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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okeydokey505 on FF has put into one post the problems within their support. He started a thread called
The Largs couple that won the euro lottery (hypothetical)
I reproduce it in all of it’s splendour for your education and amusement. Take it away okeydokey:
“If we lived in a society where we had a majority of honest people.
This couple could save The Rangers and we The Fans that have pledged our support to Save the Rangers campaign could pledge the money to repay them and set up direct debits into their account until they have the money back with interest.
Or a Multi National company could do this.
It is just a pity that (probably) some people would pledge and then not pay.
As I said hypothetical but stranger things have happened. ”
Now as I said, this sums up their support in a nutshell. 1) Utterly dense 2) Somebody else sort this problem out.
Why are they waiting for these “Blue Knights”? Why are they not mobilising and doing all they can do? Setting up a pathetic website allowing anyone to “pledge” does not constitute mobilising.
These guys are in for a rough month or two.
My dear,dear,dear,friend..Che
Pal.
Ye must be aware.. that Kojo is No like the Usual
Complacent.. Docile… Pape.
Kojo, is a real Tarrier..
And
Kojo, his A Very Long Memory,tae..
Sure,
Ah widnae Miss Sich an opportunity, that Ah wid be Presented wi’
If That Imaginary Scenario. I Penned…
Wiz, indeed..a Reality!
Noo, Ye Know.
Kojo
Yer Pal…who likes ye aloater.
Whatever happened to savethebeggars.com? Not heard anything about that ol chestnut for a while
http://www.scotsman.com/the-scotsman/sport/football/in_full_ticketus_statement_on_rangers_administration_1_2147937
Published on Thursday 1 March 2012 14:09
Following a meeting yesterday with Rangers Football Club’s (the “Club” or “Rangers”) administrators Duff & Phelps, Ticketus would like to state its desire for a rapid and successful conclusion to the Club’s administration process and confirm its willingness to enter into discussions with any serious potential bidders for the Club.
We met with the administrators yesterday to make it clear that we intend to be part of a solution for the Club, and to ensure a fast and fair resolution is achieved for all parties. We outlined that this includes working with potential purchasers to help provide various financing solutions to the Club that would be attractive to new owners.
Ticketus believes that the best outcome for Rangers, its fans, Ticketus and our investors is for the administration process to be concluded as soon as possible, with a purchaser found who is able to bring stability to the Club.
Ticketus has an obligation to its investors to pursue all avenues to ensure that the ticket purchase agreement it entered into with the Club is honoured, and we are committed to going to the lengths necessary to ensure that the future of the Club is preserved and its agreement with Ticketus fulfilled. We believe that our investors’ interests are aligned to those looking to safeguard the Club’s future.
We have already been in contact with a number of other key stakeholders, including potential bidders and fans’ representatives, and believe working collaboratively with all parties to create a solution for the Club that puts it on a secure financial footing must be everyone’s priority.
Ticketus looks forward to continuing to work with the administrators and serious potential bidders to secure a positive outcome for the Club.
Published on Thursday 1 March 2012 14:09
Following a meeting yesterday with Rangers Football Club’s (the “Club” or “Rangers”) administrators Duff & Phelps, Ticketus would like to state its desire for a rapid and successful conclusion to the Club’s administration process and confirm its willingness to enter into discussions with any serious potential bidders for the Club.
We met with the administrators yesterday to make it clear that we intend to be part of a solution for the Club, and to ensure a fast and fair resolution is achieved for all parties. We outlined that this includes working with potential purchasers to help provide various financing solutions to the Club that would be attractive to new owners.
Ticketus believes that the best outcome for Rangers, its fans, Ticketus and our investors is for the administration process to be concluded as soon as possible, with a purchaser found who is able to bring stability to the Club.
Ticketus has an obligation to its investors to pursue all avenues to ensure that the ticket purchase agreement it entered into with the Club is honoured, and we are committed to going to the lengths necessary to ensure that the future of the Club is preserved and its agreement with Ticketus fulfilled. We believe that our investors’ interests are aligned to those looking to safeguard the Club’s future.
We have already been in contact with a number of other key stakeholders, including potential bidders and fans’ representatives, and believe working collaboratively with all parties to create a solution for the Club that puts it on a secure financial footing must be everyone’s priority.
Ticketus looks forward to continuing to work with the administrators and serious potential bidders to secure a positive outcome for the Club.
RogueLeader on 1 March, 2012 at 15:09 said:
This couple could save The Rangers and we The Fans that have pledged our support to Save the Rangers campaign could pledge the money to repay them and set up direct debits into their account until they have the money back with interest.
If they had paid the taxes that they pledged to do so in the first place…..
Page bookmarked so anyone can see the bigoted twisted and sectarian Kojo at his best.
Kojo you are sick and your post is as bad as the bile on follow follow. Hope Paul shows some guts and bans you.
Catriona Shearer looking lovely in yellow on the been today.
springtime for Whitey and Rangers.
delia – don’t see how we can subsidise the rest of Scottish football. with the Huns gone the only hope for the Scottish league is that we go somewhere else. a Scottish league would then be very competitive and I could see a lot of teams attracting 10,000 plus supporters.
Nakagod, we’ll be making small changes but not overloading with images.
MWD, the Ticketus statement is more aggressive than it sounds. In short, it reads, if you want to buy Rangers, pay up.
voguepunter, cheers.
RogueLeader, DougC, thanks.
playfusbal4dguilders, looks like it.
garcia lorca, yes, lots more to come.
Aipple, cheers.
Celtic Mac, indeed.
St Martin De Porres, thank you for that kind critique.
Rieperman, no probs.
Kojo, I (honestly) don’t know what short term borrowing Celtic have done in the past but I’m sure we’ve never indulged in anything as long term as this.
canamalar, I don’t know. Tribunal was set for November and delayed two months. Verdict will trail by similar timeframe. Perhaps he is confused, perhaps you are confused, but the delay from November to January happened.
TopCorner, thanks.
ajaxbhoy, epic proportions indeed.
IanBhoy929, cheers.
tigertim, I think you’re onto something.
Valley Exile, redundancies are subject to employee consultation. It’s possible the administrators received feedback on this today from the players.
celticinthesun, thank you.
Googybhoy, cheers.
St Martin’s Bhoy, not long now for Christmas wish.
swatson, new format is lighted but no promises when the big news comes.
Patria O Muerte, yes, stunning work on Vanessa appeal.
TAL, cheers.
RobertTressell, indeed.
Franco0, aye, an interesting thought.
ScotPatsFan, it’s a WordPress feature.
deliasmith, ha! Indeed, yes. So what?
Sandman, cheers.
Paul67
Brilliant article and I feel as if I get it all now.
Question though
If Rangers win the Tax case will they survive in their current form and how long do you think they would be in administration for?
TCO
Kojo, deleted. Yellow card.
LiviBhoy on 1 March, 2012 at 14:56 said:
Against my better judgement I put £20 on Hearts at 4/1.
I did the same myself (11/2). I also took a cheeky fiver on Hearts (-2) at 70/1 :)
TheCelticOne, if they win, they survive. Should be out of admin in the summer but will remain under the cosh from Ticketus.
Kojo, is a real Tarrier
it’s not the word I would use to describe you…but it does start and end with the same letters
Sir Paul
Thanks, pal..
Ah needed That!
Kojo
Some very hun-like comments on here just now.
I’m away.
Kojo
your comments make you no better than those you protest to detest so much, to be frank they make you worse, a disgraceful sectarian remark and one which Id request the Moderators remove from the blog, your a bigot and deserve no place here.
Rieperman on 1 March, 2012 at 15:19 said:
-2? That is indeed hopeful. What do you know that I don’t?
LB
Partizan
I agree that that post was Kojo at his worst. I disagree that it takes “guts” to ban him. Having a different response from you is not cowardly.
JJ
Magnificent Seven
Pal..
Ah am Stumped..
Whit is that woid that Ye wid Use Tae Describe Me?
Speak noo.. or. furevah.. Hoid yer Wheest!
Ah am Curious..
Kojo
Kojo
can’t say on a public forum…………. in fact there is more than one…you will just need to stay curious
Paul67 – even if they were to win the big tax case there is the small tax case and the PAYE issue. There would be no Europe. Would their Season Ticket sales even cover what Ticketus are owed ?
Kojo!
We are not sectarian!
Hi Paul,
Great to see you back-up (wee IT joke there) and running, they might be bowling you curved balls but you are knocking them out the park.
Top article, CW had every legal right – and some may say responsibility – to take the actions he has thxs to Ally McC’s £ 10M black hole. Not the endgame anybody had expected, yet not altogether unpredictable.
With the exeptions of the playing staff and a small minority of supporters the stakeholders in RFC seem to be ensuring what needed to be a slick financial manoeuvre has turned into a pigs ear.
Mr Whyte is stuck between the devil and the royal blue sea, he has no option but to play this out to the (and it seems almost inevitable)
bitter end.
Magnificentseven
Pal..
Thanks fur the Reply.
Kojo
Kojo
Did Romney not describe himself as ‘severely conservative’?
You were just being a bit severely, eh, something.
We all say stupid things from time to time and with the lack of the ‘edit post’ option we can be preserved on the interweb for ever. You (we) live in a country that I assume we both enjoy and that claims to be built on religious tolerance.
Tolerance is one of the marks of a gent.
Yir pal Aipple, who still likes ye!
JungleJim
Fair point. Apologies to Paul.
Good article and there is no doubt that no one could have predicted how successful Alistair would be at failing in football competitions as a manager.
Craig Whyte–whatever plan he had–would have reckoned on having more money and time to carry it out.
TheCelticOne,
you also have to factor in how much they get hit for in the BTC. A bill of about £10m might just be managable if the season tickets to about 2028 can be sold on: A bill of £30m+ (where the smart money is) is game over.
Can someone remove Kojos comment.
I presume he is just having a bit of a laugh but he may well have just written a piece for those in the media desperate to deflect away from the troubles across the city.
swatson etc.
Pal..
Hiv You Nevah bin Turned doon fur a Joab.. or a GIG..
After ,ye gave the RIGHT Answer tae
“Whit is the Name of Yer Parish Priest?”
Ye hivnae?
Well.. Ah guess ye dinna Understaun where Ah am coming Fae.
Kojo
Good piece Paul. One question. If Whytey wanted to maintain control of the situation, why did he not pay tax and NI since he took over?
LiviBhoy on 1 March, 2012 at 15:21 said:
I know no more than yourself man, just wishful thinking on my part.
However, with the kind of demoralisation that could arise from redundancies, there’s always a chance.
Conversely, it could lead to some kind of solidarity among those remaining and of course, Hearts are mince.
Like I say, wishful thinking.
Kojo
We have all had that problem at one time…..I don’t even get asked the question….my name is a dead giveaway
but no need to descend to their level…. we are better than that
Protestant bigots discriminate against catholics.
Catholic bigot would like ‘to sack all proddys’
The ticketus statement is totally contrary to the LL understanding.
Dawell Sniveller et al have been punting the line that ticketus sell the tickets and get their money back plus commission.
Ticketus buy the ticket for half price and sell at full price, ranjurz receive no money. One caller on Synde pointed out that ticketus have bought 100 000 season tickets for £24M. Ticketus intend to sell for £45m+. No organisation can function with such a huge in-built loss. CW has effectively destroyed ranjurz, it can only go well for him if they DON’T win the big case.
Kojo
You are forgiven Pal. Tell us what happened tae ye?
JD