Rangers administration: Q & A on the latest developments

IT WAS late on Monday night when the SFA announced the sanction they were imposing on Rangers, along with the transfer embargo, and fines for the club and owner Craig Whyte, along with banning Whyte from involvement in association football. Here, we answer the key questions raised by the recent news.

What is the latest blow to hit Rangers?

Rangers have been handed a 12-month player registration embargo applying to all players aged over 17 and fined £160,000 by a Scottish Football Association judicial panel. Owner Craig Whyte was expelled from Scottish football after failing to inform the governing body of his previous disqualification as a director.

Why were they punished?

The ban on incoming transfers and the bulk of the monetary penalty were for a disrepute charge relating to their recent financial affairs. Rangers went into administration on 14 February and owe almost £20 million to the tax authorities. Almost a third of the fine was for being insolvent.

Do they have the right of appeal?

Yes and administrators have already written to the SFA asking for an immediate hearing. The appeal would go before a different SFA-appointed panel.

How will the punishment affect the club?

Administrators Duff and Phelps have warned it could “seriously undermine” attempts to rebuild the club. The fine is relatively insignificant when Rangers face potential debts of more than £130million but they would have to pay it all within 12 months or potentially face more action. The ban on signing players creates more difficulties in attempts to find a buyer. The two parties hoping to put in an acceptable bid have both sought more clarity on football regulations. One of them, Bill Miller, wanted written assurances Rangers would not face sanctions next season. The head of the other group, former Rangers director Paul Murray, previously warned that having to rebuild the squad could cost tens of millions.

How will Rangers cope amid a transfer ban?

Rangers could face a dearth of experienced players next season given some players secured exit clauses when they took temporary wage cuts of up to 75 per cent. Players revert back to their original contracts on 1 June and the club could not afford the extra £1million a month to fulfil them if they have not exited administration. Miller’s plans centre on forming a new company by buying the current club’s assets and PFA Scotland have warned that players would not be obliged to stay at Ibrox under such circumstances. However, Rangers are already under a player registration embargo from the SPL, which continues for the duration of their administration period.

Could Rangers face more football sanctions?

Yes. The SPL meet on Monday to discuss new financial fair play proposals. If accepted, these would see Rangers docked one third of this season’s points tally if they are still in administration by the start of the new campaign on 4 August. They currently have 66 points having been deducted ten points when they went into administration. A newco Rangers, if accepted by the SPL board, would be docked ten points for two seasons and have their SPL payments cut by 75 per cent for three seasons. A newco Rangers would also be unable to play in European competition for three years.

The SPL are also investigating alleged undisclosed payments made to players since the competition’s inception in 1998, which relate to disputed tax schemes. There are more than two dozen potential punishments if those claims are proven, including stripping Rangers of league titles.

What are the other obstacles to a sale?

Rangers owe Her Majesty’s Revenue and Customs more than £14million in annual tax payments plus about £4million relating to payments made to Ronald de Boer and Tore Andre Flo around the turn of the century. But they could also face a far higher bill of up to £75million over their use of Employee Benefit Trusts from 2001-10 during Sir David Murray’s reign, the subject of a tax tribunal in January. HMRC could block attempts for Rangers to come out of administration via a Company Voluntary Arrangement and could object to Miller’s attempts to buy the assets for £11.2million.

Investment firm Ticketus have a contract giving them the rights to sell £27million of season tickets over three years, having given the club more than £30million in finance under Whyte’s tenure. The firm are still negotiating with Murray’s Blue Knights consortium over a compromise arrangement and could help finance that bid.

Whyte owns 85 per cent of the club’s shares and is seeking some assurances in return for possibly handing the bulk of them over to the Blue Knights. The businessman personally guaranteed the Ticketus money and would be susceptible to action if he did not negotiate a deal. Duff and Phelps have claimed Whyte, who bought his stake for £1, would not be an impediment to a sale but they have toned down previous claims that he was “irrelevant”.