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.
945 Comments- Pages:
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RanchoFranco
I am on the same page as you
I know they will die
I just dont want them to Phoenix
AND I AM VERY UNCONVINCED BY PAUL67 ARGUMENTS
Hail Hail
danso_1888 on 1 March, 2012 at 16:36 said:
As I posted a couple of weeks ago, THEY have never recovered from Lisbon 1967.
Didn’t realise until I read on Newsnow. We don’t have one home game during the whole month of March. We do have two games at neutral venues. Hampden and Ibrox – cause they don’t own that anymore!
Paul67…fantastic article..very clear and easy to understand ( even for the hun lurkers )
Looking back knowing what you do now about football club take-overs, do you not wish you had put a cheeky wee £1.01 bid in.
Who knows you could now be the owner of the very fabric that keeps Scotland alive.
Also well done Mr Lawell and Phil Mac who both have exposed the msm for what they are….liars
ajaxbhoy on 1 March, 2012 at 16:48 said:
Would that be the same prejudice free Canada that in my parent’s lifetime insisted that immigrant orphans be allotted to certain provinces on the basis of their religious background.
“tickets from the Administrators”, beautiful line.
My dear,dear,dear,friend.. Ajaxbhoy
Nice ,pal.. Very Nice tae Read that ye Actually.. READ
ma Postings..and..
Heaven tae Betsy.. be Praised…and Actually.. agin!.. Enjoy, Whit ye read!
Ah must say that ye ur in the Minority Pal.. when ye write
that ye Actually.. agin!… Welcome… the different Opinions which ur
expressed here ,in this Forum.
Yep. Fur.. thur ur a Loata Guys oan Here..
Who hiv. Tunnel Vision oan that Very Subject..
They get Maist Upset.. whenever, they come across
a Posting. Vouchsafing.. and Opinion.. Contrary, tae the
Wan which they Clutch so Dearly tae Thur Ain Bosom.
And in Ma case..
That happens tae them.. very, very , Frequently!
A Blog,like ye says.. Thrives oan DIVERSITY… but..
it .. Wull Swiftly die..
If thur ur
TOO MUCH, ADVERSITY…. is found tae be Rearing it’s Ugly Heid, oan it!
Ma Motto is..
Heck.. Live and Let Live..
If a Guy disnae Agree wit me.. then Ah say..
Vive La Difference!
It never enters Ma Heid the cry..
“Aff with HIs Heid.. He jist said Something which Ah find Abhorrent..and Disagree Wi..
Get him Gang.. ”
Right.?
Glad that ye agree,pal..
Ye are a Real..
Tolerant Guy
Wanna they Rara Avi.. that people talk aboot but ye very seldom
Meet.
Nice Chatting ,Pal.
Kojo
yer pal..who likes ye, already
dare i ask what the reaction to pistol pete’s broadside was like on FF or Rangers Media? :-)
Paul
Tremendous summary. Not in any way lazy!
GREAT news for the soon to be redundant Ramkers players… http://www.eveningtimes.co.uk/news/glasgow-is-tops-for-cheap-private-rents-1.1150540
Kojo
Where do you get off? After having your bigotry rightfully deleted you start to play some sort of martyr — lecturing the rest of us on tolerance.
Pass the sick-bag.
Kojo
Personally this is the first time I have had any issue with you, I don’t have an axe to grind but surely I am allowed to disagree with you……
cheers
I dont listen to any of the phone-ins, so can only go by the comments posted on here.
Why do the phone-ins refuse to comment on some calls about der huns, tax, ebt’s,MMB etc until it has been verified 100% true.
but….
A verbal agreement made by Celtic regarding ticket money for ibrokes game is fair game to discuss, dissect, use to slaughter Celtic, etc.
With no need to prove if true or false, in this case proved false.
I suppose thats why i dont listen to phone-ins or but any papers.
quonno on 1 March, 2012 at 17:01 said:
Never for one minute insisted that Canada was or is prejudice free. You bring up a good point…we can also add treatment of indigenous peoples, and Jewish refugees on the St. Louis in 1939, amongst many examples. Hopefully we learn from such things.
It’s just chilling at times to hear of some of the things that go in Scotland in this day and age. I remember visiting in the summer of 1974 and playing football with some of the local kids. The subject of which team I liked never came up, and I’m almost glad it didn’t.
Hail Hail!
Given this position’s place in recent Celtic folklore, it would be quite funny if our two LBs walked away with consecutive POTY awards.
Priceless comment from the Bears Den that really sums the Rangers fan up to a tee. Re the Dunfermline players receiving partial wages one contributor writes…
Yes it is a sad story that our beloved gers owe dunfermline this £85k, but surely they had not budgeted this to their season’s earnings’s
http://www.bbc.co.uk…otball/17210537
yes we seem to have been a club outliving our income and boy we now are paying for it!!
but to blame us for their shortfall when they could not have budgeted for surely this is ALSO worng!! (SIC)
They typo is his, not mine.
Very pleased to see Peter Lawell stating the correct facts to another made up piece of baloney from traynor & jackson.
Rieperman.
I don’t see the statement on the DR website either.
Does anyone think that Graham Spiers still believes that the Government will step in and save this Scottish institution called Rangers FC?
Still think that a cashless exchange of match tickets with them would most risk free solution.
jimmci on 1 March, 2012 at 17:21 said:
I am sure the dunfermline players will take great comfort from the fact that all the ragers staff were paid IN FULL for february
If Rangers was a horse, the curtains would have been pulled around it weeks ago, such are the injuries it has sustained.
That it hasn’t been put out of its misery means very little. We all know you can’t flog a dead (or, in this case, a fatally wounded) horse.
Anyone who takes anything wither it be Keevins,Jackson,Traynor or anyone else in the media say about Celtic ought really to rememer Lazy Journalism is at the core of everything they utter and everything they write.So Bhoys dont fall for there rubbish if you are a regular on CQN you know more than they do No Lazy Journalism on here.H.H.
PL’s statement most welcome.
Hope fully it marks the beginning of Celtic’s realising that the inevitable result of lying down with dogs is the rising up with fleas.
Don’t wait for result of HMRC. Cut all commercial ties now.
Som mes que un club on 1 March, 2012 at 17:23 said:
Poor form from the Record (I know). They should have been the first to run the story. STV have it so why don’t they? If it is on their site and I just missed it then it is certainly not in a prominent position.
Malarkey
Ye jist luv that woid..”Bigot”
Doncha?
Don’t ye know that Tossing aboot the Woid.. kin Boomerang.. right back tae Yersel?
Ye Didnae Know that?
Well..
Here is the Definition.. Straight fae the Dictionary… of a
BIGOT: A Person… who is utterly INTOLERANT of anither’s
Belief, Differing Creed,Religion..or.. OPINION!!
Ah wid Say that You Qualify ..in Spades!!!
So..
Here it comes Pal..
Ah , Kojo.. Believe that YOU are a Darned Bigot!
So there..
and furthermair. Pal.. fur yer Illumination and Edification…
a woid tae the wise..
Baith Yer Airms and Yer VOCABULARY.. are far TOO SHOART
tae Box. wi.. KOJO!
Wow!
A double whammy by Mr 67 and the man now once again revelling in the name of the SSM!
Very well played,guys.
The hunz are on the canvas and the ref is holding up 8 fingers.
The crowd hold their breath…….
Tomorrow?
DR weblink to PL story….you need to look under the Celtic tab so I would not agree this is a prominent placement. should be a headline imo. ( Hate to post their link but some may want to view.)
http://www.dailyrecord.co.uk/football/spl/celtic/2012/03/01/an-open-letter-from-celtic-chief-executive-peter-lawwell-86908-23771252/
Traynor has been spouting nonsense recently that he knew about certain stories but couldn’t write about them as they could not be “stood up”.
So here we have a story he ran with and, without making any attempt to stand the story up by consulting one side of the, ran with it.
If there is one thing we can rely on from these guys is that they are consistent.
Kojo
“Whatever”- look that up in your vernacular dictionary.
great article Paul 67
up there with the best I have read since I Joined the Blog.
change of subject Cat at bbc1 weather looking lovely again today at Lunch.
MagnificentSeven
Pal. You are soitenly welcomed oan Ma Part, tae disagree wi me.
Ah canny remember whit ye ,indeed DID write.. in that Posting tae
which AH Responded.
So..
If ..
Your Posting,which wiz addresed tae Me… didnae contain any Directed Tae Me…. Personal Insults,or Condemnations tae Ma Soul or ma Dug’s… then.. Ah apoligize tae whit a wrote tae you in Ma Reply.
Noo..
Everything is wance mair Copacetic between us..
Right?
Right.
Kojo, yer pal..who likes ye aloater
Paul67:
Excellent piece. My thoughts:
Whyte’s plan; It has back-fired thanks in the main to HMRC’s intervention i.e. he is no longer in control and could not execute his plan.
Ticketus; they are in it for a massive return, for their initial investment of £24 million they will be looking for around £45 million. They will not give up easily.
If they went for prepack, they would by default be out of the SPL in my view.
Any re-entry by a Newco headed by Whyte would be unlikely to succeed as his plan was thwarted and is now public enemy number one.
In your last paragraph you make the the best point, given Whyte now the bad guy and where they are at present in terms of their lack of finances along with the running costs of any newco. Coupled with the repayments to Ticketus, it will make it extremeky difficult for any phoenix.
I have always thought and still do think they will remain in admin. until FTT announce decision.
Take a bow my friend.
Bring on the Albion and I do not mean Stirling!
Keep the Faith!
Hail Hail!
Paul67 et al
Trevor Birch, Administrator of Portsmouth FC has just announced that there is a “real danger of the Club running out of cash before the end of the season”. And that despite making 35 people redundant just a couple of weeks back. And it gets worse, apparently the next four parachute payments will go to former owner Sacha Gaydamak. Not sure the amounts involved but once again Pompey are going perilously close to the wire. Harry for England?
Anyone know the real reason for the delayed announcement on cuts at Ibrokes today? Is it because of players returning from international duty as per the LL or something else??
Malarkey,
Gotcha There,Pal.. Didnae Ah?
Sure Ah did..
You sir, are a Bigot.. a True Dyed in the wool.
INTOLERANT BIGOT!
Noo, how diz That Mak ye Feel?
Tae find that Oot?
The huns have gone to the wall,
The huns have gone to wall,
They don’t pay bills there team is dite,
Kitman’s on the dole,
The fenians come to see it,
They stand in fenian awe,
They remember the 1990’s,
The Huns have gone to the wall.
Kojo’s at it again. Much like the guy he stands up for, Keevins, it’s ok to use “shockjock” tactics. It pulls people in. My advice? Just scroll past, but he can be amusing sometimes. As for vocabulary, he can try it on with me anytime. Just remember the blog rules. He seems to have overstepped them, as I can’t find the post. Best to remember a quote from Hubert Humphrey–” The right to be heard does not also mean the right to be taken seriously.” It may not be exact, but the meaning is still clear.