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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13:56 on bbc
Rangers administrator Duff and Phelps insists there will be no announcement today over redundancies at the Glasgow club. The firm said discussions are “ongoing regarding potential cost-saving measures” and may make announcements to staff on Friday.
Rogue leader, they could buy anyone they wanted, that is how they are currently in this predicament. You have to live within your means. Buying a club no matter whether it is Clyde, St Mirren Partick Thistle or anyone else comes at a cost, this will add to the start up cost of any team. The higher league you buy in the higher the cost. Any debt outstanding by that club is also bought. The team you buy will not be good enough to win the league they are in, therefore you have to buy players to make it stronger. Everything will cost money, with little return. Is there an investor waiting to throw money into Scottish Football? If Rangers were bought for £1 and went bust in 9 months, how much are Kilmarnock worth and how much would need to be spent to clear debt and strengthen the team?
Paul67,
Will the new format allow for greater blog stability when BIG news arrives??
Come on the troika! let’s have your verdict now, you know you want to.
jude2005 is Neil Lennon \o/ on 1 March, 2012 at 13:07 said:
Steve Davis is on 28k a week. If he gave up 3 weeks wages it could save abt ten jobs.
Is that before or after tax???
thebhoywithmcgraininhisside
Like it.
Their range is actually quite limited. Perhaps if they were to expand it to pistachio with white chocolate and mint with vanilla……………………
Mon the Hoops !
P67
Like the new layout, elegant in a John Lennon Steinway (couldnt be more appropriately named) piano kinda way.
The info pouring out has been phenomenal over the last few weeks so I have chosen to lurk and leave the posting and laughing to others who do it better. Not that you would have noticed for a minute.
2 points, one serious, one not.
1. Vanessa appeal ? quite astounding and shows what a vehicle this CQN can be for all things good. A big shout out to all involved, you kept your desire, Vanessa reached her target, I hope her next step is as successful.
2. I am thoroughly enjoying all the new quotes & phrases that have now seem to be, and i’m sure will remain part of the vocabulary within our society.
ice cream and jelly
MBB
part of the fabric
the big hoose must stay open
Skinty Moonbeams
Duffield
TFPLG
Hector
HMRC FC
etc etc
and all the other quotes and phrases and nicknames that the funnier part of society, us and thems(although mostly theirs are unintentional) has provided us with and long may it continue.
Hail Hail to all the Celtic Family
POM
Paul Larkin on Twitter saying there were redundancies today just now announcement as yet!
LB
Paul67
Great, well spelled out article.
Will take the rest of the day digesting:)
Gordon_J….Happy birthday sir.
TAL
Why did Craig Whyte not sell any of his players last summer when he knew there would be no European income ?
Why not sell Mc Gregor or Davis or Whittaker along with Jelavic in January ? to compensate for the 5m loss of Naismith or was Jelavic sold instead of Naismith ?
Why would Whyte then play brinkmanship with the HMRC over Administration ?
Still think that those that bought Rangers are BANG on plan.
Hail Hail
You know how I always tell you how important the word “precedent” is?
Pompey are about to be liquidated. Likely this week.
Let us see how the English handle that and the asset transfers. Will they be booted out or will they be put straight into the EPL for the good of the game?
NewCo had a chance when there was no UK precedent…..time is not being kind to our hero. The doors are all closing.
For many Celtic-minded folk, especially the old timers, the last fortnight must seem like actually living George Bernard Shaw’s famous, “Some men see things as they are and say why – I dream things that never were and say why not.”
Think I agree with comments above re announced today to players and then press tomorrow. If this is the case may be some enbittered players “tweeting” tonight!
RogueLeader – Got a few good pals that are St Mirren fans (not of the Chick Young type but real ones). I think they would be horrified by the thought of being bought over and part of the newco. Last I heard, they were asking if they could play them every week!
LiviBhoy – there is a media embargo in place. They all know exactly who has been bulleted.
I see that Gordon Smith, like others with lifetimes in football, has joined the ‘knew nothing’ brigade.
Fraser Wishart arrives to speak to the players at Murray Park. Will the laid off players be filling their bags with anything they can get their hands on?
LB
Aptitude = ineptitude
Very interesting reading Paul67. Truly the hour has arrived, and lo, it was written that the beast smote itself with only mild encouragement from The Timmites
Arise Sir (Daniel) Larsson, Malmo Hunskelper extraordinaire.
The blue knights???
More like The Baron Knights!!!
http://www.google.co.uk/m/url?channel=pt&client=ms-hms-h3g-hed-uk&ei=n4xPT7i6HpSqjAeZVw&gl=uk&hl=en&q=http://www.youtube.com/watch?v%3DvzasI7ZWUe0&safe=high&ved=0CCcQFjAE&usg=AFQjCNGUOrV3W7sk9j-ywzWUIX5vZY_xLA
LiviBhoy on 1 March, 2012 at 14:50 said:
I think CW will have beat them to it! There is nothing left!
LiviBhoy on 1 March, 2012 at 14:50 said:
Fraser Wishart arrives to speak to the players at Murray Park. Will the laid off players be filling their bags with anything they can get their hands on?
Any tracksuits taken must be paid for, MJohnst*n had to do it when he stole them from Partick Thistle.!
Happy Buffday gordon j
Do you reckon Kirk Broadfoot will be spotted exiting with a microwave?
LB
Against my better judgement I put £20 on Hearts at 4/1. Grudge them a win but if the cuts are to be believed it’s easy money.
Also put a tenner on Flying Pickets 9/2 winner at Southwell, 2:50pm.
Today could be a good day.
LB
What about 2 newcos? I’m fed up with people telling me about all the good hun supporters so here’s a scenario:
Newco 1 = Ibrox Rangers FTP 1690 2012
steeped in the old ‘tradition’ and attracts the ‘minority’ support (allegedly)
Newco 2 = Queens (11) Park Rangers (let’s move on) 2012
agrees to dump the baggage and lose the historical negatives (loose term)
This would allow the rest of us to understand and encourage those ‘good’ Rangers supporters who wish to dump the past.
HH
row z
Are you on LSD ? ;-)
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 14:56 said:
Would the ‘good’ include those who sang and danced through the Murray years and were getting to dance, foot sclaffing included , on our grave in 1993.
It could be like the wailing wall at murray park tomorrow, well it couldnt be really as the wall blew down in the last gales and they didnt have the cash to fix it,
but you do get my drift.
My colleague here who has no interest in football said “when the players are told that its the end, it could turn ugly”
Given bentfoot naibrains durantee etc are on the list, a truer word was never said.
Very interesting article Paul. Rangers playing at Firhill, it doesn’t “bear” thinking about. HH
Regarding the new layout.
For some reason, the old one did not load properly on the 2 laptops in our home, or the one I use at work.
Internet Explorer would always shut down when I tried to open CQN; then when trying to open it again, a message box would appear and ask it I’d like to go to my previous page or my home page. The previous page would then load CQN.
No great hassle, just a pain.
The new version opens first time on the computers I use.
Question. In the top right hand corner there is a welcome message saying ‘Howdy’. I’ve never noticed it before. Was it always that or did I tick a box somewhere saying I lived in the American midwest?
Midwest of Lanarkshire mibbeees.
SPF
rowz – If Newco 2 could get hold of the Ibrox dugouts that would be their stands sorted.
These people are paid way too much ….
http://www.scotsman.com/sport/football/spl/rangers_administration_alex_salmon
Very good summary Paul, though the academic publisher in my soul would really like to see a list of the sources.
Two points you should address when there’s next a quiet day (!)
Among the deserving victims of this affair is the notion of impartiality. Key actors in the opening up of the tale have been this blog, Phil MacG and Rangerstaxcase – none of which pretends to be free of, or above, the rivalry between Celtic and Rangers. This is important – the most common criticism levelled at the three of you has been that you are biased, that you have an axe to grind. The devastating response to this is “Yes, so what?”
The other one is more important: what should Celtic do? The club is now looking at a future where it probably commands more disposable money in Scottish football than every other individual, club and association put together. Apart from the worst days of Franco or late / post-Stalinism this is an unprecedented state of affairs in Europe.
I used to post on here quite often on the desirability of getting back to the old system of giving visiting teams a big share of matchday income, including catering, hospitality, turnstile AND season ticket money. This was generally derided, but I think something like it will have to be considered if the game is to survive in any recognisabe form in Scotland.
That’s probalby one of the toughest technical and precise summarising articles you’ve written, Paul, and one of the best. To concise the entire shenanigans of the past 6 months into that space was admirable.
Hun Administrators Fc announce NO job cut proclamations today…
Is it because:
1) There are cash reserves to tide them over a while?
2) A design to boost Saturday’s attendance v the Minis (which will be a telling indictment on their support if Mordor isn’t full)
3) There is no point, as the whole shebang’s a bust flush and it’s time for Bud Flud? http://darkwingduck.wikia.com/wiki/The_Liquidator
Excuse my ignorance on the matter but, I haven’t paid a lot of attention to the orcs issues other than knowing they were fecked! I seem to remember at the start of the FTT, that the orcs asked for the matter to be split into 2 on looking at the tax issue and the other the fines imposed, is that still the case? and if so will the upcomming judgement just be the back tax with the fines etc still to come?
the cry from ibroke WAS
SURRENDER
OH THE IRONY
HAAAAAAAAAHHAHAHAHAAHAHAHAHAHAHAHHAHAHA