The Crumbling State Of Sevco Threatens Our National Game

26783406.jpg.galleryOne of the ways in which I like to relax is to immerse myself in computer games. I don’t play the sort most people would associate with de-stressing though. I enjoy war games, the more complex the better. For that, nothing beats the Total War series.

The most misunderstood of these games is Empire, which is a sprawling epic set in or around the Napoleonic Wars. What made that era perfect for a wargame was that it was, historically, locked in almost constant conflict. Diplomacy in that age mostly involved getting out of the way of the guns, and the reasons why countries went to war were myriad.

It was a dangerous time right across the world.

Hindsight means we can look back at that era and spot all the places along the path to the wars which redrew the map. Yet even then it must have been obvious which countries were to be watched, which were to be viewed as potential threats. Empire lets you do that too. A country with a weak government, a history of treachery, and expansionist ideology and which is short on key resources is one you have to be wary of. If you’re one its neighbours and you’re not locked in a formal military or diplomatic alliance then start arming up.

We have one of those in the vicinity; not a rogue nation, but a rogue football club and the things that happen there have a tendency to cast a dark shadow far beyond the environs of Ibrox. This organisation still has the ability to self-detonate, and because our governing bodies haven’t taken the precautions that would limit the damage to the club itself any scenario in which they explode could still take much of the national sport with it.

Sevco really does resemble a rogue state, you know.

They have a weak government, run by a guy so thin skinned he makes Donald Trump look like a model of composure. Their history of backstabbing, concealment, dodgy deeds and bending rules goes back beyond the current incarnation and deep into that of the club who’s identity they’ve assumed. Their ideology is, in many ways, aggressively expansionist. They believe they are the biggest club in the land and they seek to be taken seriously as a continental player too. In spite of that their economic situation is not only dire, it’s desperate.

It is run by unscrupulous leaders who pander to the worst elements of the populace. It also operates largely unscrutinised by the media, and if it was a country it would be one of those Security Council members who can do as they please without incurring sanctions. When Rangers collapsed in 2012 people talked about how they’d been punished; in point of fact, they never actually were. What happened to them was simply the inevitable consequences of administration, and then liquidation. They were never actually held accountable for the various corrupt practices that got them there, and it’s that that still rankles many today.

Officialdom is either terrified of the Ibrox operation or broadly in sympathy with it. That’s one of the things that worries us the most. There are lots of rumours swirling around about the club and it’s future. Some are more than just speculation, some are grounded in hard fact and they are of grave concern to an awful lot of people. But the chances of anything ever being done to get to the bottom of them are virtually zero. A media blackout of anything negative is guaranteed over there; that’s what gave men like Murray, Whyte, Green and King license to do whatever they pleased.

So let’s analyse the situation over there, not as Celtic supporters looking to get a good laugh – although we can do that too – but as dispassionate outsiders.

First, is the club is in financial danger?

For me, yes, I absolutely do believe that it is.

Do we believe the governing bodies and the media are aware of that?

I don’t see how they cannot be. The facts are freely available. The club makes losses year on year and they’ve recently embarked upon a quite crazy transfer spree which although it hasn’t involved spending big on fees has increased the wage bill massively. This kind of spending is wholly unsustainable for a club which, even at the height of its power, never made the kind of money Celtic consistently has. When your running costs are nearly £20 million before you pay a footballer or coach and that’s barely met by what’s coming in via season tickets you simply can’t afford to go out and sign nine players and give others huge wage increases.

But that’s exactly what they’ve done.

They will burn through the season ticket cash insanely quickly, and then the real fun starts when they’ve got to find more.

As I pointed out over on The CelticBlog last week, we’re fortunate that the SPFL elections have given us – albeit narrowly – a board where the majority is in favour of sporting integrity. It’s this organisation that will be responsible for deciding where any Rangers III ended up. Stewart Robertson shamefully finding his way onto the SFA Professional Game board confronts us with another scenario entirely; it’s entirely possible that the SFA would bend over backwards for the NewCo even to the extent where they tried to force the league body’s hand.

Do I think that could happen?

Sadly, I have to conclude that yes, it could happen and probably would happen. When all you have to go on are the lessons of the past, well we can look back four years and see what they did last time. One would imagine they’d view this situation as even more desperate and fraught with dangers than that one was. Because there are issues here above and beyond any that a club at Ibrox has faced before.

There is a very real threat to even the existence of a club calling itself Rangers.

We’re in truly uncharted territory here.

Just the other day I was listening to an ancient Radio Scotland debate, the one where Chick Young and the idiotic Jim Traynor went toe-to-toe over whether or not Alastair Johnson had nodded his head to confirm that Rangers could go bust if the Big Tax Case went against them. It’s beyond dispute that Johnson and the board were fully aware of the likelihood of that and he didn’t need to inform anyone of that fact. But it caused quite the flare up between the two hacks, because back then none of them could grasp the size of the thing in their hands. They still can’t, which is why so many still cling to the Survival Lie like a comfort blanket.

The Tax Case was the sort of crisis that could have closed their doors, and everyone knew it. I once thought that the collapse of David Murray’s companies could have done the same.

Craig Whyte ran up £20 million worth of bad debts, with a huge sum owed to HMRC. They refused the CVA because of non-payment of PAYE; don’t let anyone kid you that the Big Tax Case is what shut Rangers down. It wasn’t part of the equation. HMRC folded that bill into the final sums which were handed to the liquidators, but with the case still pending at the time it was a phantom issue.

Rangers was closed because of those Craig Whyte debts, but even with the Big Tax Case folded in as long as the assets were available in a liquidation sale there was always going to be a club at the end of it, whatever it called itself, just so long as the debts weren’t part of the package.

Those assets were always tremendously undervalued, or at least that was the perception most people had about them. But what if we were wrong? What if the asset valuation was actually right on? There were no debts, sure, but perhaps those assets came with their own, hidden, liabilities? Recent evidence suggests that they did.

Imagine that Sevco, in its present incarnation, was presented with a bill they simply didn’t have the money to pay? They’d go into administration, right? Easy. Whoever the creditors were they’d get pennies in the pound and the debts would vanish. Correct, but what if that bill couldn’t simply be set aside? What if even a third version of Rangers was impossible without it being paid?

There are some bills which wouldn’t be so easy to dodge, such as one for essential stadium repairs. If such a bill ran into eight digits it would be one that administration, even liquidation, would not be able to erase. That’s as bad as it gets.

If Sevco were unable to get Ibrox up to speed, and were rendered incapable of using the ground, where exactly would that leave them? Season tickets would be rendered worthless overnight. Even if they moved to Hampden on a temporary basis – and the SFA would bend over backwards to let them do that – the impact on their supporters would be considerable.

The impact on their finances would be absolutely catastrophic.

The club has just been granted a new safety certificate for the ground. Even the release of that information is suspect, the manner of it and the tone. Yet this news would appear – on the surface of it – to close the story down completely, but like much else it’s nowhere near as simple as that. Glasgow City Council, unprompted, appeared to confirm that there were problems with the matter. They said there was a delay in giving it to them, and that this was the result of a clerical error. That news has been greeted with frank disbelief in many quarters, especially amongst those of us who know there are issues over there which are in dire need of fixing.

I said in a recent article over on The CelticBlog that if a certificate were granted and something went wrong that a lot of people – the club included – would be in the most serious trouble imaginable. There are some suggestions that the certificate has been granted without a proper investigation taking place; a lot of people do not think it remotely likely that the council would take such a glib attitude towards safety at a public venue; that ignores past precedent, financial concerns and that famous old ugly issue of politics.

Do I believe that a safety certificate might have been granted on a nod and a wink? I am not saying that’s what’s been done, but I sadly can’t conclude that it’s impossible or even unlikely, although I wish to God that it was.

For one thing, Sevco’s board would launch their own legal action against the council, for plunging them into financial chaos. That’s why even shutting the ground whilst a full health and safety investigation takes place hasn’t even been considered. That, in itself, would create enormous problems for the club with a new season about to start. A long term closure, enforced by the HSE, would spark a court battle that could expose the council to serious financial risks. For that reason alone it’s not as simple as it probably should be.

But there’s a much more serious issue at stake.

If Ibrox is closed on the evidence of the council, for a series of expensive repairs, Sevco would collapse like a house of cards. In those circumstances it is highly unlikely that the ground would ever be opened again. The effects of that would be enormous, for the local area, for Scottish football, for the council itself. Its officials would be blamed for closing the doors on the club, however unfair that assertion might be, and with elections coming next year that would hammer the final nail into the coffins of the Labour administration.

The dominos do not stop falling in a scenario like that.

But nor do they stop falling in a scenario where someone is hurt, or God forbid killed, in an incident where a structural flaw results in an accident. Then both club and council would be exposed to searing criminal and civil consequences who’s certain, and inevitable, ending would be to wipe Sevco away. That couldn’t fail to have the direst effects on the whole of Scottish football, our own club included, whether we like it or not.

When Rangers was on the edge last time, it was the so-called leaders of our game who talked it into the shredder.

They crushed its commercial viability, collapsing the value of every sponsorship deal we were likely to get and they would have cast sporting integrity itself aside if they thought they could have gotten away with it. God alone knows what they would do faced with a scenario where the Ibrox club looked like it could vanish forever.

When people ask me why I constantly write about Sevco, why I focus such attention on them, why I waste my time on it, the answer is patently obvious. It’s because of stuff like this. The potential for that club going nuclear remains. That creates dangers for every other club in Scotland. The SFA knows there are financial difficulties over there, but they’ve not insured the sport against that, perhaps because they are unable to believe it could all happen again.

It could. It might. The risks are real.

The one thing at Ibrox you can be absolutely assured of is you can’t predict what will happen there. Trouble can come right out of a clear blue sky. The next twelve months could be as momentous as anything we’ve seen in the last four years.

Be ready for anything.

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Arrested Development: The Fans At Ibrox Just Never Learn

Former-Rangers-owner-Craig-Whyte-541404Last week I was away for a few days, taking a break from the madness and the insanity and unplugging myself from the blogosphere. My mistake was in staying connected to the internet at all, and therefore I was not unaware of events at Ibrox.

I pondered long and hard on what I wanted to write as regards these latest developments. There are, after all, legal considerations to take into account.

As such, I decided what this particular article was going to be about pretty early on. Others will certainly follow it; I want to look at these matters from a variety of different angles, but before I get to those more important matters I need to go over some old ground.

The Sevco fans’ reaction to Whyte and Green being arrested is extraordinary for a number of reasons, not least amongst them is the sheer mental gymnastics it must take to blame those men for the annihilation of their football clubs.

Way back in July last year, I wrote a piece on this site called The Club That Debt Built where I hammered across the point that Whyte was not the guilty party here. He had his hands on the steering wheel when the car crashed, but that was only because the previous driver bailed out when he saw the brick wall approaching.

The banking crisis was the moment Rangers started the long slow slide into the abyss.

This site wasn’t around then, but I was writing for E-Tims and Cybertims on that very subject and Paul Brennan of CQN had been doing much the same thing, and for far longer. In fact, it’s probably not unfair to say he was the guy who saw this coming before anyone else.

My first major article on the subject, entitled The End of Rangers? was published in 2008, and Phil McGiollabhain wrote his seminal article The Fall of the House of Murray in 2009.

These pieces, which explored the consequences for Rangers should Murray no longer be able to support them, as well as Paul Brennan’s own extensive writing on the subject, were amongst the very first to paint a dire picture for the Rangers fans … and, of course, we were completely ignored.

Part of it was simply that too many people in Scotland were believers in the concept of Rangers as “too big to fail”, in the same way that Titanic was once too good a ship to sink.

That historical precedents existed for this collapse wasn’t deemed relevant; the vast, vast majority of their fans, and all of the hacks, simply refused to entertain the idea of it.

I’m not saying this to bang our drum. I’m saying it because it demonstrates, clearly, that four years before the tsunami engulfed them people were predicting just such a thing.

This didn’t come out of a clear blue sky, and it wasn’t the fault of the Motherwell Born Billionaire.

This was being driven by financial reality, and forces over which the Scottish media and the Rangers fans had no control.

In short, it was inevitable and the only thing that might have stopped it would have been if Whyte was the guy they all hoped he was.

We had no crystal ball. We were simply willing to look at things objectively.

When you stripped away emotion, nostalgia, when you looked at Rangers as not a football club but a business struggling with the realities of that time it was pretty clear what was coming.

Empires fall, as I said in another piece for this site, and if that can happen then it should have come as no surprise to anyone that a Scottish based football club could too.

This is one that overspent, that relied for years on sugar daddy wealth and the largesse of a bank, that resorted to diverting money from the taxman when it was no longer able to compete and which continued to spend more than it earned even after Lloyds tried applying the brakes.

It was never going to have a bright and shining future when the crash turned into a recession.

Whyte had certain plans for Rangers, but it’s not clear that they involved an administration event at first, although he knew that might be the one way they could get the HMRC “big tax case” out of their hair. I do believe he had fully intended to run the club on a “break even” basis until he could resolve that, but doing so relied on European income and a share issue.

He was to be robbed of the share plan because the European money was snatched away by the ineptitude of his manager.

I’ve long argued that what Rangers fan blame Whyte for – all they can blame him for – is not being as wealthy as the press had said he was. He is being judged not for something he actually did but for what he was unable to do; keeping them afloat with his own money.

Rangers’ fans had believed all the billionaire and war chest hype. They welcomed him with open arms because they accepted, without question, these ridiculous assertions, which Celtic fans were questioning from the first.

It was this continuing belief that he had “off the scale wealth” which blinded them to the very real danger of administration past the point where it had become impossible to ignore.

They maintained their belief in those fantasises – and some were defending Whyte fulsomely – until as late as January 2012, when the transfer window opened to wild anticipation about real money being spent on the team … in spite of all the information at their disposal.

By the time that window closed, a lot of expectations and assumptions had already smashed against the rocks of hard reality, and this is what makes their apparent, and genuine, shock about what happened just a month later all the harder to understand.

It’s not as if they weren’t warned that it was coming.

We gave them the early heads-up that this guy was a dodgy geezer without the funds to carry them forward.

The very people who stood outside the police station the other day, like a baying mob (more on that later in the week) were telling us then to piss off, accusing of us running scared.

They did the same thing when we told them not to believe a single word that came out of Charles Green’s mouth, and we’ve been repeating that mantra over and over as regards the string of broken promises already from Dave King.

They’re doing the same again.

They’ve learned nothing.

They’d rather live in ignorance than face facts, and especially from us.

No matter which way they dress this up, no matter how much they might want to point the finger at Whyte and Green and the spivs, the simple truth is that their club was brought down by decades of overspending and a collective inability to confront that, and act accordingly, when the banks stopped indulging their madness.

The Rangers they knew was built on credit, and brought down by debts.

They ought to have cut spending. They could have sold key players. The playing squad would have suffered, and they’d have had to accept a period when success wasn’t likely … but that would have been small beer compared to the years they’ve spent since, following a newco as it clawed its way up through the ranks of the Scottish game.

Above all else, their club would have survived. It would not have been comfortable – indeed, the scale of the cuts would have scared the Hell out of their fans – but they would not have suffered the catastrophic effects of liquidation.

There was no grand conspiracy here.

The truth they’re going to have to grasp is that there was no need for one.

All Celtic and others had to do was follow Napoleon’s old maxim about not interrupting an enemy whilst he was making a mistake, and wait for the walls to come tumbling down.

We didn’t need to intervene. We simply had to bide our time.

The same thing applies today.

I’m going to explore the full consequences of last week’s actions later this week, but one of those is that any new share issue proposal is dead already. Even if the stock market was willing to allow a company to trade shares which are the subject of a police inquiry, who in God’s name is going to buy them? The fans? They haven’t before … I see no evidence at all that they will carry the water for King when his own grandiose promises are still fresh in the mind.

The point is moot.

There are now so many obstacles in the way of the club being able to get a new share flotation that it’s simply the stuff of fantasy.

Without it, they’re going to have one Hell of a job getting through the season.

All the hopes riding on the shoulders of Mark Warburton are largely dependent on him getting a clear run at things, without worrying about off the field matters.

That now looks like a forlorn hope, as some of us suggested that it might be.

Oh there may not be a group of agitators on the side-lines this time (they are now in the boardroom), but there are enough issues bubbling away under the surface, including the immoveable Mike Ashley and his contracts, to provide us with entertainment far into the future.

In due course, even their most avid fans are going to have to come to terms with the simple truth that whether they believe in the Survival Myth or not that the party is over.

The club playing out of Ibrox is going to have to cut its cloth to suit, and that means that the days of big spending and top players are gone and gone for good and the best thing Dave King could have done for them is to have levelled with them about that instead of promising them moonbeams.

No club’s supporters have ever been in more need of honesty from their own board, the kind of honesty that hurts but in the same way cauterising a wound does.

These people cling to fantasy like a comfort blanket, and for their own good it ought to be snatched away from them.

Craig Whyte did not destroy Rangers.

Sevco was not brought to the brink by Charles Green.

Overspending destroyed the first, and the stupidity of the supporters was the key contributing factor in the success enjoyed by the Yorkshireman with the big hands.

I mean, the guy told them – he actually said it in straight, plain language – that those hands were for grabbing money … and they loved him because he played the old “Rangersitus” card.

To watch their fans in the news footage last week, howling at the door of a police station like vigilantes, was appalling.

Their self-absorption remains total, and it’s their defining characteristic.

They won’t like reading this, and I expect the usual howling at the moon from them as a result.

But that anger largely comes from their internal knowledge that if they’d listened to us in the first place this might have been avoided.

I fully understand why they struggle with this.

But on the surface, they refuse to acknowledge how they got here or accept that it was partly their own fault.

As a consequence, they are headed down the same road and they will not change course.

That’s why the next administration event is not a matter of if but when.

You can bank on it.

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