In previous posts I’ve talked about the process by which a Newco formed from the ashes of the dying Rangers FC PLC (in administration) could not possibly be parachuted straight into the Scottish Premier League.
But now Scottish football has come up with a way around that. It’s simple really when you think about it.
If the rules don’t suit, then change the rules.
Yes folks, the fix is in. The Scottish Premier League has devised its very own Cheats’ Charter. A series of rule changes has been proposed that would allow a bankrupt club simply to transfer its league membership to a new phoenix company.
What does that mean in practice? It establishes a process by which a club can write off its debts (which would stay with the old company) and then quite happily carry on as before.
Yes folks, a club could operate an illegal tax scheme, stop paying any money to the tax authorities and run up debts to hundreds of public bodies and private companies. It could then conveniently leave this £100,000,000 + of debt in the old company and create a new one that is debt free. And this new company can then play on as if nothing had ever happened.
Does this sound like something from through the looking glass? A Tammany Hall version of integrity? Or perhaps a North Korean version of sporting fair play?
Yet it is exactly how the Scottish Premier League is trying to rewrite its rules – and for the sole benefit of Rangers Football Club.
A whole series of amendments to SPL rules will be voted on by clubs at the end of this month. Some of them are uncontentious, indeed are actually closing the stable door after the blue horse has already bolted. Like the one which, with no irony at all, proposes that a club defaulting on its tax payments should inform the SPL.
But the proposed amendments also invent something called an “Insolvency Transfer Event”. This is the backdoor means by which a bankrupt club can pass its share in the SPL, its top division membership card in effect, to a Newco.
Here’s how it might work:
The current company Rangers FC PLC (in administration) has debts of £134,000,000 or so. It passes its SPL share to a newly formed company, let’s call it Rangers FC 2012 Ltd. The old company is then liquidated, selling off its assets, which is pretty much a football stadium, some players and a training complex.
Now our brand new Rangers 2012 needs a football stadium, some players and a training complex. So it buys the ones that the old company is selling. To keep the maths simple, let’s say that it pays £13.4M.
So the old company now has enough money to pay 10% of what it owes. All of the creditors get a tenth of what they are actually owed and then the old company is wound up.
And that leaves Rangers 2012 with no debts, a football stadium, some players and a training ground. It also owns that crucial place in the SPL and can play on. Its home games will be at Ibrox, it will probably wear blue strips and it could even call itself Rangers.
To sum up then: Rangers goes on having paid 10% of its debts. Everyone from the taxpayer to the newsagents on Copeland Road is stiffed for 90% of what they are owed but Rangers goes on as before.
And, in true 1984 fashion, all of this is proposed in the name of Financial Fair Play!
How can this scenario be allowed to happen?
Well, the simple answer is that it will occur if the current members of the SPL agree to the fix. If they vote through the proposed changes on 30 April then all of this will happen.
Celtic will vote against these proposals. The administrators running Rangers will vote in favour – after all they benefit from the changes! Of course the clear conflict of interests means that the club should not be allowed to vote at all, but don’t expect that to matter too much.
So Scotland’s other top football teams now have a big decision to make. Do they stand up for sporting integrity and reject the fix? Or do they decide, as we are often told, that the league needs Rangers under any circumstances, regardless of everything?
Will they allow years of a combination of financial mismanagement and downright cheating to be rewarded or will they act stand up against it?
Frankly I have no confidence in the men who run these clubs up and down the country. I think that they will throw any principles they might have out of the window and support the fix. I expect them all to vote in favour and usher the Cheats’ Charter into place.
I think they have no principles at all and will act in their own narrow self-interest rather than supporting integrity and fairness.
Will any of them prove me wrong?