Rangers, the Dual Contracts and Title Stripping

[media-credit name=”© Scotzine” align=”alignleft” width=”300″][/media-credit]Rangers currently stand accused of breaking the registration procedures of the SFA by giving players two contracts. One of which is the ‘official’ contract lodged with the SFA and the second ‘hidden’ contract lays out payments the player will receive from Rangers’ Employee Benefit Trust scheme. If guilty of this then every player who benefited under the EBT scheme would be improperly registered and thus would have been ineligible to play for Rangers, something which would have catastrophic consequences for Rangers Football Club.

Firstly, let’s look at the rules. Section 4 of the SFA’s official registration procedures states that: “All payments to be made to a player relating to his playing activities must be clearly recorded upon the relevant contract and/or agreement. No payments for his playing activities may be made to a player via a third party”.

Simply put, Rangers and only Rangers may pay the Rangers players for their playing activities and all payments must be included in the player’s contract.

If Rangers were to have given their players a second contract laying out the payments they would receive from Rangers’ EBT scheme and the EBT scheme paid the Rangers players then Rangers would be guilty of breaking both parts the above rule. All payments would not have been clearly recorded on the relevant contract and/or agreement and a third-party (The EBT scheme) would have made payments to players for their playing activities.

The BBC claims to have seen evidence of 45 side letters promising payments to the players from the EBT scheme. This is the smoking gun evidence needed to prove that Rangers have indeed broke section 4 of the SFA’s official registration procedures. Recipients of these side letters range from Barry Ferguson to Pedro Mendes to current Rangers’ player and captain Steven Davis and many more.

If these side letters promise payments to the Rangers players via the EBT scheme (as the BBC claim they do) then there now exists a case, far stronger than just prima facie one, that Rangers have been fielding players that were improperly registered and therefore ineligible over the past decade.

A quick look at Rangers Scottish Cup victories over the past 10 years show the impact that some of the players benefiting from these EBTs had.

In the 2002-03 Scottish Cup Final, Rangers beat Dundee by a single goal to lift the trophy. That goal was scored by Lorenzo Amoruso, a player who received £639,000 by way of the EBT scheme and a recipient of one of the side-letters the BBC has evidence of.

The year prior, Rangers beat Celtic 3-2 in the 2001-02 Scottish Cup Final. The goalscorers for Rangers on that day were Peter Lovenkrands and Barry Ferguson. Recipients of £902,000 and £2,500,000 respectively from the EBT scheme. The BBC has evidence of side letters for both these players as well.

In the 2007-08 Scottish Cup final Kris Boyd scored two of Rangers’ three goals in a 3-2 victory over Queen of the South. Boyd received £215,000 for Rangers’ EBT scheme and is another recipient of the side-letters that the BBC have evidence of.

In 2008-09 Rangers beat Falkirk 1-0 in the Scottish Cup final thanks to a goal by Nacho Novo. Another EBT beneficiary, this time for the amount of £1,200,000 and another recipient of the side letters that the BBC have evidence of.

Rangers came dangerously close to being ejected from the SPL due to charges levelled at the club and Craig Whyte last month which included bringing the game into disrepute amongst other charges. At that point the judicial panel gave serious consideration to ejecting Rangers from Scottish football and they opined that “only match fixing in its various forms might be a more serious breach”.

However, in that case they were wrong, if Rangers are proven to have given players second contracts and fielded these players for over a decade then that too is a worse breach than the disrepute Rangers brought upon the game earlier this season. They stand accused of financial doping for over a decade. Fielding ineligible players they could not afford if not for the EBT scheme which HMRC classed as a tax avoidance scheme.

After coming so close to ejection once, it is hard to see how Rangers could avoid it if they are found guilty of providing second contracts and paying their players via a third-party (the EBT scheme). Further to their ejection, any match which an ineligible player was part of would be forfeit by Rangers. The consequences of that would lead to the loss of 4 Scottish Cups, 6 Scottish League Cups and 5 SPL titles.

Furthermore, Rangers would be liable to claims by opposition teams for loss of earnings. In the 2005-06 Anorthosis Famagusta were beaten by Rangers in the 3rd qualifying round of the Champions League. Dado Prso and Thomas Buffel both scored in the second leg of the tie to secure Rangers progression to the group stage of the Champions League and the millions of pounds prize money that came with it. Both Prso and Buffel are beneficiaries of the EBT scheme and recipients of the side-letters which the BBC have evidence of. If the players who benefited from the EBT scheme are found to be improperly registered and thus ineligible then Anorthosis Famagusta would have a claim against Rangers for the millions of pounds in revenue they lost due to not making the Champions League group stages that year.

The second contract issue casts a very dark shadow of the past and future of Rangers. If found guilty it is nigh on impossible to see how they could continue in the top flight of Scottish football and also retain the trophies won by the players who were in receipt of the second contracts. (15 trophies in total). What is very clear is that the SFA will need to be prompt in dealing with this situation. Once the First Tier Tax tribunal verdict is in regarding the use of the EBT scheme I would expect the SFA to act as quickly and efficiently as possible in trying to clean up the mess left behind by a decade of financial doping and effectively cheating by Rangers Football Club.

The full (and rather shocking) list of EBT beneficiaries is available on the BBC website.

Written by Daniel Brown


  1. Excellent detailed analysis, Daniel.

  2. What you expect & what will happen are two different things.

    So far the SPL & SFA have not had the gumption to make a judgement.

    The Whyte delays were due to RFC NOT providing the documents required.

    De Ja Vu! Fast forward & the SPL are making the same excuse MONTHS after their “investigation” into the hidden contract issue began….. Because RFC’s ADMINISTRATORS have not supplied the documentation requested… After the BBC Documentary I can see why.

    Big Question, why have the SPL not published their initial findings & moved to sanctions on the non provision of documentation?

    Why has the SFA, who hold the original contracts, not taken over the investigation, due to the lack of progress by the SPL, checked the original contracts& put the whole thing to an Independant Panel?

    Because BOTH Regan & Doncaster are hiding, hoping not to be the one who has to make a decision.

    Regan? tweeter of the year for rubbish trying to justify events, then as FACTS emerge… SILENCE.

    Doncaster? Clueless & on record with the biggest load of junk, ignoring ALL the issues & rules, & bleating on about CVA versus Newco & how BOTH are OK by him.

    Let’s hear you both now, even if it’s only to read your RESIGNATION.

    If either of them had any gumption they would be on an overnight back South, but hey, we are only Fans & don’t know what’s best for Scottish Football.They claim THEY do.

    It will be funny watching this lot unfold, how many people are suing the BBC now?

    We have a situation where MILLIONAIRES, all with EBTs are leading the Mob, a lot of whom are on minimum wage levels, & the Mob are paying the bills.

    Think about it, if the EBTs are officially LOANS, Ogilvie, Fat Sally, Smith, Bain & the other HUNDRED & ODD recipients could repay the dosh instead of kissing the badge & acting the die hard heroes.

    RFC problems would be over, bills paid, & the powers that be ensuring any judgements would be suspended, for the good of Scottish Football, you understand.

    I WON’T hold my breath waiting for the loan repayments to happen.

    I will await the next round of Bullsh*t from the SFA, SPL & the Administrators.

  3. The tax tribunal’s decision on the legality or otherwise of EBTs is a red herring. Even if they come back and say that the EBT scheme was perfectly legal, the use of dual contracts is in itself a violation of SPL rules.

  4. Bizarre to see what effectively is a comment from a “guest writer” being pitched as an article. Journalism is about facts, accuracy and sometimes opinion. This article is clearely written by an embittered non-Rangers fan. That in itself is not a crime but I thought we lived in a country where you were innocent until proven guilty. Now whilst it is clear this has given the non-Rangers fans something to do inbetween seasons it would serve everyone well to actually wait for some facts. The BBC may have found some and I think if nothing else they have certainly raised a big question mark overthe administrators suitability.

    But there again most of the daily rags don’t let the facts get in the way of a good story. If as much energy and brain power was utilised to forward Scotland as a country then we would lead the world in technology, business and many more areas of life. Instead the Scots enjoy nothing more than kicking each other when they are down.

    Be careful as you may in fact get what you wish for as you reap what you sow. The rest of the world’s view that the SPL is nothing but a league for pub teams could be very true, very soon………..

    Oh and Daniel – if you want your “article” to be taken seriously then it is best not to use juvenile expressions like Fat Sally. Come back when you have grown up.

  5. If they rule the EBT was legal then the payments made by it are not contractual and are discretionary payments not related to the player’s playing activities. The side letters wouldn’t be contracts and the 3rd party payments wouldn’t be a violation of the rules as the payments wouldn’t be related to playing activities.

    Of course with evidence of 45 side letters it seems very unlikely that the EBT scheme will be ruled as legal. Furthermore, every professional I’ve spoken to is of the opinion that Rangers will be found guilty of tax avoidance the EBT scheme will be ruled illegal.

  6. Whilst it is true I’m a “non-Rangers fan”, I’m not bitter at all. I’ve left all personal feelings concerning Rangers out of this. I analysed the dual contract issue and then I gave my opinion on the eventual outcome of this all.

    I did wait for the facts, when a reputable news organisation goes public in a documentary with evidence of the side letters, they clearly have evidence there as there is no chance the BBC’s lawyers would allow the documentary to air without making sure all claims could be backed up.

    It should be noted that the current tax case is an appeal by Rangers, it is not a case of “innocent until proven guilty” as it is not a criminal trial & it is an appeal case. As it is a civil case, HMRC simply need to prove that on a balance of probability, it is “more likely than not” that Rangers operated a tax avoidance scheme in the form of the Employee Benefits Trust.

    The argument that Scottish football needs a strong Rangers is nonsense. The only reason a strong Rangers even exists is due to years of financial doping (a.k.a cheating).

    Look from 1967 to 1987. 20 years of Scottish football, 4 different teams won the league, 4 different teams reached European finals. In those 20 years, Rangers only won the league 4 times yet I doubt you would claim that Scottish football was at a low point in that time.

    I didn’t use the expression “Fat Sally” in the article at all, the only time that expression has arisen on this page was in a comment by the user ‘Ian Ferguson’, not by me.

    Also, as an aside for it’s relative size, Scotland is a major player in the technology world. We currently manufacture about 28% of Europe’s PCs and more than 7% of the world’s PCs. Rather impressive for a country with just over 5 million people

  7. Old Firm ambivalence

    May 24, 2012 at 9:41 pm

    Can we all agree that if another Rangers fan suggests we ‘wait for the facts’, we just cancel Scottish football and go home?

  8. Remember guys, just because Phil Gillivan says it, it doesn’t mean it’s true.

    But in the (very) unlikely event that The Rangers are stripped of titles, I would like to congratulate Linfield FC on becoming the worlds most successful football club.

  9. why no mention of season 2004/2005?,is it because a Celtic player with an EBT was involved in almost 30 games, either playing or on the bench, including 6 champions league matches

  10. Rangers deserve all they get,there should be no excuses and no crying.
    That being said, this is still a R angers hating site and I can only assume these people will move on to hating Hearts full time when Rangers are gone.

  11. Ha Ha, “Not bitter at all”….now that’s funny!

  12. You say the things Celtic fans want to hear, whilst ignoring key facts.

    Keep up the bad work. It fits in here.

  13. very good piece…. Can I just say, six rangers fans respond and still not an ounce of remorse amongst them.

    Shame on all of you…

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