Rangers takeover: Doncaster reveals newco could escape SPL exit

THE vast majority of Scottish football supporters not aligned to a club that plays out of Ibrox believe the game’s authorities will have some serious explaining to do if a newco Rangers is accepted into the Scottish Premier League.

Yesterday, chief executive Neil Doncaster invited a group of journalists along to Hampden to get his explaining in early.

Doncaster admits to being “baffled” that in this country such a distinction is drawn between Rangers exiting administration through a company voluntary arrangement [CVA], as prospective new owner Charles Green will attempt in the coming weeks, and doing so by moving the assets to a new company [newco] as the old one sinks because of debt, as he probably will be forced to do to effect a successful purchase.

Doncaster simply does not accept that morality and sporting integrity are served very differently by throwing yourself at the mercy of your creditors, as in a CVA, or simply walking away from them, as in the newco route. A newco, he says, could raise more money for creditors than a CVA. He could give no examples where this had ever occurred in football. However, the SPL chief executive did provide examples from England, with the cases of Luton, Bournemouth and Rotherham, where clubs have failed to obtain a CVA, set up a newco, and retained their same league status, but with a points penalty – as will be one of the new financial fair play proposals clubs will have a third go at voting on come 30 May.

No club in Britain. Doncaster says, has been asked to “start again”. That is what is sought by those who say that if Rangers stiff creditors for what could be up to £100 million with a newco move, the reconstituted Rangers should not be admitted to the SPL but work their way up from the bottom of the Scottish Football League. Rules governing insolvency events at football clubs should not be determined by the “attitude of creditors”, argues the SPL chief executive, who balks at the notion of “admitting” a new Rangers. “The football club will continue to be there [in the SPL]; it’s only the corporate entity that changes. The matter for debate is on which basis the club’s football share is transferred to that new entity,” he said.

If an SPL vote is required on accepting a newco Rangers, an 8-4 majority would be needed. Were five clubs to vote against the share transfer, Doncaster would not give an answer over whether he felt their actions could be considered “daft”. He didn’t come up to Scotland for an “easy ride”, he said, when asked about the impossible situation a newco Rangers would put him in.

Supporters throughout the country are threatening to turn their backs on the game if the way is paved for the entity to replace the previous one, while club chairmen fear for the financial viability of their businesses if this doesn’t happen. Doncaster and his SPL could find themselves between the devil and the light blue sea. If the newco vote is needed, its outcome will be perceived as either anti-Rangers or soft on Rangers.

Doncaster said: “All I can say is that we will continue to deal with clubs equally under the rules. Our job is to apply those rules, equally, without fear or favour to every single one of the 12 member clubs. It’s our job to explain that what we are doing is treating people equally. If everyone understands that then, what will be the reason to be aggrieved about the outcome? Every club will be treated exactly the same. I can’t get into ‘special cases’.

“Whenever I speak to people about the distinction between a CVA and a newco what I keep being told is that it’s simply wrong that any club should be able to create a newco and shed debt. As if a CVA doesn’t lead to the shedding of debt. Administration is the protection the court gives you when you can’t pay your debts. There are two ways out of that; one is a newco, one is a CVA. Of the six administrations which have happened down south in recent years two went with a CVA and a newco, Palace and Plymouth, and there were four where there was no CVA and a newco.

“The distinction between the two is relatively fine. To draw such a huge distinction is just wrong. When Livingston were relegated to Division Three did they cease to exist and start again? Of course they didn’t. Leeds are the same. Every single club which has had an insolvency event has either continued as a football club or has ceased to exist. I’m not aware of any club which sort of started again. Of course it’s not okay to waive £90 million of debt, of course it’s not. But it happens. In football as in business.”

Doncaster’s assertion that “attitude of creditors” should not be decisive in how football debtors are treated fails to acknowledge that this is true in every monetary transaction the world over in which one party has failed to meet its obligations. If a footballer had his contract terminated, were he to accept a shortfall in his severance package, there would be no issue for the authorities. If he registered a complaint, though, this could end up in sanctions against the club.

In terms of seeing any Rangers newco as the same as the old club, Doncaster is consistent. For any punishments arising from the SPL’s ongoing investigation into non-disclosure of payments to players at the Ibrox club between 1998 and 2010 would be imposed on a newco. “You would expect the football club to take with it responsibility for anything that emerged from that investigation,” Doncaster said.

The SPL chief executive would not enter into discussion over whether Rangers could have improperly registered players for 12 years because of the manner in which they administered a tax avoidance Employee Benefits Trust scheme. It is the subject of a tax tribunal, the verdict of which is currently awaited and could land Rangers with a £60 million bill from HMRC.

Former owner David Murray admitted the club paid appearances and bonus money into EBTs to shield them from tax but didn’t divulge these transactions to the authorities because they were “discretionary”, despite the fact all payments are covered in the SPL rules.