Rangers could survive administration but club would be severely diminished
Three separate statements on Rangers’ financial position were posted on the club’s website last night – one from owner Craig Whyte, one in the name of the club itself and the Question and Answer article – but they amounted to one single message.
Administration is not the end. It could be the best route for the club, and it could be over quickly. The team will continue to compete. There’ll always be a Rangers. You could almost hear the stirring martial music playing in the background. And, for any supporters who failed to catch the mood, there was a straightforward plea to “loyal Rangers fans” to continue to give their backing to the club.
Such an approach is wholly understandable if Whyte and his colleagues hope to retain any credibility and support for their administration. The businessman can cope with a few disgruntled hecklers outside Ibrox, as he did last night when reading out a short statement, but the organised opposition of a large section of the Rangers support would be harder to shake off.
So how credible are those suggestions on www.rangers.co.uk? Could administration be merely a short, sharp shock, something like a trip to the dentist, painful but beneficial? And will there will always be a Rangers?
The Q & A is in no doubt on the last count. “Yes,” it states. “Rangers is here to stay whatever happens. The team will continue to compete as normal, and it is to be hoped that the loyal Rangers fans will continue to give their full support to Ally McCoist and his players at this difficult time for them and the club.”
Such an assertion is plausible enough, at least for the time being. Dissatisfaction with Whyte is growing by the day, but Rangers supporters appear perfectly able to distinguish between the current owners and the club itself.
As long as that remains the case, Rangers will indeed be “here to stay”. But there is a massive difference between a football club which is challenging at the top of the domestic game and competing regularly in Europe, and one which is fighting for its very existence. And if Rangers do go into administration, their domestic challenge will be severely compromised and their European participation threatened.
Already four points behind Celtic at the top of the SPL, the reigning champions will have ten points deducted by the league automatically if they enter administration. There are no doubts about that, no ifs or maybes. No matter how swiftly they went into and out of administration, that penalty would be imposed.
Celtic have won their last 14 league games and show no sign of slackening. Rangers are probably just a couple of defeats away from losing touch with their great rivals at the top of the table. A ten-point handicap would be tantamount to more than three defeats, and would leave Rangers with far too much ground to catch up. It would, as things stand, still keep them in second place, some way ahead of third-placed Motherwell. And the club which finishes second this season will go into the qualifying rounds of next season’s Champions League – a tournament which could be an invaluable source of income to Rangers as they strove to get back on their feet. But if they are in administration at the end of March, they will fail to comply with Uefa’s licencing regulations, and will be prevented from entering European competition next season.
Whyte’s answer to that is to try to move in and out of administration within a month. If Rangers go into it within ten days, they will thus be clear by the end of March, in time to meet the Uefa deadline. “It has been decided to seek the protection of a moratorium from HMRC action while a Company Voluntary Arrangement (CVA) proposal is made to creditors,” the website stated. “This, if approved by creditors within a month, would minimise any points deduction and allow the club to participate in European football.”
But it would “minimise” a points deduction only in the sense that another ten-point penalty would not be forthcoming at the start of next season – the punishment for any club which goes into a new campaign still in administration. And there is a very big question mark over creditors’ willingness to approve such an arrangement.
There is less uncertainty, however, about what will happen to Rangers employees on and off the pitch. Jobs will be lost.
“If it is decided to go ahead with the application to appoint administrators, an administrator will be appointed who is likely to instigate a review and cost-cutting programme across all departments of the club,” the Rangers statement continues. “The club has engaged Duff and Phelps, a specialist restructuring practice, to assist in finding a solution to the present position.
“Is it likely that the administrator will want to shed players? “The administrator will have a duty to look at every aspect of the business, including the playing squad. It would be for him to decide, in consultation with current management, where savings can and need to be made.”
Players earn more than anyone else at a football club, and it is therefore within the playing squad that the biggest savings are to be made. The precise number of departures could be dependent on which players attract the best bids from other clubs, and who is most valuable because of the length of time remaining on his contract. But, in the months to come, Ally McCoist will be no more able to put a footballing case for the retention of a player to an administrator, than he was able to put such a case to Whyte last month when Everton came calling in search of Nikica Jelavic.
In other words, the size of the club’s support, and the strength of the sentiment it feels, should indeed mean that “Rangers is here to stay whatever happens”. But it could be a very diminished Rangers: one which, on the field of play, is a shadow of what it was, and reduced to being a member of a chasing pack some distance behind an all-conquering Celtic.