Wings Over Scotland

First, a disclaimer-stroke-apology: Wings Over Scotland isn’t a football blog. But as we’ve said before, in our opinion the fate of (The) Rangers FC will have a far greater influence on the outcome of the Scottish independence referendum than anything Johann Lamont will ever say or do in her life (something which certainly applies to her current pitiable carping about BSkyB), so we have to look at the bigger picture, and today that means talking about Rangers again.

It’s fair to say that Walter Smith’s intervention in the affair yesterday morning really put a tiger among the turtledoves. Rangers fans unsure about giving Charles Green their full backing – but ultimately likely to bite the bullet and go along with him for want of any alternative – had a new straw of hope, and wasted no time in clutching at it, as the influential Rangers Supporters Trust immediately asked fans not to buy season tickets unless Green stood aside to make way for Smith’s consortium.

The move places another obstacle in front of Green turning his newco Rangers into a viable business, to add to the many challenging ones he already faced – particularly hanging onto the playing and coaching staff (including manager Ally McCoist, whose departure would surely scupper any chance of supporters getting behind Green) and successfully negotiating entry into the SPL. But unlike most of the media, which is this morning reporting the Smith group’s succession as all but inevitable, we’re not sure Green will be all that concerned.

By far the dodgiest aspect of the entire administration-and-liquidation fiasco, yet the one that’s been by far the least addressed in the press, is the lightning-quick sale of the old club’s assets to Green at the knockdown price of £5.5m. Nobody has yet come up with a convincing explanation as to how Duff & Phelps could have been allowed to offload the stadium, training complex, car park and whichever players don’t exercise their get-out-of-contract-free options for such a small fraction of their apparent value without anyone else even being allowed to make an offer.

Indeed, as it’s the statutory duty of both the administrators and liquidators to maximise the return for creditors in the event that the business can’t be saved as a going concern, it’s completely bewildering that anyone could be allowed to put in place a deal in advance of a CVA proposal which effectively guaranteed that creditors would receive nothing if the CVA failed – in other words, giving the party proposing the CVA a vested interest in its failure.

We’re not lawyers or insolvency practitioners, so we don’t pretend to understand why a liquidator can be allowed to sell a bankrupt business’s assets for £5.5m when there’s already an alternative offer of £6m on the table – let alone any others than might come in if the assets were formally put up for public sale – so we’ll leave that to others to uncover if they can. Instead, we’re going to look at why, having succeeded in this apparent daylight robbery, Charles Green can’t lose no matter what happens next.

This blog estimates the chances of there being a Rangers team playing in Scottish professional football next year at about 50/50. The new club needs to be accepted into either the SPL – which we’re finding harder to picture as time goes on – or the SFL, which also means it has to survive the judgement of the Appellate Tribunal in respect of the disrepute charge still hanging over the old Rangers.

(Why does that matter, when the old Rangers is effectively dead anyway? Because if the old Rangers is suspended or expelled from the SFA, then it has no SPL share to transfer to the newco, because you can’t be in the SPL – or the SFL – if you’re not an SFA member. It would also lose its somewhat anomalous vote on any possible new application to join the SPL, which would significantly reduce the chances of the application being accepted.)

But either way, Charles Green is sitting pretty. If his Rangers are playing in one or other league come August, happy days. He’ll have a broadly viable business on his hands, albeit one that’s going to have quite a difficult job breaking even in the short term. (In particular the three years before Rangers are eligible for European competition.) But Green isn’t really interested in breaking even – he’s never made any bones about the fact that he doesn’t want to own Rangers a year from now. He’s in this for a quick profit, and a revived football-playing Rangers is merely the easiest route to achieving that, not the only one.

A working football club gives him an attractive asset to sell to potential purchasers like Smith’s group, and he can charge a hefty premium for it, knowing that it’s worth more to them because they’ll have the full backing of the support. (And that with the likes of Jim McColl aboard, they can afford to pay.) Green is already talking of demanding £20m to sell the club to anyone else, which would represent a very nice return indeed for a couple of months’ work.

But what if this plan doesn’t work out? What if the SFA give Rangers the bum’s rush, or the SPL/SFL both reject their application for membership in the name of sporting integrity (stop sniggering at the back), or the fans refuse to turn up and leave the club a financial basket case, or Smith’s group call his bluff and refuse to pay his price?

The answer is that Charles Green still wins. He has a debt-free business with a valuable real-estate portfolio, (and perhaps also a number of players who are still worth something in transfer fees). He can simply shut it down any time he likes, legitimately citing economic unviability, and it’s frankly impossible to see any halfway-competent businessman being unable to realise considerably more than £10m from the assets of The Rangers Football Club even in a fire sale.

The main stand at Ibrox is listed, but that was no obstacle to the redevelopment of Arsenal’s old stadium at Highbury – architects are highly adept these days at building new projects around old facades. Property values in the area, currently low, would undoubtedly rise if prospective residents weren’t going to have to deal with 50,000 Rangers fans on their doorstep every other week.

The ground and the Murray Park training complex both have planning restrictions on what they can be used for, but the authorities would have little option other than to withdraw them if the football club was dead anyway and someone was offering to build, say, a massive Tesco at either site, providing a huge boost and lots of jobs to a severely depressed local economy. It would be easy to make a pretty convincing argument that redeveloping Ibrox as housing (especially if some of it was social/affordable housing) would represent a massive and much-needed investment in regeneration for Govan, providing years of employment in construction alone.

Charles Green’s purchase of Rangers for £5.5m is a steal. It remains to be seen if that turns out to be literally true in a legal sense, but until such times as that happens, he’s already pulled off the difficult part of his plan. From here in, no matter what, for Sevco 5088 it’s profit all the way.