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. RogueLeader at 11:19



    I wonder have Rangers donated anything to the Poopy appeal or will they send round bucketeers at this match and claim the proceeds amounts to their donation.



    Shameless but what do you expect from the huns. The Green Brigade should have a banner highlighted how much their unpaid taxes could have been used by the armed services.




  2. Kittoch



    Can a mobi take as good photos as my 15mp 18 optical zoom?



    Can a mobi take as good a video as my 40 optical zoom camcorder?



    Is a mobi as easy to view as my laptop?



    Can it hold as many songs as my MP4?



    Can it get MW like my wee radio/cassette player?

  3. JinkyvJohnGreig-saysitall on

    RogueLeader says:


    28 October, 2011 at 11:53



    I’m not sure I believe Hearts have the same issue – do they not just owe their debt to mad Vlad’s own bank? If he let them go into admin he’d just be writing off his own debt a la Boyle at Motherwell??

  4. PFAyr – I really hope the board are aware of the depth of feeling. They have been surprised on several events in recent memory, the joint sponsorship being one. If they mis-call this one the fallout could be un-sustainable.



    No amount of logical arguments from the board would mitigate Peter Lawwell raising his hand in support of that motion at the meeting.



    There wouldn’t be angry mobs in the car park. Death threats. Protests.



    There would just be nothing. An empty Celtic Park.

  5. Rogue Leader



    I have to say I agree with you. Aberdeen are our best bet. Their fans hate them more than they do us and that will be the


    best thing .



    Mad Vlad as the other poster (apologies I forget who) is a wildcard. The chance for Hearts to finally win that Champion’s League he promised might sway him. Let’s face it, there is a strong chance he would vote against them given the stuff he regularly comes out with. Now that is our two potential like minds, even Hibs might vote against them.



    Clubs must be smarter.



    Legally can Sky tear up a contract? Would they in any event? They pay Scottish football a pittance anyway so some pain might need to be done.



    Now lets be clear here, Rangers being in the SPL in whatever form doesn’t make fans of other teams turn out in bigger numbers and attendances prove it. Sponsors won’t walk away – they don’t walk away when either ourselves or them get knocked out of cups and indeed attendances actually INCREASE in cup games for other clubs when they know they have a chance to win.



    Do not buy into any of their lies. It is not for the good of Scottish football, it is for their benefit and nothing else. That is how the SFA operate. We must not let them or dodgy chairmen force this through. Hearts get a big support, Aberdeen have a very big support which travels and both Hibs and United would see increases with price reductions. Don’t believe the hype.

  6. tamstered says:


    28 October, 2011 at 12:04


    greenjedi says:


    28 October, 2011 at 12:02



    NO NO NO


    no a hun wan ow thame










  7. Lennon n Mc....Mjallby on




    Re a boycott.



    When there was talk of boycott during the honest mistakes and Dougiegate I agreed that a boycott would only work with objectives,in the context of back thewe couldnt have said ” Right were boycott because were being cheated on the park and that structures at the SFA were wrong” logic says we would have had to have said what we wanted to see changed hence objectives.



    This situation re pre pack spl re entry VIA a vote is different.



    Our objective is solely that it doesn’t go to a vote and the threat of boycott for say a season which is the only grey area i.e how long does it last?



    Other clubs must see that there will be conseqiences to collusion in the game being cheated.



    Our support must show it is ready to effect a sanction against this.



    Boycott gets painted as crass and not thoughtful but what else can be done by our support to have a say and influence the right thing getting done.

  8. The Honest Mistake (Sickened) on

    Mort 28 October, 2011 at 12:05


    Or something like:


    “Fifty Million Pounds Buys Fifty Million Poppies”


    “Daylight Robbery, Have you no shame?”

  9. The Battered Bunnet says:



    28 October, 2011 at 11:16



    Samsung Galaxy is pretty good. There is an app called Kies Air that allows wireless connection to laptop via a web browser interface, which is just as well as the cable connection software by the same name is ioffy.



    Good size screen too. Only downside is the back pack to carry the battery – ok I exagerate but apart from battery life it is a very useful Android device.

  10. JinkyvJohnGreig-saysitall on

    RogueLeader says:


    28 October, 2011 at 12:09



    Yeah, I thought about HMRC the other day – I wondered if there was any dubiety in their European licence from the SFA too…

  11. I believe Hearts are the wildcard, who knows what that eccentric fool will do.



    However there’s a fundamental issue in this “creating a blueprint” theory. When it comes round to Dunfermline, St Mirren, St Johnstone etc asking for fast track re-entry to the SPL, who’s to say the other clubs will return the favour?

  12. RogueLeader says:


    28 October, 2011 at 11:53



    I wouldn’t be so sure about Hearts. They must know that Rangers staying in the SPL only proves the theory. Hearts do not bring significant cash to other teams in the SPL and therefore while Rangers might set a precedent it doesn’t guarantee the clubs would vote the same way in future. Not having Rangers in the SPL for 3 years gives them a far better chance of European access etc.



    You need to also consider the position of teams in the relegation spots. Unless they decide to promote 2 from Div 1, they are guaranteed to avoid the drop. Boosting their finances massively. If we (the club) take a lead on this I’m sure others will follow.



    However, I’ve said before that this would be the ideal opportunity (as far as the powers that be are concerned) for league reconstruction. Two tier SPL. Rangers drop for one season, thus justice is seen to be done. Some deal is done so that top tier teams don’t lose out on cash, so they’re happy.

  13. I have re-posted this because i haven’t got the time to re-type.



    RogueLeader says:


    28 October, 2011 at 11:45




    My Amigo



    I have watched the huns escape from more nooses than i can count over the 40-odd years i have been watching these things like, the way they have rioted all over europe in my lifetime only to recieve a few slaps on the wrist for singing ?



    I know this is different but for me, the outcome will be the same in that, any harm to the huns will be minimal and, given that we have a board/CEO full of nodding churchill-dogs then, don’t expect ‘our’ corner to be fought either. ‘Our’ hierarchy have had, 4 years to pull the trigger on the huns and, haven’t done it. It won’t be any different this time! IMO!



    The establishment will work their, ‘dark-arts’ at the last minute and pull the huns out of the fire! IMO!



    Also, i think that we(Celtic fans) should be looking at, how PL and John Park have been getting away with their, ‘Arthur Daley-type’ of player recruitment right under our noses ? IMO!



  14. JinkyvJohnGreig-saysitall on

    Post Apocalypse (I mean admin) RFC newco 2012 on their first visit to Paradise.



    What would be your suggestion for a banner??



    My 2 suggestions below…



    Welcome to Scottish Football – We’ve been in business for 123 years and still going / paying our taxes.



    We won the European Cup in 1967, maybe someday your new club will win a European tophy

  15. tamstered says:


    28 October, 2011 at 12:16


    Kittoch says:


    28 October, 2011 at 12:06






    so is he or no?






    Look just cause my cousins built his hoose, my other cousin is that hooses keyholder, that he went to school with my other cousin and he’s a close friend of one of my aunties, how the hell would i know????

  16. McNair is the greatest on

    When Celtic vote no and say Aberdeen abstain the Huns cant get back in – It has to be 90% approval – 9 out of 11 is only 81.8%.

  17. I think it was posted here yesterday but does anyone think that Rangers will be relegated but that the league will be quickly reconstructed to give them a one season route back to the “big time”?



    After they’ve been promoted another quick reconstruction can be done so that everyone can get back to the “at least 3 games against Celtic and Rangers” situation.



    Any possibility in this?

  18. McNair



    Surely it should be 12 votes, but the huns must be an abstention as they’re barred f rom voting?

  19. cavansam \o/ says:


    28 October, 2011 at 12:21



    I agree with the change to a two tier set-up being down to allow them back to the top quickly. I hadn’t factored in a quick change back due to “the experiment not working”.

  20. Kittoch



    I’ve never heard anyone back home ever say a bad word about him.



    BTW in a few years a news singing sensation will emerge from Donegal, he goes by the name Danny O’Donnell and he will be as Superstar!

  21. Lennon n Mc….Mjallby says:



    28 October, 2011 at 12:09



    Cheers. If the intergrity of our game is a given that all the support understand and buy into then the chances of a boycott that might actually happen make it a weapon of choice.



    Personally I would feel I was being a mug to pay to watch a competition where one club can ride roughshod over the rules and I’d simply stop paying. I’m sure many supporters of many clubs would feel the same and this message has to be got across to club chairmen via their supporters Trusts.



    I could think of other possible solutions that might satisfy the need for justice that would allow Rangers to continue and official minds need to be looking at those not quick fixes that postpone the evil day.



    Some form of reparation is necessary as part of any package to keep Rangers alive, for example removal of titles won since the EBTS and unpaid debt started (2000 to date), non entry to UEFA competitions for the three years others were deprived of it. An admission by Rangers that they have serioiusly damaged our game and agreement to changes to refereeing, licencing, and proper ownership rules.



    What aint gonna happen is we roll over and play dead.

  22. McNair is the greatest on

    greenjedi says:


    28 October, 2011 at 12:23





    Surely it should be 12 votes, but the huns must be an abstention as they’re barred f rom voting?




    There will only be eleven members – The huns are gone – the huns newco are looking to become a member

  23. RFC is to the SPL what Greece is to the Eurozone. The extraordinary efforts being made to fix the current situation in the Eurozone is driven by mutual need. The same interdependence exists in Scottish football and despite all the ethical arguements, it is cold hard economics which will determine the future of RFC and the SPL. I’m pretty sure PL knows this and CW knows this too.

  24. HTC Sensation myself. £27 a month 300 minutes, unlimited texts and 500mbs internet. Also get free wi-fi with my BT Internet through wi-fi hotspots all over. Handy that in Belfast, as there are loads in the shitty centre.

  25. The Honest Mistake (Sickened) on

    weeminger 28 October, 2011 at 12:12



    “Not having Rangers in the SPL for 3 years gives them a far better chance of European access etc.”



    Is this true? As Barcabhoy asked yesterday, what happens to Scotland’s European coefficient when rangers oldco disappear?

  26. On scrapping the ban on future monarchs marrying Roman Catholics, Mr Cameron said: “Let me be clear, the monarch must be in communion with the Church of England because he or she is the head of that Church. But it is simply wrong they should be denied the chance to marry a Catholic if they wish to do so. After all, they are already quite free to marry someone of any other faith.”



    Scotland’s First Minister Alex Salmond welcomed the lifting of the ban but said it was “deeply disappointing” that Roman Catholics were still unable to ascend to the throne.



    “It surely would have been possible to find a mechanism which would have protected the status of the Church of England without keeping in place an unjustifiable barrier on the grounds of religion in terms of the monarchy,” he said.



    “It is a missed opportunity not to ensure equality of all faiths when it comes to the issue of who can be head of state.”