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Rangers own goal leads to ruin

The liquidators' report into the finances of Rangers FC lays bare the extent to which the Glasgow club has itself been a football kicked from end to end by dodgy dealing and financial incompetence.

Rangers is carrying £114m worth of debt – mostly unpaid tax, but also money owed to ticket company Ticketus, and the two past owners, whose actions drove the club into the ground in the first place.

Current owner Craig Whyte, bought the club for a pound from property developer Sir David Murray when a tax avoidance trick backfired leaving the club owing more than £50m in tax. Whyte paid off secured bank debt of £18m and £2.5m in back taxes.

But he did it by mortgaging future tickets sales with the company Ticketus, and used a financial instrument called a floating charge. That means that though he didn't use his own money, he may nonetheless appoint his own receiver and claim assets equivalent to £18m.

Sir David Murray is also on the list of creditors – albeit for a smaller amount. His company Premier Property Group holds security for £110k on a parcel of land next to the Broomloan Stand at Rangers' Ibrox ground. Liquidators Duff & Phelps found the club was using tax and VAT receipts as cash flow, so now the debt to HMRC is even higher than when Whyte took over.

It was not until November last year that Rangers FC informed the stock exchange and the Scottish Football Association that Whyte was disbarred from being a company director. The SFA originally approved him but has now decided he doesn't pass the “fit and proper person” test. A bit late in the day!

Rangers were sitting top of the Scottish Premier League when the liquidators were called in. The SPL rules meant that 10 points were immediately deducted from their total.

Now the SPL on April 30 debates a change that would increase the penalty for insolvency to 15 points or a third of the club's previous year's points – whichever is the greater. The change would apply to Rangers if they are still in administration at the start of the season in August. That would make the club a less attractive prospective so Duff & Phelps have postponed announcing who their preferred bidder is.

But the potential bidders are nothing to get excited about – the usual motley crew of local businessmen and international opportunists including:

One thing is for sure – nobody is consulting the fans who have paid their ticket money, bought the strips, cheered the victories and mourned the defeats over the years. They have no say and no power.

Rangers debts pale into insignificance when you look at what's happening in England. At the end of last season Manchester United had debts of £590m; Chelsea £734m and Liverpool was within an ace of going into liquidation after the Glazers bought the club by borrowing money against its own assets.

And this is the face of 21st century football – clubs bought and sold speculatively and loaded with debt whilst communities get no benefits. Only TV companies, who stage matches at times to suit themselves, and corporate box freeloaders are considered. The players are almost as miserable as they are well paid and the whole thing has little to do with sport and is certainly no fun anymore.

Penny Cole
12 April 2012

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Barry Miller-Cole says:

I think that the difference between Rangers and some of the clubs in England is that, although the financial situations are not worthy of comparison, the clout that the old firm have in Scotland is far greater than any particular club has in, say the Premiership, in England. In reference to this point I think that, sad as may seem,

One consortium or another, one corporation or another needs to save Rangers Football Club for the sake of the Scottish game as well as the club itself. I am aware that some people disagree but I claim my opinion as a season ticket holder whose seat has already been auctioned off to an English financial broker, seasons before I have paid for it. With regard to the point deductions it is very difficult to believe that Rangers would not still come second to Celtic whether they were deducted or not and would have to accept that the 'one team to beat' cannot be beaten until such times as these deductions were discontinued. I do not think personally, therefore, that this would affect the possible sale of the Club and am pretty certain that the Singaporean bidder has already expressed this sentiment.Without television revenue football would be dead, and there is no point in even discussing that argument any further. The other 10 teams in the Scottish Premier League will sadly find that out the hard way, were Celtic and Rangers to leave Scottish Football or Rangers to go out of business.

As a Rangers supporter with a very limited knowledge of business I have found it downright disgusting to discover what has gone on at Rangers since Craig Whyte has taken over and before and believe that David Murray (a man who clearly at one time or another had Rangers best interests at heart) must take some responsibility for gambling the club's future on a success that he never came close to finding in Europe. However, Rangers is a private business ran by a board of Directors, always has been from the Lawrence family for a gazillion years, through David Holmes' board and onto Murray. The fans have never really had such a say, agreed, but never complained when half the Dutch National team came to Ibrox or when Souness put the Entire English National back four plus Keeper on the field. I make this point as a Rangers supporter and Season ticket holder in reference to your final sentence.

"The players are almost as miserable as they are well paid and the whole thing has little to do with sport and is certainly no fun anymore."

In Glasgow this goes way beyond fun. Fun doesn't even begin to describe what it is to be a Rangers Supporter and I imagine most of my friends from across the river would say the same thing about Celtic Football Club and I would understand completely what they meant when they did. It is an absolute disgrace what Craig Whyte has tried to pull off here, and I suspect he will find it difficult to hide without booking himself onto Richard Branson's globally corporate space ship, but I, personally, wouldn't care if Osama Bin Laden came back from the dead and bought Rangers tomorrow if it got them out of the hole they are in and back to winning ways. I do not personally believe that Rangers is a good example to use as the horse that gets whipped with the argument against Global Capitalism because of the very comparisons that you make. Those English Clubs have those debts as working debts and still haul in massive amounts of money. The man who owns Chelsea could pay their debt with the money in his pocket. The likes of the Glazers (who I believe actually own Manchester United) can afford these debts and, most importantly, the English Premiership can sleep easy because without any one of these teams, their league would easily survive. This cannot be said of the SPL no matter what Peter Lawell would have you or anyone else believe. The SPL needs Rangers and Celtic to survive. Rangers biggest problem with David King is that he expects to get past investment money back out of Rangers. Most Rangers fans could care less whether he lives in South Africa or on the moon and how much he owes to that locations government. The problem to them will be the damage he does to Rangers Football Club. Paul Murray is a man with Rangers best interest in his blood but has no money personally and would rely on Douglas Park etc, to control the entire consortium. Ticketus in bed with anyone could have disastrous consequences because their interests are not with the Club but their own invested money. Yes, this is capitalism gone mad but these people are not Abramovichs. There is no comparison to make. Global Capitalism and Glasgow Rangers as an argument doesn't add up to me unless the tow truck millionaire is a tow truck billionaire. This may be the face of 21st Century football in England and in the rest of Europe but it isn't in Glasgow. This is a massive football club that has been ransacked by thieves and their underhanded dealings, clearly for over ten years, and there is not a Rangers fan in the world that is happy about it.

Anyone who cares about Scottish football at all should not be happy about it, no matter what team they support. I would like to see the best deal for Rangers and I should apologise after realsiing that I could have said that with that one final sentence.

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