Untold Economics: Why does an Arsenal blog keep talking about Rangers of Glasgow? « Untold Arsenal: Arsenal News, supporting the club, the players and the manager

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By Tony Attwood

The fact that Liverpool managed to scramble out of the mire, and Barca, having famously run out of cash so they couldn’t pay the players, are still there buying the likes of Cesc etc makes some people think that there is no crisis.  But crisis there is, and one big example of it is Rangers.

And I keep writing about Rangers because where they are, we could be, if we followed those who demand that we buy, buy, buy, buy and then buy.

Rangers, unlike Arsenal, have been helped by a very friendly press over the years – as one blogger put it recently “Journalistic  investigation of the scandals within Rangers over the last decade has amounted to nothing more than telephoning Rangers’ PR firm for a comment.”  I’d go with that.

But even when the press are with you, ultimately they have to recognise that something is not right (even though they will never admit to changing the story half way through events).

Last May a whizzkid as these unlikely chumps are called bought Sir David Murray’s shares in Rangers for £1.  Now he discovers Rangers are about to go bang, and he will lose his £1.

The new turnip on the block is Craig Whyte and he is the one who loves calling black white, pink puce and strawberry cheescake, trifle.

“Rangers won’t go the wall,” he says over and over again, meaning “I won’t lose my £1.”  He says Rangers have been the victim of a “malicious campaign” in the press against his club.

That was just before a judge came out and ring fenced nearly half a million pounds of Rangers’ dwindling assets so that yet another legal case against them doesn’t end with the claimant having nothing to claim.

The problem with Whyte is that people have started to question his ability to cope with the fact that Her Majesty’s Revenue and Customs look like winning their case against the club.  That means £50m fine, and death.

Whyte says funny stuff meanwhile, like: “I’ve done a lot of substantial turnarounds that are below the radar. In fact, everything in my life has been below the radar prior to this.  I’ve deliberately chosen not to get my other businesses involved in the media circus around Rangers. I’ve gone out of my way to make sure my other businesses are not affected by that.

“I understand everyone wants to know every detail of my life, everything that is going on. But Rangers is my public life – everything else should be private.”

Tough one that, unless of course what is below the radar is rather like Alice in Wonderland’s hole in the ground – a fantasy world.  Last month Sheriff Officers arrived asking for £2.8million payment to settle a separate tax case.  And what do you know, the chairman had publicly agreed to pay that bill on completion of his takeover.   And he didn’t.

So the tax man demanded another £1million in interest and late payment penalties.  Whyte now says, “I said we will deal with it and it’s being dealt with.   I can understand fans being concerned about things like Sheriff Officers turning up.  But at the end of the day, there is a big job to be done here in sorting this out as a business.”

Yup, and suddenly the papers that have been so quiet for so long want answer.  So the boss decided to ban The Herald from Ibrox for writing about a another unpaid bill – £35,000 with law firm Levy and McRae. The lawyers claimed in court that there was “real concern” about the solvency of Rangers.

Rubbish, screamed the owner, or something like that.  After all he has his £1 to protect.   But then fired chief executive Martin Bain claimed £1.3million compensation and the judge ring fenced half a million of Rangers assets on the grounds that there was “real concern” about the solvency in Rangers.

Whyte has been asked if he might put Rangers into administration if he loses the £50million case with HMRC  in November.  He doesn’t answer.   Perhaps like Billy Bunter he is expecting a postal order from his aunt.

What makes all this slightly difficult is that Rangers is the most patriotic of clubs, the most British of clubs, the most established of clubs.  Fans wave the Union flag.   They are patriots.  Except that patriots normally pay their tax bills.

If Rangers go bust there is no one to pay the outstanding bills (although the press in Scotland like to suggest there is) and the tax bill will easily eat up everything.  The banks won’t get their money back – which means it is very unlikely that any bank is going to lend anyone related to Rangers a penny.

Besides  85% of Rangers’ shares are held by MIH and through their convertible preference shares, Lloyds own MIH in everything but name.  RBS is owned by you and me (if you are British) and they worked heaven and earth to get out of Liverpool – they won’t dive in.  Lloyds don’t want them.  I can’t see any bank given them 10p overdraft.   Whyte has admitted Rangers have no current credit facility with any bank.

So if Rangers go into admin, what then?  If the money due far exceeds the assets then those claiming money will need to find a buyer for the club and its assets, including the players registrations and the ground.  If the players are not paid, they have the option of leaving since the club will have broken its contract with them.  If no one is willing to put up the money needed to pay off the creditors, the administrators could sell Ibrox for housing development.

Which raises the issue – who would put up this money and buy such a loss making club that is already very successful on the pitch?

That’s the problem – I don’t think anyone will.

Rangers will get a points deduction for administration, but then…  I am really not at all sure that survival is a given.

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