Monday 25 June 2012

The Glasgow Rangers disaster

How can an institution that is a pillar of its local community and beloved by tens of thousands of people around the world collapse into insolvency?  Quite easily, it turns out, if it's run without proper governance and with a casual attitude to debt.


Kevin Mckenna tells the full story here.


Rangers supporters claim that their club is the most successful in the world because it has won more trophies than any other: 115, including the European Cup Winners’ Cup in 1972.  


Craig Whyte ... bought the club for a nominal £1 [in 2011], having undertaken to pay Rangers’ £18m debt to Lloyds/Bank of Scotland. It has since been reported that the club withheld all VAT, income tax and National Insurance contributions during the nine months of Whyte’s tenure from May 2011 to February 2012. A list of 332 creditors is owed amounts ranging from millions (to English and Continental clubs) to a few hundred to local newsagents, florists and taxi firms. The overall debt mountain is potentially more than £140m.


Whyte funded the takeover of the club by mortgaging four years’ worth of season-ticket revenue, amounting to £24m, with an English firm called Ticketus. In effect, he bought one of Britain’s biggest clubs by trading on its future income.


HMRC has now brought the curtain down on the 140-year history of one of the world’s most successful football clubs. Rangers will now be liquidated and their assets sold.   The crisis has shaken the foundations of four of the pillars of Scottish society: the government, the judiciary, the banks and the press. This is the nation’s very own bonfire of the vanities.


Any sympathy that Rangers might have had from fans of other clubs has largely evaporated because of an absence of remorse or shame on the part of the directors and executives.


The football authorities must now decide if the new Rangers will be allowed to take the place of the old club in the SPL. If they reject the application, new Rangers will face the prospect of playing Alloa Athletic, Cowdenbeath and Stenhousemuir for the next three years. It is the football equivalent of the Rolling Stones playing Digbeth Civic Hall.

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