Wednesday, April 25, 2012

Rangers FC - A Disgrace to Scotland


What is ‘Rangers FC’?
A short time ago this would have been a ridiculous question, but today it is highly pertinent.
Is it:

    A)   A registered company privately owned and financed by shares and debt.
         B) An important element within Scottish contemporary history.  
         C) An essential part of Scotland’s social culture.  

If the answer is A, then it should be liquidated. It employs a couple of hundred folks of which only a few would find themselves on the dole for any length of time and its financial affairs have been driven to the position whereby it should be closed down, the assets sold and at least something returned to creditors. Basic capitalism at work.

If the answer is B, then it should also be liquidated. Third Lanark are a part of Scottish contemporary history (arguably the third leg of the ‘Auld Firm’) but were liquidated in 1967. Actually, there is probably a fortune to be made in opening a Rangers Museum celebrating the role that the club has played in Scottish life and debating the damage that the sectarian culture wrecked on Scotland’s economic and social affairs.

If the answer is C, then nationalize it. Surely the Scottish government would be in a better position to negotiate with HMRC, clean up the balance sheet and influence the SFA such that the club cannot be penalized to the heavy extent as is currently being envisaged. Then the ‘club’ can leave nationalization and return to the public sector in no different a manner than we have seen with the banks.

The Essence of Scottish Football
How many Scots spend more on Rangers FC than they do on their houses, how many spend more on Rangers FC than they do on their cars or on their food bill? The reality is that Rangers inspires a passion amongst a significant percentage of the Scottish pubic that perhaps only Celtic FC can rival. This is a brand far more powerful in Scotland than Coca-Cola, McDonalds or Apple.

It is right that these folks are angry. They have been let down. The sacrifice that they have made over the years has been stolen from them by corrupt businessmen and now they are facing a repeat. Let’s say that the club is bought by an American or Singaporean.  They will only buy it if the price is right and if they can make a buck out of it. That is no criticism of them, they are perfectly entitled to do so, but in the meantime, the people who really ‘own’ the club are suffering and it is likely that their sacrifice will continue for some time to come.

However, it is not only Rangers supporters that will suffer. Despite their naïve giggling, all other Scottish soccer fans will also suffer. Celtic domination is inevitable so no excitement in the league. Hardly any reason for any decent players to come to the Scottish game, the best of Scotland departing for more interesting leagues and the continuation in the decline of the national team.

Scottish football would be renamed ‘The Juniors’.

Who Decides?

It is clear that no-one is taking responsibility here. The supporters are powerless, the Scottish Government are cowards and the administrators sorely out of their depth.

However, it is the SFA that should be primarily accused of neglect. This organization should be the guardian of the Scottish game.  However, they have stood by whilst commercial mismanagement of Rangers continued whilst many, even occasional, observers could see it happening. Now they act like a business regulator handing out penalties that whilst perhaps consistent with the rules, show little regard for the future of the Scottish game they are pledged to encourage. Let’s be under no illusions that the transfer ban is based on the same commercial premise as the fine imposed on Wal-Mart for paying bribes in Mexico. Luckily for Wal-Mart they will survive, but Rangers the company will not.

Does the SFA have a crisis room established? Is it discussing this with the other clubs, shouldn’t it have been prepared for this and have seen it as an opportunity for a lasting restructuring of the Scottish game in such a way that some of the passion returns? It appears not. It appears that the future of Scottish football fans is to watch the EPL on TV and visit a Scottish ground for ‘Auld Lang Syne’

So What is the Answer?

Nationalisation will not happen. Salmond is too focused on the upcoming referendum to risk alienating sections of the Scottish public. The SFA is not going to intervene, that is clear so what is the alternative?
Return it to the fans I say, but this cannot happen without someone making money in the interim.  However, make it a condition of sale that an offer to acquire at least 51% of the shares of the company will be made within 2 years will be made to the general public.

When one group agrees to do this, make them the preferred creditor for a period of 1 month and let them go into closed session with HMRC and the SFA. Don’t let Duff and Phelps do the negotiation here, they are useless and only focused on drawing their salary at the end of the month. Actually don’t let the Blue Knights do this as their pretense of being a ‘fans proxy’ is counter-productive to the process. Let it be a hard nosed private equity type who is simply looking for an acceptable 2 year return with a carry thereafter.

Let the law punish Craig Whyte or David Murray. As Whyte correctly pointed out, the SFA cannot punish him in any way that will affect him. However, let’s not punish the real owners of Rangers. Let’s actually reward them for their investment in the club. Let’s not punish the fans of Celtic or St Mirren or Hearts by taking away one of the supporting pillars of the Scottish game. A game that is desperate for leadership, vision and reform.  Let’s admit that the game is not just about passion and religion but is about money. The old fans of Third Lanark know this. 

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