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