Paying the Price
Rangers' administration and relegation were about far more than a club that couldn't pay its debts
In March 2012, not long after Rangers had gone into administration, the Kilmarnock chairman Michael Johnston was interviewed on BBC Radio Scotland and predicted that Scottish football would undergo an "Arab Spring". It was a crass and hyperbolic statement, but his prediction of a revolution in Scottish football proved accurate, the change coming from supporters rather than from the boardrooms.
The target of Johnston's comment was the voting system which allowed Rangers and Celtic to dominate the Scottish Premier League. Under this system, a 'Special Qualified Resolution' is needed to change a number of articles within the SPL rules, most notably those on commercial matters. A Special Qualified Resolution requires 11 votes out of 121 for a motion to be passed. In practice, that meant that the two Old Firm clubs could vote as a bloc to prevent any changes to the league's financial distribution model. And they both had good reason to — the current system sees 32% of the league's commercial revenue split between the clubs finishing in the top two positions, while the other 10 have to make do with 68%. The gap in prize money between 2nd and 3rd is larger than that between 3rd and 12th2.
The other 10 SPL clubs had publicly expressed their unhappiness at this model on numerous occasions, but remained powerless to do anything about it. Rangers entering administration on Valentine's Day changed that, and the other clubs seized the opportunity to put the issue back on the agenda. The 10 chairmen held a meeting at which they discussed ways of using the situation to their advantage. The prospect of Rangers being liquidated and forming a 'newco' was already being discussed and there was a clear implication that some clubs were hoping to incentivise the Rangers administrators to vote in their favour by offering concessions to the newco should they apply to enter the league.
This was the first tacit admission by the chairmen that they might bend the rules and procedures of the league for financial reasons. As Johnston put it, "The clubs are mindful of a sporting integrity aspect but the commercial benefits may outweigh that." The commercial aspect he touched on was the potential loss of revenue if Rangers were not in the SPL, particularly given the league's £13m per year TV deal with Sky and ESPN was rumoured to be based on a guarantee of four Old Firm matches every season, as were a number of key sponsorship deals. Without Rangers in the league, clubs would be relying on the goodwill of those TV companies and sponsors and, with a number of sides already in precarious financial positions, the desire to avoid a hefty shortfall in their income was understandable.
The financial arguments didn't wash with supporters though. Fans see football as a sport, not a business, and it's difficult to reconcile that viewpoint with the idea that special rules could be applied for certain teams. Fans of every other club in the country, apart from Celtic, knew that their club would not have been afforded the luxury of direct re-entry into the SPL if they went bust. Historical precedent dictated that when a club went out of business, a vacancy was created in the bottom tier of the Scottish Football League (SFL)3, and clubs would apply to fill that gap. That was exactly what had happened when Airdrieonians went bust in 20024 and again when the same fate befell Gretna in 20085.
In the pre-internet days, these fans would have been restricted to venting their frustrations with friends at the pub or via radio phone-ins and letters to newspapers. It would certainly have been unlikely that supporters of clubs at the opposite ends of the country would have been able to debate the issue with each other at length, so any resistance would have come from isolated pockets of supporters from each individual club. Any form of organised multi-club protest would have been unlikely. But now, fans across Scotland could instantly share their reactions with other like-minded supporters via Twitter and on messageboards as the story developed.
It has become clichéd to say that online social networking has left traditional media trailing in its wake, but never was that more true than in the Rangers saga. The Scottish football press has many fine journalists, but very few of them seemed interested in the story of Rangers' tax problems. It was left to an anonymous blogger to lay bare the extent of Rangers' problems. "Rangers Tax Case" started in March 2011, and over the next 18 months broke a number of stories well ahead of the mainstream media. For his efforts, the blogger won the Orwell Prize, the UK's most prestigious award for political writing6.
In the past, it was difficult to take the media to task over sensationalised or factually inaccurate articles, but now supporters could disseminate and debunk those stories within minutes and post their rebuttals online. The same applied to statements from footballing administrators — when the SPL chief executive Neil Doncaster claimed that newcos were commonplace in UK football, citing Plymouth Argyle and Crystal Palace, fans took to Google and within minutes they had found clear distinctions between the scenarios faced by those clubs and that faced by Rangers. No longer could authority figures go unchallenged — the supporters were finding their voice and it would prove to be very difficult to shut them up.
On June 12, Her Majesty's Revenue and Customs announced that they would be rejecting the Company Voluntary Arrangement (CVA) proposed by prospective new Rangers owner Charles Green, thus making it inevitable that Rangers FC would be liquidated. The saga was more or less over for the old company, but it was only just starting for the Scottish football authorities. Green had already announced his contingency plan in the event that his CVA was rejected — he was going to buy the assets of the old club, including Ibrox Stadium, the Murray Park training complex and the registrations of the players7 at a cut price and transfer them to his new company, the catchily named Sevco 50888. He would then apply to transfer the old Rangers FC's share in the SPL and their membership of the SFA across to his new company, allowing them to carry on as though nothing had happened.
Unsurprisingly, this plan did not go down well with supporters of other clubs, who were angered by the possibility that Rangers could dodge a £50m+ debt to the taxman9 and yet retain their lofty position within the top tier of Scottish football. Their response was to instigate a "No to Newco" campaign, spreading the message via Twitter and messageboards. Lists of email addresses for Fifa, Uefa, the chief executives of the SFA and SPL and the chairmen of every SPL club were put together, and people were encouraged to email their thoughts to the relevant parties. Standard emails were written for those who didn't have the time or capacity to compose their own, but most produced individual and often passionate correspondence. The Dundee United chairman Stephen Thompson received "emails and letters in the hundreds" from his supporters and it was a similar story across the country as fans bombarded their clubs' inboxes.
On June 18, the SPL announced that a vote on whether to admit the Rangers newco to the league would be held on July 4. The choice of date was purely coincidental but the significance of the vote being held on US Independence Day wasn't lost on supporters. While their primary reason for opposing the newco entry was the integrity of the sport, a secondary aspect was the hope of a new era in Scottish football. A whole generation of Scottish football fans have never seen a club outside of the Old Firm winning the league and they saw this as an opportunity to break that cycle. The last non-Old Firm side to win the league was Alex Ferguson's Aberdeen way back in 1984-85, a success which marked the end of Scottish football's most competitive and prosperous era. By the end of that decade, Rangers had won the first of nine consecutive titles, resuming the Glasgow stranglehold over the trophy.
The fate of the newco Rangers lay in the hands of the SPL chairmen, with eight votes out of twelve needed to see them admitted to the league10. Supporters took the opportunity to crank up the pressure on their clubs to vote against their entry. Realising that they didn't want to be paying to watch a fixed league, they threatened to walk away from their clubs if the newco were parachuted into the SPL. Fans who had been buying season tickets for years, even decades, told their clubs they would not be renewing if they voted "Yes". Unlike their counterparts in England, SPL clubs still rely on gate revenue for a large proportion of their income, given the relatively modest nature of the TV deal, so these threats made the chairmen sit up and listen. They were now in a lose-lose situation and had to weigh up the potential loss of commercial revenue with no Rangers against the potential loss of gate revenue. While it was far from guaranteed that every supporter would follow up on their threat, it would be a brave chairman who would bank on them returning.
On June 21, the voting intentions of a number of clubs became clearer. Motherwell announced that they would ballot the members of the "Well Society", the programme set up to help the club's transition into fan ownership. Given the overwhelming opinion of their support, this was almost certain to be a "No" vote. Later that day, Heart of Midlothian became the first club to confirm a "No" vote, with their outspoken chairman Vladimir Romanov — nicknamed "Mad Vlad" because of his idiosyncratic behaviour — releasing a typically ebullient statement on the club's website. They were soon joined in the "No" camp by Dundee United, who cited poor season ticket sales as one of the main factors. Within days, more SPL clubs jumped onto the bandwagon and it became clear that the Rangers newco would not be playing in the SPL in 2012-13.
This appeared to be a success for fan-power, but many remained suspicious about the timings of the "No" declarations, which almost appeared to be synchronised. As it turned out, they had every right to be suspicious. The SPL, SFA and SFL chief-executives had been busy drawing up a contingency plan to place the Rangers newco in the Scottish Football League's 1st Division, two tiers above where a new club would usually enter, in the hope that this would appease the supporters while minimising the potential financial impact on the top flight. The fact that this was even considered suggests that the authorities misjudged the strength of feeling among supporters, who were against any sort of special treatment being afforded to Rangers. This even applied to the Rangers support, the majority of whom preferred the idea of a fresh start at the bottom of Scottish football11. For many, this was born out of a desire actually to earn their place back at the top of the game, but it certainly would appear to be the case that the motivation for some was a thirst for 'revenge' against the SPL clubs who voted against them, with the hope that the potential loss of revenue might put these clubs in severe trouble.
Whatever their motivations, all supporters in Scotland now more or less agreed about the just fate for the Rangers newco. Nonetheless, the authorities continued to push the second-tier fudge, attempting to blackmail and bribe the SFL clubs in equal measure. Clubs were promised league reconstruction, extra promotion places to the top flight and a better spread of financial revenue if they voted in favour of this plan. An invitational breakaway SPL2 was mooted as a possible consequence of the plan being rejected and SFL clubs were threatened with the loss of the £2m a year settlement which they currently receive from the SPL as compensation for the original breakaway. The threats didn't go down well with some SFL clubs — the Raith Rovers chairman Turnbull Hutton gained notoriety for his blunt honesty, claiming "We are being bullied, railroaded and lied to... What kind of game are we running here? It is corrupt".
The SPL newco vote, which was by now a formality, was held as planned and 10 clubs voted against their application to the league. The Rangers oldco were the only club to vote in favour12, while Kilmarnock inexplicably abstained13. The SFL announced that they would hold a vote on the plans to admit the newco on Friday July 13. The SFL would vote on two proposals — the first would be to admit the newco directly into the First Division with 22 of the 30 clubs needing to vote in favour of the plan, while the second would be to admit the newco into the Third Division, which needed a simple majority. Now it was the turn of the SFL fans to wield their power. The SFL clubs earned very little in the way of commercial revenue — just a low-profile TV deal with BBC Alba, which broadcasts in Gaelic, and a sponsorship deal with Irn Bru. As a result, they rely on gate income even more than the SPL clubs and would be foolish to alienate their loyal supporters.
Many newspapers appeared out of touch with the average Scottish supporter and were still pushing the SFL1 compromise. A nadir was reached with an article in the Daily Record by Craig Burley, who declared that the "future of Scottish football (was) placed in the hands of a few nonentities from the lower divisions." The message was clear — only the big teams matter, and the other diddy clubs should do what they're told. The worrying thing was that these views seemed to be shared by some in positions of authority within the Scottish game. The SFA chief executive Stewart Regan was becoming increasingly desperate and was quoted as saying that there could be "social unrest" if Rangers weren't parachuted into the second tier, predicting "financial Armageddon" for Scottish football. His comments were no doubt intended to scare supporters and clubs into backing his plans, but instead they resulted in him being lampooned relentlessly by fans. Regan lost all credibility among supporters, culminating in him having to close his Twitter account after receiving abuse.
Come July 13, all eyes were on the SFL vote at Hampden. Supporters were glued to Twitter, news websites and forums as they awaited an announcement of the vote. The outcome seemed inevitable, with the number of clubs claiming they would reject the SFL1 move reaching double figures but until it was official nobody was getting too carried away. Around 2pm, it was confirmed that the SFL1 vote had been rejected, with 25 of the 30 clubs voting against it. The good news for Charles Green and his newco was that 29 of the 30 clubs had voted to place them in SFL3, allowing them to take part in league football in the 2012-13 season. The spectre of SPL2 briefly reared its head but before long it was announced that the newco would indeed begin the season in the fourth tier. The supporters of all clubs, including Rangers, had prevailed and the integrity of Scottish football was preserved.
On 11 August 2012, Charles Green's Rangers kicked off their SFL3 campaign with an away fixture in Peterhead. Despite starting the game with eight international players, they needed a last minute equaliser from Andrew Little to draw 2-2. Their supporters were simply happy to have a team to follow, though the debate continues, among fans at least, about whether it is the same club. The SPL retained most of the value of their TV deal — the £13m a year from Sky and ESPN remained in place, but they now have to give £1m of it to the SFL for the rights to show Rangers games. The predictions of financial Armageddon seem unfounded at the moment — the only noticeable impact has been that most SPL clubs are working with slightly smaller squads than the previous season.
The dust hasn't quite settled yet though. The SPL's voting system has not yet been changed, Neil Doncaster and Stewart Regan remain in their jobs at the SPL and SFA, and at the time of writing the talk of league reconstruction still lingers with the '12-12-18' plan preferred by SPL clubs. Most supporters welcome the idea of a change to the league system but the timing evokes suspicions that it is for the benefit of one team rather than forty-two. Rangers still face possible sanctions, including the possibility of titles being stripped, over claims that their players were improperly registered. The saga led to a breakdown in trust between supporters and authorities, and those wounds may take a long time to heal.
It is no exaggeration to say that the events of last summer were among the most important in the history of Scottish football. Had the authorities allowed a club to walk away from its debts and carry on where they had left off, they may have irreparably damaged the image of the game in Scotland. Instead the supporters wielded their power and perhaps restored some integrity to a sport which has often lacked it. In the words of the former SFA president John McBeth, "if you look after the game money will follow, if you look after money, you will kill the game."