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Untold Economics: Why does an Arsenal blog keep talking about Rangers of Glasgow?

Untold Arsenal on Twitter @UntoldArsenal

By Tony Attwood

The fact that Liverpool managed to scramble out of the mire, and Barca, having famously run out of cash so they couldn’t pay the players, are still there buying the likes of Cesc etc makes some people think that there is no crisis.  But crisis there is, and one big example of it is Rangers.

And I keep writing about Rangers because where they are, we could be, if we followed those who demand that we buy, buy, buy, buy and then buy.

Rangers, unlike Arsenal, have been helped by a very friendly press over the years – as one blogger put it recently “Journalistic  investigation of the scandals within Rangers over the last decade has amounted to nothing more than telephoning Rangers’ PR firm for a comment.”  I’d go with that.

But even when the press are with you, ultimately they have to recognise that something is not right (even though they will never admit to changing the story half way through events).

Last May a whizzkid as these unlikely chumps are called bought Sir David Murray’s shares in Rangers for £1.  Now he discovers Rangers are about to go bang, and he will lose his £1.

The new turnip on the block is Craig Whyte and he is the one who loves calling black white, pink puce and strawberry cheescake, trifle.

“Rangers won’t go the wall,” he says over and over again, meaning “I won’t lose my £1.”  He says Rangers have been the victim of a “malicious campaign” in the press against his club.

That was just before a judge came out and ring fenced nearly half a million pounds of Rangers’ dwindling assets so that yet another legal case against them doesn’t end with the claimant having nothing to claim.

The problem with Whyte is that people have started to question his ability to cope with the fact that Her Majesty’s Revenue and Customs look like winning their case against the club.  That means £50m fine, and death.

Whyte says funny stuff meanwhile, like: “I’ve done a lot of substantial turnarounds that are below the radar. In fact, everything in my life has been below the radar prior to this.  I’ve deliberately chosen not to get my other businesses involved in the media circus around Rangers. I’ve gone out of my way to make sure my other businesses are not affected by that.

“I understand everyone wants to know every detail of my life, everything that is going on. But Rangers is my public life – everything else should be private.”

Tough one that, unless of course what is below the radar is rather like Alice in Wonderland’s hole in the ground – a fantasy world.  Last month Sheriff Officers arrived asking for £2.8million payment to settle a separate tax case.  And what do you know, the chairman had publicly agreed to pay that bill on completion of his takeover.   And he didn’t.

So the tax man demanded another £1million in interest and late payment penalties.  Whyte now says, “I said we will deal with it and it’s being dealt with.   I can understand fans being concerned about things like Sheriff Officers turning up.  But at the end of the day, there is a big job to be done here in sorting this out as a business.”

Yup, and suddenly the papers that have been so quiet for so long want answer.  So the boss decided to ban The Herald from Ibrox for writing about a another unpaid bill – £35,000 with law firm Levy and McRae. The lawyers claimed in court that there was “real concern” about the solvency of Rangers.

Rubbish, screamed the owner, or something like that.  After all he has his £1 to protect.   But then fired chief executive Martin Bain claimed £1.3million compensation and the judge ring fenced half a million of Rangers assets on the grounds that there was “real concern” about the solvency in Rangers.

Whyte has been asked if he might put Rangers into administration if he loses the £50million case with HMRC  in November.  He doesn’t answer.   Perhaps like Billy Bunter he is expecting a postal order from his aunt.

What makes all this slightly difficult is that Rangers is the most patriotic of clubs, the most British of clubs, the most established of clubs.  Fans wave the Union flag.   They are patriots.  Except that patriots normally pay their tax bills.

If Rangers go bust there is no one to pay the outstanding bills (although the press in Scotland like to suggest there is) and the tax bill will easily eat up everything.  The banks won’t get their money back – which means it is very unlikely that any bank is going to lend anyone related to Rangers a penny.

Besides  85% of Rangers’ shares are held by MIH and through their convertible preference shares, Lloyds own MIH in everything but name.  RBS is owned by you and me (if you are British) and they worked heaven and earth to get out of Liverpool – they won’t dive in.  Lloyds don’t want them.  I can’t see any bank given them 10p overdraft.   Whyte has admitted Rangers have no current credit facility with any bank.

So if Rangers go into admin, what then?  If the money due far exceeds the assets then those claiming money will need to find a buyer for the club and its assets, including the players registrations and the ground.  If the players are not paid, they have the option of leaving since the club will have broken its contract with them.  If no one is willing to put up the money needed to pay off the creditors, the administrators could sell Ibrox for housing development.

Which raises the issue – who would put up this money and buy such a loss making club that is already very successful on the pitch?

That’s the problem – I don’t think anyone will.

Rangers will get a points deduction for administration, but then…  I am really not at all sure that survival is a given.

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19 comments to Untold Economics: Why does an Arsenal blog keep talking about Rangers of Glasgow?

  • Ian Hill

    Hi I Must say Tony your always A good read. And I could not agree more with what you say many thanks Ian

  • feeno

    aw man you’ll have old firm fans bickering away on your site with articles like these, its a plague I wouldnt wish on you!! its a good read tho. Im in scotland and for a while nothing had been heard through the various glasgow publications, even pundits on the bbc where quick to shoot down any talk of financial difficulties because there nose has firmly beein the trough of David Murray, now it seems a wee bit more acceptable to be talking about it. Yet we’re told theres no agenda with media coverage etc.

  • Sharpshooter

    There is another little problem reagarding Rangers. If I’m not mistaking, they own 2% of Arsenal shares. I wonder who will buy those shares when Rangers will sell…

  • Sammy The Snake

    Always nice to read your thoughts Tony. But are Gooners to feel better if other clubs are having bigger problems? Buy, buy, buy is surely not the answer, but our current squad is far more capable than their B-Burn showing. Why can’t the club extract the best out of these players? All players who left in the summer have become better players in their new clubs. That may mean (and I am not suggesting to know anything here) that they weren’t managed properly before. Wenger is still a fantastic manager, so why are the failing so evident to see? Or shall we hide behind Ranger’s problems? Your thoughts are important to Untold readers, please share.

  • Meditation

    Its a funny old world. The thing is you cannot lie forever. A thing called reality kicks in.Problem with that is the damage could be already done so we must take the blame also for not being aware and allowing so called experts to decide our fate.Politics.The people, fans suffer in the end.Football clubs are symbols. Some held up more than others.What is there purpose as a symbol.That may tell us the reasons for selective memories from the media. on a separate note it was funny to find out that an ex kgb owns four mainstream newspapers on british shores.Alexander lebedev.Normalization. Talking points maybe..Anne’s talking points maybe. Interesting article as well tony.

  • @meditation – ex KGB..? Please tell us more – doesn’t Usmanov have some KGB ties?

    …Interesting…

  • Rangers surely don’t have £50m in their playing squad to sell, especially if it’s a fire-sale to pay debts. I’m not sure what their training ground situation is and whether they have that to sell but it could be that selling Ibrox is the most-likely way that they will get the money needed.

    Their only hope is really that a fan group will buy the club and push aggressively for the break-away league (whether that’s Rangers and Celtic in the EPL or some Northern Europe league with Dutch, Danish and Belgian teams. That’s the only way I can see that any investor would have a chance of making their money back and Scottish teams are looking less and less likely to be able to compete in European competitions.

  • Sean

    An interesting description of ‘patriot’. Glasgow Rangers have a notoriously and infamous sectarian and bigoted support. Stick to the Arsenal as your pretty ignorant on other clubs.

  • Stevie E

    Sean
    A patriot is someone who feels a strong support for his or her country (thanks Wiki). I’m sure people who are bigoted can be patriotic. In fact, I’m pretty sure the BNP think (mistakenly in my view) that they are extreme patriots. It’s very disappointing that someone like you can skim an article which has taken time to research and write (and is one of a series of articles) and just pick out a word, totally misunderstand what that word means, and dismiss the author as ignorant. I think we all know who the ignorant one really is.

  • Rhys Jaggar

    I can tell you’ve never lived in Scotland, Mr Attwood. If you had, you’d know it was a political certainty that Rangers will be ALLOWED to survive.

    Unless the deal is one Scottish Club in the European Super League so you need to kill one off before that happens. Is it?

    I don’t doubt your presentation of facts, but I do doubt your understanding of how deals are struck where national institutions like Rangers are concerned. They are as big up there as Liverpool or Man Utd are down here…..

    1. You won’t get £50m for knocking down Ibrox Park for houses. Nowhere near. So that solution won’t get HMRC their money. And there won’t be any future moneys either if that’s the road they go down.
    2. You could sell the entire squad next summer at fire sale prices and start again with kids. I’d reckon you’d get little more than £30m that way. But you’d still have a club which could start again, living within its means. Even with kids they’d survive in at worst Scottish League One, although in probability they’d survive in the SPL. Let’s say you got £20m revenue a year outside Champions League, you set the wage bill at £6-10m and made £5m profit. All of which got paid to HMRC. Any sale of players for profit goes there too. You’ll pay off HMRC in three or four years and keep a revered institution going. Better solution eh?
    3. More likely, you say: if Rangers get into ECL next season, 50% of moneys go to HMRC in group stages. Beyond that, bonuses for players either in Europa League of ECL knock out stages to keep the players cushty. Even if there was only one fixture in Europa league, if the entire revenues after operating costs went to the players, you’d probably see them share a pot of £2m. It’s doable……..

    Rangers is an absolute institution in Scotland. It’s akin to Real Madrid or Barcelona in Spain. It just won’t go out of existence.

    Not unless you can state without fear of libel the depths of criminality going on inside that club that would make politicians and Scottish people think differently.

    It would have to pretty much be that it was the epicentre of institutionalised, widespread rigging not just of Scottish football but the English Premier League as well, influenced as that is so much by Scottish managers.

    Are you able to say that Mr Attwood??

  • Sean

    Stevie E, you fail to address the fact that Glasgow Rangers have been notorious for decades for sectarianism instead totally missing the point and waffling on about patriotism. Only last month they were again fined by UEFA for offensive sectarian chanting i.e anti-Irish and Catholic. There is a difference between loving one’s club/country and hating someone because they are a different race/religion. Im glad that Mr Attwood in a roundabout way has highlighted Scotland’s shame i.e. sectarianism.

  • Paul-Canada

    Excellent read Tony. Whether you’ve ever lived in Scotland or not should have no bearing on the facts. I lived in Scotland most of my life until moving to London ( Hence Arsenal ) and now Canada. It’s easy to see where some peoples loyalties lie by the ignorance of some responses.
    I’m a GOONER through and through. It’s the only team I support. Arsenal are what got me into football but I never forget at the end of the day it is a business. You can talk about passion until you’re blue in the face but if whatever club you support isn’t sustainable it’ll go to the wall. I’m sure over the next few years we will loose some very well known clubs through ignorance and poor management.
    If a club is up for sale for a pound then look out. No matter how “BIG” they are.
    GOONER FOR LIFE.

  • Paul-Canada

    P.S.
    Tony. Do people only call you Mr Attwood when they don’t like the topic your post?
    Just a thought.

  • Stevie E

    Sean
    I’m certainly not disputing whether Rangers supporters are sectarian, it’s of no interest to me one way or the other. However, your criticism was about the use of the word patriot in this article, I simply pointed out a patriot can be both bigoted and sectarian. Because the author of the piece didn’t mention the Rangers supporters are also, in addition to being patriots, bigoted and sectarian, it certainly doesn’t mean he’s ignorant of the fact as you claim. In my opinion, calling somebody ignorant simply because he omitted some information in an article is pretty rude. You don’t know if he’s aware of this or not, but instead of just asking “Tony, are you aware that Rangers supporters are, in addition to being patriots, both bigoted and sectarian?”,you just throw out an insult in a condescending and superior manner. That is just rude. Rudeness is just a form of ignorance. Hence, it is you who are ignorant. Sorry to waffle on (another example of your rudeness/ignorance).

  • Woolwich Peripatetic

    I just love all the ‘too big to fail’ suggestions since they all seem to assume that A) someone out there has the cash to bail out these institutions and B) that the people who are owed money will behave in a supportive manner. If A) is true, where are they, if they’ve not bought the club for £1 already then they most likely don’t exist.
    B) could be scuppered by a Celtic fan with a grudge and a modicum of power…

  • Ugandan Goon

    There might be hope yet!
    the qatari foundation exists for just this reason, if a narrative that portrayed them in a sort of messianic light could be cobbled together rangers might have a chance. saying that the qatari foundation might want more than just a section of glasgow to notice or indeed give a shit!

  • Woolwich Peripatetic

    Talking of football

  • Woolwich Peripatetic

    Sorry, new phone. Talking of football clubs on the brink and those who take them to it, we’ve acquired some more Barca DNA and it’s the purest yet. The 14 year old son of one Joan Laporta has moved to London and hooked up with our academy. Looking forward to watching him being tapped up by a truly ancient Xavi in ten years time if he’s any good…

  • Laundryender

    Tony an Interesting piece but surely the real story is what has happened to all Scottish clubs since they lost TV money and are no longer able to compete.
    Were the EPL to loose TV monies I believe we are better placed for survival than most!
    Regardless of my opinion, what is happening in Scottish football is a tragedy. Long gone are the days when English clubs would go to Scotland shopping for talent. It may be hard for newcomers to football to understand but Scotland is the home of professonal football, with the oldest professional club and highest ever attendance for a match in Europe. Our club boasts a proud Scottish tradition with players like Frank Mclintock, George Graham, Charlie Nicholas, and before that Alex Mackie Angus McKinnon and many others. I fear it will be some time before Scottish football is ever a force again. It may well take something seismic like a club folding