I have transcribed Mr Doncaster’s appearance on Monday night on Sportsound with the two Jims, Spence and Traynor.
I thought it fairest to do so because, to be frank, much of what Mr Doncaster said seemed to me wrong, legally and factually, and remarkably, as I mentioned early on Tuesday, seemed to give credence to my Bill Miller “Switcheroo” theory.
As I see that Mr Doncaster is a former solicitor, then I accept that he might be right 100%. The reader can judge when I post my comments on what he had to say. That should be up later today (Wednesday).
I think it is fair to say that what he said was very telling, and that Messrs Spence and Traynor did their best to pin him down.
It is clear what message Mr Doncaster wanted to get across, and also what he was not willing to answer.
If I was a Rangers fan, what Mr Doncaster had to say would have had me jumping up and down with delight.
If there are any transcription errors, then they are mine entirely, and I would be happy to correct them. The link to the podcast is here – http://downloads.bbc.co.uk/podcasts/scotland/scotfoot/scotfoot_20120430-1922a.mp3
And now, across to the BBC Sportsound studio!
Jim Spence – Neil, welcome to the programme. I suppose the first thing to say was this unanimous today? Was this the feeling of all the clubs that we should put this aside?
Neil Doncaster – Yeah, there was a general agreement across all the clubs that Scottish football is in a very sensitive position at the moment. There’s a lot of passions that are running high and the right thing to do is to let some more clarity emerge from Ibrox over the next few days and in that context potentially get round the table again next Monday and think again. These aren’t rules that potentially affect one club, but potentially affect all twelve clubs and what is important is that we have a full set of financial fair play rules. Clubs are very keen that there should be financial fair play rules in place that ensure there’s a real motivation to live within your means going forward but equally those rules could apply, would apply, to all twelve clubs.
JS – How badly prepared has the SPL been for this eventuality? Should it have foreseen this eventuality or is this something you think has emerged from, I mean, not too many people probably a number of years ago would have thought Rangers might be a club that would face potential administration and further potential liquidation. Has the SPL been well enough prepared for this eventuality?
ND – Yeah, I think so. The whole financial fair play area is a very new area. I mean it’s something that UEFA have been pushing for a couple of years but it wasn’t that many years ago that clubs could go into administration in Scotland or in England and not suffer any points deductions. It was accepted that clubs could do that if they wished to shed debt. We then moved to a situation where clubs going into administration got a points deduction, ten in the SPL, it used to be nine in the English league and we are now confronting what happens, how you deal with a club, in the event that they can’t agree a CVA and that’s the whole debate around newco.
JS – I know Jim wants to dive in here and ask you something but tell me this. Explain to people who still are not entirely au fait with this, what’s the difference between Rangers emerging from a CVA and Rangers transferring all of their assets to a new club and emerging as a newco?
ND – Remarkably little actually. In Scotland we’ve never had a newco at any time but in England but in England whenever a club goes into administration a newco is a natural consequence. That now seems to be the accepted way that clubs now emerge from administration. So the likes of Crystal Palace recently and Plymouth in the last few years; those are clubs that went into administration., They took their points deduction for going into administration on the first place but in terms of coming out of administration a newco was the preferred route forward.
JS – But it would surely be a new legal body – a new legal incorporated football club?
ND – But clubs continue over a course over many, many years. The fact that those clubs happen to exist within several different corporate structures over the period of their life frankly doesn’t seem to concern people south of the border.
JS – If that’s the situation, how worried are you that you are setting a precedent here that any club with debts they find they can’t pay can simply go into administration, re-emerge through liquidation and come back as a newco. Surely that would be an attractive option to three or four other clubs?
ND – But hold on clubs can do that already. Clubs can shed huge amounts of debt. The amount of debt is neither here nor there. Clubs could theoretically shed £100 million worth of debt, agree a CVA with their creditors of a penny in the pound and come back in with all that debt shed and the can do that…
JS – Would the SPL allow other clubs back in on that same…
ND – But hold on, clubs can do that now within the rules so they simply take their 10-point penalty for going into administration on the first place and they can emerge through a CVA without any further impediment at all.
James Traynor – I think there is a general misconception though that if you go into liquidation and come back as a new company that you are not paying creditors anything. You actually have to pay something in liquidation.
ND – That’s the point. Oddly enough you might end up with more money going to creditors through a newco route than through a CVA so actually the differences…
JS – It’s marginal, is it not?
ND – between a newco and a CVA , they are fairly fine. From the SPL’s point of view, we have more of a say when it comes to a newco. If the administrators come forward with a CVA proposal and they agree with the creditors, and they agree a deal with the bidders for a CVA, our involvement is fairly minimal. Our involvement steps up if there is a newco because we would have to, as a Board, give our consent to the transfer of the SPL share to that newco or…
JS – Answer me this one. You met last week with a guy called Bill Kidley who set up a supporters’ survey which showed that 96 to 97% of all Scottish fans outside of Rangers fans and even some of them wanted any newco, and we are slightly ahead of ourselves here, as we don’t yet know what’s going to happen, any newco not to be allowed into the SPL and the argument was that fans are saying, if a new company can simply parachute back in to the SPL, sporting integrity dies.
ND – But what is it that we are trying to stop here. Is it that we are trying to get clubs to live within their means? Because if it is the way to do that is to make sure that clubs pay their players on time, pay the taxman on time and if they should go into administration they get hit with a huge penalty. Actually stopping clubs emerging from administration is another thing entirely so we have to be careful to be talking about what really is going on here and I think once you talk to the supporters, particularly the supporters that were involved in that survey, once you explain the reality of what a newco is and what a CVA is, it does put a different complexion on things and I think people are using terminology like liquidation when liquidation may never happen under either proposal. It may happen but it may not happen. You know, it’s newco and transfer of share or CVA, but the distinction is a fairly fine one.
JT – Why is it Neil that most fans would say if someone suffers this insolvent trauma as Rangers have, this administration and then if they come out of a CVA, then alright they’ve already had their punishment but is they come out as a newco. If they go into liquidation, come out as a newco, why is it so many fans are saying no, they should not be allowed into the SPL. They should be demoted to the third division. But the SPL clubs themselves want them back in the SPL…
ND – But hold on, this is people…
JT – I’m just asking why the fans have got this different opinion…
ND – but people are drawing a huge distinction between a CVA and a newco when actually the distinction is a fairly fine one. The fact is that clubs can already under the existing rules shed millions of pounds worth of debt, agree a CVA with creditors and come back in without any debt. They can do that under the existing rules…
JT – Yes, yes..
ND – without any penalty other than the 10-point deduction.
JS – The only difference is, one of the great Rangers mottos over the years has been “dignity” . There are other clubs we know in Scottish football who are heavily indebted but they feel a sense of honour and dignity towards local tradesmen and towards local businesses and would not dream of doing other than paying their bills.
ND – Absolutely Jim…
JS – So why should they be treated less favourably than Rangers?
ND – But they, if we wish to stop clubs doing that the way to do it is to heavily punish clubs who go into administration on the first place, not just the 10-point penalty. That’s the way to do it, rather than look at what happens after administration.
JT – That’s what a lot of us have been saying for a long time, even before Rangers went into administration, and you’re saying, in answer to Jim’s earlier, one of Jim’s earlier questions, that the SPL were fairly well prepared for this event. Well is that actually the case because you’ve had clubs in the SPL go into administration before but the punishment wasn’t changed and it should have been. You’ve had Livingston, you’ve had Motherwell. It should have been changed and it should have been ..we should have been at the point where the punishment would have been severe for administration.
ND – I think that’s harsh Jim. The reality is that…
JT – But we’ve had examples…
ND – in the Premier League it was 9 points, the Football League 10 points, we were entirely consistent with that so you could argue the Football League wasn’t prepared for Leeds United..
JT – But you’re saying that the punishment for administration should be severe?
ND – Yeah. I agree.
JT – Why isn’t severe now? That’s my point.
JS – It’s not consistent with the First Division. Dundee got 25 points…
JT – But that was the second time they were in administration Jim.
JS – But the first time it was in the Premier League; two separate bodies.
JT – But it’s the second time for administration. You can understand, but why, if we’ve had clubs go into administration before, why hasn’t the punishment been severe since then?
ND – I think it’s a very fair point but the reality is that the SPL’s rules have been pretty consistent with both the English Football League and the English Premier League on which they were based back in 1998 and it’s actually the SFL which is slightly out of step with the majority of UK football.
JT – So let me get this quite right then. What we’re saying at the moment is that the SPL, if any club that is burdened with debt and is struggling to keep going and we have Rangers in that position just now, any club, like tomorrow, three clubs could say to the SPL, well look, do you know what, we are going into administration, they will take their 10 point deduction because that’s what it is at the moment and we’ll get rid of all that debt. Clubs that are maybe in the league and are safe. We’ll get rid of that debt and pay 10p, 5p in the pound and that’s ok?
ND – Well, it’s not ok. It is allowed under our rules. It’s allowed under the English Premier League rules,. It’s allowed under English Football League Rules.
JS – Is the key thing that they should do it before the end of the season?
JT – That’s my point. If you have a lot of debt and, say your Dundee United John (John Rankin’s) team, I’m not suggesting they are teetering on the brink but like most clubs, like almost every other club…the message is then Neil, get into administration now. Pay 5p in the pound. Get rid of your debt now and you’re OK. It’s 10 points.
ND – That’s not the message but that’s the reality of where our rules…
JS – So it could be done. Any club, Dunfermline, Kilmarnock, Dundee United, could wash their debts off tomorrow and they could be back in the SPL as a newco next season?
ND – No. Newco’s different. What we are talking about is you go into administration, get your 10-point penalty, sporting penalty…
JS – Effectively they would then emerge…
ND – But if you can agree a CVA with your creditors, you can shed debt and a number of clubs, a large number of clubs, have done that across the UK over the years. That’s within the rules. It may not be right but…
JS – But ultimately any of these clubs could re-emerge as…
JT – So why then is there this outcry against Rangers, that they must be punished, that they must be sent here, that they must be banished to the dungeons of Scottish football…
ND – I think Jim, it’s because we’ve never had a newco before in Scottish football. The fact is it is commonplace south of the border. Very commonplace.
JS – One of the arguments that has been put forward and that I know the SPL board will have to decide on, on any newco coming back into the SPL, but one argument between financial fair play and sporting integrity/the cost to the SPL of losing Rangers has been that the broadcasting, the television deal would fall. Is there a clause, is there a written clause in that contract with Sky and ESPN that says that Celtic and Rangers must meet four times a year?
ND – Yeah, we’ve been clear about the situation…
JS – That’s actually written into the contract…
ND – We’ve actually got a new deal from this summer where the long forma agreement is yet to be signed so actually what the detail of that agreement is remains to be seen but…
JS – Does it actually say they have to meet four times per season?
ND – The current contract but the current contract could come to an end at the end of the season.
JT – But the extension which you are saying is still to be fine-tuned and it’s not been signed yet, that won’t be signed in its current form if Rangers are not there surely? You wouldn’t expect Sky to sign that, would you?
ND – I think our focus Jim has to be on coming up with the right way forward in this situation and with solutions to the problems.
JT – But we…
ND – And speculating about where we might be next season doesn’t do anyone any good.
JT – But is it unfair of us in the media to speculate that that extension might not be in place in its current form or the way it’s been negotiated thus far if Rangers are not there. That’s not unfair speculation, is it?
ND – I think it’s your job to speculate. It’s my job to try to solve the problems.
JT – But it’s not unfair speculation, is it, and what I’m saying … but let’s be clear on this as well, there’s a lot of myth and rumour about all of this and misinformation, let’s be fair, but, as it stands Rangers can go into further liquidation, emerge as a newco or an incubator company as Bill Miller prefers to call it, and there will, provided they do that before the end of the season, there will be no further sanctions and they remain on the SPL. Is that correct?
ND – Currently, the current rules of the SPL would apply which means that the SPL board has discretion to deal with an application for a transfer of the share to a newco. The new rules that were due to have been discussed today would have imposed certain sanctions on that transfer of share..
JT – Even if they do it before the end of the season?
ND – Well no, but that would have come in on the first day after the end of the season…
JT – But that’s my point. So if before the end of the season, if for instance it’s Bill Miller and he drops the conditions about looking for further assurances and comfort on the EBT case, if he drops that tomorrow and says OK, then it’s a newco, an incubator company, there will be then..in the SPL… their only decision is do we give them the licence back, their one-twelfth share. That’s the only problem they would have. There would be no further sanction provided they do it before the end of the season.
ND – Well, the current rules would apply to any club, and what’s not fair is to change the rules within the season. The current rules are that is an application for a transfer of a share comes into the SPL board…
JT – So Rangers in a newco before the end of the season only have to hope and make sure that they get their twelfth share back to continue in the SPL as a newco, if they do it before the end of the season, as it would happen to any club?
ND – The current rules give the board discretion.
JT – So there could be further penalties then?
ND – As I said, it’s in the discretion of the board as to how the board would deal with an application for a transfer of share.
JS -And just very briefly there have been suggestions that next Monday’s meeting will be delayed again until the Friday after to buy as much time as possible to see what happens, to see if Rangers …
ND – What it’s all about is letting the situation try and become clearer and there’s so much uncertainty and speculation about what’s really going on that, I think, to make decisions in a vacuum of information is never wise and what we need to do is to try and see what is emerging from Ibrox and try and come up with a set of rules that are right for all twelve clubs and not just for one club.
JT – Just to be clear, have either of the bidders said to the SPL, well look then, if we come back in as a newco, what would the board be likely to do. Would it be likely to impose further sanctions? Would they give us the licence back or not? They must have asked.
ND – No. The reality is that most, the vast majority of the discussions that have happened have been between the administrators of Rangers and the bidding parties. We and the Scottish FA have been very much on the fringes of that because ultimately we need to deal with a preferred bidder. At the point when a preferred bidder comes forward then you can have meaningful discussions.
JT – So Nether Miller’s party nor the Blue Knights have come to the SPL and said, look what would the board, what would the likely decision of the board be if we said we are a newco. Can we get back in. They’ve not asked you that?
ND – There’s been some preliminary discussions…
JT – So what was the answer?
ND – We’re very much on the fringe. We can’t have those proper discussions because there is no preferred bidder at the moment.
JS – Two members of the board, Ralph Toping and Stevie Brown of St Johnstone have both been quoted in the newspapers a number of weeks ago talking about the financial effects of Rangers not being in. In terms of natural justice, does that mean they can actually take a fair vote now as part of the six-man SPL board or are they seen to have made their mind up before the event?
ND – No, I think on the SPL board, we’ve obviously got four clubs, we’ve got myself and the Chairman, Ralph Topping, and it’s important that on that board you recognise that there may be conflicts between your own position as a club and as a board acting on behalf of the SPL and you manage those conflicts. You wear your hat. You have a fiduciary duty for the whole of the league and you come up with the right…
JS – One final word…
JT – Let’s be absolutely clear on the way we will speculate after this programme and that is that given what you’ve said about England and newco’s and how they come back in and deal with their debt and all of that stuff Rangers becoming a newco before the end of the season, the strong likelihood is that they would remain in the SPL without further sanctions but any other team doing that after the start of the new season it’s a different matter.
ND – No that wouldn’t be fair Jim, I think the situation at the moment is the existing rules cover the current situation so if we end up with the administrators coming to us and saying we’ve agree a CVA, then pour involvement is fairly minimal. If the administrators come forward and say we have agreed a deal with a bidder and there will be a newco and they are going to request a transfer of share then that will be dealt with in accordance with the current rules which give the SPL board discretion.
JT – What sanctions can you take then?
JS – Your time’s up…
ND – I’m not going to speculate because I thin it would be wrong to do so. We have to deal with any application, any approach by Duff & Phelps to us saying we’ve now got a preferred bidder, here’s the bid, we’re putting in either a CVA and our involvement as the SPL is minimal or there’s, we’re going to pout in an application for a transfer of membership, in the case of the SFA, a transfer of share in the case of the SPL, we’d have to look at it. We’d have a duty to do the right thing by the league overall.
JT – So you would give it?
ND – How Jim can I tell you now what an application looks like. I can’t. I’m not going to speculate. We have to deal with any application on its merits.
(Exeunt omnes – pursued by a bear.)
Painstakingly transcribed by Paul McConville