Wings Over Scotland

We don’t even like the Doors, but we’re going to reference them twice in the first 30 words: this really is The End for Rangers FC. We’ve passed the evening absorbing and analysing the most recent developments in the saga, and as far as we can see they’re the last straw – there is now simply no remaining way back for the Ibrox club.

Tens of thousands of words have been written on the subject in newspapers and online this week alone, and tens of thousands more are going to follow, so we’ll make this as concise as humanly possible. These are the obstacles in the way of The (New) Rangers Football Club participating in Scottish football in season 2012-13 and beyond:

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1. THE APPELLATE TRIBUNAL
The deadline for Rangers to appeal the Court of Session’s decision on the disrepute case expired today. The Tribunal will now be convened, we suspect as quickly as possible, in order to determine the replacement punishment. The options are well known, and it seems highly likely that at a minimum the club’s membership of the SFA will be suspended for a season.

However, purely for the sake of argument and to stop the feature ending right here, let’s instead imagine that they get off with the least severe conceivable sanction – a one-year suspension from the Scottish Cup.

2. THE SPL MEETING
On July 4th, the 12 members of the Scottish Premier League (including Old Rangers) will meet to discuss New Rangers’ application to join. The consensus of opinion seems to be leaning more firmly with every passing day towards the conclusion that that application will be rejected, with Aberdeen, Celtic, Dundee United, Hibs and either Motherwell or St Mirren (or both) voting against, on pain of seeing their own supporters walk away in thousands.

But once again, let’s give New Rangers the benefit of the doubt. Let’s say the other SPL clubs have a massive rush of cowardice to the head and vote to let them in, but with hefty conditions attached – a change in voting rights, a points penalty and a large deduction from sponsorship money for several years, to be used to pay back the clubs they owe money to.

3. THE DUAL-CONTRACTS INVESTIGATION
Here’s the big one. The SFA has stated that should Rangers be admitted to either the SPL or SFL the new club will be held liable for the sins of the old, and the dual-contracts case will be heard between July 4th and the start of the new season. BBC Scotland’s documentary “The Men Who Sold The Jerseys” doesn’t seem to leave much room for doubt as to the outcome of the case, and should Rangers be found guilty it’s absurd to imagine that anything less than crushing punishment could result – we are, after all, talking about systematic deliberate Europe-wide cheating over a period measured in decades.

But yet again, just for shigs and gittles let’s somehow convince ourselves that they get away with that too. Let’s paint a picture where either the SFA fudges its findings, or hands down a sentence that somehow stops short of outright expulsion (maybe a transfer ban, permissible this time, or suspension from the League Cup too) and allow the zombie club to stagger on. What then?

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The situation that New Rangers FC – and in particular its owner Charles Green – would find itself in would be an unimaginably dire one. With the Walter Smith consortium out of the picture, the chances of securing the wholehearted backing of the Ibrox club’s supporters would seem to be complete pie in the sky. So immediately Green would face a huge gap in his finances from the lack of season-ticket money.

UEFA rules bar the club from European competition for at least three years, so that potential revenue stream is blocked off. In our scenario they’re banned from both domestic cups too, so there’s no cash to be had there. Either the half-decent players will have all left as free agents when Smith disappeared over the horizon, (immediately removing millions of pounds of assets from the newco) or they’ll have stayed and be on the same crippling wages as before, which is a lose-lose situation for Green.

Let’s not forget: Rangers got into this mess in the first place because they couldn’t turn a profit even WITH European and cup competition, WITH a stadium packed to capacity with season-ticket holders every week, WITH the lion’s share of TV revenue and WITHOUT paying their taxes. Rangers’ operating costs are vast, and Duff & Phelps didn’t reduce them by a penny during the months of administration, because the only significant way to do so would have been to make players redundant, thereby substantially reducing the value of the business at a time when they were (ostensibly) trying to persuade people to buy it and keep it alive through a CVA.

(The issue of whether D&P did in fact discharge their responsibilites as administrators in good faith will have to wait for another day. One could argue that retaining the players was the cynical but smart thing to do, knowing that the cost of paying them for months – at full salary for most of the time – would ultimately be paid by creditors when the CVA failed, as it was all but certain to do.)

There’s no way of filling the black hole – Green will have nothing coming in from Europe or cups, and in our best-case (for Rangers) scenario much of any sponsorship/league placing money will be going to pay off their football creditors under the terms of their readmission to the Scottish game. (And of course, they might also be playing in SFL Division 3 – reducing gate receipts dramatically – or not playing at all for a season or more, causing further financial chaos.) They’ll have almost all of the costs that Old Rangers did, with a fraction of the income.

In short, The (New) Rangers Football Club will be an absolute economic basket case. It’ll be losing money hand over fist, with no prospect of that situation improving for years to come. That’s not what Green or his investors (such as they are) signed up for. There’s nothing for them in continuing to run the football club – none of them are Rangers fans, remember – except the chance to throw their money down a giant bottomless pit, which they don’t fancy. There’s only one thing they can do.

With no buyer on the horizon likely to want this radioactive chalice, Green’s only rational option is to shut the club down all over again and sell off the physical assets to anyone who’ll take them. As we’ve already examined, the real estate and any remaining players should fetch more than enough money to recoup Green’s investment and get him out with some sort of profit. And here’s the killer – even if they don’t, they’ll lose him a lot less money than continuing to run a football club he doesn’t want will. It’s better to gamble and lose a little than to keep chucking good money after bad.

(The last straw Rangers fans are probably clinging to is the notion that the Smith consortium’s withdrawal is a risky negotiating gambit, made in the hope that the club will survive the Gauntlet Of Doom and Green will then snatch their hands off to get rid of it at a knockdown price. But why would he, when he can get more money from a fire-sale? And why would they want a club in such a catastrophic state anyway? If they want to rebuild their beloved Rangers at any cost, which will mean pumping tens of millions of pounds into it over the next few years, why haggle over a few measly million now? Jim McColl and Douglas Park are worth the thick end of a billion quid between them – they could offer Green £20m now out of their petty-cash tin, secure the playing staff before they scarper for free, and get on with it.)

All of this, you’ll recall, is predicated on the premise that Rangers can survive the three great trials we’ve listed above. (And several others we haven’t even touched on to try to keep things simple.) The chances of that, we’d suggest, are pretty close to zero anyway. But even if it happens, Charles Green will still find himself in a hideous hall of mirrors with only one exit. And as far as The (New) Rangers Football Club is concerned, that exit is through a trapdoor with a rope hanging above it.