Rangers liquidation inevitable?

A week has passed since my previous post on the subject, and yet the Rangers situation remains as clear as the toilet bowel of a cholera sufferer.

The story this week has mainly been about the potential buyers - who have in general shown their enthusiasm for taking over Rangers with quotes along the lines of “I’d be the first to step aside if anyone with really deep pockets comes forward and wants to do a deal on their own” (Paul Murray) and “I hope to get something in by Friday purely as a fallback for the administrators, should the other bids fall over or not be acceptable” (Brian Kennedy). As one Twitter user suggested to me, they seemed to be fighting each other to get to the back of the queue!

So, as of yesterday, Kennedy appears to be out. An Evening Times article suggested his bid for the club was around £5 million compared to the £10 million Murray and his Blue Knights consortium have apparently offered; both of these offers seem to be dwarved by the mysterious Americans known as Club 9 Sports who appear to be offering £25 million. There is sufficiently little detail known about the bid from the far east that it seems fair to dismiss them as insignificant. In fact, considering some of the guff that has been spouted from Ibrox in the last 6 months, I wonder if they even exist.

None of these offers seems particularly palatable. It may be just as well for Rangers that Kennedy is out of the picture. His derisory (compared to his opponents) offer, coupled with his apparent reluctance to bid, suggests he was simply a chancer hoping to snatch the Gers on the cheap. Kennedy is best known as the owner of rugby side Sale Sharks; what has only briefly touched upon by the press up north is his antics during his previous ownership of a football club. Stockport County were bought by Kennedy in 2003. He instantly moved Sharks to their Edgeley Park ground, making Stockport "second-class citizens in their own home", according to Oliver Holt of the Daily Mirror.

Kennedy sold the club back to a Supporters Trust in 2006, claiming he had lost £4 million. But he retained ownership of the ground, and kept picking up his rent payments as the team plunged down the administration route. This was partly because the trust had the business sense of a snowball salesman in hell, but partly because Kennedy had convinced them to agree to a deal where he got 30% of transfer dealings, more than £1 million of hospitality profits. The accusation from many Stockport fans is that the rugby club thrived, while the football team crumbled. Classy bloke, by all accounts.

Paul Murray's group has the populist support, as well as plenty of positive press. But it is a bid with a lot of baggage. Murray, of course, was a director at Rangers at the time of Whyte's takeover. Though he left that role shortly afterwards, SFA rules suggest that anyone who was "director of a club in membership of any national association within the five-year period preceding such club having undergone an insolvency event" is not permitted to become the director of another club. Craig Whyte, for reasons that are unclear (it may even be out of spite), has inferred that he won't sell to Whyte. In addition, one of the main backers of the Blue Knights, businessman Dave King, is being chased by the South Africa taxmen over £227 million he apparently owes; as a result of this, he is under a restraining order regarding dealing with property in Scotland. From one (alleged) tax dodger to an other (alleged) tax dodger...

As for the Americans, they have made it clear that their intention is to liquidate Rangers, not rescue them, a suggestion that understandably has set up alarm bells around Ibrox. Their intention, presumably, is to start a phoenix club or 'newco', keeping the Rangers name and heritage but dumping all the debt. Certainly I can't see how the HMRC would be agreeable to that, and I understand the law now allows them to pursue newcos for previous debts, if it is obvious that they have been set up just for the purpose of dodging creditors.

From a footballing point of view, though, liquidation is what the suits in the SPL and the SFA are dreading. Of course, we have precedent in the form of Gretna. They were liquidated and the subsequent phoenix club had to re-apply to enter the SFL at the bottom (they, of course, were unsuccessful). And of course if it were, say, Inverness Caley Thistle who were in this mess, then the outcome would be very straightfoward - i.e. the same as Gretna.

But surely they wouldn't dare do that to Rangers, would they? Something to think about, since liquidation now is far from a hypothetical outcome. But we'll know more by the middle of next week, as Duff and Duffer - sorry, Duff and Phelps - have announced next Wednesday as a deadline for bids. Except that they did exactly the same thing a few weeks back...and here we are. So don't hold your breath...

L.

Dreadful Dunfermline and Hapless Hibs in the two horse relegation race

Caley Thistle's 1-0 win at Pittodrie at the weekend was as unexpected as it was welcome. After seven games without a win, and some pretty abject recent performances, confidence was not high in the support. But an early Gregory Tade goal, coupled with an abysmal Aberdeen performance meant that run came to an end, even though Inverness played 35 minutes with ten men.

It wasn't just an important result in terms of stopping the rot. Inverness may only be tenth in the table, but the gap between us and the drop zone increased to 11 points, with only seven matches (plus ICT's game in hand against St Johnstone on Wednesday) to go. So, realistically, it means that Terry Butcher's side are pretty much guaranteed SPL status next year, and confirms what most have suspected for a few months now - the relegation battle is a two horse race, between Dunfermline and Hibernian.

I've discussed both on the blog on recent months - mainly under the pre-text that Hibs are woefully underachieving, and that Dunfermline were woefully underprepared for the SPL on promotion to the top flight last summer. But, as we enter the final few furlongs, the Hibees have only a three point advantage. They certainly don't have much momentum - only two wins and just nine points from fifteen league games under Pat Fenlon, who replaced Colin Calderwood in November. Dunfermline's results haven't exactly been great - only one win in eighteen in the league, and no SPL victories at East End Park all season - and it wasn't all that surprising that boss Jim McIntyre was given the heave-ho a couple of weeks ago.

McIntyre's successor is former Hearts boss Jim Jefferies - an experienced manager, no doubt, but, as my dad put it, "He's not exactly the messiah, is he?" Jefferies is best known down south for failing to keep Bradford City in the Premier League, but his hands were tied there by lack of cash and a lousy squad. More recently, he left Kilmarnock in 2010 when the team were heading for a relegation battle, then popped at as Vladimir Romanov's latest Tynecastle stooge a fortnight later. Lasting 18 months at Hearts counts, I suppose, as a reasonably successful tenure.

Frankly there weren't many other options available, and Dunfermline needed a new manager. The question is whether Jefferies can give them even a brief bounce. Yesterday, while researching this blog, I texted an old uni friend, Jamie Donald, a journalist by trade, and a Dunfermline fan by cruel, twisted fate, for his opinion. Expecting a few lines slagging off Andrew Barrowman (I've had a lot of texts like that from him this year), I instead got this rather impressive essay:

Where to start? I think when we won promotion and our marquee signings were Andy 'no goals' Barrowman and Kevin 'no knee' Rutkiewicz, most of us were expecting to be in this situation at this stage. We're trailing the other SPL clubs in so many areas - average gate, wage budget, squad quality and depth - that it's no surprise we're trailing them in points as well.

When we talked about teams we thought might be relegated ahead of us, Hibs weren't really mentioned - but even though I've spent the past six months writing them off as relegation candidates, they keep continuing to amaze with their capacity for implosion. However, if the general consensus among neutral observers is that Hibs can't play any worse, the fear among Pars fans is that, with a squad full of first division players and SPL dropouts, we simply can't play any better.

In a way it's amazing that we're still in it- if we go a whole season without winning at home (a distinct possibility) and still stay up (an unlikely, but my no means implausible scenario) it would surely be some sort of record. And as poor as we've been, we're only three points behind, with the impetus provided by an experienced manager, and chasing a team of chronic underachievers who, if the papers are to be believed, are in turmoil...I think it's on!

That's the crux of it, really. Dunfermline should be dead and buried. But, despite months of scottish fans saying to each other that 'Hibs are bound to turn it around sooner or later', there is still no sign of it happening. The Easter Road side have the better players, at least on paper, but - even though the stories of Leigh Griffiths headbutting his coach turned about to be complete b******s - there is still a complete dearth of team spirit. A complete overhaul of the back four in January hasn't stopped them haemorrhaging goals. Their main goal threat, Garry O'Connor, has been demoted to the bench in recent weeks due to his rotten form (whether this is the cause, or the result, of him boasting a grossly expanded waist line is unclear to me), and no-one is filling the void.

So the Pars are still in with a shout. Their squad, on paper, is hugely inferior. They can't win at home - not yet, anyway. But they have a new manager. They have a squad which at least boasts some experience - the likes of Gary Mason, Mark Kerr and Martin Hardie should at least be up for a scrap. The bookies certainly don't give them much of a chance - at the time of writing they are 6 to 1 on to plummet through the trapdoor. But the prospect of Hibernian playing in the first division next season is not quite as unthinkable as it used to be...

L.

Why would the taxman make peace with Rangers?

The process of administration at Ibrox has not been typical of those which has happened at other clubs in the UK in the recent past.

When Motherwell entered the process in 2001 they had to shed 19 players. Both Dundee (twice, of course) and Livingston sacked several members of staff when the administrators moved in, as part of a drastic cost-cutting exercise in order to keep the club alive in the short-term. Similar actions have been taken at several English clubs who have been emperiled by the same circumstances.

A few weeks ago, there was a great big hootenanny in the Scottish press about the number of redundancies which would have to be made at Ibrox, especially after the administrators Duff & Phelps announced the club needed to find £1 million of savings per month in order to survive till the end of the season. The club managed, in the end, to make a huge PR coup out of it, with the playing staff agreeing to across-the-board wage cuts, and only two players, Gregg Wylde and Mervan Celik exiting - both voluntarily.

Wylde clearly has a clever agent advising him. It's pretty certain that he knew he would be offered a contract by Bolton, who had a £400,000 bid for him rejected last summer, and so would be on the dole only for a short period, yet he came out with a glorious sob story about how he couldn't sleep at night for worry about the Gers' future, and gave the impression he was agreeing to voluntary redundancy as a personal sacrifice to save others. I would bet a significant sum of money that he is on a higher wage at the Reebok Stadium, along with a handsome signing-on fee. Some sacrifice!

Celik, meanwhile, could be a poster boy for this whole fiasco - brought in during January from Swedish side GAIS (who are claiming £300,000 in compensation), the winger made a grand total of one start, and left after all of about 8 weeks in Scotland.

Anyway, my point is this - there is no way on earth that those wage cuts provide Rangers with the required savings, even though the likes of Allan McGregor, Steven Davis and Steven Whittaker were on high salaries by SPL standard. So it is not unreasonable to assume that liquidation is a potential outcome to all this...nay, it is probably a more likely outcome than salvation, especially as all potential buyers are hedging their bets until the outcome of the club's case with HMRC. A £50 million-plus tax bill would surely finish them off.

But, I hear you say, the taxman will surely strike a deal with the club for a more manageable fee, when the alternative is Rangers going bust and the public revenue receiving zilch? Certainly, that is the line that Duff & Phelps are spouting, with the caveat that HMRC will offer a deal as soon as Craig Whyte is completely out of the picture. And the Scottish media seem happy to accept this line of argument as fact, even though it comes from the same PR company that fed them Whyte's white lies for months.

But according to the likes of Private Eye magazine and RangersTaxCase.com, there are plenty of football clubs who have been up to similar mischief in recent years and are under investigation. And HMRC are used to dealing with far bigger figures than £50 million - just think of the £5 billion that Vodafone managed to avoid; compared to that, the Gers' tax bill would be, if not a drop in the ocean, then at least a drop in the loch. A reduced fine would at least vindicate some of the dubious financial practices involved, and set a precedent that other football clubs would be tempted to follow - dodge your tax bills and, if the midden hits the windmill, you won't have to pay them after all.

Certainly, I don't trust a word being spouted by the mainstream media in Scotland on the subject - after a brief spell where they got the knives out for Whyte (who presumably could be heard saying "Et tu, Tom English?" to the Scotsman's chief football writer, who published a sycophantic interview with the Rangers owner a few weeks before administration, then shamelessly stuck the boot in when subsequent events made him look like a berk). So I'm afraid that, until there are some facts to back up the claims of a deal with the taxman, or indeed to back up the legitimacy of any of these bids for Rangers, I'm going to raise a sceptical eyebrow every time.

Damn, this started out as a blog on how the Scottish football authorities are making an arse of handling this whole situation - instead it had turned, like so many of my other blogposts, into a stream-of-consciousness rant.

But at least it's a good rant. So the other blog will have to wait till next time. I bet you'll all be on tenterhooks...

L.

The SPL's last chance to change

Nearly fourteen years on, it's difficult to understand some of the logic behind how the rules of the Scottish Premier League were devised.

1998 was a different time, I suppose. The final season of the old Scottish Premier Division saw Celtic, led by Henrik Larsson, break the Rangers nine-in-a-row run which, as the fan of a diddy team, caused my childhood to be traumatized by the taunts of kids who had never been within 100 miles of Ibrox, but claimed they were Gers fans because, you know, it's cool to support the team that's winning every week. I'm not bitter, honest, whatever my therapist tells you.

Anyway...in 1998 Rangers were still being bankrolled by David Murray and Celtic were in good financial nick, and in the next few years the likes of Hearts, Aberdeen and Motherwell would pay transfer fees and wages which would give the current club chairmen angina attacks. It seems bizarre that, since there was already an astronomical gap at this time between the Old Firm and the rest, that the other teams would agree to a system where there would be a huge discrepancy teams who finished in the top two each year and the rest, but I suppose that, if the pie is big enough, you're still getting fed comfortably from the leftovers.

Everything was so rosy that, within a couple of years of the SPL's formation, a couple more teams were invited into the cartel. After all, the pie was only getting bigger; there'd be no harm in cutting it into a few more slices?

How times change. The expansion of the Champions League, and the obscene amount of money being poured into football south of the border, have had a profound effect on Scottish football. You could argue all day about why attendances are dwindling at games (and trust me, I would) but there is no doubt that the SPL is considerably less marketable to TV companies than it was a decade ago, and as a consequence there is far less cash to go around. The pie is rapidly becoming a cupcake. In 1998, the Scottish Premier League might (or might not) have been fit for purpose. In 2012, it's no more fit for purpose than Craig Whyte is fit to own a football club.

I know that. You know that. The clubs know that. Some little green man who has spent his entire existence hiding under a rock on Mars knows that. But whenever the dreaded word 'change' is mentioned, there's lots of chat, and lots of meetings, and lots of buzzwords drip-fed to the press, such as 'dynamic' and 'proactive'. And absolutely no 'change' actually happens. And all the while Scottish football slowly began to die, like a patient whose doctors do nothing while they argue over the best treatment.

But the events currently affecting Glasgow Rangers have shaken our national game to its core. And they offer a huge opportunity to the other clubs, if only they would dare to jump on it. The current format, with a grossly uncompetitive, lopsided league, with the quality of player decreasing year-on-year, with every team playing each other a gazillion times a season, cannot stay as it is - it's boring for supporters (shown by the decline in attendances) and for the TV channels (look at the mediocre TV deal). But the foundation of the SPL's rulebook is that you need win a vote 11-1 in order to change anything...which comes from the reasonable assumption that Rangers and Celtic have mutual interests. It means that, if Rangers and Celtic don't like something, it doesn't happen.

If Rangers go into liquidation (not as big an If as the club's administrators would have you believe), Celtic are at risk of being ganged up on by the other teams. The other ten clubs seem to have realized this too, since they have agreed to meet up this week without Celtic and Rangers in order to discuss the way forward. They have denied that sharing of gate receipts is on the agenda; they haven't denied anything else though. One chairman told the BBC "we want money to be distributed better and money going into the division below for the benefit of all."

Celtic might not like it, but since no other league seems keen to take them or their Ugly Sister off Scotland's hands, they might well have to lump it. Could the years of just bending over and taking it from the Old Firm in exchange for crumbs from the top table be coming to an end?

The bottom line is this; we have all recognised for years that the SPL needs to change, and every year of procrastination has made things worse, and the needed changes more drastic. Rangers aren't the only Scottish club with dodgy finances. If things continue, they may not be the last to fail to pay their bills. Sooner or later we will reach a point where things have got so bad that there is no way back. And it's not far off. Whatever becomes of Rangers (that's a subject for another day), their plight has granted Scottish football a chance to save itself. Can we take it?

L.