Myths and Legends – the SPFL and the £250k Fine of “Rangers”

A couple of days ago the BBC reported, as did various other sources, that the SPFL was considering pursuing “Rangers” for the fine of £250,000 which was levied upon oldco Rangers by the Lord Nimmo Smith Independent Commission.

As the report read in part:-

The Scottish Professional Football League board is considering pursuing Rangers for £250,000.

The amount relates to a fine levied by an independent Scottish Premier League commission on Rangers Football Club PLC’s (RFC PLC) use of a tax scheme.

SPFL lawyers examined recovering the money under an agreement that led to the transfer of Rangers’ membership of the Scottish FA going ahead.

Any claim to the company’s liquidators would likely yield a smaller amount.

Liquidators BDO are in the process of examining claims of creditors of RFC PLC.

As such the SPFL board has decided it is reasonable to try to pursue the full amount from The Rangers Football Club Ltd under the terms of the deal known as the Five-Way Agreement, although no timescale has been set as to when to do this.

…

In February, Rangers Football Club PLC was fined £250,000 by the Lord Nimmo Smith-chaired SPL commission after it found that payments from its Employee Benefit Trust scheme were not disclosed to the football authorities.

The commission found that the company’s management did not take professional advice on disclosing the payments.

The findings also stated that the current owners should not be held responsible for any breaches made by the previous company.

The reaction from Rangers fan sites has been universally negative to this news, as one would expect. This is part, apparently, of the “vendetta” that the football authorities, under the malign influence of Peter Lawwell, has mounted against Rangers.

Amongst the reactions I have read comments from Rangers-supporting bloggers that the fine has “nothing to do with us”; that it would be “illegal” to pursue Rangers for the fine; that the fine came about at a hearing where “Rangers” were cleared; that the Nimmo Smith Commission found that there was no “sporting advantage” gained by Rangers; and that Rangers should refuse to pay.

All of the above comments are, with respect to those who propose them, nonsense.

First of all, in terms of the “that has nothing to do with us” argument, we see the schizophrenic way in which, when it suits fans of Rangers, the fine distinctions between club and company seem to be appreciated. Rangers fans maintain universally that there is one Rangers, which is, was and is to come. They must accept that the club is owned by a new company, but the distinction between club and company is made a great deal of. But from the fan perspective, if it is all the same Rangers, can they absolve their team from guilt based upon the owner being someone they do not like? It seems so.

Secondly there is the cry, repeated from last summer when the registration embargo was imposed, that it was “illegal” for the football authorities to impose the penalty because of the previous disciplinary decision. This too is an incorrect analysis. What the SPFL is looking to do now is the same as the SFA did regarding registrations – not to impose a penalty ruled out by the courts or Disciplinary body, but rather to enforce a condition of membership which was AGREED by the new owner.

Of course if the fans can abdicate responsibility by saying that the club is not to blame for what its owners do, then they can try also to disown the agreement reached by the Green ownership which agreed terms to be allowed to play football. Sevco Scotland Ltd (now Rangers Football Club Ltd) agreed to pay all of oldco’s “football debts”. A fine payable to the football authorities by oldco, being the club owner and responsible for all the operations of the club, must be a football debt. How can it be anything else?

Fans of Rangers complain about SFA “blackmail” but the blackmail was not very good, was it! After all, the supposed goal of title stripping was not achieved, but a “Rangers” still took the field in 2012-2013.

Thirdly, was “Rangers” cleared? Of course not – it was found guilty – that is why a fine was imposed! This argument seems similar to that which suggests that somehow Dave King’s acceptance of liability under criminal charges and payment of huge fines and penalties was NOT the same as criminal convictions.

A fine of £250,000 is not meant to be loose change. It reflected the Nimmo Smith Commission view that there had been a long-standing and deliberate policy of failing to declare all payments to players to the football authorities.

What about “sporting advantage”? It is true that the Nimmo Smith crew did not find that there had been any sporting advantage gained. But this was NOT based on a full analysis of all of the evidence and a determination that there had not been an attempt to gain advantage. Instead the verdict was that the “prosecution” had failed to prove that there was an advantage gained – because the prosecution did not lead any evidence to allow the Commission to decide if there was any advantage.

Equally the Commission did not determine if there was the intention to gain advantage. Quite frankly that must have been the intention! Whether it was within the rules or not, it must have been an attempt to gain “sporting advantage” – making players happier or saving the team money generally gives the team advantage.

And then we come to whether or not Rangers should refuse to pay.

If it did then that would appear to be a clear flouting of the deal which gave newco membership of the SFA. In the absence of a published version of the 5-way agreement we can only surmise the exact terms of the deal. However, if there is a failure to meet any of the conditions, might this allow the SPFL to seek to withdraw membership? After all, if one party to a contract breaks an agreement the other can, in some circumstances, tear it up.

There is of course no way that the football authorities will try to kick Rangers out for refusing to pay, but in theory it could.

More directly the SPFL would formally demand payment. If Rangers refuse to pay then what happens?

The SPFL has two choices.

It can proceed through the normal football channels and leave it to Rangers to go to court to prevent action being taken against it.

Or it can raise a civil action for payment, similar to the one presently proceeding in connection with Mr Whyte and the fine he did not pay.

(As a side issue, the fine imposed on Mr Whyte as an official of “Rangers” is payable by the club/team if he does not pay – the SFA might be pursuing Mr Whyte so that it can say that it has tried, and that it has no choice but to pursue that penalty too – and if it did, then one can only imagine the anguish from Ibrox way!)

If it goes into a civil court, we can put it on the back burner for a year or more …

And what about the bearing of this on the old club v new club argument?

At first sight, it has no bearing at all! The SPFL does not need to tread in the mess which is that argument. If they refer, as they do, to the companies involved, rather than the nebulous entity which is a football “club”, then they are taking no part in the discussion. It is evidence to support neither contention.

But at the bottom line?

The SPFL is owned a quarter of a million pounds in a fine which is payable by one of its members. If the SPFL refuses to pursue the fine then it gives, I would suggest, members carte blanche to ignore disciplinary penalties. This is why football penalties stick to the “clubs”. Otherwise, if an evil football club owner wanted to engage in extreme behaviour, then, if caught, they could simply sell the club to someone else and the new owner could argue that the cheating of the previous owner was nothing to do with him, even if it was proven to have advantaged the football team.

It would be interesting to see if any clubs tried to push the SPFL to chase this amount, if it decides not to do so – and would that member be prepared to accept the enmity which would come from Rangers for having the temerity to urge pursuit of the mighty Rangers.

Posted by Paul McConville