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Opinion: There Is No Chance Rangers Will Go Out of Business

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Discussion of Rangers’ alleged financial difficulties has increased on the web and latterly in the press since Craig Whyte completed his takeover of the club from Sir David Murray.

Disputes with Her Majesty’s Revenue and Customs (HMRC), visits from Sheriff Officers, court actions raised by former solicitors and by the former Chief Executive – all of these have focussed attention on the financial position of the club.

As a brief aside to my main point, I have read comments suggesting that the concentration on this issue is unjustified, or out of proportion.

However, in recent memory, there have been financial woes at Airdrie, Dundee and Motherwell and I recall all of these having a great deal of attention paid to them in the media. Celtic’s financial plight too, in the run up to Fergus McCann saving the club, was not hidden under a bushel!

Rangers are one of the two giants of Scottish football (I pause to allow some commenters to suggest “And Rangers Reserves are the other”). They receive, along with Celtic, acres of press coverage and the existence of websites such as this have increased discussion of the issues exponentially.

Until their issues are resolved it remains legitimate to comment and discuss.

Some mischievous people have suggested that Rangers might disappear and that Ibrox would be flattened to be turned into housing.

I would suggest the following. Whilst that is a technical possibility, if the company which is the team was liquidated, in reality no matter how bad the financial position of Rangers is, they will survive as a team.

We have seen, at football clubs north and south of the border, vast sums of debt being eaten up by the process of “administration” designed to keep businesses running and to protect jobs. Football teams, like many businesses, have “taken advantage”, as some see it, of these rules to avoid paying off debts and to re-emerge debt free. Portsmouth and Leeds, for example, were able to write off huge sums and survive as teams. Indeed Leeds are back in profit now.

If, and it remains a very big if just now, Rangers were to enter administration this season as a result of their being unable to pay their debts, then the footballing penalty they would suffer would be a ten point deduction, as per SPL Rule A6.8.

Whilst that penalty would probably ensure that they would not win the SPL this season (though in Scottish football that is not certain) does any serious football observer think that, even with a ten point deduction, Rangers would finish lower than second? I doubt it.

Liquidation, and elimination of the club as an entity, is not going to happen.

The reason why football decided to introduce a penalty for clubs which underwent what are called “Insolvency Events” is simply that the process of administration and the financial irresponsibility that led to it were seen as conferring unfair advantages on the team. Why should a team be allowed to overspend beyond its means, and then escape the consequences?

The ten point penalty might have a great effect on teams fighting off relegation, but, as I have said, might make the difference only between first and second in Scotland. That would be a severe enough penalty, but far less disastrous than the relegation which, for example, Juventus were forced into a few years ago. (NB That was for interference with referees rather than for financial irregularities, and in any event, after one season in the lower division, Juventus were promoted back to Serie A with flying colours.)

If Rangers were to enter administration at some point this season, might it actually do them some good?

The process would halt court actions and prevent new ones being raised. The HMRC debts would be dealt with as part of the procedure, at nowhere near the full sums that might be due. HMRC would realise that far more would be recovered for the public purse through administration that than if they forced Rangers into liquidation.

As far as I understand the position, the bank debt owed by Rangers was assigned to a company owned by Craig Whyte. This process could well leave him as a creditor of the club and as such able to leverage that into a buy-out from administration.

Alternatively, another wealthy Rangers fan (of whom there are undoubtedly many) could look to buy the team from the administrator.

As long as the process is completed quickly, then I understand that it would not affect Rangers right to play in Europe, as long as they qualify to do so. There are ongoing discussions re UEFA’s Fair Play regime, but penalties for breach are not yet in place http://www.guardian.co.uk/football/2011/sep/07/uefa-clubs-financial-fair-play. As such, if it was going to happen, the quicker the better!

Players would still see playing for Rangers as a way to get themselves potentially playing top class European football. The days of either of the Old Firm paying Tore Andre Flo size transfer fees or wages have gone for the foreseeable future.

I am sure that the many of the fans of Celtic and other teams are having great fun at Rangers’ expense just now. I am sure that was reciprocated when Celtic were in financial turmoil in the 1990’s. On a serious note, a Rangers club no longer hamstrung by debt, forced to focus on bringing on young Scottish players with less reliance on expensive foreign mercenaries, would likely prove to be a very powerful team again (and of course despite all their woes they are the reigning SPL champions).

After all, if in the midst of these problems Rangers have been able to win the SPL for the last three seasons, who is to say how much better they will do given a new lease of life.

One can understand why the present ownership of Rangers are as concerned as they are by the coverage, and the possibility that, if things go wrong, the present ownership will lose their control, but those with Rangers’ wider interests at heart would say that the team is more important than any owner.

And perhaps the process of administration would allow the triumphant return to Ibrox of Sir David Murray?!

Written by Paul McConville | scotslawthoughts.wordpress.com

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