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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sftb
kwality ma mhan :O)
Blantyre, i was in you fabulous Knights club, beforr the Sc Final and your hospitality was great (even though we got lost going through Cmslang_, and i enjoy my Larky pals frequently as my family still stay there.
JimmyQuinnsBit, we need to agree to differ, i would dear dearly love rangers to burn to death, but without them our league dies and i mean dies and so do we, right now we have nowhere to go, and next to no revenue in real terms, if the price for no Rangers is no Celtic then I am sorry you ar on your own brother, there is coffee to smell wake up and go do it, forget what you want, focus on what you can get
If something of administration proportions happens tomorrow and we already have Nike Friday,what will we call it?
Jimci , GL2,
Like many I despaired of Gordon S at times, but in retrospect the phrase be careful what you wish for is very apt.
I can’t help think that Gordon would make a great Director of Football for us, and he could bring his talent , insight and enthsiasm into making sure we are set up for long term success. At present , I suspect he wouldn’t do it , possibly because he want to be a manager, and second , I think he would be nervous about the way he would be portrayed.( you can guarantee the press would say he was there to oversee Lenny).
If however , we won the league this season , and I still think we will, he could be a real asset if we brought him in next summer :
Setting up the youth set up for long term success
Developing partnerships abroad both commercially and for player recruitment
Guiding Lenny in Europe
Promoting us in the UK and Ireland
Only my thoughts, but , I think he could be a great long term asset
Greensideup is also Neil Lennon says:
27 October, 2011 at 22:04
that would(will) be amazing
Forget about them, we don’t need them neither do the rest of Scottish football. The only reason that teams got involved in the foreign player arms race was because of Mintys’ ‘…every fiver…’ attitude. The fact that they’re not around will have a beneficial effect on Scottish football, nationally and at grass roots. The notion that Celtic can’t function without them is ridiculous! Let’s break this destructive habit.
Sponsorship:
The following posters touched on (earlier) how income might be affected if in the event of their demise (we wish and pray): TBB/ Rogue/ TET/ Awe Naw + apologies to anyone I’ve missed.
Could we assume that several joint-sponsorship deals would be rendered void based on regular TV coverage (domestic and European)?
Leaving aside the Big Players (Nike, Tennents) let’s look at the others that feature in; match-day programmes, trackside advertising, websites etc.
Let’s assume that said companies pay 50-50 annual deals @ £100K/ 200K/ 500K – I can see a massive opportunity for Celtic to renegotiate those deals. Companies would have: £50K/ 100K/ 250K released from their annual budget (due to their default status) – could we negotiate better terms?
Would said companies look at offering us an extra 25% whilst saving 25% of their annual budgets in return for guaranteed exposure?
• 19 away games – pay-TV coverage.
• Likely participation in domestic cup competition – pay-TV and domestic coverage.
• European coverage.
IMHO they will survive in some format – our Board should be looking at how to maximise all commercial/ marketing contracts to our advantage as a result. To the company that paid us £100K each – we ask for £150K solo – if they don’t strike a deal then resurrect a contract for £100k+ with their competitor that lost out at the time of the joint deal.
If they survive – we need to hurt them off the field commercially (social benefits aside).
Time for our CEO to earn his corn!
Dacker
I was at a first communion in Larkhall that day.. ha ha
Then we met later in the Machan
Dacker
Was in the Machan that night…
Clashcitybhoy says:
27 October, 2011 at 22:07
When Gordon got appointed I was not over enthusiastic but read up on him with what he done on his time out and I felt really good. He went and studied different sports and how they dealt with players. He is ahead of his time but listening to the program tonight maybe in the wrong game. There was a guy talking who was maybe ex SAS or a sports psychologist (English accents throw me) and he said the higher paid athletes are the harder to motivate them..Folk who came out of it well were Gordon, Sam Allardyce (people first athletes second), Phil Neville and Davie Moyes… Ferguson to an extent of being a winner but with no care for the casualties.
Dacker,
think we do amigo, but thats ok, its what the blogs about
the real risk, I agree, is the potential lack of competition if they go – a team needs challenged in order to push the board to invest in the team, and to test the team regularly and improve them on the park.
The first point is concerning, and – no disrespect to other SPL teams – the focus would need to be to invest to challenge in Europe.
The second point begs the question, are we really defined as a team by the few games we have against them a year? The last few seasons have seen us struggle – at times – against other SPL teams.
look at our three main revenue streams:
a) season tickets – you could argue this might take a dip, but none of us can really estimate what this would be
b) merchandise – as a)
c) Europe – arguably better chance of getting ‘into the money’. OK, we need to play qualifiers, but thats gonna be true whether they remain or not
Well that ONE potential scenario has appeared to send the posting count through the roof. Now I’m an ageing cynic and some of the stuff suggested would suggest that when the Thai Tims visit Celtic Park, the stadium will be empty as we have all decided that we aren’t going to put up with this anymore. Or will we make an exception for that?
Anyway, as I said I’m a cynic AND an avid fan of the life of Brian. This scene in particular echoes for me in some ways just what is happening to us as a support.
REG: Right. Now, uh, item four: attainment of world supremacy within the next five years. Uh, Francis, you’ve been doing some work on this.
FRANCIS: Yeah. Thank you, Reg. Well, quite frankly, siblings, I think five years is optimistic, unless we can smash the Roman empire within the next twelve months.
REG: Twelve months?
FRANCIS: Yeah, twelve months. And, let’s face it. As empires go, this is the big one, so we’ve got to get up off our arses and stop just talking about it!
COMMANDOS: Hear! Hear!
LORETTA: I agree. It’s action that counts, not words, and we need action now.
COMMANDOS: Hear! Hear!
REG: You’re right. We could sit around here all day talking, passing resolutions, making clever speeches. It’s not going to shift one Roman soldier!
FRANCIS: So, let’s just stop gabbing on about it. It’s completely pointless and it’s getting us nowhere!
COMMANDOS: Right!
LORETTA: I agree. This is a complete waste of time. [bam]
JUDITH: They’ve arrested Brian!
REG: What?
COMMANDOS: What?
JUDITH: They’ve dragged him off! They’re going to crucify him!
REG: Right! This calls for immediate discussion!
There are all sorts of repercussions and potential unintended consequences of us or Rangers or the HMRC taking any of a number of particular courses of action, but Celtic’s response is for us the most crucial one and must be thought out, understood and agreed across a whole range of people. Otherwise we will fragment. I already hear the sound of cracks. The very last course of action for me in this case is to boycott Celtic. After all it will be after a vote and too late. Now if you are going to mobilise to boycott the team before the vote, that is different but it really requires that some knowledge on what the board intend is understood and disseminated.
There are lots of clever people on here, but all I hear is what ‘I won’t do’ NOT ‘What we will do to achieve commitment, consensus, cohesion and communication’. That crucially involves the current administration. Everything else is just another ‘immediate discussion’.
Anyway chips nearly ready and beans to go on the heat now.
hail hail
Estadio
Paul67,
You have possibly written your best article there.
But do you really think something as immoral as this can be decided within the walls of Scottish football? I fear you do!
Greensideup is also Neil Lennon says:
27 October, 2011 at 22:04
I hope you’re correct.
The SFA have questions to answer as well, license for European competition being at the front of those.
Even without the “Big Tax Bill” they are on the brink.
Celtic, don’t let them away with it, make them pay for the cheating. Finacial doping is cheating just as much as any other form of cheating.
Dacker, deleted. This is a Celtic site, which makes a difference.
Mr X, I would rather have our hand than theirs right now.
Brian Boru, thanks.
Praecepta, Celtic don’t have joint deals with Nike or Tennents, they and Rangers have separate contracts.
SpongeBhoy SquarePants, many thanks. Time for vigilance.
GL2 you ok to bring wee Shaedans hoopy on Sat?
Meeting some o the bhoys behing the Cellic end after the game, same place as last time?
V
HH
Lettim eat cake!!!!(
Estadio 22:19
Very well said.
EN
(CanDoAttitudeCSC)
ps Celebrity Juice is on its funny as ……….
V
HH
If Celtic support any move to allow a phoenix huns to stay in the SPL then I can’t see how I could continue as a supporter.
I might become a customer and go along occasionally to be entertained but the feeling would be gone.
If the huns are to be resurected they should start in division three and work their way up.
It wouldn’t take them long and we, and the rest of Scottish football, would survive in the interim, with our integrity intact.
GL 2
I have mixed views on whether motivation of a sportsman gets harder as his wages go up.
I think that for people like Usain Bolt, or , Nadal , they are totally self motivated, and I assume they don’t bother with the Euro Millions like the rest of us.
For players in a team sport it is a bit different.
We have seen several examples of players work really hard whilst on low wages, then they lose motivation when they get a big pay-check ( boruc?).
By contrast , I respect Beckham for wanting to play in the Olympics – I’m not sure I agree with him , but at a stage when he could grab his cash , I do respect him.
Estadio,
ye have a habit of gettin to the heart of the problem by paintin pictures… ahm gonna have to look out that film now
Greenlion2
I think there’s a ‘genuine’ side to Gordon Strachan that endears him to some. He came to us very much as we saw him, no-one was overly enthusiastic, but I think I warmed to him the more I saw him treat the media here with disdain. Still to this day I cannot fathom why some Celtic fans chose that side of him as a stick to beat him with. He’s a student of the game, talks well about it, talks very well about us. My one lasting image of him is not the best, but when we scored late against Hearts, a Gordon og I think, and he stood with his hand as yapping-mouth motion to someone on the Hearts bench, all the while laughing. He laughed and smiled many other times of course, and others will of course quote Tannadice, but that shot of him was of pure roonyeness that I think we can identify with. It sure would be personal if I ever met him – full of praise and warmth for what he gave us.
Sorry dont get the deleted comment Paul??, and yes thats why i am here, its a Celtic site so explain
Is the For Sale sign up the bigot dome yet
Will any of our media publish if they dont pay the staff tomorrow or will it be up to us on the new media to break the story as usual, what do we think
It is out of hands if they stay or not stay. But I would not expect my team Celtic Football Club to support them in anyway!!
praecepta
If PL earned enough to pay his bonus he would be doing something…
I critise the board on here on a regular basis, and I believe I have every right to do so, but I don’t put them down for the sake of it, I try to give an alternative view point.
All the talk lately of something not right at the club has had me thinking, out board are our board cos they are smart cookies, the lack of investment has been for a reason, and I think the board have known about their troubles, or the signifance of their woes for years, and they must be working on something to the end of an escape route.
DD has said from day one he wants out, and if he is not using the present situation to this end, I for one will be flabergasted.
Much of what we blog is circumstantial, and the differing opinions are healthy, but I fear we are getting sidetracked, the end goal for me is getting out of a country where we are not wanted and hated, this will never change, in fact the hate is intensifying.
Do I trust the board to do the right thing ?
Bloke109. It was Paul Hartley of all people
P67,
respect your decision as always,
but didn’t see anything untoward with Dackers posts… unless I missed somethin?
On the matter of GS – I am a fan of the wee man as he always has positive things to say about us, which is very different to not saying anything negative.
As a football supporter, I am appreciative of what he gave us and I believe as a manager, he is very appreciative of what we gave him.
Hail Hail Wee Gordon
Dick Byrne says:
27 October, 2011 at 21:52
Are EN & MWD the Two-Cocks twins rather than the cocteau twins ;-)
hh
bjmac
Wee Gordon was very interesting tonight in what was a very good programme on the pressures of sport. Any up and coming youngster who is making their way in any sport would do well to listen to some of the advice given by any of the contributors. The sports psychologists were very keen on David Moyes and his methods. He is a top class manager and a gentleman to boot
Dacker
there is a no swearing rule on the site…
Paul67 says:
27 October, 2011 at 22:23
Praecepta, Celtic don’t have joint deals with Nike or Tennents, they and Rangers have separate contracts.
Not being pedantic – figuratively speaking I was taking the so-called big deals out of the argument to make my case on the lesser sized sponsors’ position. :-)
jeez
Jeez, really? I thought it was one of their Lithuanian players. Was it really PH?
What happened on snyde tonight I was out and missed it. Can I listen to it somewhere?
Paul 67
Whilst that might look like a doomsday scenario you’ve painted there may be other options? Your scenario is based on the premise that only Mr Cack would be interested in making a bid for a new RFC. Whilst he can push the Liquidation button, an administrator might have more than 1 bid on the table especially if the starting price is £4m.
In fact, if you were a real Billionaire rather than a Thousandaire you could have a wee bit of fun by bidding yourself. Mr Cack offers £4m…………. but I have a telephone bid of £5m…….Mr Cack bids £6m……….I have 7 on the telephone.
Now if RFC 2012 Prepacked was delivered by a real Billionaire post administration such a person could control exactly the parameters of the new company.
Would a real Billionaire be interested in a bit of auctioneering with a Thousandaire? Even if it didn’t make financial sense it might be…………fun?
Would a certain Mr King be interested in upping the price? Would Loyal but Anonymous business persons like to form a consortium to outbid £4m?
I suspect that whilst Mr Cack might think he has the thing all to himself, the one thing he can’t control is bidding by other parties and I suspect that the Thousandaire may reach his ceiling shortly after the numbers pass out of his right hand digits.
There’s always more than one way to fleece a mark! Just ask Kojo!