Once upon a time there was a football club in distress. Ok, it’s not quite the same as a beautiful damsel but stay with me. The football club had already suffered under the ownership of a Knight of the Realm and then a Whyte Knight who was supposed to ride to the rescue had only made things much worse. So a new band of heroes was required.
But The Knights of the Round Table had disbanded. The Knights Templar were nowhere to be found. And even The Knights Who Say Ni had said no.
So step forward The Blue Knights.
No, not the international brotherhood of motorcycling law enforcement personnel, who may well be preparing a copyright suit as we speak. Not the jazz band formed by Curtis McLaw. Not even the American wrestler, also known as Greg Valentine.
No, this group of Blue Knights is led by former Rangers director Paul Murray and is said to include some wealthy fans, a number of supporters’ associations and the company Ticketus that already owns 100,000 season tickets for future years. And, according to the Scottish media, this is the consortium that will save Rangers FC PLC (in administration).
Unfortunately for fans of the cash strapped southsiders that’s where the fairy tale ends and reality has to kick in once more.
Because the formation of a wee group with big plans does not change the basic situation one iota. The club is still in administration and unable to pay its many debts, including those to HMRC, other football clubs and many smaller creditors. The players who are on reduced wages for three months will still be able to leave on the cheap in the summer. The footballing authorities are still investigation allegations of illegal payments and failure to disclose contractual details. And the tribunal investigating what is known as The Big Tax Case will still announce its decision and add £50M+ to the debts very soon.
So, unless the Blue Knights are willing to start by giving the club more than £100,000,000 to wipe out the debts, they have as much chance of taking over Rangers as I have of taking over Microsoft or Apple.
And I say “giving” the club £100M deliberately. Because we are not talking about lending or investing here. We are talking about pouring the money into the black hole at the heart of the club’s accounts knowing that they will never see any of it ever again.
So, Blue Knights. Do you have £100M to throw away? And that’s on top of the cost of buying Craig Whyte’s shares because, contrary to the impression given in the media, he won’t be giving them away for free. Then there’s the investment needed to replace the players who will leave. And of course Ticketus will take the money it is owed from season ticket sales over the next three years, thus diminishing income.
Not exactly an attractive proposition, is it?
But hang on. Have the press not mentioned a CVA as the way out of the mess? Well, they have. But, as I’ve already pointed out, we can’t exactly trust their spin on the situation, can we?
A Company Voluntary Agreement, or CVA, is a legal method by which creditors can agree to take far less money that they are owed as an alternative to a company being liquidated.
Could this work? Would Rangers’ creditors agree to being paid only a fraction of what they are owed? Well, some might on the basis that something is better than nothing. But the largest of these creditors is Her Majesty’s Revenue and Customs. And HMRC is likely to insist on receiving all of the money that is due to taxpayers rather than settling for a small percentage.
Because if HMRC was to agree to a cut price deal it would be giving carte blanche to every business in the country to stop paying its taxes and seek to pay a smaller amount at a later date.
So where does that leave the Blue Knights?
The consortium simply cannot buy the club. It would make no sense to pour good money after bad. And so, in my view, the liquidation of Rangers FC PLC (in administration), the company incorporated in 1899, is inevitable. There is simply no way out of the terminal state that its past and current ownership have got it into. If it was an animal it would be put down now to save it from any further suffering.
A new club will certainly formed, the phoenix I’ve written about before. It may well buy Ibrox and look to establish its own new football team.
Now Paul Murray and his leading backers are not stupid. They will have worked all of this out before I have. And so what they are really doing right now is not bidding to but the current club, but rather putting themselves in prime position to run the phoenix that comes next. But the Scottish media won’t say that. They are stuck in the denial phase of grieving over their favourite club’s demise.
And so our story ends not with the rescue of Rangers, but with its death. Well, it’s only in fairy stories that a happy ending is guaranteed.