Leading article: Not such a beautiful game

Share
Related Topics

The saddest thing about Rangers FC's slide into administration is not the spectacle of a 140-year old footballing institution brought low. Nor is it the dire implications for the Scottish league if one half of the "Old Firm" rivalry with Celtic is fatally wounded. Rather, it is that Rangers are so far from being an isolated case.

There are two strands to the club's financial meltdown. One is its annual losses of around £10m. The other, which precipitated the latest crisis, is a tax issue. Rangers have been using offshore "employee benefits trusts" to pay some staff, in an effort to minimise their tax bill. Now that HM Revenue & Customs has decided the practice is illegal, the club faces a bill of up to £70m, on top of the £9m it already owes.

It is too easy to point the finger at Craig Whyte, the Rangers owner. Too easy, and not entirely fair. Not only were the arcane financial structures created long before Mr Whyte bought the heavily indebted club for £1 nine months ago. More importantly, both vast debts in general, and EBTs in particular, are endemic across the sport both north and south of the border. Rangers are just the latest addition to a growing list of clubs – including such stalwarts as Portsmouth and Liverpool – that have been rocked by their debts in recent years. And as many as eight more big names may now face EBT investigations from HMRC similar to the one troubling Rangers.

The root cause of football's money problem is not hard to find. Players' wages have spiralled unaffordably out of control, but clubs keep raising them further to lure the best talent. The result is a financial timebomb.

There have been moves to address the situation, most notably the "fair play" rules from Uefa which come into force in 2014. By limiting clubs' losses, European football's governing body hopes to cap wage bills. The scheme does have some clout: those that fail to comply could be expelled from Uefa's competitions. But it is only a small step forward, and far from enough. According to Uefa, the 665 top European clubs were £1.3bn in the red between them in 2010, despite their bringing in more than £10bn. Such losses are simply unsustainable. Alas, Rangers will not be the last to prove it.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

IT Portfolio Analyst/ PMO

£40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

Systems Analyst (Technical, UML, UI)

£30000 - £40000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Senior Private Client Solicitor - Gloucestershire

Excellent Salary: Austen Lloyd: Senior Private Client Solicitor - We are makin...

Day In a Page

Read Next
 

I was a Woman Against Feminism too

Siobhan Norton
A screengrab taken on July 13, 2014 from a video released by the Nigerian Islamist extremist group Boko Haram, showing the leader of the Nigerian Islamist extremist group Boko Haram, Abubakar Shekau  

Boko Haram is a vicious sideshow - Nigeria's self-serving elite is the real culprit

Kevin Watkins
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn