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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flip snyde
flip shortbread…
gies flippin peace please…
I don’t buy papers and don’t want to hear what those clowns are saying…
sadies bhoy..
they bread hate, we teach love…
BT
I like mine toasted.
MWD
BT
chirpy tonight…?
…it’s the waiting that’s the worst ;-)
we don’t teach spelling though… o))
unless HT is a teacher…
CultsBhoy loves being 1st on 1 March, 2012 at 20:05 said:
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’
Also saying a player still being paid £36,000 a week.
How long have pompey been out of the epl?
http://soundcloud.com/celticresearch/traynor-lawwell-liar/s-GBIcv
Jabba calling PL a liar
TET
The Bears Den housing Teddy Bear FC who could be offended ? ;-)
HH
Desperate stuff……….incredible…
blantyretim on 1 March, 2012 at 20:09 said:
sadies bhoy..
they bread hate, we teach love…
———————————————-
BT you’re on a roll tonight.
blantyretim on 1 March, 2012 at 20:09 said:
Precisely.
flip u all…
Just a thought. If rangers (in administration) can’t make the final game at Celtic Park at the end of the season, I think we should invite a decent club to fill the gap. What do you good fholk think? Maybe even a wee cup to play for?
Rico
……on the radio, of course.
Paul
A very succinct and enjoyable read. I trust you had as much pleasure in penning this. ;-)
I am hearing the Social Convener and cause of this season’s financial shortfall, is dependent on CQN for his news. Well no-one else is telling him!
it is my mum and dads 50th anniv tomorrow…
God bless them both..
you bhoys will have peace from me so take care from now till I return ..
Celtic are the bigger club :o)
blantyretim on 1 March, 2012 at 20:09 said:
sadies bhoy..
they bread hate, we teach love…
———-
who, the current buns ?
I think jabba, might be asked to produce is evidence in court :o)
Awe Naw
It won’t be the bigotdome, unless they rumours are true about ticketbus wanting to be part of a consortium to get them up and going after they have been blended.
Unless there is another mob who throw their hand in, then the fighting will start.
A down side would be ticketbus owning the bigotdome, they could do a deal that newco gets a cheap rent, and they get to sell the season books.
Still without euro football for 3 years min things could be worse.
TET
Thanks for posting that.
Well-done to Big Peter……slappin’ it into those who would see us fail, those who glorify in any Tim misfortune while obscuring the picture with partial PR puffery.
Shameful.
Blantyre tim
Do you mean they hate holy communion ?
Naw ?. Cannae be right !.
…..Did someone say PARTY??
The reason it’s taking so long for Rangers to die is simple.
Rangers fans, the vast majority, are simple.
You can’t just shut them down overnight, you need time for simple huns to be allowed to register the full magnitude of what is actually happening. There are still a significant amount talking about Billionaires and saviours, this has to be drained out of them, however slowly. It’s a laborious task but we all have a duty to try and educate them.Those of us who are up to the task are stoically trying our best to make sure they understand exactly how and why it’s happening. It’s not the easiest task and hopefully there is still a long way to go. We need to let them come to terms in their own time, allow them to buy a few more tickets for the Big Hoose, to say their goodbyes and get the admin guys some more cash. Patience and sympathy, that’s what they need right now. It’s not pretty but by God, it’s good fun.
Thanks to all for keeping me updated on the Snyde broadcasts…I’ll have to give it a listen sometime…if I can get it over here…
Strange feelings on the rank and file redundancies to come at Ibrox/Murray Park (not players or others with golden parachutes)…the human side of me feels somewhat for those who will face a difficult time in the current economic climate…but then I think about the Band of Brothers episode where the concentration camp was discovered outside a German town…the townsfolk pretty much plead ignorance to it’s existence, but were made to clean it up…is it fair to say that if you work for Rangers you not only get the pay cheque but the baggage as well?
canamalar
If I was PL I would be miffed at being called a liar on the radio.
And we still deal with these scum, beggars belief
Tommy Joad on 1 March, 2012 at 20:06 said:
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
+++++
Can you imagine the furore if someone had the temerity to wag a finger at Moisty?
Oh wait.
Not long in and speed reading back.
Paul67, fantastic lead. Peter Lawell, fantastic statement.
Do the huns understand what’s going on yet ? ‘cos the few I’ve spoken too are still in denial. One season ticket holder (debenture/free tie mob) I spoke to this week raised the subject himself, ranted a bit and then said “Don’t know why I’m talking to you about this anyway – we don’t wash our dirty linen in public”. I almost sucked my underpants up my erse trying to keep a straight face.
HH
Aw Naw
HMRC have several agendas running. The most important is just to win the case. That gives them precedent to go after much bigger fish in EPL.
Next, HMRC know that they’ll only get their money if liquidation doesn’t happen.
Next, whilst HMRC are allowed to press the nuclear button post ITTT they don’t necessarily need to press it. It is NOT automatic to enforce.
So NEWCO debt free relies heavily on how HMRC play their cards.
However, if they think they can NEVER get their wedge then the button will go down.
That will be messier than people foretell.
Whyte is still playing his cards in that direction because he NEEDS liquidation. He has though misplayed several hands and a NEWCO is now NOT a certainty. The spotlight is also slowly turning on both SFA/SPL the gatekeepers of newco. The more doodoo they get in the less they can sign up to SPL newco from within. The longer this drags out the more doodoo they are in.
Whyte and RFC may yet slip this the way they want, but it won’t be because they sprung a quick deal. Any prior ‘plan’, is well off course. Our job is to keep blowing upwind and making it as hard as possible to get back on.
HH
Looks like Lenny will now tell the world what FPLG said to him at Celtic Park when we win the league !.
Can’t get the soundcloud to work.
BT
You’ll get bapped oot, any mair of that!!
Don’t worry buddy you’re truly (sun)blest :-))
Whos having a liquid friday tomorrow then folks?
The Tax man COMETH!!
blantyretim on 1 March, 2012 at 20:09 said:
sadies bhoy..
they bread hate, we teach love…
We don’t knead them.
ThisIsTheOne on 1 March, 2012 at 20:27 said:
They don’t wash their dirty linen in public. What they don’t realise is that the big mirror on the wall that they are still admiring themsleves in as they wash their dirty linen is a two-way mirror and there are thousands of our faces pressed against the glass on the other side PTSL.
:))))))
Rico
BT
Thought I had posted my last for tonight but sorry cant let that one go…
if youd said it yeast erday then it would have went unnoticed.
I am my Mothers Pride.
blantyretim on 1 March, 2012 at 20:13 said:
flip u all…
……………..
BT Erm toasty!
Wish J and E, a happy anniversary…. Two of lifes great people brought together in marriage… Lovely stuff, I hope yir da has enough Jelly and ice cream for the morra?
Vinny
xx to yir ma n da
Ajaxboy – Do what i do and listen to it when you get home on SSB Rewind:). Also, you could try listenlive.eu/uk; that’s the one i use to pick up Clyde, works a treat.
slainte
tony