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. Lennon n Mc....Mjallby on

    I should add that its a bit hypocritical of fans moaning about what the board will do when they are asked to vote yet everybody will still go to away matches.

  2. The thing about the pre-pack is that the administrator still has to get ‘the best deal’ for creditors, not just the secured one(s) – there are a number of rules regarding fair prices for assets of the old company – where would the Whyte Knave get such a ‘fair’ amount of money?

  3. In 2011 there is little I like about soccer(before anyone starts, this is what it’s called where I’m from, football is a different game entirely). But one thing that hasn’t changed in 2011 is my love for Celtic FC. If the board at Celtic vote to allow Huns Newco to be admitted the the SPL, I’m done.

  4. Guys forget the other clubs boycotts – like us its the board that decide not the fans. Decent Arabs and Sheepies would happily see the back of the horrors – their board won’t though.

  5. David Peter Deans says:


    27 October, 2011 at 12:46



    “However the big picture is we need a strong Celtic and Rangers for football to survive in this country.”



    ” Plus of course the banter that goes on between Celtic and Rangers fans.”




    First comment NO we do not need that crowd.



    Second comment ” Banter” are you being serious,you are clearly well out of touch.

  6. Joe Filippis Haircut on

    Paul67 A very interesting article the scenario you paint of Rangers newco is extremely clever and just the type of scheme an asset stripper like Craig Whyte would indulge in. However,the bigger picture is that if this happens Scottish football will be finished as Rangers Newco could then spend a fortune they dont have in bringing in new players and with in a few seasons be back in the same debt as they currently have what then ? Rangers Newco Newco it would make a farse of Scottish Football.As a fan if this is allowed to happen I wont be back at another match I will find other ways to spend my hard end money and we should canvas all the other Scottish clubs who cant see further than there nose and show them that this would be an end to proffesional football in Scotland. H.H.

  7. nothing without fans on

    The Lizard King at 13:02



    It’s at the discretion of UEFA, and their regulations look like an exception would only be granted for a club in a top ranking country – though as with most things UEFA, the regulations are far from clear.



    Exception to the 3-year rule would be on the basis of:



    The status and situation of football within the territory of the UEFA member association will be taken into account when granting an exception. This encompasses, for example:


    a) size of the territory, population, geography, economic background;


    b) size of the UEFA member association (number of clubs, number of registered players and teams, size and quality of the administration of the association, etc.);


    c) the level of football (professional, semi-professional or amateur clubs);


    d) status of football as a sport within the territory and its market potential (average attendance, TV market, sponsorship, revenue potential, etc.);


    e) UEFA coefficient (association and its clubs) and FIFA ranking;


    f) stadium ownership situation (club, city/community, etc.) within the association;


    g) support (financial and other) from the national, regional and local authorities, including the national sports ministry.

  8. I put Davie Weir’s date of birth into that BBC World Population thingmy – it seems that he is the 211th person to have lived since history began.

  9. Lennon n Mc....Mjallby on

    To my mind the board don’t have any clout if 2 votes are needed,the fhans travelling to away matches do,they provide the only thing that matters.



    The power is in our own hands.

  10. The Battered Bunnet on

    You know, it’s all so darned complex that there must be hundreds of possible scenarios to how this could play out.



    It crosses my mind though, given the fragility of football finances, that even a newco could fail in jig time if not adequately funded.



    Wouldn’t that be a riot….

  11. Rather than voting them back in as a newco with minimal penalty, I will be looking for the SPL to remove their league titles from 2002/03, 2004/05, 2008/09 & 2009/10 for cheating.



  12. I can’t believe the Celtic board after years of crying financial prundence would then turn around and cut their own throats financially by allowing Rangers to ressurect themselves in this way.



    It makes a total farce of the previous 4 years strategy which appeared to be “prepare for the day that the Huns go wallop, so that we don’t go the same way”, and people are right Vlad at Hearts would surely vote against this as well.

  13. Green Lantern (((((0))))) on

    There is also the question of natural justice and getting your just desserts.


    They would not be where they are in the league or indeed have been in the Champions League this year had they not cheated and had this cheating not been sanctioned and colluded with by the SFA.


    They have already deprived Celtic and other teams teams in the SPL of much needed revenue by this cheating, and there have to be consequences for this. If Scottish Football is to retain whatever credibility it may have left then justice must be seen to be done by the authorities.


    They are not fit to be part of the SPL and should be made to start again in one of the lower leagues.


    I would also hope that Celtic and any other clubs who may have lost money due to the illegal activities of these crooks seek legal redress through the courts.


    Show THEM no mercy.

  14. celtic *o* lennon on

    Had to spend 10 mins calming down after reading that.



    Is that true that they can take a 10 point hit, be debt free and signing new players by january through a pre-pack? Thats disgusting beyond belief, the orc hordes would be celebrating like it was 1999. What a masterstroke that would be if they pulled it off, all that cheating and 10 points deducted would be the punishment.



    Lets not kid ourselves either the other 10 clubs would cream themselves to vote them back in and the sfa would sfa about it either. They would be pissing themselves laughing at us and who would blame them.

  15. Imatim and so is Neil Lennon on

    dirtymac says:


    27 October, 2011 at 13:10


    The thing about the pre-pack is that the administrator still has to get ‘the best deal’ for creditors, not just the secured one(s) – there are a number of rules regarding fair prices for assets of the old company – where would the Whyte Knave get such a ‘fair’ amount of money?






    2010 Never Again



    Who is the Whyte Knave a front for?



    LLoyds and Murray ensured Whyte got control of Rangers. Why?

  16. merseycelt dumps sadsally on

    And another thing..why were we all mocking them for their sad fantasies when the clowns on desperate, desperate were predicting the scenario as outlined by Paul above?




  17. paul i see you are on about rangers again getting boring ,i care about celtic which you should be doing and let rangers get on with there business which has got nothing to do with us,dont think after last night victory eveything in the garden is rosy far from it ,in truth we beat a bad lot ,so we have enough problems of our own to be fixed. oh and one more thing the last 2 games no striker on the bench ,what a pathetic state our club is in .as usual i will be called all the huns of the day,but i see what my eyes see and it aint pretty anyway hail hail.

  18. Joe Filippis Haircut says:


    27 October, 2011 at 13:12



    While recognising that Paul’s pre-pack scenario is only hyopthetical, I’m not sure us canvassing other clubs would be time well spent.



    Much better for us to focus on our own club and let them know the strenght of our views: especially shareholders and supporters groups.



    In parallell, we could also make more noise about the prospect of other grounds being boycotted (although we know how well that usually works …).




  19. The logical extention of this scenario, Newhunsfc, would be the extinction of Celtic.


    Many Celtic fans would leave citing reasonably “why pay £580 for a season ticket to a rigged game”


    Then the hun would become stronger still, while buying beyond their means, with no need to pay.


    They would continue to have CL monies etc etc etc.



    It cannot be allowed to happen.


    If it does then the game is finished in Scotland for us, Celtic.

  20. Lennon n Mc....Mjallby on

    Look what happened the last time the Celtic support seriously considered a bhoycott,if we show ourselves as getting organised them surely that would be enough?

  21. celtic *o* lennon on

    And i doubt it would happen again either. No one else pulling that stroke would get back into spl (even us as most clubs hate us) as they have nothing to offer the other clubs. Jeez I need to calm down steam coming out of my ears

  22. timbhoy2 – as usual i will be called all the huns of the day,but i see what my eyes see and it aint pretty



    You looking in the mirror, hun?



    xx (thumbsup)

  23. A chilling account of what might happen, Paul. And all the worse because I fear you have it spot on.



    If all of this comes to pass, what’s to stop the new company spending beyond it’s means for a few years and then repeating the trick?

  24. celtic *o* lennon on

    timbhoy2 says:


    27 October, 2011 at 13:18



    If what paul67 has written was to happen the games a bogey for all of us so we do need to hear it and we do need to discuss it. Would you be happy to continue to throw your money away after its been proved to you that the scottish game is run for the sole purpose of sucking up to the huns??

  25. David Peter Deans on

    Sorry i have upset so many Celtic fans on the site. I have misread the situation regarding Rangers demise. I was thinking from the football side of things. I do enjoy the build up to the old firm games and the excitement that goes along with them.



    Again please accept my humblest opologies.

  26. Green Lantern (((((0))))) says:


    27 October, 2011 at 13:17



    I agree wholeheartedly with your sentiment. The orcs have also cheated the likes of Panathinaikos and Sp Lisbon out of further advancement in the Uefa Cup because of their cheating.



    There’s also the matter of people who have lost jobs because their club has been cheated out of money – what is it for each placement higher in the SPL: £100-150k per season? Hearts, given their position in 2006, could easily demonstrate that without the cheating, they would have been finishing 2nd, Aberdeen perhaps 3rd and for how many years have the orcs raped them of such revenues. Not only that, but one might easily argue that crowds at these clubs have suffered dramatically too – one just has to see Aberdeen’s crowds since their last decent Euro adventure 3 years ago, how they’ve dipped since and where they may have been without a cheating orc side swindling the punters from their cash.



    Which is also another thing – all that money at the gates paid to watch a fully loaded league?



    *******swears (a lot)******* cheats

  27. As it stands as runners up (which obviously impacts on crowds) we are drawing almost 50k/game. The two derby games are sell outs and generate say £1M between them by the time you add on a premium for the tickets, additional income etc.



    What if we lost tv completely (which I doubt we would) – £2M



    Additional commercial income lost without Rangers to compete against? A complete guess but would it be as much as £2M.



    So £5M/season for 3 seasons til they get back up to SPL – £15M.



    However we’d be champions. I’d suggest that would keep our gates high enough to compensate for the loss of derby games, increased merchandise as champions would offer additional compensation. With no tv deal we might be able to boost out own tv revenue.



    I’d suggest that at most we’d lose £10M over the 3 seasons.



    So if we vote to keep them in? Everything I’ve seen here and elsewhere suggests that thousands of fans would walk away, whether that was the main reason or simply the final straw in the financial, family commitments haystack. So here’s the commercial option as I see it – loss £3M/season for three seasons (assuming no CL income) OR lose £2M+/season permanently.



    I’m convinced short-termism would cost us dearly.



    If there was some kind of connivance to ease their pain I think it far more likely that it would be the catalyst for league reconstruction that would see them parachute into SPL2 or similar and let them back in after a single season.

  28. ‘Celtic might be in a position to survive Rangers failing but it would cost our club tens of millions.’



    Wonder how the money before morals Desmond/Lawwell will vote…

  29. Paul67



    SFTB pointed out the other night that if we were the only club to vote against a newco, this might actually help us in a round about way, we could petition uefa, fifa, that we are being discriminated against, and use it as an escape route.



    Seems reasonable to me.

  30. Paul67 et al



    I am sorry Paul but I have to disagree. Everybody must get paid, the Butcher, the Baker, and especially in this case, the Undertaker!

  31. Very very very interesting article, Paul67.



    I think there is a real possibility this is how it will play out. Celtic need to start preparing now to make sure they’re not outmanouevered.



    1) The Celtic Board need to very publicly confirm they will vote against the prepack clun getting back into the SPL….that’s one vote, we only need one more



    2) Approach a few “friendly” clubs that they have a good working relationship with and give them the old carrot and stick.



    Carrot = incentives such as loaning them our promising young players over the next few years if they vote against.



    Stick = let them know we’ll refuse all away tickets for SPL games if they vote the prepack Rangers into the SPL.



    We only need one other vote….surely the persuasive characters on our Board can get one more vote!




  32. johann murdoch : (from previous thread)



    You are right, sprint coaches can make a big difference. especially when working with guys who are already professional athletes. Margot Wells (wife of Olympic champion Alan) made a huge difference to some of the rugby players at Wasps in London.



    celtic have, in the past used sprint coaches (even back in the 90s), i remember a guy in the Celtic view who was brought in (ex professional sprinter) – working with the youth team.




    in the early 2000s – Larsson, MON era – the sprint coach was a guy called rab thomson – I believe he was full time at the Club.



    More recently, I found this online:



    “Mike Antoniades has worked with professional athletes and sports teams including: Chelsea FC, Chelsea Academy and Celtic.”



    I am not sure if the Club currently use a specialist sprint coach, but I suspect not.

  33. Celtic PLC will place lip service to Celtic fans opinions on this matter, the SPL clubs including Celtic will make commercial financial decisions on the Rankers scenario that PAUL67 has presented in his article, it is foolish to think these clubs will sit round the table to only consider Corinthian values in terms of sport or that the tax man has been cheated, they will consider the financial implications to each of their clubs and to the income of the SPL as a whole of Rankers not being in the SPL, and we all know it

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