The Daniel Cousin Mystery – Why are Rangers’ Administrators Signing Players?

Daniel Cousin has become a metaphor for what seems to be a remarkably ham-fisted first week of Rangers’ administration. In only a couple of weeks he has gone from the man whom some Rangers fans thought would save their season to being a symbol of the confusion now reigning at Ibrox.

What has happened, and why?

The only sensible explanation for the events of last week about Mr Cousin is, as I spell out below, that he was paid his wages for the rest of the season “up front” prior to the administrators coming in, and that Rangers did not manage to get him signed and registered because administration came upon them on Tuesday, almost two weeks before their planned date.

Read on, and see if you agree.

 

Daniel Cousin’s Previous Time at Rangers

Cousin is a Gabonese international striker, who had a successful season at Ibrox in 2007-2008. Having been bought by Rangers for a reported fee of £750,000, his value increased though his first few months with the team, until he was sold to Fulham for £3 million in the winter transfer window. However, as a result of him already having played for two teams that season, he needed FIFA dispensation for the transfer to go through, and when this was refused, he returned to Ibrox.

It is ironic that having, on that occasion, remained a Rangers player through intervention by the football regulators, he is now barred from playing for Rangers by the football regulators!

He finally left for Hull at the end of the summer 2008 transfer window.

 

The Hero Returns, or Does He?

We now fast-forward to this year where, after being released by his club side on 31st January 2012, Cousin became a free agent. As Rangers forward line had been badly affected by injury and the transfer of Jelavic to Everton, good front men were very valuable to Rangers.

On 11th February the BBC reported that Cousin had agreed personal terms and was headed to Ibrox to sign. His agent, Willie McKay, was quoted by the BBC describing the deal:-

He said that Championship clubs in England and others in Qatar and Dubai were also interested in Cousin, but the striker’s preference was to rejoin Rangers.

“He can go elsewhere for three times the money, but he fancied having Rangers Football Club back on his CV in probably his last season in football,” said McKay.

“The boy is happy to come back, but they have offered him 25% of what he was on in his last contract at Ibrox. They offered £7,500 then they came back and said ‘we’ll give you five grand a week’. It’s only 10 weeks.”

Ally McCoist was quoted in the same piece saying that he had not yet registered as paperwork from the Gabon FA was awaited.

As we know, 13th February saw the intention to appoint an administrator signalled to the court, and on 14th February, administrators were installed.

Mr Cousin seemed to be in limbo.

 

The SPL Board Refuses to Register Cousin

On Friday 17th February, the SPL issued the following Press Statement:

“The SPL was at 3.26pm today presented with a contract between Daniel Cousin (“the Player”) and Rangers FC dated 17 February 2012, signed by the Player and by Paul Clark, the Joint Administrator of The Rangers Football Club plc (in Administration). In terms of SPL Rule A6.20, the consent of the Board of the SPL was required for the Registration of the Player with the SPL. The Board of the SPL declined to give that consent. Accordingly the Player is not Registered with the SPL and is not eligible to Play in SPL Matches. Rangers FC have the right to appeal this decision to the Judicial Panel of the Scottish FA.

Notes

A6.20  Except with the consent of the Board and that only where (i) the term of a Player’s contract of service with his Club has expired and such contract has not been renewed or extended or such a contract has terminated with the mutual consent in writing of the Club and the Player concerned and, in either case, the registration of such Player with the League in terms of Section D of the Rules has been cancelled and a replacement Player is sought to be registered to replace the Player whose contract has so expired or been terminated; or, (ii) where the Player sought to be registered is a temporary replacement for a goalkeeper who is unable by reason of injury or illness to play and that only where written confirmation of such inability shall have been obtained by the Club from a qualified medical practitioner and submitted to the Board and the Board is satisfied that the Club concerned has no other goalkeeper who is registered and able to play, a Club that has taken, suffered or has been subject to an Insolvency Event or Events shall not be entitled or permitted to register any Player with the League and the League shall not register such a Player in terms of Section D of the Rules until such Insolvency Event or events shall no longer continue or subsist.

The administrator has announced the intention to appeal this decision.

We shall look at that decision first, and then at the implications of the surrounding circumstances.

 

Can a Club in Administration Register New Players?

As we see from Rule A6.20, a Club in administration (being an Insolvency Event as per the Rules) cannot register new players unless with the consent of the SPL Board. There are two cases where the Board can consider such an application by a Club where there has been an Insolvency Event: (a) where the new player is to replace a player whose contract has been terminated by mutual consent, or which has come to its end and (b) where a temporary replacement for an injured goalkeeper is needed.

The former covers the situation where an administrator might agree with a number of highly paid players that their contracts are at an end, but the team still needs players (presumably cheaper) to play the games.

Other than those situations, a club in administration etc cannot register new players. The SPL Board authority to permit such registrations only extends to those two cases.

Was the attempt to register Daniel Cousin therefore done on the basis that he was replacing Jelavic? Did the administrator read the rules before applying?

If Rangers did not mention that Cousin was a replacement for Jelavic, but do so in their appeal, then it is possible that they would be successful. However, I cannot imagine that the SPL Board, in the interests of fair play, would allow an administrator to register a player on a £7,500 or £5,000 per week contract when many other SPL teams not in administration could not afford that!

This leads me to my wider point.

 

What Actually Happened?

The administrators’ primary role is to run the club with a view to rescuing it as a going concern, failing which to be able to generate as much as possible to pay off creditors. The duty is NOT to the Club.

However, as long as there are funds, the administrators can spend money, if it is in pursuit of their statutory goals, and if expenditure might bring more money back.

For example, Rangers may well have paid out the cost of policing the match yesterday in advance, knowing that failure to do so would have led to the game being cancelled, and therefore they expenditure permits larger income.

Why would an administrator want to register a player on a contract paying at least £5,000 per week? Surely there are cheaper free agents available?

I think, and this is speculation, but the time line makes sense, that what happened was this.

1                     Cousin’s agent is contacted about coming to Rangers. An agreement is reached for a wage of at least £5,000 per week until the end of the season (10 weeks at £5,000 = £50,000).

2                     Willie McKay is a very astute agent who will not act contrary to his client’s interests. Therefore he would not have signed his client up to a deal where (a) there was doubt about his being paid and (b) where, if Cousin had played for Rangers, and then the club folded, he would have had problems signing for someone else under the “more than two clubs in a season” rule.

3                     How would Mr McKay have protected his client’s interests as he knows that being a creditor of Rangers is a worthless position if there is an Insolvency Event?

4                     Craig Whyte and Rangers know that bringing back Cousin is a popular move with the fans, a reminder of happier times. It would take some of the heat off them for selling Jelavic without a replacement and indeed might be seen as good business as no transfer fee needed to be paid.

5                     Mr McKay wants his client’s position guaranteed. A promise by Rangers to pay could be worthless. The one way to guarantee his client’s pay (and indeed his own) would be to be paid up front.

6                     Rangers agree therefore to send Mr Cousin £50,000 or thereby to sign him until the end of the season, planning to meet with him and put pen to paper during the week just passed.

7                     On Monday the SPL website reported Rangers’ announcement that Cousin had signed, subject to international clearance.

8                     On Tuesday, after the HMRC dash to the Court of Session, administrators were appointed, triggering the Rule A6.20 restrictions.

9                     By this stage Cousin was not registered, and it appears that a valid contract had not been signed. In that case (and even if a valid contract had been completed) the administrator could have told Cousin to head back home as they were not taking him on.

10                 Instead, on 17th February, as noted above, the SPL was resented with a contract signed by Cousin and the administrator.

11                 That can only, in my view, make sense if the administrator knows that the signing will cost Rangers Football Club PLC (in administration) nothing, because the player has already been paid in full!

In that event it would be wasteful of the administrator not to try to register Mr Cousin, as he effectively will play for the administrators for free.

If the player’s contract was conditional upon being registered, as I imagine must be standard practice, then the refusal of the SPL to do so would have allowed the contract to be torn up anyway. The only reason I can contemplate for the present position is therefore that, as the preparations for Monday’s announcement were being made, £50,000 or thereby left Ibrox for Mr Cousin’s account. The contract and subsequent registration application were caught up in Tuesday’s drama, and the administrators are trying simply to make the most of a bad job.

Any other explanation for their conduct would, I suspect, lead to Lord Menzies asking the some very serious questions.

 

Conclusion

As I said at the start, this whole mess is, in a nutshell, a sign of how the Craig Whyte administration operated. Last minute dashed with forms and money – moves made for PR purposes – failure to get the formalities right.

If my understanding of the position is correct, then there is a good chance that he will be registered as a Rangers player, but will there actually be any more Rangers games for him to play in?

 

 

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33 Comments

Filed under Administration, Football, Insolvency, Rangers, SPL

33 responses to “The Daniel Cousin Mystery – Why are Rangers’ Administrators Signing Players?

  1. oisin71

    Spot on Paul.
    What’s Gordon Smiths role now? Is he really needed at RFC. Surplus to requirement.

    • Oisin,

      I would not be surprised to see Mr Smith, with great reluctance, let go by the administrators this week.

      This would have a silver lining as it might allow him to rejoin Radio Scotland and discuss things with Messrs Traynor and Young!

  2. gopaul

    if the £50k has been paid up front – is there a NI and TAX payment upfront to… or is this yet another issue for HMRC

  3. I have been scratching my head about the Cousin situation and this is about the only thing which makes sense.

    Paying him up front shows how mad Whyte and Co are.

  4. Michael

    He would get a dispensation from the “more than two clubs in a season” rule if Rangers had folded.

    Of more interest to me, if he has the £50k and the Administrators try to dispense with him and get a proportion of their money back, would the Administrators have any chance?

    • Michael,

      I am sure he would get a dispensation, but would have to go through extra procedures to get it, rather than simply being able to sign as a “free agent” again.

      As regards the £50,000 paid (if that is indeed the case and the figure) I think it would be unlikely that the administrtaors would bother trying to get it back. After all, it was spent from Rangers funds and they could, in theory, get a return for it. Maybe Mr Cousin can do some coaching at Murray Park?

  5. jim62

    He can’t be a replacement for Jelavic under the rulke you quote??..Jelavic’s contract did not come to an end nor was it terrminated by mutual consent..he was simply transferred in the normal way…surely???.

    • Jim,

      Strictly his contract would be ended by mutual consent by his agreement to the transfer. It is not like Major League Baseball where a contract continues even when a player is traded. His employment contract will end in the same way any other employee’s would on moving workplace.

      I may, as is often the case, be wrong however, but that’s how I would see it.

  6. TheBlackKnight

    Paul, some very good points. I made similar observations the other day on hearing the SFA rejection of the registration.

    I have to disagree with your position however (first time for me). 😉

    I know it is sometimes hard to believe, but Rangers Football Club (IN ADMINISTRATION) are bound by the laws and restrictions same as everyone else.

    They are a company (albeit currently in administration) that normally employs individuals with very specialist skill sets.

    They currently have a substantial ‘skilled’ workforce. (no laughing at the back)

    I would be astonished that such a position arises where Rangers Football Club (IN ADMINISTRATION) could not use

    Somewhat helpfully, the first team squad and reserves have been removed from the Rangers FC (apparently not in administration if you look at their “business as usual”) website?

    There are numerous players to choose from. There are 28 first team players, 5 of which claim they are ‘specialist’ forward players. 2 are currently injured and one is registered with Rangers but out on loan.

    Any of the remaining ‘specialist’ could fulfil that role.
    Unless they now all have sore tummies?

    • TheBlackKnight

      6 players that are forward. Sorry

      • TheBlackKnight

        Sorry should have read, “I would be astonished that such a position arises where Rangers Football Club (IN ADMINISTRATION) could not use their existing workforce and now appear to be ‘stretching’ the rules”

        * remember the threadbare mantra of late!!

    • TBK,

      I see what you mean, but my reading of the rule A6.20 suggests that a “one for one” replacement can be permitted.

      Jelavic out – Cousin in.

      But we shall see once the Judicial Panel considers the point.

      Even when replacing a goalkeeper the rule does not mention how many other the club has on its books.

      • TheBlackKnight

        As with many rules working the game, they are ambiguous and open to interpretation. However, the goalkeeper example (a ‘specialist’ role in itself, not bring an out field player) is one that many clubs have 2nd, 3rd and 4th choice keepers. Likewise outfield players have a specific role. These positions are transient with managers having to ‘make do’ with selections to suit who is available.

        I can understand the position where a player replacement is required where there are NO ‘specialists’ available for that particular position. It is not a strong argument to suggest that ‘we need more’ options. Many goals this season have been scored by outfield specialists, not being ‘strikers’.

        Like I said before, the only situation that it could be considered is where no other options are available.

        (well that is my reading of it)

  7. abrahamtoast

    If the administrators had simply told the SPL that Cousin’s wages for the season had already been paid prior to their appointment, surely the SPL would have waved through his registration without any fuss (as long as PAYE and NI had been paid)?

    That is so obvious that it can’t be true, so there must be something else in it.

    • Abraham,

      I think that these administrators have probably never heard of Rule A6.20 until the SPL refused them under it.

      I imagine that, knowing the position now, they could put forward an appeal with the details which they omitted first time around.

    • TheBlackKnight

      Why would any team in financial uncertainty,(and in a position where the use of EBTs have been challenged by HMRC between 2001-2011) make a financial transaction to a 36 yr old ‘out of contract’ player (who once played for that club during that period of possible misuse)?

      I really can’t think why that would be!

  8. gopaul

    Paul do you feel that a company like rangers can be worth less that its liabilities…. is the trophy cabinet (120 years of cups etc) not priceless ?

    other administration football clubs have been small fry and clubs with no track record of winning big tropheys – but rangers is the exception – 54 titles – a world record.

  9. Johnobhoyo

    Excellant work as usual Paul, but there is no way even an incompetent and dodgy a buffoon as the MBB is would sanction the up-front £50,000 payment to cooserse.
    He knew that administration was just around the corner and that he would likely be released when that happened (if he had already signed).

    On a related matter – why the hell is Wallace still allowed to play for RFC when it is clear that they will not fulfill the rest of the transfer fee to Hertz?

    Unbelieveable, it really is

  10. ifa007

    My understanding is DC received International Clearance from FIFA, then registered with the SFA but the timing of him registering with the SPL coincided with Rangers going into administration, which has caused all the “confusion”.

    Interview with Willie McKay, about 19 minutes into the programme.

    REAL RADIO FOOTBALL PHONE IN REPLAY – 15/02/12

    http://www.mixcloud.com/player/

  11. gopaul

    http://www.scotsman.com/sport/football/spl/rangers_administration_key_witness_says_rangers_can_still_win_50m_tax_case_1_2125385

    seems to suggest that the EBT were not salary payments – but loans – and interestingly from this source – that there are not letters saying the loans dont need to be repaid…

    go news for rangers then – there are 10 years of loans – which can now be repaid by the players, managers (W Smith? Saint MCoist?) etc etc to bail out ranger.

    Could be millions in loans outstanding for rangers… no ?

    damned if there are not these letters, damed if there are !

  12. We all suspect that the administrators will be making players redundant very soon. They still need to field a team, however. Might be as simple as getting rid of two or three players at a high wage (10k/week+), and recruiting Cousin at a lower one (5k/week). Admins could justify him with that. He’s got to be better than some of the high wage strikers that are currently playing.

  13. Obi Wan

    Among the gers fans I know, there is a staggering lack of remorse, shame or embarrassment about how their club has behaved. They feel they were entitled to win these titles and entitled now to get help out of their mess.

    Bears & dead Owls don’t give a hoot about paying back debts to other struggling clubs, never mind the tax man.

  14. Johnboy

    With the administrators effectively running the club at the moment and the news of them trying to sign DC and also their statement previously that they would consider any interest from parties wishing to invest in the club i have been wondering the following

    1. Do the administrators have the legal power to sell Craig Whyte’s shares in the club?
    2. If the answer to the above is yes, why would Craig Whyte have moved to put the club into administration?

  15. Jaycee

    If we rephrase and edit rule A6.20 to reflect the Jelavic and Cousin situation, I think it becomes clearer:

    “A Club that has been subject to an Insolvency Event shall not be entitled or permitted to register any Player with the League except where a Player’s contract of service with his Club has terminated with mutual consent, and the registration of such Player with the League has been cancelled, and a replacement Player is sought to be registered to replace the Player whose contract has been terminated.”

    Rangers FC was not in administration when Jelavic’s contract was mutually agreed to be terminated and his registration cancelled, so Cousin cannot be considered to be a replacement for Jelavic.

    I have no idea what the administrators are playing at.
    Are we sure they’re not Dave Clark and Paul Whitehouse?

  16. Excellent. One question:

    We’ve heard the administrators and several media outlets talk of the HMRC wanting to keep the club away from liquidation. Is this the administrators talking the club up as they have since the court appointed them? Is it HMRC feeling the heat from media (Record’s ‘Heaven help us’ e.t.c.) and politicians and seeking a happy ending?

    • mik

      I believe it is Smoke and Mirrors Rangers PR team in overdrive, HMRC have invested to much time and effort on this and as this will be their test case for future investigations of many clubs they will stick to their guns IMHO

  17. Ken

    Very much enjoying your analysis Paul – thank you!

    My initial thought re the Administor endorsing the Registration attempt was that they knew full well it would be rejected (after all the SPL already acknowledged earlier in the week they would be consulting with admins on the matter – so surely they were already advised?): the reason being to avoid paying Cousin anything, since technically he was already signed by Rangers (before Administration) although not registered. The contract would surely be contingent upon Registration (if only because of the Internation Transfer questions, even setting aside any concept of Administration at that point); ergo continuing with attempt to register – subsequently refused – would leave Rangers (In Administration) absolved of responsibility to pay for the week he had been there.

    Fast forward however to Paul Clarke’s ‘disappointment’ and intent to appeal – that would certainly mitigate that argument one would think.

    But it remains a very questionable decision – given the microscope the Administrators are under, surely if the pre-pay was the reason, they would make that public knowledge?

  18. Helmy

    Surely HMRC dont want to liquidate at the moment over the small bill where they will be a minority creditor to White.
    Once they win the big tax case they will then get a far larger percentage of anything that can be recovered. Possibly even putting themselves over the 75% line, but definatley in the driving seat.
    Plus the big tax case will set the precident they want, and administration could limit the financial firepower available to appeal.

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