Sporting Picks of 2012, Part 1 - February 14th

Rangers Enter Administration

Craig Whyte Announces that Rangers have gone into administration

“Rangers Football Club has entered administration - meaning it has been docked 10 points, effectively ending its Scottish Premier League challenge.  The club appointed London firm Duff and Phelps as administrators at 14:50.  The move followed an unsuccessful legal bid by HM Revenue and Customs (HMRC) at the Court of Session in Edinburgh to appoint its own administrator.

HMRC lodged its petition over alleged non-payment of about £9m in PAYE and VAT following Craig Whyte's takeover.  Mr Whyte confirmed on Monday that the club had filed legal papers to appoint administrators. He insisted Rangers would "come out stronger" and "always be here".  It was initially thought that the club had 10 days to make a decision on whether to proceed, but the HMRC action on Tuesday changed the dynamic of the situation.”

This story was by far and away the biggest football story in this country, with repercussions that will be felt for the next few years.  For people outside of Scotland, it will be astonishing to think that the Rangers story kept Euro 2012, Wimbledon and the build up to the London Olympics off the back pages of almost all of the Scottish newspapers.

Rangers had been in financial trouble over the course of the last decade.  What had put them on to the road to liquidation has been an investigation by HMRC into the administration by Rangers of Employee Benefit Trusts (or EBT’s) that they had set up for their players towards the end of the 1990’s.

The impending tax case and the financial woes was the issues that saw the majority share holder David Murray decide to sell his stake.  By the spring of 2011 there looked to be two contenders for Murray’s share.  Dave King was a South African born businessman who had long had an interest in Rangers – he also had form in tax avoidance having been wanted by the South African authorities for such a charge.  The person who won was Craig Whyte, a Scottish businessman who had, to put it mildly, an extraordinarily chequered history. 

He had been disqualified as a company director for seven years, while most of the companies he had been involved with had gone into administration.  In short, Craig Whyte was not, by any stretch of the imagination, the ideal candidate to take over Rangers.  Had any of this been exposed by the Scottish media, in particular the red top tabloids, then Whyte would not have received the hero’s welcome that he got on the last day of the 2010/11 season when he had all but taken ownership of the Scottish Champions.  Yet while these stories had been circulating – mostly in Private Eye – at the time, they did not reach the mainstream Scottish Media until Mark Daly’s investigation was broadcast by BBC Scotland in October 2011 – five months after Whyte’s takeover.

Other little facts that failed to reach the mainstream media until it was too late was Whyte’s failure to pay either PAYE or NI to HMRC and the theory that Rangers were trading insolvent.  When Rangers filed the papers to go into administration, many people didn’t see what happened next when it came.  Essentially due to the ineptitude of the Scottish press to report the facts.

Rangers limped on to the end of the season.  The close season though was filled with the fall-out from Rangers administration and subsequent liquidation, with the question of where the newly constituted Rangers would play dominating the Scottish Sports media (keeping Euro 2012, Wimbledon & the build up to the Olympics off the back pages).  The SFA & SPL hierarchy wanted (for commercial reasons) New-co Rangers to begin life as an SPL member.  The supporters (initially of Aberdeen, Hearts & Hibernian) wanted Rangers to receive the treatment that they believed that, given the same set of circumstances befalling their clubs, their clubs would receive.  When those supporters began to talk of boycotts and non renewal of season tickets, the SPL clubs took notice and blocked New-co Rangers application to join the SPL.  One suspects that the corporate sponsors that were supposedly planning on pulling out of Scottish Football took note of the new found supporter-power and changed their plans.

Likewise, when the re-constituted Rangers submitted their application for entry to the SFL, despite the despicable pressure put on them by the SPL & SFA hierarchy (remember, for purely “commercial reasons”), the clubs voted to admit Newco Rangers to the bottom rung of the SFL.  Six months on, parts of the Scottish footballing landscape are still the same.  There are lots of differences thought, mostly in the contrasting reputations of the governing bodies, the Scottish sports media, Rangers themselves and the fans.

Rangers, now owned by Yorkshire businessman Charles Green, have started in the Third Division and are only now living up to the tag of favourites for the Third Division crown.  To the surprise of many tax experts HMRC lost the “big” tax case against Rangers, many of the same tax experts believe that HMRC will appeal this decision in the New Year.  Both the SPL & the SFL have kept with the Murdoch shilling by striking reduced Television deals with BSkyB (and with ESPN) – so much for talking up Scottish Football.  Meanwhile both the SPL & The SFL have unveiled their own vision for the future structure of league football in Scotland.  The SFL see a top league of 16, while the SPL see two leagues with invites for SPL2 to go out (hands up who thinks Newco Rangers will get an invite?).

The implosion of Rangers did not come out of the blue, so to speak.  The ramifications of the decisions made this summer will probably be still reverberating around the game when Rangers return to the SPL.