The prepack route for Rangers Newco FC


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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  1. saltires en sevilla on




    “miss the banter ..” are you having a laugh?



    what is your view on the famine song ?







  2. Has anyone ever considered the SHOT IN THE ARM it would give Scottish League Football as a whole, if Rangers Newco had to start from Division3.



    I imagine the die hard Rangers supporters would come out and support their team through the Scottish Football League setup. Every team in Scottish football would benefit for 1 or 2 seasons dependant on whether Rangers Newco achieive automatic promotion through winning Div3/2/1 before rejoining the SPL.



    That would be money in the pocket of every team.



    Maybe. Just maybe. This is what Scottish football is needing.



    I reckon so anyway.




  3. merseycelt, Leeds and Portsmouth were both lost income through relegation and/or lack of CL money.



    El Juarez Bravo, 12:50, well said.



    Battered Bunnet, agree.

  4. David Peter Deans



    In the last ten year the only way they have been strong is by cheating.




    Do you honestly think they should just waltz back in?



    In a stronger position than they are in now.



    If that happens then football is dead in Scotland.




  5. Philbhoy - It's just the beginning! on

    It is incredible that the huns could go down the prepack route, still win the league and get the £4million Scottish bounty for playing in the CL next season.



    Who said honesty is the best policy?




  6. saltires en sevilla on




    spot on



    They will do whatever they is necessary..the path of least resistance



    Celtic (club and fans) must have a coherent response plan and have the balls to follow it through.







  7. JinkyvJohnGreig-saysitall on

    philvisreturns says:


    27 October, 2011 at 12:47



    Agree, I preferred the early 80’s when they were dire. Much more enjoyable when it was Aberdeen, Dundee Utd and laterly Hearts challenging (and often defeating) Celtic. The Cup Final of ’85 was an incredible feeling as was winning the league in ’86. I also remember the incredible feeling when watching as an 11 year old highlights of us defeating Aberdeen at Pittodrie midweek in the Centenary season – to beat them there felt like an enormous achievement. And R*ngers really were awful until ’86…

  8. The Honest Mistake (Sickened) on



    Is there any way we could issue an ultimatum to leave the SPL if this is voted through? I don’t care where Celtic play, Wales, Ireland, Outer Mongolia this cannot be allowed to happen. If we can’t get any support then we have to bully this through to the other teams in the league.

  9. MWD,



    the shot in the arm would be just like the Gretna ‘fairy tale’. We’ve been there done that, saw Chris Killen score the injury time winner and after a year or so it would be like it never happened.



    I’d also like to question the whole ‘for the good of Scottish football’ mantra. It gets wheeled out whenever Rangers sign a Scottish player or anyone from another Scottish club. I am still waiting to see exactly how extensiongate for one was for the good of Scottish football as a whole.

  10. Paul67


    Great site, been a long time lurker but I have a question to ask.



    Regarding the new company “Rangers Newco FC Ltd”, if the new club is registered in England and has an office in London, (something Whyte was keen to develop if I remember correctly,) is there anything to stop them applying for membership to the English league? They would effectively be an English club with grounds in Scotland.



    I’m not sure if this has been asked before and if it has sorry to waste your time.




  11. saltires en sevilla – Celtic (club and fans) must have a coherent response plan and have the balls to follow it through.



    We faced down Extensiongate and will need to face down this.



    Time for Peter Lawwell and Ian Bankier to suit up. (thumbsup)



    JinkyvJohnGreig-saysitall – Life is just sweeter when the huns are in their place.



    When their tails are up they’re insufferable. (thumbsup)

  12. The Lizard King on

    Paul67 says:


    27 October, 2011 at 12:51


    CL money is not guaranteed but the probability of Celtic obtaining it rises significantly without Rangers. This is the single most significant income stream available to us.



    TV income is minimal and even if it fell, would have a tiny impact on Celtic. Lets say is halved and we lost £0.6m.


    Gate receipts – ok so we lose 2 sell outs per season, but the replacement crowds would be what 45-50k, so we lose another £0.5m.


    Sponsorship – would this reduce? Nike deal in place – no impact. Tennents – more money for us surely?



    Ok fag packet stuff, but I repeat, to anyone, what is the business case for maintaining the Old Firm? It is not obviously a compelling one if money is the key factor.







  13. Paul, a couple of points I don’t get here. Why would an Administrator accept as little as £4m for the unsecured creditors? CW is I think, the only secured creditor at £18m, so £4m for the unsecured would be a total consideration of just £22m for Ibrox and the playing staff? Not sure what Ibrox is actualy worth but surely it’d take more than that to buy the company assets? Even if £22m is the ballpark number, Rangers newco ltd would have to raise those funds from somewhere. If not equity (and who’s going to throw £22m of hard cash at this?) then debt. Debt free by January? Looks like a big ask to me.

  14. So it’s a Catch 22 situation? We want them to be punished but, along with the other clubs, don’t want the league to fall apart, sponsors to be lost etc etc.



    Ok, why not let them remain in the SPL (shock!) but with the proviso that they are docked, say 50 points, and docked another 50 points next season also.



    This way, all fixtures can be fulfilled, sponsors kept happy and TV deals remain in place.



    There is NO way they can stay in and just be docked 10 points. NO WAY!

  15. Paul67



    Good to see you have nailed your colours to the mast.



    The club can only do the right thing and vote no, they have no choice really.



    Wet warm, and hun free.

  16. LivornoBhoy-stands by Neil Lennon on

    In the scenario Paul67 paints if Rangers Newco FC ended up champions surely they would still be excluded from European competition for 3 years.?



    Or do they get away with that one as well?

  17. Am I right in saying that this new Rangers FC would be inelligable for European football for 3 or 4 years under UEFA rules as they have to be trading for at least that length of time?

  18. Great article Paul.


    What chance of any support from supporters of other clubs for the refusal to allow thenewhunsfc access to the SPL?




  19. If this happens, then Scottish football will be dead within 5 years (if that).



    All those teams in debt would find their lines of credit revoked. Who is going to offer credit to a football club who have a ready made escape from repayment?



    No Celtic fan would ever step inside a SPL ground again.



    It will be the end.

  20. The Lizard King on

    Doesn’t a new company have to wait 3 years before being eligible for European football? Or is it at the discretion of the SFA who gets a license (sigh)?







  21. I’ve been looking into pre-package administration recently myself and the sporting implications of it are unprecedented, as far as I’m aware.



    If Rangers did offer to take an 10 point deduction it wouldn’t be enough for such an extreme solution. They should offer to start from 0 points.



    I would accept that.




  22. If this comes to pass then I think I might hang up my scarf and start watching local amateur football. The game will truly be a bogey.



    But then, perhaps that is just surrendering to the cheats.



    Cheat your way through 2 decades and then get off almost scot free.



    I always felt they would somehow wriggle off the hook.



    Every avenue to persecute and prosecute them for their cheating, sporting and legal, should be pursued to the full.




  23. merseycelt dumps sadsally on

    And another thing…when it happens, the turkeys, including Celtic, will not vote for Xmas and 99.9% of Celtic fans, including me, will continue to support the club.



    When did our support become conditional on principled behaviour demonstrated by the Celtic board? The comments suggesting that Celtic FC supporting the replacement of the old huns by the new huns team is a line in the sand which, if crossed, will lead to the mass withdrawal of fans from supporting OUR team are delusional.




  24. Paul67



    If the above is allowed for rangers, I would hope EVERY Celtic fan would never step foot in an away ground in the SPL or attend Hampden again.





  25. Paul



    If this isn’t a stupid request, regquiring lots of time: can you give us an educated guess as to who the ‘unsecured creditors’ are likely to be in this case?



    And an opinion as to why any of these might creditors (other than through contracted terms: although even then, one would imagine there should be some form of ‘get out’ clause allowing traders to cut their losses when the company they are supplying is so obviously so near to death) continue to offer services to RFC at this time?




  26. Nuclear Bovril and a Half Munched Pie on

    The Honest Mistake (Sickened)




    Thanks for the response even though it wasn’t the answer I was hoping for!



    My initial thoughts that while I will back any fan led protests/pressurising, only a threat by the club to quit the league in protest has a chance of derailing this unjust farce. Money shouts loudest.

  27. Would 10 out of the 11 remaining SPL clubs vote to allow them back in as a newco? Can’t see Mad Vlad at Hearts voting for them so even if the other 9 vote for them, it will be down to DD to give them the thumbs up or down. Would he really give away almost guaranteed CL football (qualifiers at least) for the forseeable future?


    TV money is almost an irrelevance, its so small to Celtic that losing the Sky/ESPN deal would probably be more worthwhile than keeping as we would then be able to negotiate our own TV deal.

  28. RavenCelt says:


    27 October, 2011 at 13:02


    If this happens, then Scottish football will be dead within 5 years (if that).



    All those teams in debt would find their lines of credit revoked. Who is going to offer credit to a football club who have a ready made escape from repayment?



    No Celtic fan would ever step inside a SPL ground again.



    It will be the end.






    I was against the boycott idea last season. If this happens I would see it as absoultely obligatory. Boycott every team in Scotland and the National team too. Call offs right left and centre for the national team. Gloves off. Court cases all over the place. Retrospective claims for lost earnings in europe.




  29. If the board vote yes?


    Surely any true Celtic supporter wouldn’t?


    Aren’t the board Celtic supporters first?

  30. Harald Flatpack on

    Paul or anyone with a better understanding than me!



    With a transfer window coming up in January and with Rangers have some playing assets worth buying, why wouldn’t an administrator wait a number of weeks and then look at selling assets like these?

  31. Philbhoy - It's just the beginning! on

    I have no objections to renaming the stadium for a huge sum of money and for a time of say 10 years.



    We will always call it Celtic Park or Paradise.



    Only the media would call it by it’s sponsors name.



    Money for nothing!

  32. Lennon n Mc....Mjallby on

    How strongly do we really feel about a pre pack re entry?




  33. Rangers have gotten away with so much, so often, it is written in the Central Quay Scrolls that they are the chosen ones and they do believe it. If they get away with this with negligible repercussions’, then society and Scotland’s national image, not football, will no doubt be harshly burdened with the fallout for decades to come.

  34. RavenCelt – No Celtic fan would ever step inside a SPL ground again.



    If I was Peter Lawwell, I’d be making this point to my SPL peers.



    I’d inform them that Celtic views the prospect of a club being able to escape liability for its actions via this route as a form of cheating, and let them know that Celtic would consider a range of measures in response, including but not limited to asking our own supporters to boycott any club that votes in favour of this form of financial cheating. (thumbsup)

  35. Paul67 the only way our board would vote against them getting back in would be as a token effort when all other 10 clubs have ok’d it.



    Will never happen. We live in Scotland there is no such thing as integrity where Rangers are concerned.

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