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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Any of you Bhoys blog on Pie & Bovril?
MWD
Stephen Black 18.49
Many thanks’.
TT
I suppose i just need to accept the edicts of Paul “silly me”, night all keep the faith (and that would be Celtic) I
Vmhan who Supports Neil Lennon says:
27 October, 2011 at 22:25
Nps for Saturday…Funeral is now next week
Clashcitybhoy says:
27 October, 2011 at 22:27
This is a theory I could bore you to over a few beers…Beckenham is a guy who has done brilliant with his talent but I think the Olympics for him is for Brand Beckenham. It will keep his image up in America…
I listened to Joey Barton last week talking about why he went into football and he said it was not for money. I believe him but I also ask the question of a player who is working his ticket to get out fo a club he will shirk his job if he has already got a deal in place official or unofficial.
If you are a striker who has maybe been tapped up by a mid table EPL club who sold their last striker for £36m and you out scored him when the 2 of you played in the same league would you be as focused….Totally Hypothetical
I’m sure the pre pack admin described in the article has been the contingency plan for a while and that it is simply another version of the MO Whyte has carried out elsewhere.
I have been wondering for a while whether it would even be necessary for Newhuns to apply for a place in the league. Would it be possible for the administrator to sell all of rangers’ assets, including the league registration, with no liabilities attatched?
Does anyone familiar with the league rules know if this is a possibility?
As a separate point, I think the potential demise of rangers is a great opportunity for scotland to rid itself of bigotry. Sectarianism would die out a lot more quickly if rangers were not around to promote it. Scottish clubs should sieze the opportunity to get rid of rangers and the government should help if it can find a way.
Ernie
I’d agree with your last 2 paragraphs but not the first 2.
Yes I’d be angered, yes I’d be disappointed and yes I’d expect those within Celtic Park to hang their heads in eternal shame.
However, PL, RD et al are not Celtic, we are. Only if we allowed them could they destroy what is intrinsically Celtic.
Brian Boru
In one of his first games, Moyes had a very public spat in the bench area with Alexandersson and finger-jabbed him. I think the player took the huff at being subbed. Moyes laid down a marker earlier on, and to back the point the programme made, I don’t think there are many managers who could work with the same group of players (essentially) for a few years and still achieve consistency. Credit to him.
bjmac
Aye. And your the sack. ;o)
MWD
GL2 just checking you’re good for Sat. not been on the blog for a few hours.
whits the craic wae the hun are they really gonnae do a pre pack = cheating, swindling, fraudulent, tax avoiding…. etc, the RFC version of how to live in dishonesty, not really a good message to send to their supporters, some of which are the pillars of Scottish Society….. I give you ……… Scotlands Shame!
If der hun mark 2 get to take der hun mark 1 then I’ll never attend another game against any other Scottish club away from home. I think its an opportunity to get out of Scotlands ….. continuing shame SFA.
Back later :¬)
V
HH
Deary me, how can i possibly aplogise !!!, hope hun never becoms a swear word, jeeese, words fail me, what have we become?
What if
Rangers old co split in two?
Old co One is the existing football operations.
Old co Two is the existing debt ridden tax dodging financial entity.
Old co One is financed by gate entry income with other match day income going to Old co Two to help finance the debt (if only to cover the interest).
Existing players of value are sold and the receipts go to Old co Two. Replacement players are paid by match day income with all home match goers paying at the gate. say £10 for 25000 ex SB holders and £20 for 5000 non SB holders.
Such a gate of 30000 for home games with one every two weeks would allow weekly football wages of £5k a week for 20 players allowing for one third of income going to running costs of Old Co One, that is no increase on Old Co Two debt.
If the Big bill hits, Old Co One decides if they can play elsewhere and Old Co Two is in effect liquidised to meet its creditors with Ibrox being rented back to Old Co One by its buyer.
The figures can be played with but you get the idea. It depends on enough Rangers supporters wakening up to the reality of their situation that there is no easy way out and that only by facing their past can they have a future.
My underlying point is that there has to be some out of the box thinking amongst the Rangers support (ok a fatal flaw possibly) that decides if they want the club to continue and what kind of club they want to continue.
Ernie lynch
You mentioned the other week the PLC board would vote the same way the rfc board voted in the Tricolour/SFA flag doon vote back in the day.
Ive missed history, how did they vote? Genuine unknown.
EN
Dacker, no swearing allowed.
JimmyQuinnsBits, feel free to defend any post but Dacker is no different to any other contributor. Language rules apply to all.
Praecepta, ah, I see. Not aware of the smaller deals.
Mississippi Burnin, anyone else would need to pay the equivalent of £4m + £18m.
I once bet a horse called MFI and the legs fell off it 20yds from the line.
Bloke109
Im a bit confused whether you are criticism Gordon or praising him. You say you cant understand Celtic fans who got at him for his disdain of the media then you pick up his disdain for the minis bench and say thats your lasting impression of him even though you say he smiled lots of times including Tannadice or am I mis reading what you are saying.
Auld Neil Lennon heid says:
27 October, 2011 at 22:43
My underlying point is that there has to be some out of the box thinking amongst the Rangers support
================================
An oxymoron Auldheid?
blantyretim says:
27 October, 2011 at 22:34
Paul67, I obviously did miss somethin… apologies
Hamilton Tim, spot on… they aren’t Celtic, we are
Dacker, “hun” has not become a swear word but you will notice this site is remarkably free from swearing and any time I notice an occurrence I delete it.
Rule has been in place for 7 years and is widely supported.
THE EXILED TIM says:
27 October, 2011 at 22:31
I am not for running the board or PL out of town (yet). :-)
When the bell tolls 2012FC will have to eat humble pie – I expect (nay demand) we play hardball on any associated contracts.
We will be favourites in all competitions + we will have guaranteed European entry. They will survive (in some format) – I want us to distance ourselves from them commercially and maximise the opportunity when it happens!
Estadio Nacional says:
27 October, 2011 at 22:43
Ernie lynch
You mentioned the other week the PLC board would vote the same way the rfc board voted in the Tricolour/SFA flag doon vote back in the day.
Ive missed history, how did they vote? Genuine unknown.
==============================
EN, in case Ernie has logged off – the huns voted in FAVOUR of Celtic being allowed to fly the Irish tri-colour back in the day.
Echoes of Famine
Through mists of sleep my mind’s eye wanders, and forms a shadow of a glorious past,
I surge through clouds that veil my vision, to take my place in the supporting cast!
In hovels dark and damp with ills, where the coin of life had the face of death,
We sought not comforts, gold or wealth, our only wish…. a coughless breath.
But hopes and dreams are nought but tears, when no-one ventures to wipe them dry
And let us see that land of promise, where a smile replaces the forlorn cry.
And you …Yes you…You ‘landed gentry’, your wealth built on the East-end dead,
With barbed wire souls, repelling conscience, you closed your eyes and went to bed!
And did you dream your evil burdens, would stoke the flames of tyrranic fire,
And keep us humbled ‘neath your heels, fearing ambition to aspire?
Did you really think your wells of money, could douse the raging thirst of slaves,
Were you so blind you couldn’t see, the unity built on mounting graves?
Or did you think your ways were just, bestowed on you by an enlightened God,
Chosen by the spoon of birth, to be our betters and spare no rod?
And you …Yes you…You ‘landed gentry’, your wealth built on the East-end dead,
With barbed wire souls, repelling conscience, you closed your eyes and went to bed!
And when you strolled to church on Sunday, Catholics, Protestants, Mormons, Jews,
Whose ten commandments formed your bible, which god endowed your bitter views?
Love thy neighbour (if he has money), thou shalt not steal (unless needs must),
Bear no false witness (but in mammon’s service), thou shalt not covet (except in lust),
Did you pray for those that wanted or salve your conscience of satanic greed,
False use of power enriches power, true use of power leads those who need!
And you …Yes you…You ‘landed gentry’, your wealth built on the East-end dead,
With barbed wire souls, repelling conscience, you closed your eyes and went to bed!
But in those middens, fed by honour, the flower of justice spread its roots,
As winter’s frosts and black snow melted, the springtime nurtured rebellion’s shoots
Despairing chains cast off forever, those prison walls were laid to waste,
Restored to us our fruits of labour, no more again we’ll have to taste
Those bitter salts of hopeless weeping, those cast off crumbs of mocking bread,
Subserviance’s grime washed from our labours, on dignity we feast instead.
And you …Yes you…You ‘landed gentry’, your wealth built on the East-end dead,
With barbed wire souls, repelling conscience, you closed your eyes and went to bed!
That’s how I was raised!
hail hail
Estadio
SFTB 20.06
Thank You.
TT
Paul67, hun is a swear word to me :¬)
V
HH to ye for all the good work on the Mag and video.
Bloke. I remember the Moyes incident with the player but could not remember his name. Moyes was on radio 5 on Monday night too in a discussion with John Motson and he comes across as an extremely intelligent man.
It is my belief that he will be the next Man U manger when fervid finally calls it quits
Maybe all the 22 year old players trying to make a name for them selves and thinking they are ‘awe that’ see the manager getting underminded by the CEO and dont hold much respect for the manager?
That combined with 22 year inexperience briught on by Bosman dud ‘experience’ is not a good plan.
Re Rangers pre pack
Firstly I want to thank Paul for bringing this possible scenario to the fore
Secondly I would like to thank all the posters for their opinions on this great and well informed blog
My opinion
Let RFC old co go down the sinkhole with no get out of jail card straight back to the start without collecting the $200
We are living in a time when tax evasion tax avoidance and greed by the bankers has cost the many so much and never has there been a time when the few owe the many as much as this time. This is no time for bailing out the reckless selfishness of a few who let greed overrule societal principles.
We need to be ruthless in this approach otherwise it will be business as usual again for those who still have their tax free money offshore
RFC are just a part of this a wee part of this but nevertheless a part of the this rip off of the centuries and by that I mean the late 20th and this 21st one
For the sake of our children’s future and a better society where tax is paid at source we must disagree with any business in the future who think they are too big too fail like RFC and the banks…where is that Minty the laughing Cavalier picture when you need it
Let RFC go it won’t kill them off so there’s no need for misty eyed sentimentalism honest people will still survive and so will CFC
RFC will come back eventually more humble and more like people just not ra people anymore
TDB
A hard working chap whose every penny earned is tax paid and who believes paying your taxes is for the common good not personal gain
No ones too big to fail anymore CSC
Can someone please copy and past my swearing please, must be getting old
TinyTim says:
27 October, 2011 at 22:49
Had to look back to see what it was ….. Your looking good for 60…. Happy Birthday mate
Mr X 22:48
Cheers for tthe info, jeez…
EN
Mr X says:
27 October, 2011 at 22:46
ah, but naw… most of them I know are out of the box
we had a wee hun buddy – everybody should have one – huvnae seen him for years now. Was convinced he was lifted by wee green aliens in Bonnybridge, or was it Bonnyridge? Probes an stuff… horrific
MWD – for the sack, mate…
We hate rangers and we hate rangers,
We hate rangers and we hate rangers,
We hate rangers and we hate rangers,
We are the ranger haters..
Now thats a song i haven’t heard in a while…
Mr X says:
27 October, 2011 at 22:46
I try to avoid name calling, especially oxys. :)
Auldheid
It makes no difference if the average hun knows what is happening to their club, guys like Adam on rtc would be above average inteligence to the norm, he believes they are in serious do do, the people who matter, the compliant media are not telling them the facts, now I believe the reason they are not telling them is a social one as oposed to a footballing one.
What happens when the news hits that the players will be sold, the ground is sold and leased back, the crap will hit the fan at some point.
See you wed, can’t text you as got no credit, and have to leave the cave to get a signal, will get some credit at the weekend.
lennon’s passion
Agree on a level playing field Dan’s was a booking but unfortunately as we all know this is not the case, it is this licence to kick anything in a Celtic shirt that is allowed to go unpunished that angers me most, Hibs 14 fouls 1 player got got punished with 2 yellows Celtic 6 fouls 2 yellows to different players. There was at least another 3 players in the Hibs team that merited a booking, the sad thing is if Kayal doesn’t display his anger at Sproules challenge, Sproule would more than likely have escaped with a warning, Celtic 6 fouls 2 yellows to different players.
Bloke109..It sure was..and I think he signed him the next season
EN
BJmac mac wants a 3’some with male twins.
That’s a bit weird BJmac. Even for you. :o)
MWD
ok Paul. so it my use of that word, well done you are now god, I must go to confession