The issues around Rangers' finances were laid bare yesterday during a day of claim, counter-claim and public horse-trading. The club has been in administration for three weeks, and the expectation was that a decision on redundancies would be announced in the afternoon, but instead there was a flurry of public-relations activity that revealed the extent of the dramas besetting the club.
The administrator, Duff & Phelps, released two statements, the first stating that it is "expediting the sale process" and will be "holding discussions with prospective purchasers over the next few days. If, however, it becomes apparent that the sale process cannot be accelerated there will be no choice but to implement very severe cost-cutting measures at the club". It also warned that without reducing outgoings, or receiving additional funding, "the club will not be able to fulfil its fixtures throughout the remainder of the season".
The second statement confirmed that Rangers would not be playing in Europe next season because the club cannot meet the criteria to be granted a Uefa Club Licence by the Scottish Football Association in time for the 31 March deadline. But it also sought to dampen some of the blunt language of the previous statement. "We are doing our best to ensure the company trades viably during administration and this will require a rigorous cost-cutting programme," said David Whitehouse, one of the Duff & Phelps administrators. "Our preferred option remains to reach a point where a company voluntary arrangement [CVA] is reached and the club can emerge from administration as a viable business within its existing corporate shell."
In short, Duff & Phelps believes Rangers can still exit administration conventionally, but the other option is for the assets – the stadium, the training ground and the players – to be sold to a new company that then applies to take the old company's place in the Scottish Premier League.
Negotiations between Duff & Phelps and the players have been ongoing because the administrators face having to release some of the high earners, such as Steven Davis, Allan McGregor and Steven Naismith, to cut costs by £1m a month. However, the only serious potential buyer for the club, the former Rangers director Paul Murray, who is heading a consortium of investors, does not want to buy a team in which the key assets have been released.
"We are striving to strike a balance where cost-cutting measures can be implemented but do not destroy the fabric of the playing squad to the extent it will inhibit the prospect of a sale," Whitehouse said. Now, Duff & Phelps has forced Murray to show his hand by threatening to release these key players by the end of the week.
The developments came after Murray had pledged, during a morning radio interview, to make a conditional offer by a week tomorrow. Dave King, who is the second-highest shareholder at Rangers and a former colleague of Murray's at Ibrox, also released a statement yesterday. He revealed that he intends to sue Sir David Murray, the club's former owner, for £20m. He also praised Her Majesty's Revenue and Customs for its handling of Rangers' tax problems, but said he thought a newco Rangers was "inevitable". Fans are against this option, and there would also be sanctions by the SPL, including a likely heavy points deduction at the start of next season.
The club owes £15m in unpaid taxes run up during Whyte's reign, although a first-tier tax tribunal is currently deliberating HMRC's claim for a further £49m in taxes and penalties after accusing Rangers of misusing employee benefit trusts from 2000 to 2010. The verdict is expected next month, and no CVA is likely to be agreed until then. King also accused Whyte of "duping the fans". Sir David Murray responded in a statement by saying he reacted with "incredulity" to King's comments.
What happened yesterday was posturing among figures from the club's past, present and future. Meanwhile Rangers' fate hangs in the balance.Reuse content