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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teams more often than not, start games against celtic with the objective going for a 0-0, that would stop because it offers little to them
we need to change for the better of everyone, we need radical change or we all die, not because of rangers demise, but because people are walking away from the league because it lacks anything other than predictibility
BBC mentioned wage deferrals as well as wae cuts. Wonder if someone has had a word?
night night and thanks cqn, don’t have to say why
am off to bed
once there was a way to get back home
sleep pretty darling do not cry
and I will sing you a lullaby
golden slumbers…….
Superb articles Paul and James.
Reasonably intelligent supporters of them (an oxymoron I know), that I have spoken to, do seem to be moving to the view that a liquidated Ragers will come back leaner and stronger and, having stiffed the taxman for £75M +, will be bankrolled by an Abramovich type benefactor.
I’m already of a mind to remove all gelatinous and frozen dairy produce from my menu.
EC67
Paul67 (or anyone else who might know)
If Skinty Moonbeams had been stuck with the scottish institution and the BTC had gone against them leading to liquidation, would Hector have then been able to go after Murray Holdings for his money since the various companies were obviously interconnected and cash (or debt) had been moved from one to another at will over the last 20 years as required?
If so, Murray has managed to sell a potential 45 million debt due to HMRC and 19 million pounds due to Lloyds bank to the MBB for a quid. A smart trade if you can manage it.
Also struck me on Saturday that it costs three times as much to buy the Celtic app for your i phone as it does to buy Rankers lock stock and barrel.
ggh
please give the lads a wee bit support if you are in the area
Joe McHugh @videocelts
Celtic u-19s playing ICT in Dingwall tomorrow 1.30pm ko, watch out
Gordon_J backing Neil Lennon on 1 March, 2012 at 22:29:
Wage deferments simply not work. If they do not have the money now, they are unlikely to have it in the Summer, rhetorical question.
Keep the Faith!
Hail Hail!
seventyxseven
mail back 2 you
Message to administrator from Celtic Board ” see when yoos pay Dunfermline, we’ll pay yoos”…
Having been labelled a ‘Happy Clapper’ some months ago, nice to witness EVERYONE getting behind the Board on this…..they have ‘played’ the situation brilliantly…….
They are in SOME mess, eh..!!!
I would just like to say that all this talk of Jelly is very suspicious, don’t ya know that Jelly is a drug? And I just can’t get enough? Of course I could always just walk on, with hope in my heart. Cause at the end of a storm nothing Matters Mary when your free. I rebelled cause this land was made for you and well what the hell do we care now?
On the subject of job losses at ibrox,have to agree with the hell mend them school of thought,these are adults who,of their own free will,chose to work for an organisation with an openly discrimatory background,so,at the risk of seeming uncharitable,no sympathy from me,for those who advocate the opposite approach,does your sympathy extend to the kit man with his arms folded snub to the greatest player to ever grace our beloved hoops?.
I’ve been reading this site for a long time now and never before have I felt the need to leave a comment but James Forrest has changed that.
His comments on the blame attached to the demise of Rangers FC (In Administration) is simply one of finest pieces or prose I have had the pleasure of reading, and I have read many impressive articles & comments on here in the last few months.
For me JF is no longer The Emperor he is simply ‘The Daddy!’
On a side note….I got off the subway at Kelvinbridge the other day and was walking up Great Western Road when I noticed a new establishment being refitted for opening….it’s a Jelly & Ice Cream shop!
Twenty four hours later I am walking down Byres Road where lo and behold Nardinis are in the process of opening a new place.
It looks like we’ll have many fine places to dine out on the finest desserts come the title party.
A Dick the Hun back on Scotland Tonight.
MWD {:-))))))))))))
there’s A Dick on ~STV..
A. Dick must be close to his annual bath. That’s one helluva lot o grease on that heid.
MWD
cultsbhoy : Just one?
How long is it? Is it cut or forewarned?
MWD
worryingly we have had same thought at same time :-)
Partizan, Gorbalstam and celt55…..
re your posts earlier today about Matt McGinn’s “the boys who shook up Lisbon” line …”and their trophies numbered six”
The sixth trophy was in fact the Reserve League Cup.
Celtic beat Aberdeen in a two- legged final (4-3 on aggregate).
Rangers won the reserve league and Celtic finshed 4th behind Hearts and Aberdeen.
celt55…
The Charity Cup was discontinued after the 1960/61 final when Celtic and Clyde drew 1-1 and If I recall correctly shared the trophy.
One aspect of the competition which was quite progressive for its time was the rule which counted corners in the event of a draw. If the teams finished on the same number of corners the winner was decided on the toss of a coin.
From 1962 to 1966 the trophy was contested by a Glasgow Select and various English sides (Manchester United, Spurs, Cheslea and Leeds).
I wonder where the trophy is now – could it be in the oh so Blue Room?
Excellent article Paul. I agree with your analysis. This is a cunning plan going horribly wrong… and James Forrest, superb post bud. Nail on head.
Exiled Tim
You have mail.
Listening back to SSB just now and it’s got to the part where they’re talking about the viability of flats/supermarkets being built in the Big House. Guidi sounds like the Grim Reaper. This is brilliant…………………..
I thought it looked more like a Woodpecker with that hair rather than A Dick…:)
Keep the Faith!
Hail Hail!
Keith Jackson…investigative journalist extraordinaire……LOL….!!
Craig Whyte started playing the stock market at the age of 15. By the time he left school he had more than £20,000 in his bank account.
Today, aged just 39, this financial whizzkid from Motherwell stands on the brink of pulling off the biggest deal of his life – and finally bringing the curtain down on one of the longest-running sagas in Scottish football.
Record Sport understands self-made billionaire Whyte has entered into the final stages of negotiations to buy control of the club he loves from Sir David Murray.
And he’s still one year younger than captain Davie Weir.
A deal worth around £30million is now believed to have reached such an advanced stage that sources say Whyte, a high-roller who splits his time between a home in London and the idyllic Castle Grant in Grantown-on-Spey, could even have the keys to Ibrox in time to fund a major refurbishment of Walter Smith’s top-team squad in January.
The news will delight Rangers supporters who have been fretting over the future of their club ever since Murray first slapped a For Sale sign on the front door of Edmiston Drive around three years ago.
As the club’s financial health deteriorated to such an extent the banks moved in to control the purse strings, a series of false dawns came and went.
First, a consortium headed up by South African-based tycoon Dave King came to the fore only to fail to meet Murray’s asking price.
Then, in March this year, Londonbased property developer Andrew Ellis emerged as the frontrunner and was granted a period of exclusivity in order to get the deal done.
But Ellis, now part of the consortium, did not have the financial clout to back up his bold promises and his bid collapsed, leaving Rangers firmly in the grip of the Lloyds Group.
Exiled Glaswegian King was then talked up once more as the possible saviour but he was also engaged in a long-running battle with the tax man and while those issues remained unresolved, he too looked l ike an increasingly unlikely white knight for a club now engulfed by crisis.
But yesterday, quite out of the blue, Record Sport learned a new man is at the table and that a deal to end Murray’s 22-year reign is ready to be completed.
And that man is a relative boy.
By the age of 26, Whyte was already Scot land’s youngest self-made millionaire. Now, 13 years on, and in charge of a vast business empire, his wealth is off the radar.
Whyte is a venture capitalist who has made his millions from playing the markets – a skill he secret ly began honing in his third year at Glasgow’s Kelvinside Academy. In one of his few interviews he revealed how he immediately regretted going to the private school – because he despised playing rugby.
He said: “I hated the discipline of it. It was a rugby-only school, which I didn’t play as I was interested in football.” Whyte worked weekends for his dad’s plant hire firm. And he saved up his wages to fund his habit of gambling on Stock Exchange.
It is said that, by the time he left school, he had more cash in his bank than many of his teachers.
At 19, he was in charge of his own hire plant.
Now he owns his own castle – one of the most historic buildings in Scotland. And very soon he could be adding Rangers to his portfolio. It remains to be seen if Whyte’s move to capture the club will f lush any other parties out of the woodwork because – despite their failure to strike a deal with Murray – King and his consortium have yet to throw in the towel on their own ambitions.
They had put together a package worth around £18m but this was flatly rejected and Ellis drove the price up when he agreed to pay Murray more than £30m.
The club’s debt has been reduced by around £10m since then but the selling price remains the same.
Now, quite clearly, Whyte believes he will be able to close the deal and the young gun must have said enough to impress Murray, who has stated all along that he will only sell the club to the right people – men with enough money to take the club forward.
Who knows? Murray may even regard Whyte as something of a kindred spirit.
After all, Murray was himself aged just 37 back in 1988 when he launched a takeover of the Ibrox club.
It was the beginning of one of the most successful periods in Rangers’ history but Murray’s aggressive pursuit of European glory eventually saw him writing the kind of cheques that his club could simply not afford.
Now Whyte is bringing his money to the table but it remains to be seen if he will adopt the same scatter-cash approach as the man who has owned the club for the past two decades.
But if he brings in even half of the number of trophies Murray delivered then the fans are unlikely to be complaining.
Just watched BBC Scotland news & weather, poor wee miss shearer having to tell more bad news on her beloved orcs. More worrying, our very own Judith Ralston has lost far too much weight & not looking her usual good self.
A Dick shafted by Dick (Whyte) Turpin shafted by A Mint shafted by Hector……… and it’s not over yet….
HH
Neil Henderson @hendopolis
Scotsman Sport: Rangers squad reject request to play rest of season without pay…
Begs the question, how much do you love your Club?
Keep the Faith!
Hail Hail!
Lennybhoy
Very true…..they’ve always had a special hatred for Big Jock and his Lions and their achievements , hence the vile chants.
I agree with you that it was their pathetic attempts to wipe out Jock’s legendary achievements that has led them to the place they find themselves in today.
For every one of their scum support who have chanted their disgusting bilge, and every director and employee who has sought to beat the Legend by unfair and unjust means, I am just as pleased to revel in their predicament.
Let them die…..
I told my wife that the day they went into administration was a day of such pleasure and delight , that I would put it up there with the days my kids were born. She , being a woman, thought this was inappropriate, and she might be right.
But the day they go into liquidation and die…….surely she won’t have a case that day.
why don’t Celtic put forward a proposal that will benefit Scottish football
we could pay off one of rangers debts to Dunfermline off the ibrox ticket money
and I am sure that celtic would pay this money immediately so that the pars players could receive the remainder of the wages that they are owed
seems like a plan to me
Evening all. Haven’t posted since the 14th feb. can’t stop shaking long enough to type.
Anyway I was giving some consideration to the options facing the dark siders.
If they go into the liquidizer and come back as newco in the 3rd division. They could be back in the SPL debt free in 3 years.
However if HMRC cut them a credit deal where they pay back their taxes, interest and Penalties over say 5 or 6 years, they would be functioning with an additional 10 million deficit every season on top of the current 10 – 15 million deficit they currently amass every season.
I am warming to the idea of them staying alive but with the same spending power as say Hearts for the next 6 years. They would struggle to get European football. The overall damage to them and their follow followers would, IMHO be greater .
I commend it to the house…..
Sunburst
Gordon@22.41 : Another good history lesson, although I suspect the trophy has already gone the way of the Arsenal shares,
Just a shame they they don’t have a replica of the European cup to flog.
ggh
The Mighty James Forrest, 20.47
“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.”
Incendiary stuff!!!
Pass it on.
For the avoidance of doubt
“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 …
“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…
This clause, on its own, is enough to deny them a license.”
Clarke carlisle of the PFA is on Question Time. He made a comment about high paid footballers being happy to pay high tax.
Guess things must be different in England.
@MattMcGlone9:
A classic from Archie McPherson on @ScotlandTonight “Who did due diligence on this guy (Whyte)? Inspector Clouseau”
I heard him myself, indeed a classic
Keep the Faith!
Hail Hail!
If they come to a deal, the european exclusion willl last as long as any deal, remember they’re not allowed to have any outstanding tax debt, innit :o)
Keith Jackson today
http://www.talksport.co.uk/radio/richard-keys-and-andy-gray/blog/2012-03-01/jackson-rangers-are-getting-closer-liquidation
Gordon on 1 March, 2012 at 22:41 said:
Well done. From memory I thought the Charity cup went on longer than that. I do remember corners counting though, which was pretty innovative.
Jabba, Kieth Jackson, etc..
these guys should be the focus of radio phone-ins..not the hosts but the subject..I cringe now as they try to back track but as I’ve said before – ‘they are caught in the Headlights of the digital revolution.’ Their every utterance caught forever an reproduced to hang themselves with…
My toes curl when I hear them getting ripped in to Huns..stable doors!