Yesterday Bill Miller, the American who is now, possibly, the only bidder left for Rangers came out all guns blazing. He released a press statement making clear exactly where he stands on his bid, and what needs to happen for it to succeed. You can find the full statement here in the Scotsman. But I hope Mr Miller won’t mind if I offer my thoughts on it. (That is not a statement of self-importance – rather it is a joke, in case anyone takes it the wrong way.)
Mr Miller’s statement is in bold, with my comments underneath each section. Take it away Big Bill!
Full text of statement by American businessman Bill Miller on the Rangers takeover…
“I am making my proposal to takeover Rangers Football Club open, transparent and available to all those interested in Rangers future. Given all of the noise in the media from various sides of the transaction and given the numerous inaccuracies in much of what has been reported or intimated by others, I have decided the time has come to set the record straight and to issue a challenge to any would-be suitors of the club.
After the nine weeks since the administrators, Duff & Phelps, were appointed, there seems to have been a lack of openness and transparency. Well done Mr Miller for making a clear statement, directly to the fans and the “would-be suitors”.
“Most importantly, I am doing this now so that Rangers fans and supporters can judge my bid and plans for the club on their actual merits – rather than rumours and innuendo. There is no time left for empty promises and grand-standing. The time has come for all interested parties to either put up or shut up. Everyone involved has had their ‘15 minutes of fame’.
Good stuff Mr Miller – “empty promises and grand-standing”. We can’t be having any of that!
“Put up or shut up” – “15 minutes of fame”. I guess Mr Miller sees no role for Paul Murray, Brian Kennedy or Bill Ng in his vision of Rangers.
Bearing in mind that, at various times, each of those individuals seems to have been the fans’ favourite, it seems brave of Mr Miller to come out against them like this, especially the “Blue Knights” who are seen by many as the only “saviours” with the interests of Rangers at heart.
However, we seem to have a straight-talking, no punches pulled Yankee here. American owners are and have been active in English football, with the Glazers at Manchester United, Randy Lerner at Aston Villa, and Tom Hicks and George Gillett at Liverpool (the latter pair being proof that Americans don’t always make a success!)
“Let’s save Rangers. There is no time left.”
There is no time left. The man who is billing himself as Rangers saviour is not being “rose tinted” about the position. He is not saying that the future is in doubt. He is saying that there IS NO TIME LEFT. As well as wanting the other bidders to put up or shut up, he is telling Duff and Phelps to do the same.
“Facts about my bid:
• “Of the three qualified bidders, I am the only bidder who refused to entertain offers from Ticketus or engage in discussions with Craig Whyte. It is difficult for me to see how any parties who were present when this awful situation was created can be a legitimate part of the solution. I believe firmly that when you mortgage the future by the use of debts and financing instruments like has been done in the recent past, you endanger the very survival of the club. All of the ground swell created in the attempt to indicate that a CVA is a simple solution to save the club and its history is simply a naïve understanding of how this CVA process would work and the risks associated.”
Here is his first meaningful point of difference. His diagnosis of debt endangering the survival of the club also applies to Sir David Murray, but he is now ancient history, it seems.
Mr Miller boasts that he has refused to entertain “offers from Ticketus” or “engage in discussions” with Craig Whyte.
There are two problems with that approach. Firstly, Ticketus, whether Mr Miller likes it or not, have a legally binding contract with Rangers Football Club PLC. Secondly, Mr Whyte’s company owns 85% of Rangers.
D&P have tried unsuccessfully to get court approval for ripping up the Ticketus deal, and tuning them into creditors. Despite the court being told that, on financial assistance grounds, D&P were looking at unravelling the Ticketus contract, I am unaware of any action actually being taken about this. Maybe because there is not actually a “financial assistance” case, as I discussed here?
Mr Whyte, too, remains effectively the owner. If Rangers Football Club PLC is to “saved” then, without some clever manoeuvring, or Mr Whyte being unaccountably generous, he will be entitled to be bought out.
The comment about a CVA being wrongly seen as a simple solution is very wise, and one which seems to have been repeatedly ignored by many. There are he hurdles for a CVA, which, in regard to HMRC, would require them to go against its already published guidance.
So, what clever solution does Mr Miller have?
• “Despite constant rumours and suggestions by others, I have proposed a purchase of the club through a CVA from the beginning. I have no plans for liquidation of the club. After careful evaluation of a Rangers CVA process, it has become apparent that there are substantial roadblocks and risks associated with such an approach. Of the qualified creditor claims, which is currently under £100M, the Ticketus claim of £27M (in excess of 25% of the total) would put Ticketus in a position to be able to block any CVA agreement with which they did not agree. There is no way that Ticketus would agree to accept a “pence on the pound” settlement as has been suggested by others.
“In addition, it is apparent that there will be several lawsuits that will emerge in relation to a potential CVA exit among the various creditors and claimants (you pick them), which will need to be settled by the courts.
“Consequently, the CVA will be prolonged – meaning the process would go on well into next season and possibly beyond. This would place additional penalties on Rangers as long as they remain in administration. Obviously, the longer the process dragged on without a resolution, the less viable the club would become. If this process continued on for a long period without resolution, the inevitable result would be real liquidation.”
It is quite right, I think, that Ticketus will not accept a “pennies in the pound” deal. Neither will HMRC. Therefore, put quite simply, there cannot be a successful CVA.
There will also be lots of court actions, it is fair to say.
However, that does not render the CVA prolonged. Instead, it means that Rangers cannot exit administration in a positive way.
There are two ways out of administration, in the same way that there are two ways out of an intensive care ward: the road to recovery, or the road to the mortuary. A company will either be saved, or wound up.
As I wrote earlier this week, I don’t see how Rangers can keep going long in administration – I think the cash runs out in June – so a long term administration is not going to be possible, unless some kind soul puts up lots of money to fund it in administration, or every sellable player is sold off as soon as possible. But the latter keeps the club lingering on, and does not address any of the structural issue, nor, it could be argued, would it be likely to achieve the purposes of administration.
I am interested by the concept of “real” liquidation. That implies that there is “unreal” or “pretend” liquidation.
There is no such thing. A company in liquidation is dead; it has ceased to be; gone to meet its maker; at peace and pushing up the daisies.
• “Over several weeks of discussions, my advisory team and I have created a solution that saves Rangers, protects its history and gives it a fresh start – rescued from the ruin created by others. I believe, and we have compelling professional advice to support my view, that my offer, as structured, can enable this to happen without any question of Rangers seeking or being given any special treatment.”
Goodness me! A solution which does all of the following:-
1 Saves Rangers;
2 Protects its history; and
3 Gives it a fresh start!
And all of this without any “special treatment”!
Mr Miller, please tell us more!
• My proposal on the table now is to pay £11.2M for the club which includes the £500,000 deposit required by Duff & Phelps.
“In order to preserve the club’s history, records, championships and assets, I will put the “heart” of the club into an “incubator” company while Duff & Phelps works to make the “sick patient” healthy through a CVA process that effectively works to “radiate” the toxicity of past administrations’ sins out of the patient while the “healthy heart” is preserved and moves forward. Once the CVA process has been completed and the patient is on the mend, the administrators will return Rangers Football Club plc to me for a nominal sum. The healthy heart and the healthy patient (The Rangers Football Club plc) will then be reunited through merger.
“In this scenario, the club can continue with all of its business assets, including its history, protected from the present illness. Thus a new corporate entity will own the club’s assets during the incubation period including all of its history.
So this is the “masterplan”. First, pay £11.2 million for “the club”. As we know, administrators’ duties are ranked hierarchically. The primary goal is to rescue the club as a going concern, and the second to achieve a better result for the generality of creditors than liquidation.
The over-riding duty which determines how the administrator seeks to fulfil those purposes is:-
“…the administrator of a company must perform his functions in the interests of the company’s creditors as a whole.”
The primary purpose of administration, which seems, at least in press statements by D&P to have been glossed over is to attempt to rescue the company as a going concern IN THE INTEREST OF THE CREDITORS!
Saving Rangers in the interests of Rangers, or its fans, or its history are not the purposes of administration.
Mr Miller proposes to pay £11.2 million to buy a company whose assets are valued at well over 10 times as much. The sale of Ibrox and Murray Park will not lead to payment of the value in the accounts, but, when combined with the value of the players, even in a fire sale, I cannot see any way in which the assets of Rangers realise anything as low as £11.2 million.
Let’s look at the process Mr Miller and his experts have devised. If I have misunderstood him, then I apologise.
1 He buys all the assets of Rangers, including the goodwill and “history” and transfers them to an “incubator” company. Does this include the share in the SPL which entitles the club to play in that league? If so, the SPL, as a private limited company, needs to consent to the transfer of the share.
What about the licence to play under the SFA and in the SPL? Presumably the playing assets at least need to stay with the licence and SPL share? If they stay in the “sick” company, then how will it benefit the creditors to allow them to be passed over with no significant payment to creditors. This plan therefore requires a transfer of assets to Mr Miller’s “incubator” for £11.2 million.
2 Once the assets have passed to the incubator, D&P are left with £11.2 million in cash in Rangers (IA). There are no assets left other than that. Let’s ignore Mr Miller’s Gerald Ratner-esque comments about sins and toxicity.
How does he imagine D&P will deal with the creditors? The pot of £11.2 million will be needed (a) to pay D&P’s fees, which by now will be over £1.8 million (b) pay Mr Whyte, as the secured creditor (unless a court declares that he is not) and (c) use what is left to propose a CVA to unsecured creditors. However, he has already said that he knows Ticketus will not accept a “pennies in the pound” deal. HMRC will not do either.
How on earth will D&P contrive a successful CVA out of a company with no assets other than the payment of £11.2 million; a company which presumably would not be trading, as all assets and licences etc transferred to the incubator; and which, if it cannot stay in operation, cannot stay in administration?
3 Let’s assume for a minute that these obstacles can be overcome. Mr Miller wants the administrators, once the CVA is complete, to return Rangers Football Club PLC to him. But he would never, as far as I can see from his transparent plan, have owned Rangers Football Club PLC! How can it be returned to him, and his for a “nominal sum”. Maybe one penny? He would then “merge” the incubated club with Rangers Football Club PLC and Rangers can continue on, as before, but with debt eliminated!
4 This latter merger would, again, involve the SPL approving transfer of the share back. Easy!
What is wrong with this plan? Where to start? It would require:-
(a) the football authorities, to whom we shall return, to ignore all procedures and hand the SPL share and licence to the incubator, even though that company will in no way meet the requirements to be a member of the SFA/SPL;
(b) D&P to agree, in return for £11.2 million, to pass the whole assets of Rangers to the incubator newco, thus being an acknowledgement by D&P that this is the best deal possible for creditors;
(c) the creditors to agree in sufficient numbers to a CVA which might be for fractions of a penny in the pound; or, for the CVA to make it to pennies in the pound,
(d) Craig Whyte to agree to “walk away”.
I think I have more chance of winning Olympic Gold in the 100m in London!
Any suggestion that Rangers history is lost by such a process is preposterous. Using such logic, Rangers would not actually have a 140-year history as its current corporate structure was only created in 1899. To suggest that Rangers thus have only a 113-year-old history is absurd.”
It is an interesting philosophical argument about whether in the circumstances envisaged, it would be the same “Rangers”. However, in law there is no doubt. That procedure would end Rangers history. It would then start again of new now.
• “As a final step in the process, I have held a series of talks over the past week with officials from the SPL and SFA in an effort to ensure Rangers play in the 2012/13 season without further points deductions, fines or other punitive sanctions, relating to either the terms of my purchase or the actions of the prior administrations, beyond those levied during the 2011/12 season.
“My offer is contingent upon the regulatory bodies agreeing that the club will begin play in the 2012/13 season in the SPL and that they will do so without any loss of points and with all historic titles intact. I will not acquire the club unless I receive written assurances from both regulatory bodies to this effect.
“It is my strong view that Rangers and their fans should not continue to be punished in the future for the past failures of others. Rangers need a fresh start and I will always stand up for the club.”
I love it! Mr Miller lands in Scottish football and immediately meets with the SFA and the SPL to tell them that, unless they tell him now, and in writing, that there will be no further penalties imposed on Rangers for any of the numerous matters which are being investigated, prosecuted or still to be raised, then he will leave.
His carefully worded comment, referring to the “actions of the previous administrations” shows that he wishes carte blanche to have the alleged misdeeds of both the Whyte and Murray regimes forgiven.
Whenever a football team is punished, there is a cry that this unfairly punishes the fans, or the players, or someone, on the basis that it is people, not the company, who break the rules. However, as we see in law with corporate criminal responsibility, the actions of individuals can, in certain circumstances, be laid at the door of the company. And the club has benefited from what the previous administrations did, even if the creditors have not.
If actions against the rules of football were proved, would Mr Miller agree to Rangers losing honours attributable to such breaches? If not, his frankly incredible demands, become even more ridiculous.
I can see circumstances, for example, if someone wanted to pay £100 million towards buying Rangers and paying its debt, where such a request of the football authorities could reasonably be made. However, to try to “low ball” the creditors, and look for a free pass where a whole range of “sins” are forgiven without penalty – that is so brazen that Mr Miller would fit in with the stereotypical “We are the People” Rangers fans. As with most stereotypes it is a caricature rather than a consistent character, but if Mr Miller was able to have his terms accepted (and very quickly too) it would be a disgraceful capitulation by the football authorities, simply because they would be giving a free pardon before clarifying what charges Rangers are guilty of.
There has been a great deal of comment about the integrity of Scottish football, and many feared that there would be a “soft option” route offered to Rangers.
Perhaps Mr Miller has read those articles – perhaps indeed he believes every word he said. If Scottish football agrees to being blackmailed (not in the criminal sense) by Mr Miller, then it might as well close the doors.
Should the SPL and SFA give Mr Miller the written guarantees he is looking for, I can sense many court actions, and it would be such a blatantly biased action by the football authorities that I would not foresee them lasting, or if they did, they would not have a sport to administer!
“I have retained the services of certain sports business and UK football experts from Scotland, England and America to assist with the turnaround of this distressed and loss-making business. I realize Rangers have been losing money on a monthly basis and can easily find itself right back in administration in short order if significant changes are not made to the business and if the new owner does not have the financial wherewithal to accomplish the turnaround while the club haemorrhages cash.”
The plan is the same that every “incomer” to Scottish football has brought – change the business – staunch the losses – turn the business around. In the last 20 years in Scotland, the only person to succeed in so doing is Fergus McCann.
Mr Miller seems to want to talk the club down – “distressed and loss-making” for example. He implies he has the financial resources to accomplish the change of direction, but foresees the club continuing to lose money at a significant rate for a while yet.
• “We will focus on a disciplined business approach that uses strict adherence to budgets and metrics to ensure the club does not attempt to live beyond its means so that it can be in compliance with UEFA’s new requirements of financial fair play. I am acutely aware that the club will require working capital and this will be assessed in more detail in coming weeks as the due diligence period progresses.”
He is still to assess the working capital needs. It is true that this will come after he completes his due diligence, but presumably he reserves the right to alter his bid depending on what he sees.
In which case his offer, as indeed is the case with any offer made prior to due diligence, must be conditional – akin to offering to buy a house “subject to survey”. It is a sign of intent, but not one by which an offeror can be bound.
So it appears that Mr Miller, whilst taking a pot shot at others for PR and spin, may be indulging in the same tactics himself!
The position with Rangers just now is that prospective purchasers hold the cards. There is no tooth and nail competition with bids aggressively being raised. If it wasn’t for the £500,000 deposit to look at the books (and wasn’t that a million a couple of weeks ago?) I might have been tempted to put in an offer myself!
Mr Miller inadvertently points out his own inconsistency. He refers to weeks of due diligence. However, as his statement said early on – ” There is no time left”. Not weeks left – no time.
How does he think the club will continue through the weeks of diligence? The administrators cannot sell season tickets when it is not known if there will be a team playing next season, or more precisely, as the Battered Bunnet pointed out, they are restricted in how they spend the money they receive for season tickets, even before we consider the Ticketus issues.
• “We will focus Rangers aggressively on growing current revenue streams and developing new ones. I believe that such a program is necessary to ensure Rangers have the kind of player wage bill that is necessary to field a highly competitive team, while not operating at a loss.
Here is the same mantra as always – growing income streams and developing new ones. A player wage bill necessary to field a competitive team. That suggests no reductions in wages, and therefore, as that is by far the biggest cost to a football team, the implication is that the outgoings will not drop, but that income will go up. How?
European income? That is what has led, in part, to the present mess.
Maybe Mr Miller will take Rangers touring round the USA, or try to establish them in the minds of American fans. I suspect this would be doomed to go the same way as the efforts to “break” Celtic in the Far East – having Chinese, Japanese or Korean players does raise interest levels, but not to the extent of creating multi-million pound incomes.
I am sure that the Miller Manifesto of high wage bills at Ibrox would go down well with much of the support. But where is the money coming from to do this?
• “As I have already discussed directly with him, Ally McCoist will be retained as the First Team Manager and will be responsible for the success of Rangers on the pitch.”
I try to refrain from purely football related comment here. If there is not a legal angle, I will pass by. However, I have not met any football fans, whether supporters of Rangers, Celtic or Annan Athletic, who believe that Mr McCoist would have retained his job after the collapse of the lead in October/November if it had not been for administration happening.
This seems again to be a touch by Mr Miller directed towards the fans. “Super Ally” is very, if not universally, popular. Sticking to him will cheer many more fans than it will dis-hearten.
“The challenge to others:
“Since other bidders and/or would-be bidders have consistently made claims in the press for weeks and months about how they have all the solutions and answers for saving Rangers, I have decided to offer a challenge. I have worked quietly over the past several weeks to put together a plan that saves Rangers from liquidation and allows the club to be made healthy again. I have attempted to do this without fanfare or without drawing personal attention to myself as I don’t need or desire to see my name in the headlines.
Mr Miller does not want publicity or to see his name in the headlines. Why on earth is he buying Rangers then?
Mr Whyte has had many of his statements questioned over the last year. One which is undoubtedly true was made to Tom English in the Scotland on Sunday in October.
“Question by Tom English – Is this the most hassle you’ve had in business?
Answer by Craig Whyte – For sure. But this is what I signed up to. Nothing on this scale has happened to me before and nothing on this scale will happen to me again. Even if you owned one of the clubs in London I don’t think you’d get this level of intensity in the national press. I wouldn’t wish it on anybody. No football club owner in Scotland has had the hassle that I’ve had.“
If Mr Miller wants to keep out of the headlines, he should choose another business in which to invest!
His plan is to save Rangers from liquidation, or maybe that should be “real” liquidation. However, shifting players, registrations, assets and licences runs the risk, even if permitted, of being very complex, with third party ownership issues, for example, raising their head.
Even after it all, and until a court says differently, Craig Whyte owns 85% of Rangers.
“However, it appears there are others who suggest that I have some motive other than to acquire and protect the history of this great club and put in on a strong footing for the future. They maintain they have better plans to save Rangers. So, in an effort to give Rangers and its fans, supporters, players and staff an opportunity to see for themselves, I have shared the details of my plans.
Setting up a “straw man” is a well used tactic in PR battles. Accusing “others” of suggesting Mr Miller is not involved for the good of Rangers might be seen as a very blatant effort to get people looking for answers there, rather than at Mr Miller’s door.
The other bidders’ views of Mr Miller are as irrelevant as the reciprocated views of Mr Miller to the bidders.
“Although it was my intention to wire the required deposit tomorrow to secure preferred bidder status, I have notified Duff & Phelps that my offer is to be suspended until Monday to give anyone else interested in acquiring Rangers time to complete their bid and put down the £500,000 deposit. I would not want anyone to have the impression that my offer is not the best one for the club. So I now put it to the other suitors who claim to want what is best for Rangers. If you sincerely want to save Rangers, the time has come for you to put up or shut up. I will agree to “stand down” until Monday, April 23rd to allow any and all “saviours” to step up and claim the club by paying the required deposit and entering into an agreement to purchase.
I have lost count of the number of deadlines for offers, for best and final offers, and for unconditional offers set by D&P. It is not surprising therefore that now the bidders are setting time limits too.
“The time for talk is over. The club is in serious jeopardy of dying. “Real” liquidation is looming. If no one else steps up by Monday, then I will assume everyone is done talking and I am the only one serious about saving Rangers.
Here we go again with “real” liquidation, as compared with fictional bankruptcy perhaps?
“In the meantime, I will continue talks with the SPL/SFA in an effort to get a quick and satisfactory resolution so I can then move forward to become the preferred bidder as outlined.
“I ask Rangers fans, supporters, staff, players and Ally McCoist, after reviewing my plan for the club, to make their opinions known by Monday to the press and to the SFA and SPL officials. Time is running out to save Rangers.”
In a saga where there have been many remarkable statements, this one stands up with the best of them. Mr Miller basically puts a gun to the football authorities’ heads and demands a free pardon for anything Rangers may have done previously.
Quite how it is legitimate for a person to discuss with the governing (and quasi-judicial) bodies the sentence for any offence committed, whilst the trials are ongoing or yet to start is beyond me.
Mr Miller’s solution, and the carefully chosen £11.2 million price, seem to me to have no bearing at all on the process the administrators are required by law to follow.
When money is raised by the administrators, for example by selling assets, the money first goes to pay D&P.
The next share would go to the creditor under the floating charge. Right now that is the Rangers FC Group Ltd. After that, there will be nothing for the creditors.
I might be daft, but surely Mr Miller’s plan renders liquidation unavoidable?
Posted by Paul McConville