The news that
Rangers have gone into administration this week seems to have caught much of
the Scottish media off guard. After all
it was only recently that the spell former owner David Murray cast over the
Scottish Footballing reporting community seems to have been broken. Never has there been such an infestation of
chickens coming home to roost since one G Brown took up residence in 10 Downing Street.
Yet the alleged
“financial doping” undertaken by Rangers in the latter half of Walter Smith’s
reign and during the reign of Dick Advocaat seems to be only part of the
problem. Employee Benefit Trusts were
favoured by clubs who’s recruitment strategies involved high earning foreign
players – Arsenal were investigated some years ago and volunteered to pay the
money due to HMRC. In the case of Rangers, it is its deployment as a vehicle to
make payments to employees without incurring Income Tax or National Insurance
that has alerted HMRC. This spending of money that Rangers did not quite have
first had an impact on Rangers when they appointed Alex McLeish as manager in
2002, when his transfer budget was significantly reduced from that of
Advocaat’s. Despite this McLeish managed
to win 6 domestic trophies, including the treble in 2003 and another
championship in 2005, and took Rangers out of their “Champions League” group
and into the knockout stages in 2005/6 – something Advocaat never managed to
achieve.
While Murray is at fault for
the “financial doping” which led to the HMRC investigation and imminent guilty
verdict, Rangers new owner has not helped one iota. Craig Whyte took over last year, yet is
already responsible for Rangers entering administration. How?
Because he has somehow not paid any tax bills since taking over, accumulating
a bill owing to HMRC of £9 million. On top of which, the Administrators (pictured below)
yesterday announced that there is approximately £24 million missing from the
club books – all from a loan from Ticketus – who were hoping to profit from
future season ticket sales. This money
appears to have been paid to a “parent company account”.
Yet the warning
signs about Whyte were there, the BBC has ran several investigations on Whyte
and revealed that he has been disqualified from being a company director in the
past, while Whyte has appeared in the pages of Private Eye on several occasions
– in an eerie parallel of current events his first appearance involved his
involvement in a company called LM Logistics group that collapsed in August
2010. It almost makes Whyte’s rival as
suitor for Rangers, David King (wanted by the South African authorities for tax
evasion) seem like an ideal candidate to own Rangers. Yet Rangers are not the only club to have
found themselves in a hole of their own making.
Both Motherwell and
Dundee have been in administration in the past 10 years, while up here Gretna went out of
business when their owner fell ill.
Overall in the UK the most serious financial crisis to befall a
footballing team was the crisis that surrounded Leeds – which was triggered by
their failure to qualify for the European Cup in 2001/2, while Portsmouth seem
to have a financial section of the sports pages all to themselves. Of course, it could be that this could evolve
to be the biggest crisis of the lot, because there is the added element of a club
owner which would fail any fit and proper ownership test.
Interestingly the
one voice that has been quiet on this issue has been the governing bodies. Perhaps that’s because the crisis at Ibrox
has shown that Scottish footballs governing bodies (the two relevant ones being
the SFA and the SPL) have not learned the lessons of Dundee and Gretna – we might have
statutory 10 point deductions for teams entering administration but there is no
veting for potential club owners. The
English Premier League’s regulations might be paper thin, but at least they are
there.
Scottish Football
has never understood certainty. Yet
Monday’s events have shaken the Scottish Football community to the core. An institution which has been an integral
part of Scottish Football for 140 years could be gone from the landscape. I can’t be certain that Scottish Football
won’t survive without Rangers, I don’t think the prognosis will be as bad as
some people think – even with reduced television money (conversely, neither do these posts). What is certain is that the chances of
survival will be enhanced with Rangers (and Celtic). Yesterday’s confidence from the Administrators
in some sort of recovery for Rangers is good news, but should be taken as an
opportunity to learn some lessons for the future of Scottish Football
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