Monday 13 February 2012

Rangers go into Administration

One half of the Old Firm of Scottish football lodged an intention with the Court of Session in Edinburgh to go into administration this lunchtime. They now have five days to appoint an administrator.

We wonder what punishment the Ibrox giants will incur as a result of doing so to relieve debts of £21-75m.

The last time a Scottish League team went into administration without penalty was Livingston then of the SPL on 3 February 2004, just before their CIS Cup Semi-Final the tournament they went on to win that year. They were managed by the preferred consortium for the following season before Lionheart took them out of Administration, but after relegation to the First Division.

Since then there have been three league teams that have entered administration:

Gretna had been allowed up to the SPL without meeting the ground regulations in time. But after living the dream the nightmare was entered on 8 March 2008, when they entered administration with debts of a mere £4m. The team were already bottom of the SPL but were deducted a further 10 points. At the end of the season they faced relegation and the Scottish Football League uncertain if they would fulfill their fixtures relegated them to the lowest tier of League Football into Division 3. The SFL fears were well founded as the team was liquidated on 8 August weeks before the start of the season.

Debt £4m
Crime Entering adminstration, then fear of completing fixtures following season
Penalty 10 point deduction, then later relegation down to bottom tier Division 3

Livingston were again in trouble after the Italian Job turned out to have been some sort of hatchet job. Something those of us in the stands had been growing more aware of all that single season of Massone control. With unpaid bills to the council of £330,000 the Court of Session put the club into administration on 28 July 2009. Two days later despite the fans baying him to sell the club to the administrator Massone refused twice and liquidation proceedings were begun. The new owners who the administrator had been acting on behalf of lodged a surety bond of £720,000 against any loss of earnings should the club fold, were still relegated to Division 3 on 5 August, less than a week before the first league game was scheduled within the period of any appeal. Rules of insolvency was the reason cited for such a harsh penalty, despite the successful bid being in place with the support of the fans even before the entering of administration.

Debt £330,000 minimum (rumours of max £1m)
Crime Entering adminstration, then liquidation in and out less than a week after.
Penalty relegation to bottom tier Division 3

Dundee like Livingston had been in administration before from 25 November 2003 to 6 August 2004. They entered administration on 14 October 2010 with debts of £2m, £420,000 of which was to the tax man. Their penalty was to face a 25 point deduction on 1 November which saw them on -11 points 20 points below the next team. Miraculously with only 11 senior team players left in the squad and a ban on buying players while in admin the team went on a Division one record 23 game unbeaten run to avoid slipping down in the same season that Livingston managed to win their way back up from their penalty.

Debt £2m
Crime entering adminstration for second time in 7 years
Penalty 25 point deduction


Apparently new owner Craig Whyte borrowed against 4 years future season ticket sales to 'reduce' the paper debt from £28m to £14m. This is thought to be a £21m debt to Ticketplus and then £5m VAT on that deal. There is also the issue that Rangers are currently awaiting the final verdict on the £49m Employee Benefit Trust tax case. It is a tangled web for one of the largest supported clubs in Scotland, that may well lead to liquidation proceedings. If it does what then. There has been the precedent set as above for such financial disasters.

Debt At least £21m possibly as much as £75m
Crime So far entering liquidation
Punishment To be decided

1 comment:

  1. Do I see that Dundee went into administration for the sum of £2 or is there a 'million' left off the end somewhere? Shurely shome mishtake