Some months ago, when I was a novice in the affairs of Mr Whyte and the increasingly complex dealings of Rangers Football Club PLC (now in administration) I wrote a piece on Scotzine.com confidently predicting that Rangers would never go out of business.
As with many of my predictions, that will, I think, prove to be wrong.
Therefore, in an effort to redeem myself, I wondered how someone could seek to save “Rangers” in light of its present predicament. I am looking at the practicalities of doing so. There will be some who think that, as a matter of principle, “Rangers” should not be saved. That is a discussion for elsewhere.
I am happy for people to comment below, and if anyone wants to detail their own plan and have it as a post on here, they can email me at scotslawthoughts at aol.co.uk.
There are four ways of saving “Rangers”.
1 Take over the existing company.
2 Buy the assets of the existing company from the administrator or liquidator.
3 Buy an existing Scottish football club and rebrand it as Rangers.
4 Set up an entirely new company.
The purpose of this piece is not to do an in-depth analysis of all four. Instead I want to explain briefly why 1-3 are unlikely to work, or at least would not be preferred options.
Take Over Rangers Football Club PLC
The company is in administration. The majority owner is Rangers FC Group Ltd. There are no signs that Mr Whyte, who owns it, is ready to walk away without any return.
In addition, even if he was, there are various bills already owed, and the First Tier Tribunal has still not pronounced its verdict in the Big Tax Case.
It is not unreasonable to think that it could take an investment of around £100 million (this being a back of the envelope calculation) to get near to clearing the decks.
A benevolent billionaire could try to do so, but generally these creatures are thin on the ground.
I am working on the premise that anyone who wants to save Rangers is not a person of limitless wealth. This applies whether they wish to take part as a fan or as a businessman.
Therefore I do not see any value to someone taking over the existing company.
Buy the Assets of the Existing Company from the Administrator or Liquidator
This seems more practical. After all, the assets can be bought without the debts.
But what assets are there?
Murray Park and Ibrox. Various players’ registrations. The trademarks and goodwill of the company.
What liabilities are there, even if the financial debts are left behind?
In light of the present mess involving the administrators, Mr Whyte etc it is likely that litigation regarding this will run for years. Liquidation can be a quick process, but, especially where matters are complex, they can take years to sort out.
All that time, if there are competing claims for property, assets can sit in limbo.
As well as the threats of litigation dragging things out, there are also issues regarding disciplinary matters. An effort to buy over all the assets, and keep the oldco’s history, ground, strip and players could find itself caught up in ongoing investigations into the second contract issues, as recently put into the mainstream by Hugh Adam.
The possibility that football rules could have been breached systematically renders an ongoing and lengthy investigation almost certain. If “Rangers” under this option claims the oldco’s history, then it will also have an interest in arguing that, for example, any titles won in the past with allegedly ineligible players should not be stripped.
In addition, any newco buying the assets could well find itself with a major problem with Ticketus. Depending on the precise terms of the “sale” of the next three years’ season tickets to that company, they could argue that any football matches played at Ibrox by “Rangers” need to honour the Ticketus season ticket rights. Honouring such a deal would be very expensive for a newco already shelling out for the assets.
This is still a possible route, but by no means the most effective one.
Buy an Existing Scottish Football Club and Rebrand It as Rangers
Various possibilities have been suggested here. St Mirren, Cowdenbeath, Morton, Airdrie United and even Motherwell have been mentioned as possible teams to be the cocoon from which a new Rangers would appear.
This still raises some of the problems above, and also has the practical and PR issue of having “killed off” an existing team.
If we take it that Ibrox’s fate is to be decided, either in the Court of Session or the High Court in London, and that this will take some time yet, taking over a team with a ground close to Ibrox might be a possible solution. I think though that the reaction to this would be a huge problem, as indeed would the fact that all the staff of the team being taken over would come across. There would potentially be high costs in (a) getting rid of existing staff and (b) bringing in new players, managers and back room staff.
As above, if the newco seeks to put on the mantle of the oldco, it has to deal with the fallout from that. Liquidation might wipe out the debt, but not the moral issues.
So What Is The Answer?
As I said above, I am not claiming that this is the only solution, but as an independent viewer it looks to me as if it is most practical.
The first thing is to indicate what sort of person would have, as far as I am concerned, the best chance of succeeding.
There are regulatory and legal issues that cut down the field of available directors of a newco.
On one hand, the possibility that investigations into Rangers’ financial affairs could go back over 20 years means that, potentially, anyone closely connected with the club over that time could find themselves at best embarrassed by disclosures, and at worst suspended from football or even in a dock. (I am not making any accusation of criminality here, but, as I said, looking at the worst-case scenario.)
This would apply to directors and executives, but also to players and managerial staff. Even if people connected with Rangers were entirely innocent of any wrongdoing, it could very well be the case that they benefited from increased pay through “second contracts” or EBT’s. The taint would be there, even if the person was an entirely innocent recipient of the pay.
In addition, there is the “fit and proper” rule. Article 10.2 of the SFA’s Rules deals with this.
The Rules lay down factors to be considered in deciding if a person is “Fit and proper”. Being a director of a football club within the five years prior to the club undergoing an Insolvency Event is one of the factors for the SFA to consider in determining fitness.
Entering administration in the way Rangers have is an Insolvency Event.
Therefore everyone of its directors in the five years prior to 14th February 2012 needs to pass the test, with this mark on their record.
That means that Paul Murray and Dave King (even ignoring Mr King’s other issues with the tax authorities in South Africa) still need to convince the SFA of their bona fides.
Even such a part of the Ibrox furniture as John Greig would need to do so.
It therefore seems to me that, in fact, the ideal candidate to take a new Rangers forward would be someone with no formal connection with the club for at least the last 20 years.
I want to make it clear that I am not suggesting wrongdoing on the part of any individual members of Rangers’ board over the years, but having palpably clean hands would be a great advantage. This is especially so as the quicker the project gets off the mark, the better. In addition, such a person would not have to undergo the SFA assessment process. With Mr Whyte to date several months have passed without a decision.
So we are looking for someone with significant, but not Bill Gates like funds, with a good track record in business and without any particularly prominent skeletons rattling in the cupboards. I won’t run off a list of names because (a) I don’t know enough of the Rangers’ wealthy fan base to make any useful comment and (b) I would not want anyone to think that the omission of a likely name implied rattling skeletons!
Of course the person could be a businessman in it for a profit, but making football clubs profitable enough for the risks involved seems an impossible task. In addition, someone with known Rangers’ connections would re-assure wavering fans.
We therefore have our prototype buyer (or head of the consortium). Let’s call him Mr Newboss.
What Should He (or She) Do Next?
Mr Newboss first needs to show he is not the same as the old boss.
There is also a need to hit the ground running as I suspect that other serious bidders might appear, such as Paul Murray’s group.
The first thing I would recommend to Mr Newboss is to announce support for a Truth and Reconciliation Commission. A full and frank explanation of what has gone on in Scottish football, and especially at Rangers, over recent years. Maybe call it a Leveson Inquiry for Scottish football?
Let us get light into all of the dark corners. Have a spirit of perestroika and glasnost.
Get the “guilty men” before a judge in an inquiry where they can be questioned.
Who could object to that?
Secondly our proposed owner would need to make it clear what the newco was not. Even although legally it would not be Rangers 1873, he ought to make clear that this is a New Rangers. A club looking to take the best of Old Rangers’ traditions, and to dispense with what some refer to as the “toxic” elements of the past.
This might alienate some of the Old Rangers support, but I suspect that there are many who would support that, and indeed there might be some who would be happy to back a Rangers not perceived to have the reputational problems of the oldco. In any event, this plan does not require a 50,000 home crowd every week.
Mr Newboss needs to get a new company set up ASAP. As of 5 minutes ago, the name Glasgow Rangers Football Club 2012 PLC is available.
The only things still to be done therefore are (a) find a ground (b) find players (c) find a competition to play in.
The Risky Approach?
Mr Newboss needs to pre-empt matters. He needs to strike quickly.
He should announce his intention to take his newly formed “Rangers” and seek to enter the Scottish Football League for season 2012-2013 in Division 3.
Why do this rather than aim for the SPL?
A move to the SPL would face a great deal of opposition. Such a “parachuting” would be contrary to SPL rules. There would be a great deal of resentment amongst other fans, and indeed it is unclear that there would even be a space. If a member of the SPL goes into liquidation, there would be no relegation. Is the champion of Division 1 going to accept missing out on promotion to let newco Rangers straight back in to the SPL? Not likely.
In addition, newco, even if in the SPL, cannot play in Europe for three years, even if it qualified. Why not use the time in the “sin bin” rebuilding?
An acceptance that newco starts in Division 3 would also be a sign of a new mood – an acceptance that the rewards for success need to be earned, rather than assumed as of right.
It would also assist with the thorny issue of players and ground, as I will mention below.
Why is this a risky approach?
It depends on being launched before Rangers Football Club PLC is necessarily in liquidation. It might even be seen as the coup de grace, or a mercy killing.
Mr Newboss needs to get a head start over other competitors for the badge.
Some Rangers fans might turn away from a newco idea if they think Mr Newboss killed it off. Many though would see that the actions of Sir David Murray and Craig Whyte are what have led to the club’s predicament.
Mr Newboss needs to send of his application to the Scottish Football League, together with a cheque for £1,200. If accepted, then a further £1,200 needs to be paid as an entrance fee. This would permit the company to become an Associate Member of the SFL, but most importantly, once accepted, a place at the bottom of the pyramid is theirs.
At the same time as applying to the SFL, newco would apply to the SFA too. This is cheaper – the fee is one payment of £1,000! The absence of “tainted” directors would make that much easier too.
The SFL can’t admit newco till there is a vacancy, but striking early would allow a build up of momentum, which would be used to defeat competing claims for the slot, whether by a top Junior side, a Highland League or Borders team.
For the sake of travelling costs, a team in the Central Belt is more economical for 3rd Division teams to visit, rather than Highlands or Borders.
In addition, coverage of the SFL, apart from a smattering of games on BBC Alba, is by sfl.tv. A newco “Rangers” would attract attention and coverage, and might result, even if only for three years, in a TV deal which would generate significant sums for the remaining members of the SFL. In addition it is almost certain that a newco would attract a far bigger following than any other SFL club, and therefore the SFL membership would benefit through increased gates twice a season.
It is hard to see such an approach not succeeding in gaining entrance.
What About a Ground and Players?
The SFL requires a team either to own a ground, or to have at least a five-year lease. However, that can be waived as a result of short-term issues, such as the building of a new ground, or re-furbishment of an existing one.
Newco can’t ask, straight away, to play at Ibrox. That would involve it in the almost inevitable Ticketus litigation. Season 2015-2016 is the earliest they could seek to play there, and, if things go according to plan, that would be the newco’s first season in Division 1.
What in the meantime?
Mr Newboss could approach Queens Park and the SFA to use Hampden. However that can be a cavernous stadium if not nearly full, and Mr Newboss wants his team to be playing in a lively atmosphere.
Therefore are various grounds where temporary groundshares would be possible in and around Glasgow, and all for far less than it would cost to rent Hampden!
Whether this would be Firhill or Broadwood; Strathclyde Homes Stadium at Dumbarton or St Mirren Park; Airdrie’s home ground or one of the stadia used for rugby in Glasgow, this would be perfect for a Division 3 or 2 Rangers.
It would also give the fans the chance to experience a different set of surroundings, emphasising the breaks from the past, whilst initiatives such as the Rangers Charity Foundation, for example, can act as positive connections with Rangers’ heritage.
In terms of players, the SFL rule 115.2 only allows a maximum of 22 registered players over 21 years of age. There is therefore no need for Mr Newboss to go hunting for huge numbers of players straight away.
The route to take would be the Gretna/Livingston/Dundee one, but without the crash landing.
A mix of old heads and youngsters, of a quality one or two decisions above where they are playing, and a wage bill higher than the direct competition, would be the best springboard up the divisions.
As a comparison, Aberdeen, in the SPL, have has wage bills averaging just over £5 million over the last three years.
I am sure that some recent Rangers stars could be coaxed back to a newco, perhaps as player coaches. Management staff, as long as untainted by the Murray/Whyte years too would come on board.
The aim would be to build crowds watching the newco succeed as it climbs the divisions. This would lead to them reaching the SPL, if there is no re-structuring, in 2015-2016. By that time the Ibrox legal battles should be over.
If not, it would be possible to look then to move to Hampden temporarily.
What should have emerged by then is a profitable and debt free (apart from an overdraft for cash flow purposes) outfit, with a support built of old and new fans, and cleared of the more troublesome elements.
Whether some fans like it or not, the Scottish Government wants to clamp down hard on “offensive” behaviour at football.
I am no fan of the new Act, which came into force on 1st March, but it is there and the Government is looking to apply it. What better way for newco Rangers to make its mark, and to emphasise its meaningful point of difference than to make clear that the behaviour which has blighted some Rangers games in the eyes of UEFA and the football authorities here is no longer tolerated.
What Would This Cost Mr Newboss?
This is undoubtedly the cheapest of the four options mentioned.
There is no need for a ground to be purchased straight away; no need for a huge stadium to be rented; no need for a 40-man squad packed with internationals.
This would be the chance for a club to start off from scratch following UEFA’s Financial Fair Play principles.
The newco would have a huge financial advantage, and a legitimate one, caused by the fan base available to them.
It would also be appropriate for Mr Newboss to declare that his team would restrict wages to a specified percentage of income – its own informal salary cap.
This would allow the newco to build up financial reserves for its progress up the league, and instead of Rangers being a shorthand term for financial mismanagement, be a beacon for what prudent finances actually should be.
This would also lay the groundwork for a share flotation as the newco moves ahead, to give its supporters the chance for a meaningful role in the Club.
Can This Happen?
It is a chance for someone, or a group of someones, to start a team with no debt, and none of the challenges linked to oldco.
The vocal fans whose behaviour causes concern might keep themselves attached to the team, or else walk away. It would be seen as best for Scottish football if the “offensive” Rangers fans left the game, as it would with “offensive” fans of other teams.
I have just listened to the end of Rangers’ loss to Hearts on the radio, with the commentator talking of sectarian signing policies, and sectarian singing. This is a once in a life time chance to break that thread, but I am sure that, after a few years, newco Rangers fans would be claiming a link back to the oldco’s honours, in the same way as Airdrie United has appropriated the history of Airdrieonians, rather than of Clydebank, which strictly and legally, it should have inherited.
So the challenge is clear.
Whereas Mr Whyte had to find (from whatever source) £18,000,001 to buy Rangers, Mr Newboss would need far less than that and would have the chance to make an historic change to Scottish football.