uk/news/uk-scotland-glasgow-west-17219700
Evening Cts,
I’m not sure if the players and staff mentioned earlier did actually get made redundant?
Whether or not it happened is a moot point as it will happen, fair play to those who posted around lunchtime about they’re sadness for those who are made redundant, the perhaps controversial part is ….. I don’t feel that anyone employed in that racist and sectarian place deserves any sympathy, if they were not loyal and true then they were being economical with the truth in they’re interview. If I was, in some nightmare scenario employed by rfc and was working for them, one short week would surely inform the most nieve that it was an exclusive Protestant supremist organisation, being employed by rfc would be a stain on my sole which all the money in China couldn’t shine clean.
I want rfc closed down and the bulldozers in to flatten it, return it to the pigfarm it once was.
Vmhan no sympathy CSC
HMRC advertising on Clyde…. Hector is a comedy as well as fiscal genius!
Btw… Great article Paul
Even if rangers (in administration) get saved I would imagine the banks will only lend them money on the strictest of conditions given their previous financial accumen. I.e. none other than dubious.
Heard about these folk on R4 this morning:
http://atfa.org/cgi-data/news/files/4323.shtml
Ten years later and they are still pursuing Agrentina for the debt they owed before they became Argentina (in administration).
Seems to me no matter what the outcome they are gubbed.
Falkirk would make a great replacement. :)
Rico
Mwd
I was trying to be charitable…
TLWIO
TET
Did I miss a space ?
;-)
HH
Murdochauldandhay
Good point.
In all of this some things are effectively losing significance.
Listening to the radio in the car on the way home it struck me how little attention I’ve been paying to the lead story-
The trial of two men for attempting to murder the Celtic manager. Not over a debt or bad business deal or because he was diddling someone’s wife but because and only because he’s our manager.
A truly astonishing turn of events and inconceivable in any civilised country.
thanks sparkleghirl, couldn’t work the link either, having my own little IT meltdown
Last call on Snyde
Cap well and truly doffed
I salute you sir!
TLWIO
Possibly Declan doing his parody?
MWD
Awe_Naw
You’ve lost me,must be the lack of vino….
Can I have raspberry….
I think expenses only means no tax and NI
Hector … Murdoch….
I notice a wee bit of uncorroborated spin by the beeb again
“Craig, from Paisley, moved to Northern Ireland after receiving death threats.”
tour de force article P67!
jacky mac, Too late for today but this is the website I got it from
Radio streaming
Someone (The Exiled TIm?) passed me the link last week when I said i couldn’t get clyde because I was outside the UK. Clicking on the links on that page didn’t work for me (got a ‘waiting for video’ message) but copying the link into VLC worked. Not sure if it would also work in Windows or Real players.
I never considered Guidi to be the sharpest tool in the box, but based on tonight’s performance my goodness he is thick as mince.
He can’t make a coherent point about anything, which is probably why he goes into the big huffy wean act every time he’s challenged.
PABLO68, enjoy that cruise.
Auldheid, very well said.
MWD, cheers.
The Idiot, thanks.
EXILED TIM, thank you.
roy croppie, “It’s not just the blue room that’s bare, the blue bin is empty now as well!, ha!
Lubo, cheers.
Battered Bunnet, appreciate that, thank you.
jackie mac, you’re very welcome.
Tommy Joad, cheers.
DJBEE, deleted, language.
ABZMike, thanks.
CultsBhoy, cheers.
did an abeerdeen bhoy buy a drink?
cultsbhoy, cheers…
SSN reporting on Portsmouth – along the lines of ‘£37m of debt means it’s curtains – nobody wants to buy a club with this level of debt – liquidation almost certain’
sorry..
I said bhoy/cults..
my mistake… o))
adi_dasler on 1 Marc
My thoughts exactly, even the admin guys are at it!
You cannae make it up
Last chap on Clyde, excellent.
Left an incredible stat – 11 men convicted of attacks against Neil Lennon and 8 are in jail. Why no public inquiry? Why no public inquiry? Why no public inquiry?
WHY NO PUBLIC INQUIRY?
Well done David (I think)
When our manager was attacked at Tynecastle last season I wanted Celtic to withdraw from the league and stop playing football for a while, I was sickened and it was way too serious in my opinion. Thankfully Neil Lennon has greater fortitude than me because he deserves all the good things coming his way x 10.
As for the rascals and miscreants, they reap what they sow, an eternal truth.
TJ
For those of you feeling sympathy towards those being made redundant at RFC, can I remind you of the recent posts on some of their supporters’ websites indicating that ‘Catholics should be the first out the door’ and that RFC’s travails are ‘a punishment for them having signed Catholics’.
I am totally sanguine about whatever mayhem comes their way.