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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MICK11 on 1 March, 2012 at 20:31 said:
Whos having a liquid friday tomorrow then folks?
The Tax man COMETH!
I will indulge in a few Guinness and Irish Whiskey’s purely for medicinal purposes you understand. To cure the jelly and ice cream stomach pains.
HH
Torontony
Thanks and cheers!
Hail Hail!
row z \o/ (O) whatever part of my club is dependent on rangers I am willing to lose! on 1 March, 2012 at 20:29 said:
‘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.’
First tier tax tribunals don’t set precedents. Their decisions aren’t binding on other first tier tribunals.
In any event these cases turn on their own specific facts and circumstances, and it’s not like the exact same thing will have happened elsewhere.
Liquidating the huns would though show other clubs that HMRC is getting tough, and that’s probably what they want to achieve.
The Exiled Tim
I was reading about your dilemma re reception of Holy Communion, on here last night. Was it a transubstantiative question, or was it a more consubstantial problem?
RowZ
I will write 1000 lines.
The huns have been liquidated there will be no newco
When the above happens.
Your words are soothing but the tax man knows what he is getting a landmark ruling and move onto the next target unless there is more to come out yet.
HH
If anyone gets onto Clyde or real I would like the following questions answered….
1)Why did somebody .. After due diligence… And seeing the state the club was in plus a multi million£ tax case over hanging actually buy the club.
2) what evidence did they have that said they would win the tax case and why did that suddenly change merely months afterwards?
And! Why did he not have a clause putting any tax bill into Murray internationals hands if they did lose.
3) if Lloyds forced the Whyte deal because they wanted their £18m … Why didn’t minty sell the season tickets to ticetus whom he had dealt with previously
4)if Whyte had negotiated the ticketus deal to fund the buyout prior to finalisation … How did minty nit know?
And finally the big one!!!!!
Why is Murray not up for prime minister?
With the currenty economic disaster and levels of national debt he must be the man to turn it all around!!!!!
After all only a genius can sell £75m of debt for a £1
What started out with a football story became a drama. What was a drama became a shambles. What was a shambles quickly turned into a comedy and what was a comedy has swiftly turned into a farce. This is an administration like no other; 15 days and counting without a player being sacked. Indeed, they tried to sign one. 15 days and counting, and only two members of staff paid off, and one of them was Gordon Smith, so that was hardly a shock.
15 days in which the blue half of Glasgow has woken up to what the green half has known for months; Craig Whyte is a man of no credibility or material wealth. Indeed, his entire business history is littered with the wreckage of companies in which he has been involved.
15 days in which people have cast around for someone to blame, above the man who’s getting the flack, Mr Craig Whyte himself.
It’s time some facts were faced by the Rangers fans.
This is not simply the fault of Whyte, or Murray or the banks or the managers who recklessly spent crazy money the club did not have. All of these people are culpable, all of these people played a role in what has gone on. Every one of them is guilty as charged, every one of them has had a hand in creating the current problems.
The media wants to slip out of responsibility, but the very notion they can is hilarious, because they are a big part of how we got to the present crisis. Had Celtic been in trouble and Whyte was the only man on the horizon, the media would not have been afraid to do their own “due diligence” on him, and his reputation would have been in the gutter long before he ever got his hands on the keys. And the Celtic fans, themselves, would have blocked his way and collapsed the deal if the media had not been up to the job. No-one should pay any heed to the media’s claims that they broke this story; we know full well that it was the Celtic online community who did that.
The SFA and the SPL would like to escape the net of blame, but they are probably even less credible than the press when they try. There are serious questions about their conduct here, with everything from players contracts to European licenses still under serious, serious question, not to mention that the man at the very top of the house, Campbell Ogilvie, has been involved in not one team which operated EBT’s but two, and is likely to find himself the subject of some heavy enquiries when this thing ends. And there is no end in sight.
Rangers FC’s survival is going to be decided not on a football field but in a courtroom. It is difficult, if not impossible, to see how the SFA and the SPL can wait around until these matters are resolved. The process could take years, and in the meantime, as Paul Brennan has hinted at in his magnificent article from earlier, more than one Rangers could emerge … and then the question becomes which one is even granted a license to play at all? In the meantime, one club faces relegation in the SPL and they have a case for that not happening now.
Believe it or not, the money is not the only hurdle facing Rangers right now. A bigger problem is going to the clock. Time is getting away from them. The March 31 deadline to gain a European license is actually a much more significant date than has been understood; it is also the deadline for gaining a license to play in Scotland … and no-one in the press has even hinted at that, let alone brought it to the attention of the world.
What are the grounds under which a side can be denied that license?
Let’s take the first finance & admin criteria, which relates to the stadium.
“The club shall have the sole use of the ground or “shared” use and shall be in a position to establish security of tenure for the ground and to play matches as and when required. To establish security of tenure the club shall own or have a lease in place for the ground. The lease shall run for at least the period of the current season as well as the following season.”
Can Rangers guarantee that? Will the ground be owned by the club, or by someone else? Can they assure they can meet fixture requirements by having a fixed place to play their home games? Without that they can’t get a license, and it’s not clear who will own Ibrox this time next year, whether it’s Whyte, a consortium or even the courts.
Let’s take the audited accounts requirements.
“Each club shall be required to provide a copy of its audited financial statements prepared according to the Companies Act 1985 and relevant accounting standards (UK Generally Accepted Accounting Practice). The statements shall refer to the year ended 2011. Clubs will provide this information as follows – SPL clubs – by 31 March 2012, All other clubs – by 30 April 2012. The auditor’s report in respect of the annual financial statements shall not include an emphasis of matter or a qualified opinion/conclusion in respect of going concern.”
We know that Rangers will not have accounts submitted in time to meet the European deadline, as the administrators have admitted this. Furthermore, we know that even if they manage to get their accounts finalised, there will have to be a “going concern” opinion contained in them, because there are significant doubts that Rangers will survive long enough to fulfil next season’s fixtures. This clause, on its own, is enough to deny them a license.
The ability of Rangers administrators to guarantee that the club will be in a position to turn up for even as much as one game next season is already in serious doubt. The licensing guidelines have to be followed to the letter, and they are overseen by UEFA and FIFA.
If the SFA and the SPL are to be seen to be doing their jobs, they have to acknowledge the very real prospect that no version of Rangers might exist by the time next season starts.
There is one other party to blame for the shambles the club finds itself in, and so far I have yet to hear anyone in the media or elsewhere allude to this fact, far less spell it out. I will not do so, and tell you who is most to blame for the mess.
Rangers’ fans are to blame.
There are two reasons why they are to blame, and both are found in the DNA of the club, it’s supporters and the mind-set which has grown around them. First is the notion that there will always be someone else to pay the bills, someone else to pick up the tab, always someone else to blame when it all goes wrong. Rangers were in the hands of an understanding and professional bank, in Lloyds, who’s conduct only stopped the club carrying on a suicidal course of action. Rangers fans, angered at what they saw as unfair restrictions – restrictions from spending money they did not have, in other words – protested, threatened and finally forced the bank to walk away from the table. That left them easy prey for a man like Whyte, and made the deal attractive to Murray, who himself has experience in dealing with the notorious ingratitude of Rangers’ fans.
Rangers fans have had 30 years of success built on someone else’s money. Even today, they still believe someone, somewhere, should step in and save them from the appalling consequences of years of mis-spending and recklessness. Yet it is that very attitude that drove boards at Rangers to spend sums of money they could not afford. The unrealistic expectations of a support reared to believe the spending would never end have forced the club to the brink of death. The Rangers fans have pushed their own institution to the edge of the abyss, first by barracking Murray to spend more than he could afford and then by pushing away the very people who were in the best position to help them through the crisis – Lloyds Banking Group, who despite the madness written elsewhere never wanted Rangers to die and would have helped them survive.
The second reason Rangers fans are to blame is even more stark, and difficult to face. The very nature of the support, the very intolerance at their heart, the very exclusiveness they seek to put out there, has made them wholly un-attractive to any investor who does not already have Rangers in his or her blood, and no events in the club’s history have been as damaging to that aspect of the business than Manchester and the European fines. Rangers Football Club is too associated with the songs of hate, with the images of rioting fans, with the detritus of bigotry and the stench of sectarianism. They are known, rightly, as Scotland’s Shame, and no corporate investor could possibly want a part of something so tainted.
Every time Rangers fans sang “Why Don’t You Go Home” or “Big Jock Knew” they were wrapping the noose ever tighter round their own necks. Every minority who was abused, every Catholic who was spat on, every foreigner who got it in the neck, every ground where they spewed forth hate, every TV image of the “Red Hand Salute” increased the revulsion felt by every right thinking person who might once have been of a mind to help. If Rangers really were a positive influence on society, if their fans really were ordinary football supporters, if their survival really was critical to the Scottish game, someone somewhere would be willing to step up and save them … but no-one who does not have those same stains on their soul will even care.
The hardship Rangers fans are about to face, the difficult times, the pain, the tears, the sight of a triumphant Celtic, the only surviving superpower in the Scottish game, celebrating a league win at their own home ground … all of it, they brought upon themselves.
I make no apology for the harshness of the tone of this post. The “good “ Rangers fans who have to watch this must be aware that they too are part of the problem, for never challenging the behaviour of the people who dragged their club into the gutter. Those people are likely to emerge from this with one idea of where the club should go, and the “good “ supporters with another. There is a chance that two distinct versions of Rangers will emerge from this, with a bloody, damaging fight for the soul of the football club at stake for the winners. God help the NewCo if the wrong people win that battle, and “No Surrender” Johnston is one of them.
This crisis is vast, and complex and poses enormous dilemmas for many, many people. But it is not the making of one man, or one group of people. This mess was a collaboration on an epic scale. It took ignorance, arrogance, ego, envy and hate to get to the point where Rangers is poised on the brink of death, and the solutions being mooted, everything from dumping debt and leaving creditors in the lurch to being saved by a state they think owes them something, are all grounded in the same awful mentality that got them here. No lessons have been learned.
For the club to be saved – for the club to be worth saving – this is what has to change.
I see no sign of that happening.
Good Evening Bhoys,
I have been having a wonderful time at work over the last few weeks. Quite a few Tims there.
All the jokes about the Big Hoose having to remain open etc.
All the “journalists” performing U-Turns and Cartwheels re Whytey and Minty.
I have come to the conclusion after listening to some of SSB recent contributors that there appears to be relatively few sane, erudite, reasonable, sober, realistic Huns in Scotland and beyond.
Their level of stupidity/ignorance is frankly incredible. It must be the schools to blame!!!
The game is over and still they shout WATP.
Good riddance to this sectarian cancer in the best wee country in the world (copyright – Bawface Salmond).
I know a few decent Rangers Fans but unfortunately have met a lot more bigots of this hellish club.
One last wish before I depart this world – The Tic to win the League at the Bigotdome and then the Huns to be Liquidated the next day.
Carlsberg Monday – lets hope so.
Hail Hail
The non story of CFC not paying rankers for the game on the 26th March.
I don’t get it, the biggest story just now, notwithstanding the NL murder trials, has surely got to be the dying moves of Scotlands 2nd largest ….. Institution, the rfc.
The PM has waded in along with the el presedente of Scotland…. In other words, the forces of darkness have spoken out in support of the penny arcade so why is the theme in MSM the money that CFC have YET to collect from the support? It’s all a bit weird, in any other country there would be serious investigations into the root cause of the rankers financial shenanigans.
Scottish mainstream media seem to have an agenda controlled by a hidden hand. This is why we have serious problems with football in Scotland, no transparency.
V
Nail on the head James Forrest.
Ernie Lynch
Technical correction re process accepted.
However, HMRC are trailing and practising very carefully in order that when they go for bigger EBT fish they have a proven and tested approach that led to success with the judiciary, rather than some of their spectacular failures in other arenas.
There is a version of reality that suggests that £50m is recoverable from a club the size of RFC. I know you argue against that on the basis that their business will collapse.
Depends on whether HMRC have a strong ‘recovery’ brief or a strong ‘teach a lesson’ brief. Motherwell, Dundee and Livingston suggests the former, Airdrie and Gretna the latter.
HH
James Forrest is the Emperor….
AWESOME.
Great post… Says it all…
HH
JF
Great stuff.
Jamesie,
Skimmed a bit, but great post!
I see thems are planning to come back in the crown paint league sometime in the far off future!! Hope it disnae clash wae the 1st man on Venis or Jupiter!!.
James Forrest
Fantastic post,the ‘they deserve better ‘ protest,
summed them up and pushed the huns even further over the edge.Gotta luv em.
Hail hail once again excellent James.
Are jelly and ice cream inseperable?
Why cant the Pars pay their players the wages due this week??
James Forrest is The Emperor of Ice Cream on 1 March, 2012 at 20:47 said:
.. . . . . . just what I was thinking : > 0
On a more serious note – brilliant !
HH
James Forrest
If I had writen that post it would have gone something like this…….
A big boy done it and ran away……
Am i cheating if i have the wives homemade trifle?
Has Grimmond McCrummoch got the tin tack yet?
James Forest,
There’s no way the hun fans’ pathetic threats to take their few pennies out influenced Lloyds. Rather they saw how the wind was blowing down Ibrox way and made damned sure that they got every penny they were owed before the big tax bill hits.
wonkyradar on 1 March, 2012 at 21:05 said:
Am i cheating if i have the wives homemade trifle?
It depends. If it contains jelly, it’s not real trifle, therfore would count as a jelly based desert. No jelly, then it’s real trifle and doesn’t count.
:)
Rico
James Forrest
Spot bloody on!
Hail Hail!
I see another bigot is behind bars for abusing our manager and the nail bomb trial continues at the High Court.
How many have been locked up now?
Imagine this was Sir Alex.
And they wonder why we want then gone!
It will be World War 3 if we win the title at Ibrox. The fans won’t be safe, the players won’t be safe and innocent people walking the streets won’t be safe.
Tempting as it would be to seal it there, my head says that a defeat beforehand, postponing the party by a game, would for once be a blessing in disguise.
“part of the fabric of Scottish society”
A.Salmond
I’ll never forget that soundbite Alex.
James Forrest is The Emperor of Ice Cream on 1 March, 2012 at 20:47 said:
Wish I had the talent to have penned it myself.
THE EXILED TIM on 1 March, 2012 at 18:46 said:
Awe Naw
——————————
This Nimmo appointment on the SFA Enquiry with no public ToRs is not encouraging based on this.
http://scottishlaw.blogspot.com/search/label/Magic%20Circle
R C
8 at the last count. Seemingly.
r c
Just mind it when you’re puting ur X on the V P.
JF @ 20:47
A bravura piece, James.
Adding yet more dazzle to an already glittering evening.
Thank you.
FF
James Forrest and Paul67
You two guys ( and others ) sum it up more that the rest of the scottish media put together
That is why I follow CQN rather than mainsteam media. PL statement say it all
about the current media
I just can’t get enough. Our day has come.
roy croppie on 1 March, 2012 at 21:09 said:
Only in the greatest wee country in the world.
Two concurrent court trials for threatening the manager of one football club.
Truly a shamed Scotland.
Ceaser67 on 1 March, 2012 at 21:13 said:
R C
8 at the last count. Seemingly.
Thanks mate, depressing really but at least something is being done. How he deserves this Championship.
Finally for tonight.
Not a mention of PL’s statement on BBC Scotland TV \news.
Vmhan Supporting Lenny! on 1 March, 2012 at 20:57 said:
The non story of CFC not paying rankers for the game on the 26th March.
I don’t get it, the biggest story just now, notwithstanding the NL murder trials, has surely got to be the dying moves of Scotlands 2nd largest ….. Institution, the rfc.
I beg to differ this cover up is bigger than anything in Scotland at the moment.
http://www.heraldscotland.com/comment/letters/why-was-megrahis-defence-team-kept-in-dark-about-vital-evidence.16881114