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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Ibleedgreenandwhite
Pal. Ah see ye ur still
No Taking yer AIN ADVICE?
whit ur we gonna Dae wi ‘ a Guy like You?
Kojo
Kojo,
Only once was I asked outright what team I supported by what turned out to be a bunch of bluenoses, guess what I got the job!
Wish I hadn’t as it was early nineties during they’re ‘none in a row’ and I was slaughtered weekly!
Partizan on 1 March, 2012 at 15:56 said:
Gorbalstam
The Charity Cup
Chris McLaughlin@BBCchrismclaugReply
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Various options discussed between players and administrators at #Rangers. 11 players go and 50% wage cut deferred till end of season…
Nothing worse than a kiddie on Celtic fan,,
Hail hail
While we are waiting for the announcement there is a new article up on Scottish Law Reporter which is headed: The curious case of the Magic Circle gay justice scandal, Scots judges on their way to Thailand, the Rangers FC inquiry & a dropped fraud case!
Should be something there for everyone I think.
http://scottishlaw.blogspot.com/2012/03/curious-case-of-magic-circle-gay.html
I have to say that I am not as joyful as everyone else on this thread.
So what am I missing ?
Ticketus are now looking for another owner. Someone to come forward with investment and take their risk …but actually they are looking for a quick and SUCCESSFUL conclusion to the administration process. Ticketus as far as
I can see are speaking on behalf of Craig Whyte .. as that´s exactly what he wants also …. they also went into business with him already .. and are comfortable with the deal.
Craig Whyte has done nothing wrong apart from possibly exploiting a few loopholes … so what ?
Can someone tell me why Craig Whyte is not exactly where he wants to be right now with regards Rangers ?
yours in the demise of the hun &
More and more confused by the minute
Awe Naw
fuds”R”us :
http://www.snspix.com/r1/6157106/print/6157106.html
what on earth are those paper shredders doing at ibrox?
very fishy….
The administrators need £10m to run Der Hun till the end of the season. They are £4.5m short per Chris McLaughlin from the BBC.
My dear,dear,dear,friend.. Stevio62
So ye ur in Holland?
Ah luv the Dutch..
A few Years ago… Ah visited Amsterdam..
and Ah wiz maist Impressed..
Ah stood at a Corner.. and watched.. A Procession o’ Wee dutch Women.. Wan after anither.. opening thur Front Doors tae thur
Ground Floor Aparments..and
Getting Doon oan thur Knees.and Actually..
Scrubbing the part o’ the Pavement.. which wiz in Front of thur
Outside Door.
Noo, that is whit Ah call .. Persnickety Clean!
True Story,pal. Trure Story.
Kojo
Yer pal.who likes ye aloater
Partizan
Quizball?
HH
Paul67
That being the the case.
Excellent QN day and superb leader.
I get the feeling you have been writing that for a while now.
{:-))))))))))))))))
MWD
Chris McLaughlin@BBCchrismclaugReply
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8 players go with 50% wage cut across board now or no redundancies and 75% wage cut. Situation fluid and a mixture likely #Rangers
Rogueleader
what´s the betting that the money in Craig Whytes lawyers account will be accessed with full Ticketus approval upon whence the realise they haven´t flushed out any emotionally suspect investors ? or have as indeed the case may be now?
Hail Hail
check out the pro rangers spin on this tweet lol
Chris McLaughlin @BBCchrismclaug Reply Retweet Favorite · Open
Running costs till end of season total around 10m. Shortfall is around 4.5m. McCoist fighting hard to save jobs. #Rangers
aye, his own!!!
Kayal33 on 1 March, 2012 at 16:02 said:
Chris McLaughlin@BBCchrismclaugReply
Is that, 11 players go and 50% wage cut deferred till end of season…?
Or, 11 players go(now) and 50% wage cut deferred till end of season…?
Laird of the Smiles aka PMTYH on 1 March, 2012 at 16:09 said:
i read it as the latter, could be wrong though
Celtic Statement
CELTIC Chief Executive Peter Lawwell has today set the record straight with an open letter to the Daily Record newspaper, following a number of stories concerning tickets for the game against Rangers at Ibrox on March 25.
The open letter will appear on the Daily Record website today (Thursday) and will also be printed in a prominent position in Friday´s edition of the newspaper. The letter reads:
Dear Sir,
I am writing with regards to stories which have appeared in the Daily Record over the last few days concerning tickets for the forthcoming match between Celtic and Rangers.
Having not been given the opportunity to comment on these stories prior to them being printed, it is important that Celtic´s position is made clear:
• There was no agreement for Celtic to pay in advance for these match tickets. Therefore, the accusation that Celtic ‘reneged’ on an agreement is wrong.
• The actions of Celtic Football Club have not threatened jobs at Rangers. Any suggestion to the contrary is also wrong.
• There is no ‘bust up’. Indeed we are pleased that yesterday (Wednesday) we received our allocation of tickets for the match from the Administrators of Rangers Football Club.
• We will sell these in the normal manner and will abide by the rules of the Scottish Premier League.
While we have no desire to become involved in the business of any other football club, we felt it very important that we set the record straight and in doing so protect the reputation of Celtic Football Club.
Peter Lawwell
Chief Executive
Celtic Football Club
From reading that letter it seems somebody was threatening very severely with going to court, hence the prominent display in the newspaper and website…..
Wednesday is the 7th week anniversary of the RTC FTT going of to consider and report their findings.
MWD
looks like the sharp suited man has re-entered the fray! Jabba and jangle jangle getting a slap down
enmac, a bampot stands shoulder to shoulder with Neil Lennon on 1 March, 2012 at 15:39 said:
What do y’all think of this?
Destroying paperwork is routine. As certain records hit 7 years old, the requirement to retain them for tax purposes lapses. They are still commercially sensitive. It’s not necessarilly proof of shenanigans.
Paul67
cheers
No Europe next season either way
It sounds as if they will be hamstrung for years no matter the outcome
Love it
I think the DR just got its haw maws booted by Celtic FC,,,,:D
HAIL HAIL
Well said our man.
Might listen to Synde tonight after all.
Well said Peter Lawell
Well said Peter Lawwell
That letter reads like it came with a cover that said, “Print this or else”
My dear,dear,dear,friend.. The Legend o’ JohnnyDoyle.
Hiya,pal..
Glad ye are sae Understauning.
Anyway.. Ah canny go intae whit ye asked..
If Ah did..
Ah wid jist get Awe Het up and Mad Agin.. and Ah dinnae want
tae get .. Banned Fae the Blog.. fur..Sir Paul.. must be
losing his Patience, wi Ma Antics.
But,,Ah kin tell ye this much..
Whit Ah experienced ..wiz no a Nice Interlude, that gives me
pleesure…when Ah look back tae it.
Nice Chatting Pal..
Kojo
yer pal..who likes ye aloater.
Pistol Pete strikes again!!
From RTC
The waiting time for the outcome shall depend upon how much work the judges have prepared in advance of the final days’ summations. If they have written up their findings of fact in advance of this week, a decision might come within a matter of a few weeks. (Following tribunal process, both sides have presented their versions of the facts of the case in previous sessions). Much more likely, given the volume of evidence presented, is that Rangers’ fate will not be known until late March or early April. In fact, there is no deadline on when a result must be published. A few exceptional decisions have taken over a year to be released.
I can’t see that the administrators are doing anything to help the creditors. Surely if there is £5.5M available then it should go towards paying Dundee Utd, etc and some of the PAYE owed to Hector?
I say liquidate them NOW, erase them from the face of the planet so we can all move on and enjoy our jelly and ice cream.
Strong, professional statement from Celtic and Peter Lawell. Tells them how it is in no uncertain terms without getting drawn into any unnecessary arguments.
Peter Lawell and Neil Lennon have plaid a blinder throughout in foiling the best efforts of the media to drag us into this unholy mess and tarnish our name.
Well done.
Well done Peter & Paul. Great Letter to the DR and a terrific article.
Am I being unfaithful – I feel quite sorry for some of Fourth Lanark’s players.
Rumours that Neil Alexander is one to go. I’ve met this guy a couple of times and he is a decent fellow who is not earning millionaire’s row wages. Shame
Hail Hail
Got to say Kojo’s onto something ?
Thats one of the reason ive been “abroad” for over 16 years.
17th century Scotland is, i believe alive and well.
First class statement from Peter Lawwell, consice, to the point, no ambiguity.
Kojo, always consistent, always funny.
SaveKojoCSC
HH
If I were HMRC I would be intercepting that truck before it reaches the incinerator. Will create a few jobs piecing all the pieces together and counter any redundancies.