In the event of Rangers facing financial Armageddon after the resumption of their HMRC tax hearing a quick – very quick – recovery scenario is available to them. At any point during next month’s hearing they may consider their position is no longer tenable and, unable to meet the tax bill, a new company could be formed which attempts a prepack administration.
A prepack offer from a new company, for example, Rangers Newco FC Ltd, would offer an administrator a deal for all assets of the club, including stadium and offer to meet outstanding player wages. Deals like this seldom offer unsecured creditors much but even a small percentage might realise more cash than the administrator would gamble on raising in an unstructured sale.
In such circumstances, the administrator could accept as little as £4m for the unsecured creditors.
In normal business Rangers Newco FC Ltd would begin trading and this would be the end of the story but football is not normal business. Rangers Newco FC would own a stadium and would employ some footballers but they would not be part of any league structure. They would need to apply for membership to the Scottish Football League or Scottish Premier League.
In this scenario, the death of Rangers Football Club would leave a vacancy in the SPL, presenting several financial, logistical and sporting challenges. Without Rangers, the league would have to invalidate all this season’s results involving the club, one team would be without a game each weekend for the rest of the season, current TV contracts and sponsorship deals could be jeopardised, while future contracts would be worth a fraction of their current values.
Every team in the league would have to downsize and some would have to win fresh support from their bankers, which may or may not be forthcoming.
There is, of course, a resolution to this problem.
Rangers Newco FC Ltd could present an offer to the SPL. The new company, with its stadium and thousands of potential supporters, could take the obligatory 10 point punishment for going into administration and adopt the place of Rangers FC, complete their fixtures and allow every other team in the league to fulfil commercial obligations.
If these events took place before Christmas, Rangers Newco FC could be debt-free and signing players in January to enhance their league challenge.
To force the deal through, Rangers Newco FC would require 10 of the remaining 11 SPL clubs to vote in their favour. If any two clubs stand against them, they would have to apply for membership of the Scottish Football League, but, having researched this story for several days, I expect Rangers Newco FC Ltd would get enough support to pick-up the place of the defunct Rangers FC.
Any natural sympathies towards Rangers aside (which will not exist in all places), money talks and, apart from Celtic, this league is neck-deep in debt. Celtic might be in a position to survive Rangers failing but it would cost our club tens of millions.
Crucially, if the other SPL clubs back Rangers Newco FC, they create a template for a snap recovery from their own troubles. Instead of repaying your debts, simply get yourself into a safe league position, ditch the company, prepack and start again with a clean sheet.
This would create a clear incentive to stiff creditors. While the banks will get wise and not offer unsecured facilities in future, HMRC and small traders are likely to become perennial fall guys. Why would any mid-table team pay millions in tax, rates and policing bills, when they have a sporting incentive to ditch creditors without punitive penalty, freeing income streams to buy football bling in the next transfer window?
This would make a mockery of the Uefa predident Michele Platini’s Financial Fair Play initiative and make our league the poster-boy for Financial Doping.
Scottish football will be mortally wounded if it were to parachute a club straight into the upper echelons of the game while establishing a blueprint for the abandonment of creditors.
It is incumbent on all who care about the game, in Scotland and throughout the world, that we insist Scottish Premier League clubs do not allow a prepack company to phoenix into the shoes of a dead football club.
Celtic fans, as well as those from Aberdeen, Hibernian, Dundee United and St Johnstone, together with fans from Motherwell, who could become genuine championship contenders, and from those clubs who would avoid relegation if Rangers failed, must insist their club votes against any prepack company parachuting into the league.
The SFA executive must use whatever influence it can to prevent the name of Scottish football being brought into disrepute. Politicians, who either have, or aspire to have, tax raising responsibilities, must register their abhorrence that a self-serving oligopoly should attempt to vote themselves an escape from paying tax.
Fifa and Uefa must explain to the Scottish FA that the days of shady financial deals in football are gone.
Watch the media coverage of these events carefully. If and when the decision time comes, the case to acquiesce to Rangers Newco’s demands will be overwhelming. Sincere ‘impartial’ observers will do their upmost to convince us all we must do whatever necessary to save Rangers for the good of the Scottish game. Some voices will even tell you Celtic need Rangers Newco. Whatever part of my club is dependent on Rangers I am willing to lose.
Rangers-HMRC tax hearing resumes next month, when there is also a two week international break. The most important element of making a prepack offer succeed is to offer a fait accompli: ‘Here is a solution, you have no time and you have no alternative’.
Should Rangers go into administration, I believe this is a very, likely scenario. If you are a supporter of Celtic or any other club, make your views known.
Read issue 3 of CQN Magazine free online here or buy a print version at Magcloud.
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EN
You and MWD twin brothers?
Here was me thinking that you’d be a young guy in the flesh :)
All, i think for anybody raised in the central belt Irish and other supporters need to give me licence and forgivness i dont have first hand experience) during the 60s and 70s ( I come from Larkhall) the demise of Rangers would be sweet, if your a Catholic of course it does not balance, revenge is always bad.
Unfortunatly we all want revenge, because that is really what we are talking about, revenge rearding the injustices we all recieved from being spat on going to school, to being attacked for daring to go out with a lady who was not a Catholic we could go on of course, revenge is as I said sweet, but a pyrrhic victory will not satisfy me what we need is change not victory because this victory would be temporary.
We achived change through the David Murray years, and we need to to take the positives as they say regarding this situation, winning and losing is part of the game (or it should be) if we insist in the destruction of Rangers we destroy our game in scotland (forget the pipe dreams and moon beams of our board on going to the EPL) this is a common ploy to destract the working man / woman, we need to deal in reality because belive me the Celtic board will (their lawful duty is to the shareholders) all and I mean all we need in sport is a level playing field where we win or lose on our merits and right now we can all agree we are definatly losing on our own merits.
We are actually closer to this than most on here think, if what we want is to win because of the demise of Rangers financially then the victory is Pyrric and we continue to delude ourselves that we are a fine side.
As a last point (forgive the ramblings) there are many companies that go to the walll and recievership (administration) owe lots of cash and taxes and come out the other end and survive, in other words that is the law, and i have been in the situation where Recievers have saved jobs, lets not forget our roots,
End of sermon
Dacker fe Larky
Excellent lead article Paul, thank you.
Whatever they do to cheat their way back into business they will get away with. No one with any influence will stand in their way.
I would even be surprised if Celtic voted against them.
Lubo.
Estadio Nacional
You know how with every set of twins, you have one that is always slightly better looking than the other, from the really ugly twins through to the really good looking twins. I don’t want to upset you but… i’m the slightly better looking wan. :o)
How Dubia treating you?
I hear your loving working with the Indian’s.
MWD
When it happens – celebrate! Whatever comes after that – deal with it ‘as and when’!
Sleep tight all. Tomorrow may yet be a Fantastic Day.
Jobo
Ins Allah
Lennybhoy…Supporting Neil Lennon and CFC until I die says:
27 October, 2011 at 21:18
Neil canamalar Lennon hunskelper extrordinaire says:
27 October, 2011 at 21:18
As I come on here every Thursday night and say Radio 5 do a documentary and its usually good. Tonight was about stress and pressure in sport. Gordon spoke about us against the huns and said folk talk about derby games but that our derby has been important for over 100 years etc unlike the Manchester derby but it was the mans honesty about you can be in a ground with 60,000 people cheering you and 5 people criticising you and you only hear the 5 people.
He then spoke about faceless folk on the internet and radio abusing him. He said they could be huns kidding on they were Tims. He then said it was better to go out after losses as at least folk he met were telling the real story
He told a story of how bad he was at Coventry when 25000 wanted his head and it was that bad the groundsman had to hide his car. He said that while 25000 were abusing him he was thinking about how his family were coping with it. He said he stayed back until the crowd left and when he went out to his car there was 1 guy standing and the guy asked if he could speak to him. He went over and the guy said you were a great player, coach, manager etc for us but its time you left. Then it felt personal
Ive probably missed a few bits but compared to people who were on with the old thriving on it Gordon came across human…well worth a listen again
Moonbeams WD. \o/ Supporting Neil Lennon 100%. C’mon the hoops. says:
27 October, 2011 at 21:32
Aye…right I’ll crack the jokes…:)
Keep the Faith!
Hail Hail!
Greenlion2 says:
27 October, 2011 at 21:36
Cheers mate…
Keep the Faith!
Hail Hail!
Hamiltontim 21:28
MWD was delighted the interest in me and thought he might be my brother…
Thoughts with you Mate.
EN
Gl2,
cheers
hail hail
Have just read Paul’s leader and feel utterly flat.
Whilst I never really believed the huns would become defunct, to see it laid bare as to how they can wriggle out of their mess is beyond belief.
Dacker,
on this particular question, its not about football
See Big Nan’s post, and see the social consequences of them as a focal point
There would be a football cost – at least short-term – but the social benefits far outweigh this
So, when it happens, I plan to party like I’ve never partied before…. and I have had some humdingers.
They’ll bury me laughin
Martybhoy – the reason the wullie collum
Dacker – pure mince
If this scenario transpires then we must bury them – if we dont then Celtic are not worthy of our support – pure and simple………..
A few good Celtic men falling out tonight about things that might never happen.
We should be focusing on Celtic.
A winning team.
A winning mentality.
A winning manager.
As for the huns?
I do not love them!
All you need to know about pre-pack/Pheonxing!
http://coopermatthews.com/phoenixing.html
GL2.
Cheers. have to say I have always had a huge admiration for WGS; before he came to us and when he was with us.
Strangely my admiration for the man grows as time passes.I think he is a genuinely good man and I would welcome him back to CP, in any capacity, at any time, with open arms.
I feel wee Gordon is really one of us.
Moonbeams WD 21:32
Loving it, very very hard work six days a week for a company run by Indians where you are very much the minority in amongst currupt lying lazy folk you are relying on to keep your job. Only mention Indians as its an Indian company Im working for and its very relevant.
Can only knock ma pan in six days a week and enjoy my time off, and I enjoying that as it is.
Hope alls well, Bro…
EN
Be careful what you wish for, as for Mince “I wish”
Firstly great article Paul you have certainly given us all food for thought. It has been a while since the blog has generated so many pro Celtic views
The scenario you have painted is probably the worst case scenario for us all. However the reality is we as a club have the ability to deal with it if we show a little bottle from the top. It is now time for the board to either dip into their own pockets or extend our credit facilities and lead from the front. I don’t want us to go down the route of spending more than we can afford but we do need to be aware that business is a long term game. If the board were to allow Neil to spend an initial £15m next summer and buy genuine quality similar to what happened with Martin O Neil and followed that £15 m with additional funds we would be in. Position to have the loan repaid within 3 or 4 years. We have a real opportunity to almost guarantee champions league revenue for at least 3 years. That is £15 to £18 million pounds in additional revenue and does not take into account further revenue growth in season book sales and merchandising when the team is successful. After the initial outlay and repayment we start the process over again by borrowing and repaying and so on. The risk factor until now has always been higher due to the risk ofno CL revenue. Once we get beyond the first year we can grow the coefficient and it gets a bit easier.
What astounds me is that we have some seriously astute businessmen on the board who know what it takes to make a business work but have allowed us to decline, thus risking their current investment. As I sId earlier we will never have an opportunity as good as this for some time.
Now is the time to really set in place our generation of domination
BB
martybhoy59 says:
27 October, 2011 at 21:23
Big Dans was a yellow mate,a good professional foul straight through the guy to stop the attack.
EN
Give your employer a days work and you’ll be fine!
Hope you are well and applying the suncream as required!
Take care.
And your right this is not about football, or indeed what is right, its about the law, as I say be careful what you wish for, i hate them more than anything but what counts for one counts for all
The Moonbeams/Nacional Twins…
jimmci
“I feel wee Gordon is really one of us. ”
What if Gord was one of us
Devil dog like one of us
Drinking Kestrel on a Bus
Trying to make his way home
sftb
How long were you sitting on that one ?
Dacker
you will be glad to know there are still two buses going to Celtic park every fortnight… KTF
Dacker,
I was very specific about what I said… the fact that its not about football doesn’t make it any less relevant, or important, or right.
I’m very careful what I wish for, and I wish it.
I think the whole point is that if the law, or SFA regulations, were applied consistently then:
a) Rangers wouldn’t have been playing in Europe this year, and
b) There would be zero chance of ‘new rangers’ being re-established into the SPL
Dick Byrne
Aye. Like Arny & Danny Divito.
EN. Glad to hear your having a ball. Hopefully setting yourself up for life too.
MWD
Good night all good folk on the blog tonight.
And good night to all my friends in Celtic.
voguepunter
if you ever see signs of preparation and craftsmanship in my posts, you will be mistaken :-)
I had to look up the lyrics
Philbhoy,
night chief…. 10 o’clock tho… woos
The O’Jays – Money
Until we meet again…
Keep the Faith!
Hail Hail!
When “THEM” go bust it will be happy days indeed. I think Whyte will be the happiest of all. Asset stripping is his primary objective. He will put the “I tried to save the club” face on, just long enough to get out of town with his bag of money in tow and their Whyte night will disappear over the Horizon, never to be seen again.
Any supporter of “THEM” is truluy delusional if they think any different.
Celtic will vote against them getting back in because that is the way Dermott wants it. Given the state of the game down south, they will gladly invite us to the table without the baggage of “THEM” around our necks. This will be the final GIRFUY to the SFA for one corrupt organization supporting another. It could not happen to a nicer group of “Peepil”.
gsu
I think on all of the years on here the 6 biggest splitter groups for mineshafters (Boo)/happyclappers (Yeah) were
Amotisation (A tear in my eye thinking back)
the board
the songs debate
the poppy deabte
Aiden
Gordon
Substitutes include Shaun Maloney ,Tony Mowbray and Kenny Miller….I include the Sharp suite man in the board….Also excluded the ML2’ers music and fashion tastes as they are a given as being Primarkish
Philbhoy 21:51
Cheers, worked too hard, this is my one night off. So glad I have MWD as a Brother…
EN
gnite! from donegal!