Rangers FC gone into administration

Article here in Saturdays Irish Times which basically explains how they got themselves into this mess

SOCCER ANGLES: The Scottish champions are facing an uncertain future as their financial crisis deepens, writes EMMET MALONE

THE GOOD news for Rangers owner Craig Whyte this week was that he and former wife Kim managed to resolve a dispute over maintenance payments without the need to take their allotted time in a Scottish court. How the 40-year-old multi-millionaire must wish that striking a deal with the taxman was quite so straightforward.

Whyte said this week that the club he bought nine months ago for a pound are entering the “toughest few weeks” in their 140-year history.

Essentially, Rangers are awaiting the outcome of a tribunal that will decide whether or not they really owe the roughly €60 million in taxes, interest and penalties that most observers believe they do.

Whyte claimed when he took on the club and its debts from David Murray last year that he believed there would be no liability but that’s looking a little far-fetched now with most people believing the very best Rangers can hope for is a bill for about €30 million which would not, it seems, be enough to avoid what has been called, somewhat euphemistically, “a solvency event”.

The worst case scenario, and an unlikely one, is that Rangers would actually go out of existence but what seems far more likely is that the club will go into administration, strike a deal to write off a proportion of the debt and then exit it in a more sustainable state.

Things are complicated, though, by the fact that Whyte has securitised a significant proportion of the club’s season ticket revenue for the next four years to raise about €25 million. This, along with the €6.5 million or so received from Everton for the Croatian striker Nikica Jelavic, must, according to Whyte, be ploughed into the club to pay some of the many and varied creditors.

The Scottish champions’ problems have their origins, in more ways than one, back at the start of the last decade. In 2001 alone, Whyte says, the club went from having €25 million in the bank to owing that much, in part because of the massive campaign of spending that had been undertaken by then manager Dick Advocaat. His 30 or so signings in four years cost the Glasgow outfit a net figure of about €60 million without ever delivering the European success that was supposed to follow dominance at home.

Murray, meanwhile, embarked on all ill-fated scheme aimed at minimising the tax that the many expensive foreign stars (Ronald de Boer, Giovanni van Brockhurst and Andrei Kanchelskis among them) would have to pay by channelling money for their “image rights” to them via an “Employee Benefits Trust” which, it turns out, was not best suited to being operated by a football club.

At the height of the scheme more than €10 million was paid into the off-shore accounts out of which the fund operated in just one year.

The amount of tax owed on the payments made from those accounts to players and other officials is what will be confirmed over the coming weeks.

This, of course, was all just part of Murray’s promise to spend £10 for every five spent by cross-city rivals Celtic.

The club’s problems now are compounded by the fact that they are, even after years of cutting back, currently spending roughly €10 for every eight they generate in revenue with the result that there is likely to be a €12 million loss reported in the accounts for last year when they are eventually filed.

All of which will be amusing the Celtic fans who had to endure the various Rangers successes that were funded by this reckless spending spree.

That, of course, is the way it goes in Scotland and, indeed, in most cities or leagues where such irrational rivalries exist.

Still, you’d expect Celtic boss Neil Lennon to have more sense than to say, as he did this week, that neither Celtic nor the SPL need a strong Rangers.

This, after-all, is a league that only three months ago signed a TV deal worth just €19.2 million per season for the next five years, with even that achieved only because almost one in seven of the games to be broadcast live will be between the Old Firm clubs.

The importance of those games, and the wider rivalry between the two clubs, is one reason why Whyte, Rangers officials and the fans will be confident of emerging from whatever financial storm might be about to descend on them.

In a rather roundabout way they have soon-to-be England boss Harry Redknapp to thank for another.

Back in 2008 the now Spurs boss notched up his one and only trophy success, the FA Cup, with Portsmouth but the club never recovered from the spending involved in assembling the team and subsequently went into administration.

When they tried to come out, having agreed to pay 20 pence in the pound on much of its debt, the Inland Revenue went to the High Court to challenge the “football creditors rule” under which the likes of players and other clubs must be paid in full in order for a financially stricken club to return to competition.

The Revenue lost, however, and so Whyte knows that it will almost certainly be possible to write off most of Rangers’ tax bill, however much it ends up coming to, before getting back to business.

Still, even the proportion the Scots are obliged to pay should prove a serious constraint in terms of their ability to challenge Celtic for the next few years – Portsmouth actually seem set to go bust again over the coming weeks in spite of their previous deal.

And with Hearts receiving their by now annual threat of a winding up order from the Revenue a couple of weeks back, the Bhoys might finally have to concede that, after years of seeing bigotry in the work of officials that crossed them, the taxman might just be a taig
Peter Lawwell has come out and said that Celtic and indeed Scottish football don't need the monkeys much to the indignation of the their following. This guy makes all the deals at Celtic park and knows all the facts and figures if he says Celtic don't need him then he must be taken at his word.

'We've embarked on a strategy that is independent of any club in Scotland. We'll focus on our own business & what we need to do.'

This is taken from Celtic Minded

I’m still playing catch-up on the posts so pardon me please if this
has been nailed already but there’s a recurring myth which I want to
address, viz, the myth that Scottish football needs a “strong” Rangers.

Let us see first of all how this “strong” Rangers has worked in
For the best part of the last quarter of a century, Rangers’
“strength” and apparent success lay in their ability and determination
to outspend every other team in Scotland.
They fully played their part in contributing to the collapse of the
Bank of Scotland in order to finance transfers and wages for players
which no other Scottish team could even countenance.
Using tens of millions of pounds from a bank which would ultimately
collapse and pass on its debts to every man, woman and child in the
nation, “Strong” Rangers signed prominent internationalists from
England, Denmark, France, Scotland and elsewhere to fill every place
in their starting eleven.

After SDM took control of the club, Strong Rangers went on to win 16
titles. Five of these went to the last game of the season – strongly,
I’m sure – even though Rangers, uniquely, were allowed to use fortunes
of the doomed bank’s zombie assets to boost their “strength”.
And despite the media propaganda that tells us otherwise, Strong
Rangers’ recent title successes were still claimed by the most
expensively assembled squad in the country, underwritten by tax-payers
who have been saddled with the tab for the reckless practices of the
failed banks.

Question One: How many titles might Strong Aberdeen, Strong Dundee
United, Strong Hibs or even Strong Partick Thistle win if a tax-payer
owned bank now decided to give one of those clubs a credit line that
would allow them to outspend their nearest challengers by a ration of
“ten pounds for every fiver”?

Strong Rangers, not content with having used everyone else’s money to
buy their nine-in-a-row (which was obviously a Good Thing for Scottish
football) then apparently decided that having to waste money paying
the income tax of their expensively assembled international
mercenaries was too much of a handicap to their future ambitions. So
they strongly rejected this practice and availed themselves of more
tens of millions of pounds which the rest of their competitors were
too honest (“weak”) to steal from the nation.

Question Two: How many titles might Strong Aberdeen, Strong Dundee
United, Strong Hibs or even Strong Partick Thistle win if any one of
them was allowed to compete for the signings of top players without
the inconvenience of having to give millions of pounds to the taxman
each time they offered a contract to their potential employees?

If Scottish football needs this kind of “Strong” club, let’s be
absolutely honest about it in unequivocal terms.
Let the government propose the formation of a new club for the good of
Scottish football.
Its name doesn’t matter much but let’s not actually call it Strong
State Supported Football Club For The Good Of Scottish Football.
Let it simply be called Babylon Establishment FC.
For the good of Scottish football, Babylon Establishment FC must have
a line of credit with the nationalised bank of its choice.
The credit limit must be raised if Babylon Establishment FC struggle
to dominate the Scottish league.
For the good of Scottish football, Babylon FC will not have to pay
taxes on the wages which it offers to its players. Otherwise those
players might choose to sign for another club.
For the good of Scottish football, there must also be some kind of
constitutional arrangement in place which guarantees that Babylon FC
will always play in the top division of the Scottish league, even if
other clubs have to go to the wall as a consequence.
And for the good of Scottish football, the press must clear all of
their copy about Babylon FC with the government before it is published.

The alternative is unthinkable; it might herald a return to the dark
days when Weak Rangers languished in mid-table while Dundee Utd,
Aberdeen, Hearts and Celtic were competing for the championship title.
Clearly, that was a Bad Thing for Scottish football.
Who would want a return to the misery of watching Scottish clubs
horsing Real Madrid, Barcelona, Bayern Munich, Hamburg, Sporting
Lisbon and others out of European tournaments, year after year. That
was self-evidently a Bad Thing for Scottish football.
And heaven forbid that Scottish international teams might ever again
go head to head with the likes of Brazil, Germany and Holland in the
World Cup Finals or the Euro championships.

So let’s not accept the false paradigm of the need for a Strong
Rangers. If there is to be a debate on the principle, let’s be clear
and honest about the terms and parameters which pertain.
Peter Lawwell has come out and said that Celtic and indeed Scottish football don't need the monkeys much to the indignation of the their following. This guy makes all the deals at Celtic park and knows all the facts and figures if he says Celtic don't need him then he must be taken at his word.

'We've embarked on a strategy that is independent of any club in Scotland. We'll focus on our own business & what we need to do.'

This is taken from Celtic Minded

Whats his point?:razz:

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