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Rangers face financial meltdown

In terms of English clubs that are facing financial disasters we are used to discussing WHU, Liverpool Beachballs and Manchester U.  To that list we can now add Portsmouth.   Their new owner in September turned out not to be the billionaire Sheik Yermoney but a guy who borrowed £50 off a bookie’s runner and placed it all on Portsmouth to go down.

So he was then bought out by Sheik Yerbooty who turned out, amazingly, not to be a billionaire but a guy who borrowed £50 off the bookie who took the original bet.   Sheik Yerbooty told a paper all this, and Portsmouth said the story was a fake, and said they would sue the paper.

The paper said, don’t worry sunshine, we’re suing you, because the story is true and we’ve got the tape.  You have besmirched our good name.

And would you believe it, for the first time in the history of the press, the story was indeed true.  Portsmouth are owned by a guy who isn’t even a paltry millionaire, but someone who openly admits he bought the club without knowing anything about football, and now wants to flog it again.

It couldn’t get sillier could it?  Well, yes, in Scotland it can.   You don’t need to know the ins and outs of Third Lanark and Gretna to know that Scottish clubs go down the drain faster than… well, beach balls with a pin stuck in them I suppose.  Nor that for the past 24,000 years the league has be won by either Celtic or Rangers.

Now Walter Smith at Rangers has agreed what the world has been whispering for months: the club is bust and being run by 
the banks who have people on the board.

The club is up for sale but no one wants to buy – although they say they have “tentative offers”.  No new players have been bought for 18 months, and none can, nor are existing ones being offered new contracts.  Everyone is for sale. The backroom staff are out of contract in ­January and have not been offered new contracts.  The bank is owed £30m.

Now we all know that Scottish football is small in comparison with EPL – obviously so because the population is much smaller than in England.  But even so, when one of the two giants of the game goes bust, that shakes the whole fabric of the league.

Rangers have been hammered twice at home in the Champs League and are bottom – as incidentally are the financially much more sound Celtic in the Europa League.

So there you are – you could buy a Champions League team for £30m – although what you would do with them who knows.  Maybe the century of sectarian rivalry between the two clubs is finally having its payback time.

I’ve only seen Rangers play in Scotland once – away to Aberdeen – so I would never claim to have a proper understanding of the club or indeed of Scottish football.  But on that one occasion even I, with my north London upbringing was shocked at what I heard.  Maybe no owner really wants to be associated with that.

While on matters financial here’s a piece that Gordon Driver sent me from the NY Times.

It is about a bedding manufacturer called Simmons. It has debts of $1.3b and is about to go into bankruptcy. Replace “private investors” with Glazer and Simmons with Manchester U and you begin to see a pattern.

“How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times and an example of a growing phenomenon in corporate America.

“These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Then, not long after, they often borrowed even more money, using the company’s assets as collateral — just like home buyers who took out loans on top of their first mortgages. For the financiers, the rewards were enormous.

“Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, thus recouping all of the cash it put down, and then some.”

So Manchester U can rest a little easier.  They were not the only ones to be destroyed by this con.

(c) Tony Attwood 2009

Details of the new Arsenal book MAKING THE ARSENAL can be found on our on line shop.  We should have copies ready for despatch by the end of this week.   And there’s the continuing story of Arsenal 100 years ago on the Making the Arsenal daily blog

24 comments to Rangers face financial meltdown

  • walter

    I really loved the last sentence Tony. LOL. It will make them feel better after losing to the beachball.
    About the Rangers, well it did give me a shock. I really was supposing that Celtic and Rangers where the only 2 clubs in Scotland that could survive financially.
    But the most shocking thing was that the press told the truth about Portsmouth. This will take me a few weeks to get over with.

  • pig

    ‘maybe the century of sectarian rivalry between the two clubs is finally having its payback time.’

    here tony, you have hit the nail upon its head. your mention of this insidious force in the world reminds me of the classic billy connolly sketch: ‘are yu cathhlik or prodestant’ (albeit in a scottish accent) the basic premis of which was that he didnt give two hoots for either party, he just wanted to get home without getting a kicking from either faction.

    i have no problem with football (or anything for that matter) being tribal. however when it comes down to which flying teapot you worship that denotes the team you support it says a lot for the human race as a whole.

    at least with footie, we can normally leave religion and politics
    out of the game. unfortunately the celtic/rangers shitting in your shoe and pissing in your brew antagonism has been there for years. fortunately most of the rest of us are not caught up in it as badly.

  • walter

    As looking from a distance, it always was a strange thing that religion can give such a fuss upon a football team.
    And yes we also have some kind of situation where some teams in the past came from catholic foundings and other from socialist (as we don’t have that much protestants in Belgium) like in Bruges. But now some 100 years later we have moved on and I can not imagine any of the fans supporting their team in Bruges because being catholic or not, or being socialist or not. Rivalry yes but not on the same fanatic base like in Glasgow.

  • AGS

    Hi Tony
    First time I’ve posted, but I have been reading your articles for some time and really enjoy them – keep up the good work. I think it is hugely important that the issues surrounding the business and economic climate in which Arsenal operates in, be addressed and discussed, and take my hat off to you that your blogs constantly strive to do just that. It is worrying times for English football.
    Your reference to the Simmons situation in the USA reminds me of exactly what is going on in this country too. Take Philip Green and his purchase of BHS as a prime example. He bought BHS with little of his own money, he then borrowed a further measley sum of £1.2 billion against all BHS’s assets, and promptly paid it as a dividend to his wife – who also happens to be a resident of the lovely tax haven called Monaco – thus negating all the lovely tax that our Government would have been due on such a large income. This type of greed is rife amongst the private equity industry and poses questions too for how any takeover of Arsenal will be financed etc.
    The Glazers situation is a bit different as I understand it, because the money they borrowed was purely to buy the club from the Stock market and thus far they haven’t taken any further loans against the club to pay themselves a dividend. However, the only way they will get anything out of it IMO will be to put the club back on the stock market, hoping that they sell all their shares for more than what is borrowed against the club i.e they sell for £800m and have £100 profit after paying back the loans.
    Great article Tony and looking forward to more of the same

  • LRV

    Very intriguing piece, Tony.

    The Portsmouth story is too pathetic to be funny. I can’t even get my head round the “Fit & Proper Person’s Test” that the FA is supposed to be doing. If such things as this silly Charade can slip past them, how can we trust them with running the game that we all love? Not content with letting Man-IOU and Liver-beachball-pool be ravaged by the scoungers, they are letting the smaller clubs who may never be able to survive it down very badly. Very sad indeed.

    As for the sectarianism in the scotish game, it is bound to foster deterioration at some point. If it is happening now, they all need to wake up from their drooling slumber real quick or the other teams will face the same fate.

    And sorry Tony, I was supposed to book my copy of MAKING THE ARSENAL last week. Unfortunately, my card was illegally spent by person or persons unknown. So I have to wait for the bank to sort it out. I will book it unfailingly this week as I have been promised a resolution within the next couple of days or so. Don’t forget you will have to sign my copy.

  • Diaminedave

    AGS – Surely the Glazers are making money on it. Do they not get paid as directors of one of the holding companies that own ManU? And they will get expenses.
    So from not owning ManU and making Zero money they have gone to owning it (at least on paper) Being paid as directors of one of the companies (say £500,000) a year having not used their own money. They have the possibility of making a huge profit when they sell it on.
    This will make the paltry! wage look insignificant.
    If it all goes tits up what have they lost – something they never had in the first place!
    So for zero investment they are making money sounds good to me !!

  • Everything does indeed come down to the selling it on gamble. For a while football clubs were like houses – bound to rise in price. But they can go down too (look at Newcastle and Leeds).

    There is also the point about what happens when you are an owner. I dont believe that the average top man in Arabia fully appreciates that it is commonplace for fans to abuse owners – remembering these are people who are often royalty or akin to royalty.

    So that combination – abuse and the possibility of decline – is a powerful antidote to the notion of buying

    And there’s one further point. Chelsea have shown that although money can bring you the championship from being a middle decent team – it does not guarantee it for ever. I really think Abramovich thought that his side would simply sweep Manchester U aside and take over at the top.

    The Glaziers have not created the success at Manchester – just allowed it to continue, so that is not really so relevant. It is the model of Chelsea and Manchester City that is the key – money does not buy total success, but it does buy abuse when it goes wrong.

    I suspect that the fiasco at Portsmouth and the fact that the QPR billions never arrived, and the strangeness of the case at Notts C, are all signs of the fact that the market is changing. There are reasons for owning a football club without revealing who you are – but I must be careful in explaining those in case someone decides to sue. And of course I am not saying there is a single illicit act going on within Notts C, Leeds, Birmingham or anywhere else where we don’t know who owns what.

    Get ready for Act II (which is often where the police are called in and start asking nasty questions).

  • walter

    Well one thing is for sure, the moment the financial meltdown of some of the big 4 clubs really happens we will have read it here first. Long before others, more professional followers of football, had realised what went wrong or what could go wrong.
    I’m sure there will come a day that wat is told will be first “untold” over here.
    What I find so strange is the fact that the FA just doesn’t seem to care about their own laws, like the proper person thing.
    Is it because of the fact that they don’t want the negative publicity on clubs running bankrupt that they don’t act ?
    I think the proper runned clubs should ask the FA directors why they don’t act. But are there any decent runned clubs apart from Arsenal out there ??

  • Jonny

    When the game itself is governed by non-elected profit-making organisations, who are clearly prone to corruption and incompetence and motivated by personal gain, what is the point in having a “Fit & Proper Person’s Test”? Why should, and how can, we trust these people to make these decisions in the first place?

    Who judges the judges?

  • AGS

    Diaminedave – Hi there. I agree with your comments 100%, just didn’t manage to get everything in when writing my post to this excellent article. To add to your comments, I’m sure that Malcolm Glazers sons (who tend to be the ones involved on day to day basis) do get salaries from the club to some extent, although I thought that in general, Directors of Football clubs did not take salaries as such, only the Chief Executive (do Arsenals directors get Salaries, I’m not sure??), but I’m sure you will agree that if Man IOU’s performance on Sunday is anything to go by, then the Glazers better start thinking of cashing in pretty soon. They are a team in decline in my opinion and their dominance is over (great!!!!). Without the same level of success, the club could become worth much less, because they have set the bar so high for themselves these last 3 seasons. SFA also knows that the £80m they got for Ronaldo will not go back to him in full, despite what was said in the press. Otherwise Ribery would now be a Man IOU player for sure. They needed the money to pay interest on the debt. Will be interesting to see what happens next summer with them. But I believe it is a big danger for Arsenal that Kroenke or Usmanov could buy the club in the same way as the Glazers did. Arsenal is a shining light in the murky world of Footbal Club ownership and long may it continue this way.

  • sid

    While this team undoubtedly has bags of quality, it is clear that we do not have a team of real winners. Having quality is not enough in the Premiership. I know I might upset a few (maybe a lot) but Cesc is not Arsenal captain material. Saying this does not take away from the quality of the player but if we’re honest, he doesn’t really lead the team. Wenger has plied us with a load of tosh about leaders all over the park but for me, we lack THAT GUY who says “lets keep the ball, make them work and probe for the finishing blow”. The players should know how to close a game given their age and experience but we’re lacking in this department severely and Cesc, as good as he is, is not not the rallying type need for this team. I think a lot of it is to do with the nice guy “palms and teeth” culture that’s been grafted onto the team. I just feel that the Chelsea and Man U players are under no illusions as to what is required to win in terms of determination and ruthlessness. We seem to think that having good quality players is enough. I can’t really put my finger on why we seem so complacent and take leads for granted but maybe it has something to do with having quite a few players who haven’t won much up until now. If you don’t think its a worry that for a few seasons now, our fighting spirit does not show until we’ve been pegged back in a match that should have been out of sight for the opposition, you are overlooking perhaps the most serious weakness in our team. And one more time please tell me, HAS DIABY IMPROVED OVER THE LAST FEW SEASONS? Don’t worry, I’ll wait. The sooner Nasri’s back the better. Carlton Cole would have been a perfectly acceptable replacement for Ade.

  • Patrikgooner

    Hello guys… Rather disappointing end to a game we should have won comfortably. Still not learnt how to kill teams off – will we ever learn? This team is a testament to AW’s philosophy but something is definitely missing. That special ingredient I feel is another ‘ant!’ Let me explain. David Ginola said a perfectly balanced side is a mixture of ants and butterflies. It is clearly obvious we have many beautiful butterflies in our team too many in fact and not enough ‘ants’ I.e WORKERS! What I would give to see a good old fashioned ENGLISH midfield grafter in that side. Someone like a Parlour, Keown, Keane, Robson, Vieira (I know PV, RK, arn’t English but I hope your intelligent enough to understand) or from todays lot of players a Parker or even a Bullard. Someone who won’t care what player it is but will let them know if they are not pulling their weight in a game. I believe Wilshire could be that guy but alas maybe 1 or 2 years away. 2) This may be a contentious point but I believe all is not right right with AA. He has said some things in the press already about London, England the EPL and it was clear yesterday he is – at this moment – simply going thru the motions. In fact save for his wonder strike against UTD I can honestly say he has been pretty average this season so far. There must have been good reason why he was at Z St. P’s for so long in his career and why he hasn’t played for a top side before now. Maybe 2nd season syndrome? I feel that IF he continues to show a lack of appetite and a lack of respect to his team-mates then maybe we should look to exchange him for Hleb, Flamini or someone of that ilk come January. There is no disguising the fact that all is not well in Andre’s world right now.

  • sirish

    aZ was frsutrating but yesterday was just downright infuriating, from poor refereeing to bad team selection.i would never have started vito yesterday.he has a great game against fulham but your goalkeeper is not something you mess around with.wenger was simply waiting for mannone to make a mistake before dropping him,now he’s made 2!he dropped a clanger against brum and should have been dropped after that.granted it wasnt a free kick yesterday but there is no excuse for palming the ball back into a dangerous area like he did.penalty was very soft but we have been awarded worst this year and the truth is the game should have been over before then,why can we kill teams off?2 goals should have been enough but we were awful in the second half.arshavin had his worst game for us but i wont criticise him too much because the guy is pure class.diaby and eboue were also terrible but they manage to be bad on a consistent basis.diaby is shocking.one of the laziest players ive ever seen.the sooner he goes the better.our hands are tied with eboue.we dont have a right back good enough to fill in for sagna but that doesnt mean he should be starting right wing arsene! he made is changes too late again yesterday.dudu should have been on much earlier.poor calls from the ref but we cant blame that on our inability to kill off a very poor side.missed a big chance yesterday and we really need to pick things up for spurs at the weekend

  • sirish

    The truth is that until Abou Diaby was ridiculously penalised for being bear-hugged by Zavon Hines and Carlton Cole punished Vito Mannone¿s poor effort, Arsenal were in complete control and playing well at Upton Park. Even then it took another appalling referring decision to see the Hammers pull level, Alex Song being harshly adjudged of bringing down Cole in the penalty area and Alessandro Diamanti scoring from the spot. I don¿t want to criticise the young goalkeeper too much because I feel he¿s done quite well overall since being brought in, but yesterday was the third blemish on his record after spilling the ball against Birmingham and allowing a header to float over him against Blackburn. With the North London derby coming up next weekend I¿ll say again that it¿s time for Almunia, our best and most experienced goalkeeper, to return. As much as I am frustrated about last night¿s game ¿ and believe me, I am ¿ I still don¿t think the team should be overly criticised for their efforts. As painful as it was to see the points snatched away from us, it was much more the referee¿s poor performance that contributed to the result than any complacency or lack of a killer instinct by our own players.

  • terrylane

    The worse performance so far this season. Eboue was at fault for their first goal as he just let the WHU player run at him and had no clue how to stop him. Has anyone seen Eboue do anything really world class? Truegooner – your man of the season Song did absolutely sod all in the 2nd half. He is a gormless ball watcher. He couldnt boss a nursery school playground. You dont understand football if you thing he is good. You are obviously easily deceived around certain players. There is a terrible streak of arrogance in this team and lack of professionalism. Throwing away 2-0 leads is a disgrace. Contrary to what Wenger and our players may thing other teams are not going to bend over for them even if they are behind. We have a fair weather team and in key areas show ponies who are conning us. Clichy’s crossing and Diaby’s passing in the second half was second rate. The Eboue and Sagna partnership on the right doesnt work. Sagna was a great defender when he arrived he now looks poor. I think its cos of playing with Eboue on the right who offers nothing. He cant defend and is like a headless chicken up front. Why not play Vela or Wilshere on the right flank (or Walcott when he is fit every third month in the season!). With Nasri back soon hopefully AW will drop Diaby and Eboue. Mannone showed his inexperience but I think he is a good raw talent. The bigger question is why does a club that considers itself to be a big European club doesnt have a top class goalie and DM? I know this a rant but I cant stand seeing the same problems week in and week out. Furious!

  • sid

    in all fairness That was painful…how could we drop points on a day so many title contenders did? I was very very angry and frustrated as I watched our old defensive failing surfacing once again. I was sat there in front the telly next to a Man U fan and he didn’t even rub it in…it was that shocking! I felt as if we were just ok in the 1st half but the difference in quality gave us 2 goals. Ok…so not a totally fabulous 1st half but we more or less played our game n got rewarded.

    Then the second half…we were as flat as a Coke that was left without a cover for months! I was really disappointed that we didn’t come out hungry to get the 3rd. No killer instinct whatsoever! I was thinking, “A 3rd and the game is over…surely!”…yeah right… I just couldn’t see it coming and Mannone makes a mistake to compound a flat 2nd half…great! Don’t get me wrong…Mannone has done well enough to be Arsenal’s number 2 and put Almunia under some pressure but he’s not yet good enough to be number 1. He is a hell of a prospect tho. Carlton Cole…he just decided to take a tumble…Song didn’t need to tackle the lad…but he barley did and bang…penalty…but definitely not enough in it to be a foul in my opinion.

    But it’s like I could have seen it being 2-2 after looking at our body language a few minutes into the second half. It’s a mental lapse that we continuously seem to have. And as Ronaldo-less as Man U are, they would have NEVER let that 2-0 advantage slip. If I see or hear, “must learn from that experience” again, I’ll just get upset and angry bcuz I’m so so so so tired of hearing it. It could give me an ear-bleed one of these days.

    I’ll just end by saying I’m trying to stay positive…we need to as supporters…as Arsene once said, “If you eat caviar every day it’s difficult to return to sausages.” And boy-o-boy wasn’t Alkmaar and West Ham eating sausages! Kinda looking fwd to Wednesday then Saturday…let’s get back to winning ways! And yes Dev! Agreed that we need to be using offensive players in an offensive formation! Eboue needs not be in that advanced role on the right! We had Edu and B52 on the damn bench! We need to be more positive away from home sometimes!

  • grand funk diaby

    If you do not give your mediocre opponents some form of hope, they will resort to leg breaking eventually. So i am perfectly okay with the ‘big win at home, draw or slender win away’ formula.

  • walter

    I think Sid the answer is obvious. Mu and we lost points and Chelsea and Liverpool not.
    After a CL week it’s always difficult just like after the internationals.
    The teams that then have the advantage of playing at home mostly win, the teams that have to play away…lose or draw.
    Chelsea so far mostly had the luck of playing at home after the CL and won. Liverpool when they played at home after the CL won and when away lost.
    Mu also lost after an away game in the CL and drew at home after a CL game.
    We lost at MU after a CL match and the other games we played at home and won. This week we played away and we drew.

    So I realle think that the difference is the CL and the home or away game after the CL.

  • walter

    If we would have won it, I know “if”, we all would be in heaven. Now we are 2 points away from heaven.
    So chear up all, always look on the bright side of life.

  • walter

    Sorry to go way off topich but from midnight we could register for the Arsenal – Aston Villa game on sunday 27 december. So I stayed up to be sure to put myself, and my younger gooners, on the list.
    So I, with my fellow gooners from the Benelux, will be coming over to the Emirates that day.
    F*ck the financial crisis, f*ck the Rangers meltdown,….even f*ck Foy and his mistakes.. we’re on our way. 🙂
    Sorry about this but even for a person of my age I got excited about the prospect of coming home. 😉
    And now to bed for a short night….

  • ryan

    this was a good article and a really good discussion about team ownership, the fa and all the rest. it’s quite annoying that it’s all turned into stuff which is totally off topic as though the later posters haven’t even read the article. diaby’s form, az, arshavin’s work ethic and god knows what else are nothing to do with the article. i normally welcome those topics on blogs, but god knows there are enough blogs talking about those things without people needing to come here to a blog where people are talking about something totally different and so it’s a bit irritating seeing people dragging it all back as though they didn’t even read the article. whoever said the fa are corrupt and can’t be trusted to judge others is 100% correct. i couldn’t be in more agreement if i tried! they are not qualified to do the job and it’s no surprise that they do such a terrible job of it/ when you hear about this person’s test being so poorly done it’s not surprising because we all know the fa are so terribly incompetant.

  • Brickfields Gunners

    Another good article Tony -as usual!We do have to give thanks that Arsenal is being well run by the present group and our hope is that it be continued even after the others expereince meltdown .I do agree with Ryan ‘s comments about going off topic but for many of us this is the best place to air our greivences and perceived injustice inflicted upon our beloved club .I had wanted to post some comments yesterday regarding the WH
    game but decided to wait till I saw the replayed footage again – I fell asleep after the 60th min and awoke in horror at the 80th min to see the score at 2-2.It was that boring .Why AW persists with Diaby , I ‘ll never know ,especially as Bendtner was on the bench -at least he gives the impression that he’s trying.Lets hope that they do the needful against the Spuds this weekend and redeem themselves.

  • diceman1984

    Wenger’s and Arsenal’s success story finacially is always overlooked and undervalued.

    Wenger has revolationalized modern football and set leading examples in so many ways that I believe this is another one of them. We’re not like chelski so we won’t spend stupid money trying to buy 2nd place. Not to mention almost all their stars are 100 years old overdue and overrated bunch of you know what…

  • walter

    On a smaller scene, my country’s scene that is, a club of our PL has three days to pay 800.000 euro to the social security of my country or they will be not permitted to play this weekend against Standard in the league.
    If they can’t pay this amount of money, the chance is excisting that the will not be allowed to play again in the league this year and put back to the 3rd division.
    You now might say: gosh an FA that does their work. Well in fact the FA, if they would have followed their own rules should have done this at the end of last season but they gave Mouscron a license to start but they had to prove every 3 months that they payed off their debts to the tax and social security.
    So this was trouble coming as sure as 1+1=2.
    But at least it looks like it that our FA finally had enough of it.
    It’s not the first time in my country that a club actually stops playing in our PL during the season.