Will the SPL survive without Rangers?

THE cost of Rangers being lost from the Scottish Premier League could average out at only £375,000 to the non-Old Firm clubs next season. Detailed analysis conducted by Scotland on Sunday demonstrates that top-flight sides need not be facing catastrophe if five of them were to vote against admitting a newco Rangers into the set-up – the sporting integrity dilemma that will be faced if prospective Ibrox owner Charles Green cannot obtain a company voluntary arrangement (CVA).

Under our calculations, a total of £5.76 million would be wiped from revenues if the Rangers brand and their support were removed from the SPL financial equation. Celtic, though, would take the hit for almost half of this loss. That is because it is inconceivable the other clubs would not take the opportunity to change the voting structure if Rangers were out of the picture. Currently, the big two effectively have a veto. If that disappeared, so too could the present distribution model. In our projections, the top two SPL places would claim just over 20 per cent of centralised broadcast and sponsorship deals. At present that figure is 32 per cent.

It is possible that revenue reductions for clubs in an SPL without Rangers may be even be lower than our projections. Essentially, we have presented worst-case scenarios for the squeezes on television deals and attendances.

The SPL claim that the Old Firm account for 85 per cent of their earnings. We have therefore hacked 42 per cent off all centralised revenues in calculating what the loss of Rangers might mean to other clubs. Yet, no one knows if Sky and ESPN, or indeed other sponsors, would, or could, demand such heftily renegotiated terms. Especially since a Deloitte report last week put the worth of the Old Firm to Scottish football at 67 per cent. Moreover, we have arrived at our attendance totals by replacing clubs’ gates for Rangers games with their lowest crowd of last season. We have not factored in the fact that increases would follow greater competition among clubs for higher league placings and European slots. Indeed, aside from Celtic, some followers of SPL clubs might be more likely to buy season tickets because they weren’t going to be treated to visits by Rangers.

The picture that forms from this research is of a Scottish top flight that need not be entirely dependent on Rangers, or Celtic for that matter. Certainly, the loss of any revenue would bring serious challenges for clubs whose lack of liquidity has some commentators claiming any downturn in revenue could send them over the edge. However, the same thing was said when Setanta went bust four years ago. Then the doom-mongers said three clubs would be driven into administration as a result of £250,000 holes in their budgets. Only one club has since suffered an insolvency event... and in 2009 Rangers weren’t one of the sides being tipped for financial Armageddon.

It is insulting to maintain, as the more melodramatic do, that the SPL would be turned into the League of Ireland without the Old Firm brand. The sell-out, vibrant occasion the all-Edinburgh Scottish Cup final delivered surely obliterated that notion.

Of course, SPL club owners and chairmen are going to be nervous about how the Rangers saga could resolve itself. With our projections suggesting Motherwell would lose more than £700,000, Dundee United almost £600,00 and Hearts £500,000, serious cuts would be required at these clubs. But that reflects the fact these clubs were the big winners in terms of centralised prize money earned by their high league placings this season. Individual factors come into play. United would wipe out any reductions in gate receipts at a stroke were Dundee to replace Rangers, for instance. St Johnstone, too, would also benefit from a visit from the Dark Blues.

The flip side is that some clubs would suffer little financial impact were they to reject a newco Rangers in the SPL. Hibernian chairman Rod Petrie said recently that sporting integrity cannot be obtained for any price. Easy for him to take such a principled stand, perhaps, when the cost to his club would be little over £100,000. Kilmarnock chairman Michael Johnston has voiced the opposing view, yet, with Rangers’ value to the Ayrshire club being around £200,000, it must come within the club’s budget parameters.

Dundee United chairman Stephen Thompson has spoken of his anguish over a “lose-lose” situation if the SPL clubs are forced to decide on how to treat a newco Rangers. No wonder. United fans, as with those of Celtic, Aberdeen and Motherwell principally, have threatened to turn their backs on the game if a new Rangers takes up where the old one left off. They will not countenance the Ibrox club being allowed simply to walk away from a debt to the public purse of up to £70m and walk into the SPL as opposed to applying to the Scottish Football League and working their way back up. Strong factions within the fan bases of every club feel the same.

As a result, any projected losses for top-flight clubs without a newco Rangers may not be a whole heap different from possible losses with a newco Rangers in the SPL. Instead of reduced television revenue, clubs could suffer reduced season ticket sales. And instead of being denied bumper gates from hosting Rangers, disgruntled Celtic supporters could deny them bumper gates by not attending when they entertain their club. The Scottish game could be torn apart by the Rangers newco issue on levels far beyond the financial.

It has to be hoped that is avoided and Rangers exit administration through a CVA.

If they don’t, though, then the SPL clubs might want to heed the warning issued by former president John McBeth this week. “If you look after the sport the money will follow you, if you look after the money you’ll kill the sport,” he said. When it comes to the SPL, our analysis would appear to bear him out.