Newco Entry to the SPL – A Guest Post by Den

I was thinking that the meeting to decide the SPL’s future is only a few days away.

I tried to look at the issue as dispassionately as I could, not sure I succeeded but it was interesting to try.

Is this meeting to decide the criteria for allowing a common or garden Newco into the SPL or for allowing Newco Rangers into the SPL? Naturally all of the debate is regarding Rangers but will any decisions apply equally to clubs which find themselves in the same position.

The SPL do not seem to have adequate rules or guidance for such a situation. Given the number of Football clubs going into administration and coming back as a Newco in the UK you would have expected that they would.

Doncaster and Johnson would seem to be in the pro Newco camp. They are playing the Public Relations game to get their argument across.

Both men have shifted the debate to the sanctions for joining the SPL as a Newco.  An important question but not the first I would consider.

The first question is how does a Newco apply to the SPL and what are the basic qualification criteria.

I would expect that, should there be a vacancy in the SPL, promotion from the SFL would be the first consideration: failing that, there should be an open application process where existing Football clubs and any Newcos can apply for membership.

Then there are the joining fees (I will consider sanctions later). Membership of the SPL is a valuable asset and applicants to any club or association expect to pay some sort of joining fee and/ or serve a probationary period where some membership benefits are restricted. If they can’t pay then they are probably not good candidates, if they won’t pay they can’t join.

The application and joining fees should apply to anyone not qualifying for the SPL from the SFL regardless of who they are.

The SPL therefore should have an open process for application for membership and requirement to provide proof of ability to run a football team to SPL standard which will abide by the regulations of the body and the Law of the land

Now the question of sanctions.

It is anomalous to consider sanctions against a Newco on applying for membership. The disciplinary procedures of SPL and SFA should be used to investigate and determine sanctions: the Newco should however be subject to the sanctions imposed on the old club and agree to accept any new sanctions imposed by the footballing bodies in relation to events at the old club occurring prior to their membership of the SPL.  It may be argued that this is punishing the Newco for offences relating to a separate Company. However if you ignore the relationship to the old company, Newco would not even get to the application stage, lacking any footballing pedigree. What part of the track record of the old company do you take into account or ignore? Therefore a Newco could bring forward sanctions from the club it is replacing and forming a Newco would not be an easy way to avoid taking your punishment.

Of course the whole debate has been caused by the Rangers situation, but rules shouldn’t be made up to suit an individual member but for all without fear or favour

Digressing a bit. A neutral observer of Scottish football would see that Rangers are an important part of it, they have a large fan base bringing in a lot of money and Old firm games are clearly important in TV deals. They number a lot of prominent people in their fan base and quite clearly the media fill a lot of column inches with Rangers related stories. Quite a number of Rangers players and administrators have played top roles in the games ruling bodies (and continue to). From a commercial point of view the loss of Rangers will have an effect that cannot be ignored.

It stands to reason that people running the game are going to be less sanguine about excluding Rangers from the Scottish game than opposition fans. Excluding them would cause a lot of upheaval and most people in Governing bodies want to avoid that.

Back on track.

It seems inevitable that there will be a Newco applying to take the place of Rangers. Even should there be a CVA it is likely that a new company will be formed to take the football side forward leaving the old Company with the financial and legal issues to sort out.

In summary. SPL should have rules regarding Newcos already or should get them in place ASAP. In principle they need to ask themselves whether they favour Newco or not and if so what are the criteria to apply and the implications of these rules for future behaviour. They must discourage clubs from living beyond their means breaking the association rules and then using the Newco route as a way to avoid their obligations.

There is no Newco applying yet so there is still time, but not a lot though.

 

 

Written by Den

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13 Comments

Filed under Administration, Football Governance, Guest Posts, Rangers, SPL

13 responses to “Newco Entry to the SPL – A Guest Post by Den

  1. Greg72

    I’m almost – but not quite (!) – apologising for yet again mentioning the creditors! Remember, the Administrators’ prime duty is to act in the best interests of the CREDITORS – not the company, nor its ‘fans’ (sorry!), nor anyone else – but for the creditors!!

    • Robert

      For clarity, the purpose Administrators is to achieve one of the following hierarchical objectives:

      1/ Rescuing the Company as a going concern; or
      2/Achieving a better result for the Company‟s creditors as a whole than would be likely if the Company were wound up (without first being in Administration); or
      3/ Realising property in order to make a distribution to one or more secured or preferential creditors.

      If the Administrator has to resort to the third objective then they have to explain why they cannot achieve the second and/or first objective.

  2. A Modest Proposal

    You’re quite right to point out that the general terms for admission of any ‘newco’ to the SPL should have been the subject of more public discussion. That would provide a better context for the debate on the proposed admission of a ‘newco’ Rangers and the impact of that on sporting integrity.

    Nevertheless, some have already made their views clear – John Yorkston of Dunfermline has said that he will urge his colleagues to prioritise sporting integrity and vote against the admission of a newco; Heart’s Vladimir Romanov has said that it is very important to keep sporting integrity and Hib’s Rod Petrie has said that it’s not a question of money as it’s fundamental to his club that the sporting integrity of the competition is maintained. On the other hand, Michael Johnston of Kilmarnock has said that clubs will be mindfull of sporting integrity but the commercial benefits may outweigh it and Rangers prospective owner Charles Green has evoked the Chicago of Capone in preference to the language of diplomacy when stating that “without Rangers there is no SPL and the other club chairmen know it”.

    My modest proposal is that the SPL should table a rule change for debate alongside any proposed admission of a Rangers newco in order to enable the other clubs to be quite clear about their approach to the operation of the SPL when it comes to balancing sporting integrity and commercial pressures. The change would be to authorise bribery of match officials for SPL matches.

    After all, if a club votes to approve the introduction of a Rangers newco then surely they would wish to follow the same approach to sporting integrity when it comes to individual matches?

  3. http://www.telegraph.co.uk/sport/football/teams/rangers/9293521/Rangers-given-licence-to-compete-in-SPL-after-U-turn.html

    Newclub with no legal reason to be in the SPL, Old club that’s broken the rules, doesn’t seem to matter. The SPL is about making money for its members and (ironially) they think that Rangers is a neccesity to do so. Forget rules, laws, best practice, even tax.
    It makes you want to weep – tears of frustration, for the death of a game we love, for the absence of morals or sense of fairlplay in a country which I used to think had those in its DNA.

    My skin is creeping at the thought of what mercenaries like Doncaster are doing to facilitate the biggest theft in Scottish history. Theft from other clubs and from the taxpayer, for what? So that the “Weearapeepul” brigade have something that they think elevates them over the rest of Scotland?

  4. Ian =B=

    Interesting first point, if there is a space in the SPL then how do you get access on the short list of applicants? Again, I like the reasoning that you have to have certain criteria. The thing is, there are other teams in Scotlad that would fulfil the criteria better than any newco, Dundee FC for example. So if a newco were to get in, what is to stop other teams suing the SPL? It is worth spending the sum of money you would think that you would gain by being there over the 1st division. If RFC newco is admitted on the basis that it has the continuity of the club, then could the other potential candidate sue the new RFC entity for lost revenue? Could this be taken to the court for arbitration in sport, which being outside Scotland may take an entirely different line on the whole RFC saga compared to the SPL? If the other candidate club were to sue in the Scottish courts, would the SFA find itself in further bother with FIFA after RFC(IA) sued the SFA last week?

    As others have written, would sponsors see the SPL as a tainted brand? Would there be any money left in Scottish football? Also, as others have written, why does Scottish football get such a bad financial deal compared to Switzerland or Denmark when it comes to TV deals?

  5. Jim Harkins

    It will be difficult to do for partisan fans to do but you have to look at the situation from Doncaster’s view-point. His job is to make the SPL a successful organisation commercially and for all the reasons outlined in the “off track” section above, keeping some form of RFC in the league is imperative.
    He has a wonderful opportunity to make that happen because no rules exist which govern the issue and precedents (in the SPL) indicate that the CEO and the managing board have unlimited discretion in everything. If I were in his position I would ensure that no rules are agreed at this stage – too difficult ; climate unsuitable – so that the present discretion could continue.
    I hasten to add that I do not think that is a suitable outcome.

    • Ian =B=

      yes, I can understand your perspective on ND’s motivations, and it seems logical train of thought. However, do you think that the SPL remains untainted commercially if a newco is let in? Is it not increasingly the case that damned if they do damned if they don’t? Any decision by the SPL has to consider the wider financial implications of both possible choices, and the SFA is increasingly under pressure here in my opinion as the implications of the situation are spilling outside of RFC(IA) and the SPL into questions over the wider probity of the game’s governance in Scotland. Just think about what Alex Thomson has written and broadcast.

    • Hugh Jarse

      “keeping some form of RFC in the league is imperative”

      Whilst I appreciate that a lot of people believe this and it has been repeated ad nauseum – but that does not necessarily make it true.

      The SPL is absolutely viable without Rangers (and/or Celtic for that matter) with the negative consequences of them being relegated or disappearing entirely being completely overplayed. The economic case for their retention is far from proven and I would hope that the SPL chairmen will be savvy enough to realise this.

      Rangers (and Celtic) have taken almost all of the money since the SPL was established with the league itself, Scotland’s performance in European competition and the performance of the national team becoming less and less competitive. Keeping this status quo going at all costs benefits no one – not even the old firm.

  6. NumbNuts

    The role of ND is not just to ensure the SPL is “a successful organisation commercially”. It has to be to protect the reptutation of the league as a fair, sporting contest. For that reason I would not agree that “keeping some form of RFC in the league is imperative”.

    The role may be difficult but personally I think they should have made the rule change decisions already since they should not be specific to RFC. The delays only give rise to criticisms that they are pandering to or unjustly punishing (depending on tint of glasses) this particular club.

    I think the delays are based on avoiding blame. Announcing strong sanctions that could then be blamed for damaging a CVA for example, well its a bit like putting a tree onto the tracks when everyone knows the bridge further along is already down. Theres a big train crash coming, just make sure its not because of you.

  7. ian lewis

    The SPL provides absolutely rock bottom priced television for SKY and ESPN.They would struggle to replace the hours of transmissions at its current cost.The idea that they would upsticks if there was no Rangers is fanciful.It is instructive that as far as I’m aware neither company has made any comment on the situation.

  8. merciatic

    Let’s look at it from a “Newco’s” perspective. A healthy club would be bought for market value we can presume. Yet in administration, the same club (or assets of) can be bought for considerably less, yet emerge from administration in a very healthy state or debt free. This is an advantage: Money owed to creditors can be invested in the club (or has already been!). Other advantages from coming out of administration might include players on the books that an otherwise equivalent club could not have afforded; cups or titles or higher league positions that would not have been gained, including European places; no debt to service. Creditors are disadvantaged of course as are other teams in the same competition.

    For a Newco to then compete with those teams with a fresh start I feel that these advantages should be nullified. Points deductions help with inflated league positions. Fines will fall way short of redressing any financial advantage and help neither creditor or competitor.

    Punishment should reflect the scale of the advantage gained. A fixed points deduction for £10 million as £100 million of debt is not fair and points deduction should reflect the debt shed e.g.1 point deducted for every £1 million of debt shed, to be applied over multiple years if necessary. This would help the SPL’s predicament a la Turkeys voting for Christmas as no other SPL club is ever likely to amass the amount of debt as Rangers have.

    I would also like to see the (football) governing bodies get involved in the money going to creditors with a minimum pence in the pound deal set. This could be as an initial lump some followed by a yearly levy.

    I have had this idea for some time but only now taken time to write it down. I would appreciate some comments.

  9. WeeAndyBhoy

    A point to Mr Doncaster regarding his comments last week regarding CVA’s, Newco’s & clubs keeping their history.

    Example 1 – Airdrieonians
    1 x Scottish cup win 1923-24
    3 x Challange cup wins 1994-95, 2000-01, 2001-02
    Liquidated 2002

    New club formed 2002 – Airdrie Utd
    1 x 2nd division league trophy 2003-04
    1 x Alba Challange cup 2008-09
    NO MENTION IN AIRDRIE UTD’S HISTORY, OF THE TROPHIES WON BY AIRDRIEONIANS.

    Example 2 – Darlington
    Went into adminstration 2012
    Unable to secure a CVA
    Demoted 4 leagues (yes 4!!!) to one of the Northern semi-pro leagues as a consequence of being unable to pay their debts

    There’s two decent examples that Mr Doncaster should be using when discussing rangers & their current plight. One example is close to home & one only came into force last week. Either one would be applicable to rangers, depending on events over the next few weeks.

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