Last year I wrote about the impact of sending Glasgow Rangers FC to play in Scottish Football League 3 after the company that owned the football club was liquidated last year. I described this as a “punishment” and argued that it was not a smart one, mainly because it was hurting the clubs that “imposed the punishment”. I should have known better than to enter into a feud that makes Macbeth look like a Rom Com.
To reprise the order of battle, many if not most fans of teams other than Rangers subscribe to the theory that Rangers FC ceased to exist as a football club once the limited liability company that owned it went into liquidation. Hence the newly formed company that runs the football club whose home ground is Ibrox and whose fans wear scarves saying “Rangers” is in fact an entirely new club, and therefore was required to start again at the bottom of the football pyramid.
Those who believe this theory thus claim the outcome was not a punishment at all, but in fact an application of the rules that was if anything generous to the new club (there are still lower tiers where they could have been asked to start).
I’m no Rangers fan, but frankly I think this position is absurd. Barcelona may be mas que un club, but surely every football club is more than a limited liability company. Playing this season against the minnows of SFL3 Rangers averaged attendance of 45,750, compared to 46,324 last season when they played in the Scottish Premier League. Clearly the people attending these games believed they support a team with a rich history founded in 1872, not 2012.
Thus in my view the treatment of Rangers should be considered a punishment. Both sides argue about the legitimacy of this treatment, but as the figures above show, Rangers have not lost much in the way of support, and many observers have pointed to a greater intensity in that support, fostered by the sense of victimization. The club easily won the division and were promoted to SFL2, and it would be surprising if they were not back in the SPL in two years.
How they are doing financially is less clear. But my guess is that things are looking good. The wages of the current squad will be well below what they paid when in the SPL, although they broadcast income will be substantially less. But shorn of their debts and with the support they enjoy, I think they will prosper.
So what of the SPL clubs? In 2012/13, just looking at the clubs that were present in both seasons, attendance fell by 4.6%. Below is a table showing the percentage changes for each of the clubs, as well as the difference in their league positions
Team | change | change in position |
Aberdeen | 3.4% | 1 |
Celtic | -7.8% | 0 |
Dundee United | 0.9% | -2 |
Heart of Midlothian | -1.6% | -5 |
Hibernian | 5.9% | 4 |
Inverness Caledonian Thistle | 0.4% | 6 |
Kilmarnock | -16.1% | -2 |
Motherwell | -9.9% | 1 |
Saint Johnstone | -11.0% | 3 |
Saint Mirren | -2.3% | -3 |
In overall terms Celtic were the worst hit, since although not the largest loser in percentage terms, they have by far the largest attendance, and their 7.8% drop amounted to almost 76,000 lost tickets, more that the total attendance for the season at St Johnstone.
Six out of the ten teams lost attendance, while the remaining four showed small increases. These changes do not seem particularly affected by league performance.
And what of the finances of the SPL clubs? Last month Hearts went into administration, and while it was in financial difficulties even before the Rangers expulsion, the absence of a big home gate against them can’t have helped. Ironically Hearts asked Rangers to play a friendly against them this summer to help with cashflow, but there’s precious little friendship now between Rangers and SPL clubs, and they refused.
So, referring back to my earlier blog, I would still argue that the punishment of Rangers was not a smart one, and there were smarter ways to do it. Others have argued that keeping Rangers in the SPL would have led to mass boycotts by enraged fans of the other SPL clubs. Maybe, but I seriously doubt it. In any case, I think it’s clear that the punishers have been hurt by the punishment. Perhaps not that much, and perhaps embittered fans feel it was a price worth paying.
But it does serve to illustrate the paradox of sporting competition. A good contest involves intense rivalry. Which means that the rivals actually need each other- eliminate your rival and you are the loser.
Hey Stefan,
I buy what you’re saying, but in an even bigger picture, I see an overall benefit for the SPL.
Rangers not only have better wage issues, but fewer travel considerations to deal with too. A bus to Brechin isn’t as big a deal as a Europa League match in Bucharest, for example. Financially, they’re probably doing pretty darn well.
The rest of the clubs saw minimal growth or dips in attendance, but actually Celtic could more than cover the lost league revenue with (a) guaranteed deeper runs in domestic cups (not that the odds shifted too much) and virtually guaranteed Champions league positions for a few more years. More home gates will overcome the loss per gate.
As you point out, Hearts were already a mess. That can’t be pinned on the Rangers episode.
The added bonus of Rangers’ relegation goes to every team in the league. At least once a year, they are guaranteed a “glamour cup tie” with a massively supported club. Where that possibility was like winning the lottery in the past, all lower division clubs can now anticipate a nice little injection of funds due to the Rangers travelling road show. It’s far from scientific but a look at Elgin City’s numbers indicate a very healthy uptick in attendance when Rangers came to play. So, if everyone is promised a wonderful stadium-filling fixture, it sounds pretty good for all.
SB
Interesting perspective – you’e definitely right about the benefit to the lower division teams- SPL2 clubs must be looking forward to the coming season. Maybe random relegations of top clubs would be a good innovation?
Why do you insist on perpetuating the limited liability company that “run Rangers” myth? The club was incorporated, which means the club is the company, and the company is the club. Look at the Duff and Phelps reports which clearly say Rangers FC, also referred to as the club and the company.
Green bought the assets of the club. It’s clearly documented in the report. It’s also documented exactly what he did buy. The club was not sold as a going concern, it was sold as a bundle of assets. The club he formed had to reapply to play in the league. There was no demotion and no punishment in this case. Not for that anyway.
Did it hurt other clubs, I think that is obvious that it did. What was the other option..let the assets of a club that had died form up as another entity and go straight where it left off? The old Rangers ran up debts so far that they couldn’t recover. This wasn’t helped by the Murray regime who fought the taxman at every step when working with him would have had the whole affair over relatively quickly and a lot less painfully. This put them in an unrecoverable toxic situation.
Whyte has said on the record his whole plan was to put Rangers into a pre pack liquidation as soon as possible and re-emerge with the assets intact straight away. He was talked out of it, and screwed over by D&P when he did try.
SPL clubs did have a hard time last year..but budgets have been cut and even though money will still be tight this year they should be on a much more firm financial footing. Killie are in trouble at the moment, but that is as much to do with a fight between the sponsors and the chairman as it is to do with Rangers. Hearts had been a basket case for years. Their Romanov had already said long before Ranger’s death that he wouldn’t put another penny in to the team.
The rest of the clbs are struggling also, but as I said earlier that has been the case for a while. Scotland has had more than it’s fair share of clubs with financial difficulies in the past. Dundee, Gretna, Clydebank, Airdrieonians, Motherwell are just some others. It would be set to continue even if Rangers hadn’t died..but that has definitely speeded up the process
OK, I challenge you to go up to any fan anywhere else in the world and say to them “you know what mate, your club is no more than the limited liability corporation (and whatever other legal entity) that owns the club”. They will laugh at you. Everyone else in the world seems to understand that a club is it fans, community, history, stadium, etc- the technical legal ownership is just about accounting, nothing more.
I have quoted before a long list of English clubs where the limited liability company has been liquidated and ownership has been transferred to a new legal entity- in none of those cases did anyone suggest the club should go to the bottom of the pyramid and start again.
This is from the Duff & Phelps report and as you can see you’re totally wrong as they clearly state the ‘club’ was sold on as a going concern and through the whole legal report they continually refer to club and company being separate entity’s ….
4.1 The Club continued to trade under the control of the Joint Administrators up to the date of the sale of the business and assets of the Company to Sevco on 14 June 2012. During this period, the Club was able to complete all of its remaining SPL fixtures and achieved second place in the final SPL standings for the 2011/2012 season.
4.2 The continuation of trading operations enabled the Joint Administrators to put the CVA Proposal to the creditors of the Company and after the CVA Proposal was rejected by creditors, the Joint Administrators were able to secure a going concern sale of the business, history and assets of the Company to Sevco.
4.4 Following the sale of business and assets of the Company, the responsibility for maintaining all trading operations passed to Sevco which continues to operate the Club. The Joint Administrators have completed a handover of operational matters to Sevco and are now undertaking an exercise to finalise all outstanding issues relating to the Administration trading period.
4.5 The corporate entity which remains under the control of the Joint Administrators i.e. the Company, will be placed into CVL once all outstanding issues have been attended to. It is likely to be several weeks before this occurs.
10.9 The history and spirit of the Club have been preserved by the sale which completed on 14 June 2012 and it is now the responsibility of the new owners to secure its future.
Another quick point I’ll make is about the company being incorporated.What a lot of people miss out is the fact the ‘club’ is a recognisable entity in it’s own right and as such can be legally sold,traded or exchanged from an incorporated company ! In fact Lord Nimmo Smith fully explains the legal realities of why it’s the same club,in his judgement from the SPL commission.
Football clubs are always a recognisable ,for example if Chelsea (who are an incorporated club) win a cup nobody says ‘oh look Fordstam Limited won the cup’ nor will Fordstam Limited or it’s owners or directors be etched on any trophy.The actual football club and the team go down as winning the cup ! link to Chelsea official page as you can also see even though they are an incorporated company they also clearly state club and company are separate http://www.chelseafc.com/club-info
Another reason Rangers can legally claim the club is a recognisable entity in it’s own right,is ironically because of the SPL contract they had to sign in 1998.Which clearly states club and company are different entitys.In fact rule A4 states that a football club cannot join the SPL unless it has an owner/operator !
On the point of the ‘demotion’ being a punishment……The SPL had various meetings after Rangers PLC went into administration and the new rule made up was that there would be no automatic sanctions regime when a SPL club’s parent company enters administration or if they had a NEWCO.Instead punishments would be done on a case by case basis,where the actual clubs come together in a meeting and decide what any punishments are instead of the SPL board.
When Rangers (the club) were sold on from Rangers plc (the corporate entity) to SEVCO as a going concern,the actual league share was held by Rangers PLC (the corporate entity) and not Rangers (the club).So when the club applied to transfer their league share from one parent company to another the other,clubs had to have a meeting and decided if the transfer would be acceptable or if the club should be further punished and rejected.They obviously choose to punish the club further and rejected the transfer on grounds of ‘sporting integrity’.
To quote the SPL….
“With the change in rules meaning that any application for a share transfer would now be considered by the clubs in a general meeting rather than the board, a fixed penalty PUNISHMENT is not appropriate,” SPL chief executive Neil Doncaster.
I don’t entirely follow your argument, but whatever it is I can’t see how it shows that I’m “totally wrong”. My whole point is that a limited liability company is a legal construct designed to facilitate economic transactions, that has almost nothing to do with the heart and soul of a football club (any club, not just Rangers). When you raise legal points and legal opinions you miss the point completely- no one truly thinks that this is what we mean by a football club. If a judge ruled tomorrow that your football club no longer existed you would not take it seriously either.
Absolutely spot on. It’s great to see that outsiders can see this.
Hi Stefan,
A balanced, analytical outlook. As a Rangers fan who has lived in Glasgow all his life, I must say I was shocked at the amount of sheer hatred directed at the club from the rest of Scottish football during the whole saga. One example would be the ‘Rangers Tax Case’ blog, set up and ran by a Celtic fan. Due to an HMRC leak, the blogger could pass on confidential information regarding the case, while Rangers, who were forbidden to discuss it publicly, could not.
This resulted in the club being presumed guilty by all and sundry, even when the tribunal eventually found the club largely innocent.
This hatred has not abated, with the torching of the Rangers team bus this week testament to that. It’s certainly an uncomfortable sociological phenomena in our country.
On a slightly related topic, do you know of any precedents where a ‘newco’ has been allowed to retain their place in the division post insolvency?
Dougie
It’s quite hard to say exactly- I have detailed financial data from Companies House on English clubs going back to 1958. Most English clubs were limited companies before 1920. Each club has a company number, which they get at registration, and therefore gives you an idea of its date. So Birmingham City’s company number is 27318, and it became a limited company in 1888- the oldest limited company (owning a football club) that still exists as far as I know (though Birmingham City Football Club itself was founded in 1875). Bristol City’s original company number was 53889, but the company that owns the club today is 1501663. In 1982 the old club was liquidated and the assets sold to a new company. There are many cases like this. In other cases the old company has become a subsidiary of a new company (for example Bolton was originally 43026, which still exists, but the holding company that controls the club today (Burnden Leisure) is 335699. If you’re interested you can look these up on the Companies house online search facility: http://wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo
So I think about 45 of the 92 clubs in the English Premier and Football Leagues are controlled by companies with different numbers than the ones that originally owned them. Not all of the original 45 original companies have been liquidated- my guess is a couple of dozen.
And this is just to describe the relatively orderly English system.If you look at most of the other countries in Europe club ownership and identity have a habit of changing on a regular basis.
Stefan,
One of the more interesting sections of your Soccernomics work was on the effect of corruption in football, particularly with regard to the Italian league. As the extent of referee bribery was uncovered attendances dropped. The core lesson from this was that football fans will put up with almost anything, but unfairness and a rigged league will hit crowds more than anything.
It seems odd therefore that you examine the attendances post the Rangers “punishment” without looking at the counter factual – what exactly would attendances been like if the rules had been bent to breaking, just to keep a big club in the league? Everyone knew that if it had been a Dundee United, Dunfermline etc, then they would have been forced down the same route as Rangers were. Remember that Livingston suffered the same fate. The Rangers board played a game of chicken with HMRC and football and it backfired, not on them, but on their fans. Shameful, but hardly anyone else’s fault. They gave football no choice, given the rules on liquidations. There was no option.
Now if you are suggesting that the rules should be ripped for what you imagine would be a short term gain, and the stitch up that is Scottish football should have been propped up no matter what, I think you are forgetting one of the key lessons of you own work.
Cheers,
Niall
I think if Rangers had been allowed to get away Scot free (ho ho!) then you are right, but I suggested in my earlier blog what I think would have been a better punishment- keep them in the SPL but fine them 20% of gate for the next 5 years (or even longer if you think necessary). Nobody would then think Rangers “got away with it”, but there would have been less damage to other SPL clubs. Of course, some here are arguing that no real damage has been done.
As I’ve said before, those who believe, like the blessed Margaret, that “there is no alternative” are really not looking for one.
Stefan,
I can see where you are coming from here, but to make up a new rule and impose draconian fines going forward on Rangers would have been open to all sorts of challenges, not least because the club from a legal perspective really was an entirely new company. I think you underestimate the anger of fans of the smaller teams on the structure of the league prior to Rangers being punished, and the extent to which that would have fed into even bigger drops in attendances if a stitch up had been agreed. This was a league after all where Celtic and Rangers openly colluded to use their 2 club veto on changes to put pressure on other teams and indulged in the obviously illegal anti-competitive practice of jointly agreeing to charge clubs to sell away tickets. The lack of competition over the last decades has already had a drastic affect on attendances. It would only have got worse if the rules were abandoned.
“A good contest involves intense rivalry ” you say, but there is no intense rivalry between the other clubs and Rangers/ Celtic. You like to beat a big club, sure, but like a Fulham or Norwich facing Man Utd, you can’t delude yourself that this is an actual rivalry.
Scottish football needs to grab this opportunity to introduce real reforms that will bring competition back to the league, not fiddle around the edges and prop up a corrupt system.
Thanks,
Niall
You say they are doing well financially. Widely reported they are losing more than 1millon pounds per month and heavy speculation that they are headed again for another administration event.
Your overall point has validity in a be careful what you wish for type way but the alternative of bending rules was the end of the game in scotland.
Well, if it’s true that they’re going into administration again then the current owners will lose out, but I find it hard to believe with this level of support that ultimately Rangers will end up at the top of the pile again.
and what else will people in Scotland do? Watch rugby?
Rangers losing “£1m per month” omits the fact they took in season tickets sales before that. I think many clubs will take, say, 50% of their gate money before the season starts, so from an accounting perspective, it wouldn’t be all bad news to lose money each month thereafter, so long as the gate money more received could cover all the other 11 months “losses”.
The £1m per month was also based on a loss of £6m, over the first 6 months that the newco traded, which would have included listing costs and other one-off costs.
Good article Stefan. You’d never read such a balanced and neutral view in the Scottish press or media which is notoriously ‘Celtic compliant’ and buries the truth in its fanatical campaign against Rangers and its fans. The Scottish branch of the BBC leading the way.
WATP and always will be.
With respect Stefan, the distinction between the cultural identity which rests with the fans as against the legal entity is a pretty fundamental one. The legal entity has to be bound by the rules of the competition it participates in.
In my opinion, Rangers fans have the right to claim the history of the club as their own – it is their money and their support which was the main reason why all those trophies were won over the years. The demise of the company does not take away that sense of pride those fans rightly feel about the achievements of their club, nor the sense of identity they have with the Rangers team now. For opposing fans to claim differently seems to me to be small minded.
However, the legal entity that was Rangers can’t sidestep the law of the land or rules of competition based on a cultural sense of a football club being distinct from its legal personality. It is the legal entity that entered into contracts and other obligations and it was the legal entity who held the SFA licence and SPL share – not the more abstract concept of “the club”. The club has no legal personality and so cannot be punished – any sanction had to be applied to the legal entity hence the eventual inevitable outcome.
Regarding the suggestion that the new Rangers are likely to be prospering in financial terms, as you say, it is difficult to come to clear conclusions on that given the lack of accounting information available. The only accounts produced did show losses of several million pounds over a 7 month period, albeit that there were certain exceptional items within those figures. Given the significant additions to the playing squad over the summer, and further exceptional items, and without any obvious opportunity to significantly increase revenue, prospects may be somewhat less positive than you have suggested. The funds raised from the share issue are inevitably being eaten into simply to maintain the cash flow required to get the club through the lower divisions. Therefore, the business model adopted by the new club remains open to question as evidenced by the significant fall in the clubs share priced over recent months.
I don’t think you’re reading this blog or the comments on it- you really should in order to avoid making points that I’ve already answered. Read up where I cite instances from England where companies owning football clubs have been liquidated and ownership passed to a new company without requiring the club to start at the bottom of pyramid.
Celtic had extra revenue because of champions league last 16 , where gate money , merchandise , hospitality , etc , tv money produced profits of around 30 million add to that khi to swansea 7m. Makes your statement seem silly at best Celtics attendances at home games were more than newco the rangers , who actually were giving home league game tickets out for free if you purchased cup game tickets! So if you had actually looked into the ticket scenario games that had 40,000 plus were in fact free entry ie montrose , elgin games at ibrox! A quick google of free tickets for rangers home games would have provided you with these facts and indeed how in 1 game at hampden the national stadium there was only just over 14,000 a game played in glasgow and not really an away game . Hibs aberdeen sold more season tickets last year than in previous years because there fans obviouslt thought there was a better chance of silverware! Is this why rangers have frozen prices? Celtic lost that much money that this year season tickets are down £100 as a reward for the fans loyalty , strange if they were losing so much income !!
Thanks for the tip – unfortunately my comment was typed before some of the previous comments and only sent when I had better connection which is why I had not picked up the earlier comments. In the current case the transfer was to be after administration and after a CVA had been refused. Are any of the English transfers you refer to in that category? How would you distinguish the downfall of Livingston from that of rangers to justify different outcomes?
fair enough- sorry for sounding snappy. I think it’s usually the case that liquidation of the company occurs after the transfer of the club to the new entity- but the point is that in most cases the old company is no longer a going concern. Look at the examples of Bristol City and Wolves from the 1980s.
I’ve not looked in detail at the Livingston case. I am arguing that it made economic sense to treat Rangers differently, even if it involved adapting the rules. Laws and rulebooks are changed all the time to fit the circumstances. As many of the comments here and on twitter demonstrate, many fans did not care about the economic outcome but just wanted Rangers to be sent to SFL3 or below- de gustibus non est disputandum.
Don’t take as read this “Widely reported they are losing more than 1millon pounds per month and heavy speculation that they are headed again for another administration event.”
The seven month interim financial report was indeed showing a £7 million pound loss; however £5 million of that was one off costs of the liquidation expenses and backdated wage payments to players who subsequently left. On the income side no sponsors money had yet been accounted for and only a small proportion of total Season Ticket sales. None of this is taken into consideration when the back of a bus ticket calculation concludes the £1 million a month loss. It is ludicrous, and Rangers accounts, when the full report is produced, will show a much stronger position.
Bemused by comment from James D –
“Makes your statement seem silly at best Celtics attendances at home games were more than newco the rangers , who actually were giving home league game tickets out for free if you purchased cup game tickets! So if you had actually looked into the ticket scenario games that had 40,000 plus were in fact free entry ie montrose , elgin games at ibrox! A quick google of free tickets for rangers home games would have provided you with these facts and indeed how in 1 game at hampden the national stadium there was only just over 14,000 a game played in glasgow and not really an away game”
I attended every game at Ibrox last season and I can assure you none of them were given to me for free.
great article stefan.
the reason some uninformed people are questioning ur article is they can’t handle a non rangers supporter trying to defend the football club.
just remember we were cleared of the tax case ( i know hmrc are appealing but they don’t have a hope in hell winning the appeal) hmrc shouldn’t have been allowed to block a cva while the tax case was ongoing. however they did & we will move on & probably become bigger, better & probably more hated by every other jealous & obsessed sad individual who hate our football club more than they love their club.
The grinding of teeth from those of a green and White persuasion only serves to vindicate the blog…that Scottish football was crazy to demote Rangers. Indeed, the lies about free tickets being handed out came about because of 1 picture on the net of some complimentary tickets. Of course, every club hands out some freebies. Fact is, crowds were incredible, we have a 1 horse race league, attendances have went through the floor (and we ALL know the real numbers at celtic park…), clubs are going under at a steady rate of knots, all clubs are down sizing. ..Rangers have existed since 1872 and always will exist. Just as well because the rest of Scottish football seem to love to hate…and the affect on the standard of our football is lost on what can only be described as bigots.
I think the real point of my blog is that rivals need each to compete in sport, and the failure of rivals is, paradoxically, bad for you. I think the comments on this blog shows that many Scottish fans just don’t want Rangers, and maybe many Rangers fans don’t want the rest of Scotland. I think that should worry you as a Rangers fan just as much.
You make a very odd argument. The fact that a club is not just a limited liability company is the reason why the club had to be punished in whatever legal form it might present itself. If it had been, it would have evaded responsibility for its own action by legal shenanigans.
Actually I make a very simple argument- I think there were cleverer ways to punish Rangers. However, if you read all the comments you will see that a lot of people believe this was not a punishment at all, only the logical treatment of Sevco, a new club with no connection to the old Rangers club. Now that is a very odd argument. So you and I do not disagree if we both say that “Rangers have been punished”. But you might still disagree with my claim “the punishment could have been smarter”.
Your analysis is partial. What is your counterfactual? If the new club had been allowed into the SPL then would attendances have grown, fallen or what? How do you account for wider economic conditions and reflect longer-tern trends in attendances? Does it include any allowance for the possible impact of the reported fans’ boycott if the rule books had been re-written? What other club-specific issues have you taken into account? For example, take Celtic, how many season books sales were made to Irish-based fans last year and how does this compare with the peak of circa 7,000 before the crisis there? And there’s more……
Bottom line for many Scottish football fans, especially for those like me who are not supporters of either Celtic or the new Rangers is that if the new club had been parachuted into the SPL or even SFL1 then they would have walked away. There is no point to a sport unless we all abide by the same rules. The old club was guilty of financial recklessness to a degree that any attempt to shoe horn a new, debt free club back to the same level would have made a nonsense of any notion of fair play and free competition. What is the long-term damage to a sport which rolls over to accommodate those that were once powerful whilst ignoring the very basics which keep people engaged? Now that is Armageddon!
This is not economics, it’s an opinion piece, and as Hitchin’s was often keen to point out to adversaries, “what is claimed without evidence, can be dismissed without evidence”.
Of course it’s partial- Gibbon’s Decline and Fall of the Roman Empire in six volumes is still partial. And of course it’as an opinion piece- that’s what blogs are! And while I at least offer some data, that data is open to multiple interpretations – that would be true of even the best research paper in economics. And of course you can dismiss it- you can see that lots of people do- though they all seem to be of one stripe- so that ought to make you pause for thought.
As to the counterfactual- I did address it – I just disagree with you- I don’t think there would have been a mass boycott. As always the counterfactual is not observed, hence we can’t know. But the threat of fan boycotts is commonplace in sport, and fans seldom go through with it (think Green and Gold- some fans no longer go to Manchester United, but the stadium is still full).
Armageddon? That seems to be the problem here- this is sport, not religion. If you want an example of a league that regularly changes its rules to suit its most powerful members think of the English Premier League- a League created to meet the objectives of the big clubs? Armageddon, or the most watched football league in the world?
Stefan,
You are right of course to say that the counter factual can not be observed. There is little doubt though, that the boards of directors of many clubs thought it could be implied by the season ticket sales at the time of the “punishment”. At many clubs, as they examined their early sales, a disaster looked to be looming. Now you seem to be suggesting that fans would have buckled and not followed through, as with Manchester United. Manchester United are in a rather stronger position however to withstand a drop off of some fans, with queues of people waiting for the opportunity to purchase a season ticket and massive revenues from “day trip” fans who pack out their shops. Hardly the same situation as we see at Kilmarnock or Motherwell etc.
Perhaps they all could have been lying. That is not what Aberdeen thought from the angry campaign of their supporters and the massive drop in real sales. They were the first to come out against a stitch up, and for very good reasons.
Many fans drop out of football every year (as your data in Soccernomics demonstrated), to be replaced and the myth of the loyal fans is just that. In a shambles of a league, already a laughing stock, the temptation not to go back is strong when faced with unfairness. So many fans from Scotland have given up over the last 20 years. This was seen as the last straw.
I speak as someone who bought a season ticket for the first time in years, despite living on the other side of Europe from my home town club, in order to support my team through tough times, something I hadn’t previously considered. Fans may indeed have brushed off corruption as you suggest. I would rather watch an amateur team and Sky TV for quality than turn up to watch a fix.
Perhaps asking the clubs themselves how their ticket sales looked may change your mind.
Cheers,
Niall
and if you’re right about this then my argument fails – we’ll never know for sure. I begin to wonder if Scottish football is not doomed whatever happens. There are so many angry comments on this blog (some I’ve had to censor) and on twitter that I wonder if there won’t be boycotts when/if Rangers are promoted to the SPL.
” I begin to wonder if Scottish football is not doomed whatever happens”. On that we agree. The way out is radical and involves a more even distribution of funds – from sharing away game revenues for instance. For another blog / discussion perhaps.
In my opinion, many old firm fans who were also bored with the two horse race would welcome a competitive league, even if it hurt their own revenue streams. Who wants to watch a league where only 4 games really matter, even if you end up winning it?
Stefan, The real attendance figures for PAYING customers in the SPL may be even lower than stated above. Your attendance figures must include All the FREE childrens season tickets handed out by many Clubs last season, with every Adult season Ticket , to boost flagging sales.
Maybe- it seems both sides here dispute the numbers here
James, I think you may have been listening too much to online forums
,”who actually were giving home league game tickets out for free if you purchased cup game tickets! ISo if you had actually looked into the ticket scenario games that had 40,000 plus were in fact free entry ie montrose , elgin games at ibrox! A quick google of free tickets for rangers home games would have provided you with these facts!”
What facts about free tickets? I googled couldn’t find much about them, I did hear this one from a Celtic fan in work during the season, he had seen one of the “free” tickets online, frankly, every club gives away comps and tickets to local schools or sometime good causes for near every game, in fact for a while there I could have got a comp for most, if not all games at Celtic Park. (think I better add, if the free ticket you are speaking about is the one that was on the internet on Celtic sites with £0.00 as the price, you do know that if a persons smart card fails they are issued with a ticket with this price on it, yes?)
Myself and my friends bought tickets for all the cup games at Ibrox, funnily, not one of us received a free ticket, in fact I have never met a Rangers supporter who has. If you meet one, ask him to right about it on say Rangers online forum Follow Follow for example as the guys there don’t seem to have got any either, it would nice to be enlightened about this and how he managed to get one with buying a cup ticket and all the folk I know didn’t, hey I’m a Scotsman, if Rangers are giving away free tickets in the future I want to know how to get some
You seem to fail to mention Celtic gave away 2 free tickets to season ticket holder for several games , I’m not sure how many (2 to 3 games maybe?) I only know of this because of the Celtic fan in my work telling me about it., then I only know of free tickets with Rangers cup tickets from Celtic fans also, so maybe this is nonsense as well?
“how in 1 game at hampden the national stadium there was only just over 14,000 a game played in glasgow and not really an away game”
Yep! a bit disappointing, especially when you consider over 30k were at the first meeting at hampden, but then with the SFL 3 already having been won by rangers I suppose some sort of drop off was to be expected, but I bet QP were more than happy considering their highest attendance the previous year was around 770 (just to be clear, this was highest attendance not average attendance )
How about we speak about Dundee utd V Celtic, probably a more attractive game i’m sure you’ll agree, attendance 8717!
Also, just as a footnote an away game is an away game, you don’t get “not really an away game”
“Hibs aberdeen sold more season tickets last year than in previous years because there fans obviouslt thought there was a better chance of silverware!”
Not sure about Hibs, but I do know Aberdeen gave away free kids season tickets with adult season tickets and it is reckoned over 1k were given out (reason for increase in st sales?)
Is this why rangers have frozen prices? Celtic lost that much money that this year season tickets are down £100 as a reward for the fans loyalty , strange if they were losing so much income !!
Not sure what you mean “is this why Rangers have frozen prices” according to yourself,, Celtic have reduced prices as £100 reward for the fans loyalty, but if it’s Rangers freezing price it means something else? even though the club stated it was for the backing and loyalty the fans gave them during the problems of the last year.
How about I reword it and say, Rangers have frozen ST priced for fans because of their loyalty and support during the recent problems the club has had, Celtic have reduced tickets by £100 because they are moving folk from their normal seats and closing a stand for most SPL games (I don’t know if this is true, but it is something I have heard, but it probably has as much, if not more credence as some of the stuff you have spouted)
PS I don’t think Celtic have any money worries, the Champions league run will have helped a lot
PPS I think you’ll agree with me when I say I believe both clubs manipulated the attendances (IE counting Season ticket holders even if they didn’t attend, whether that’s the right or wrong thing to do I don’t know?)
I’ve actually always wondered, how many clubs from the Scottish Premier League have been hit with liquidation?
I’ve been reading recently about Hearts, but they look as if they might survive with a few companies interested in them…
Good question Tom- I don’t know the answer to that one. Anyone?
The Fergus McCann era (1994-1999)
The Bank of Scotland informed Celtic that it was calling in the receivers on Thursday 3 March 1994 as a result of exceeding a £5 million overdraft. However, expatriate businessman Fergus McCann wrested control of the club, and ousted the family dynasties which had controlled Celtic since its foundation. According to media reports, McCann took over the club minutes before it was to be declared bankrupt.[11]
In order to alleviate the club’s considerable financial debt, McCann reconstituted the then privately owned Celtic Football & Athletic Company Limited as a public limited company – Celtic PLC – resulting in one of the most successful stock market flotations in British financial history. Celtic PLC was then created as a new company and registered with company house for VAT purposes as a new company thereby being in control of Celtic Park Barrowfield training ground and 4 other outbuildings on London Road Glasgow .The transfer of club assets allowed Celtic to continue membership with SFA while Fergus McCan launched a share issue for fans to buy into the newly formed company.
http://en.wikipedia…._of_Celtic_F.C.Pacific shelf:
There are 3 main companies in this discussion:
1. Celtic plc – this company was formed in 1897 and was previously known as “The Celtic Football And Athletic Company Limited”. Its name changed in 1994 to Celtic plc. It was the football club until a restructuring on 15/2/02 when “aspects of (its) trade” were transferred to Celtic F.C Limited . It continues to own the players (ie pays the transfer fees), Celtic Park and the 1/12 share in the SPL.
However its accounts also states that “Celtic F.C. Limited has the main activity of which is the operation of a professional football club.” It admits that the football club IS Celtic F.C Limited.
2. Celtic F.C. Limited – this company was formed in 2001 and was previously HMS (402) Ltd. as mentioned above, it is a professional football club. It receives all the gate money, employs and pays all the wages of the players and other staff. It receives the TV income. It is the company that competes in Europe.
It is also insolvent to the tune of £23 million.
3. The Celtic Football And Athletic Company Limited – This was set up in 1994 and was previously Pacific Shelf 595 Ltd. It is not the football club despite its name. Not much goes through it. It had £80K of turnover in 2010. It was probably set up just to preserve and maintain the old name.
The conclusion is that the football club is Celtic F.C Ltd, a company that was formed in 2001. It won the league in 2002, 2004 and 2006-8, although it seems that the 2002 win was done by 2 separate companies. However the Celtic fans don’t have any problem in acknowledging that season’s league win.
I don’t understand how a company that is not the football club can own players but I don’t know the exact regulations and presumably they are not breaking any rules. Perhaps Whyte was looking at a similar arrangement for Rangers and having Rangers Group owning the players, but the club continues to pay their wages? That’s a scary thought.
The bottom line is that the company that plays Celtic’s games was formed in 2001 and has won the league 5 times. “If you know your history” and all that….
https://www.duedil.c…company-limited
The conclusion is that the football club is Celtic F.C Ltd, a company that was formed in 2001. It won the league in 2002, 2004 and 2006-8, although it seems that the 2002 win was done by 2 separate companies. However the Celtic fans don’t have any problem in acknowledging that season’s league win.
Stefan you said “no one truly thinks that this is what we mean by a football club. If a judge ruled tomorrow that your football club no longer existed you would not take it seriously either.” but the point is that not just a judge but a lord said “THE RT HON LORD NIMMO SMITH) annex a paragraph—— In common speech a Club is treated as a recognisable entity which is capable of being owned and operated, and which continues in existence despite its transfer to another owner and operator. In legal terms, it appears to us to be no different from any other undertaking which is capable of being carried on, bought and sold.
Lord Nimmo made this point quite well. However, when talking about the Football Club, it has always been and will always be, Rangers Football Club.
But no matter what is said and by whom; those that are bigots, haters or just envious of Rangers world record league titles will just clutch at straws!!!
It seems to me there is a plentiful supply of bigots and haters on both sides of this argument.
Qualify that statement if you can????
Surely the long history of sectarianism on both sides is well documented – seen from afar it looks like a rivalry that has got out of hands. Of course, there are also fair-minded people on both sides too, but their voices often seem to get drowned out.
The insinuation that the insolvency of Hearts had anything to do with the absence of Rangers is ridiculous.
Hearts “lost” two home gates against Rangers and “gained” two home gates against Dundee. Their attendances against Rangers in 2011/12 were 14,842 (21 April) and 15,495 (23 October). Their attendances against Dundee in 2012/13 were 12,446 (2 September) and 11,284 (30 January). That’s a total difference of about 6,500 fans, which equates to about £100,000 in revenue after allowing for VAT.
Hearts went into administration owing in excess of £25,000,000, having gone through a season where their fans raised over £1,000,000 (via a share issue) to keep the club afloat. I fail to see how £100,000 would have made any difference either way.
Plausible. So why did Hearts ask Rangers to play a friendly? Would that have made much more of a difference? What you might be failing to see is that servicing debt and staying afloat requires much smaller sums of money than repaying your debt. Insolvency occurs when you can no longer service your debt.
The suggestion of a Hearts – Rangers friendly occurred after Hearts had entered administration. They needed cash at that point to keep the doors open long enough for the administrator (BDO) to process and consider bids to take the club out of administration. According to BDO they have now raised enough to do this, mainly from the sale of 3,000+ season tickets since they were appointed last month.
Hearts themselves openly said that they needed £2M of additional funding (beyond their normal revenues) to stay afloat last season. The fans raised £1M of this through the share issue. Most of the rest of the gap was covered by the team reaching the League Cup final. Earlier this summer they said they needed £2.5M of additional funding in the 2013/14 season, they proposed this would come from selling players (£1M) and an unspecified membership scheme (£1.5M). They were forced into administration because season ticket sales were slower than budgeted.
As I said before, £100,000 or so from the visits of Rangers would not have made much difference given the scale of problems that Hearts were facing.
hibs went into liquidation and didnt play football for a full season,yet are still deemed the same club that won the scottish cup? ok a long time ago but still…
hearts in the past also went into liquidation, try telling their fans it’s not the same club that was founded
Sorry Stefan,but Rangers are not simply the same club because they play at Ibrox and have the same support. They are the same club because the SFA say they are (in transfer of original membership statement)UEFA (co-efficient ranking added to and current squad now listed,which would not be the case if UEFA deemed it a new club)the European Club Assoc. (granted Rangers associate membership because the club were founding members in 2008 (again,which they could not do if they believed the club was founded in 2012),the governing body the SFL (club correctly listed as founded in 1872 together with all honours),the London Stock Exchange, the Adveritsing Standards Agency,BBC Trust,Wee Red Book etc etc have all came down on the same club side of the debate,as have Lord’s Smith and Glennie,not a single worthwhile body or organisation has Rangers listed as founded in 2012 club honours 1. Because the stance of the SFA (which would also apply to Hearts and Dunfermline in similar scenarios)is transfer of membership means same club. People citing Gretna or Airdrie Utd(now Airdrionians)are way of course as Gretna applied as a new club for a brand new license and Airdrieonians are simply Clydebank in another form as confirmed on the SFL website. For these reasons Rangers are the same old club,not simply because they play in blue at Ibrox.
Agreement on transfer of membership
Friday, 27 July 2012
Joint statement on behalf of The Scottish FA, The Scottish Premier League, The Scottish Football League and Sevco Scotland Ltd.
We are pleased to confirm that agreement has been reached on all outstanding points relating to the transfer of the Scottish FA membership between Rangers FC (In Administration), and Sevco Scotland Ltd, who will be the new owners of The Rangers Football Club. There were a number of complex and challenging issues involved but, primarily, the ScottishFA had to be satisfied that the new owners of Rangers would operate in the best interests of the club, its fans and Scottish football in general.” New OWNERS of The Rangers Football Club (which was always the correct name of the club,not Rangers FC and certainly not Glasgow Rangers.
SFL Official Website. (Confirming the above) http://www.scottishfootballleague.com/club/rangers/
UEFA website (current squad now listed under Scottish Cup.(The oft used last match played is a red herring,as UEFA only list top flight league matches,Dunfermline’s last league match for example is listed as having been played v Kilmarnock).
http://www.uefa.com/teamsandplayers/teams/club=50121/domestic/index.html
Also from UEFA website. “It represents the Hoops’ 44th league crown, leaving them ten behind rivals Rangers FC, who were absent from the top flight for the first time this season.”
http://www.uefa.com/memberassociations/association=sco/news/newsid=1943008.html
There are many other such examples,but suffice it to say Rangers fans do not view they’re club as the same club simply out of emotional attachments,they do so because everyone who matters confirm they are,
Again, I disagree with your interpretation- see my reply below
I disagree. I don’t think the opinion of the law matters that much when it comes to defining a community- the law is there to arbitrate on matters that to do with contractual liability, entitlements, rights and the like- it has nothing to say about how people feel about their club. The law may be helpful or unhelpful in supporting that community, but it cannot define it. If Rangers fans had walked away after the liquidation of the company, saying “this is no longer the club I recognise” then Rangers would truly have died. I’m surprised as an economist who spends a lot of time working on contractual issues relating to football businesses that I have to keep repeating this, and also repeating that every football fan outside of Scotland also seems to understand that the law does define our sense of belonging to a community.
Hi Stefan,
your article ends with the following sentences. “A good contest involves intense rivalry. Which means that the rivals actually need each other- eliminate your rival and you are the loser.” Which, in the most part, in this particular instance, means Celtic. No other SPL club has that truly intense rivalry with Rangers.
Lets look at the impact this has had on Celtic in more detail. As you say average attendances are down by almost 76,000. As far as I recall the average price for a SPL game at Celtic Park last season was £28. That is a loss of £2,128,000. It is a league, with no offense meant to any other club, that is all but over before it starts. Now for arguments sake I’ll leave the figure at £2.1m for this season and the next even though Celtic have reduced their season ticket price considerably this year.
So in the bare minimum three seasons that Rangers are out of the SPL, in league gate money terms, Celtic are down by £6.3m (all other things being equal.) I think if you ask anyone at Celtic if they would be prepared to take a hit of £6.3m over three years for a literally unfettered crack at the Champions League for three seasons, they would bite the hand off you. They need to make it there once and they have more than made their losses up. UEFA’s own figures state Celtic made £23,670,000 from their Champions League adventure last season. So what are Celtic getting in return for this £2.1m?
As was very evident last season Celtic were inconsistent in the SPL and arguably over-achieving in the Champions League, there was no pressure at home, no Rangers to keep them competitive week in week out, in short, they became a midweek team. All energies were focused on performing on Tuesdays and Wednesdays. Saturdays and Sundays? Well there were 38 of them to get it right seemed to be the philosophy. Alex Ferguson always said Manchester United didn’t get motoring in their domestic league till December and lo and behold after the Champions League groups were over (December 5th) Celtic won 10 of their next 11 SPL games. Their league lead went from 3 points to 18 during this run all but guaranteeing the title.
In my opinion this is a very significant factor in why Rangers being out of the SPL is really not harmful to Celtic. Giving certain players a rest prior to a Champions League game was commonplace last season, would that have been the case in a competitive title race with Rangers? Not a chance.
In both 2003 and 2008 arguably the best team in the division lost the league. Both Celtic (in 2003) and Rangers (in 2008) wilted under the demands of getting to the UEFA Cup Final. Celtic had no such concerns last season, this season and most likely next season. I’m not saying they will qualify for the Champions League all three seasons but their prospects are higher if they don’t have to focus on the league every single week of the season. At the cost of £2.1m a year, I think that’s a reasonable price to pay.
You have a good argument here- and if you’re right then the punishment might have been smart- and an even smarter punishment would have been to force them to start even lower down the pyramid. I think generally speaking it’s argued that high standard of domestic competition helps to raise the standard of international competition (consider for example the current soul-searching about the weaknesses of domestic cricket in Australia) – but then you might argue that the fact that Rangers probably will return ensures that ultimately Celtic will face some competitive discipline.
Ultimately I think your argument gets close to another one that is close to my heart- that the big clubs in Europe have outgrown domestic competition and therefore there’s need to turn the Champions League into some more like a superleague.
Hi Stefan,
I’m not saying this was some fantastic Machiavellian plot by Celtic but in the cold light of day despite the financial hit of Rangers non-SPL involvement there were plusses to be garnered from it. For me it fairly consistently followed the path that was mentioned previously regards Livingston, Rangers got treated in exactly the same way and went to the lowest tier. I doubt any sane person at Celtic Park would wish it indefinitely but in the shortish term it gave Celtic three good opportunites to get to the Champions League and give it their best effort when they got there. If Celtic do get into the CL in all three seasons and continue to get healthy profits from selling Wanyama for £12.5m etc then the financial chasm between the two clubs will be greater than it has ever been.
Ordinarily I’d agree regards domestic competition helping on the international stage but last season Celtic midweek to weekend were poles apart. Simply put, the squad didn’t have enough quality in depth to keep that level of consistent performance. The three or four changes made and weary legs of the others meant the domestic team did suffer on ocassions.
I agree completely on clubs outgrowing domestic football, the FA Cup being a shining example. The reward of getting into the EPL and retaining that position is the be all and end all for a good percentage of teams. For the bigger clubs getting into the Champions League, regardless of performance in it, is key. Juventus made £44m from CL TV money last season, they didn’t get by the quarter finals and made more money than Bayern?
No, and I wasn’t implying a plot either.
Sorry to come back to this late having just read the further posts. Much of what you say has merit, but the hypothetical assumptions in this argument are things that different sides are never likely to agree on.
I think chairmen in the SPL initially had intended to agree to have the share transferred to allow Rangers to remain in the top division. The negative reaction of the fans and massive drop in advance season ticket sales lead to a view that admitting Rangers would have been a greater risk than admitting them. As you say, the actual extent of any boycott can never be known. However, I do not think a comparison with Manchester United is likely to be much of a guide as to the impact on small clubs who do not fill their stadiums and who are still reliant on ticket sales for the majority of income. If a boycott had gone ahead then several clubs would have been likely to tumble into administration very quickly due to the perilous state of the finances of many clubs. It might have been that a boycott would have been short lived or fairly small but, if it turned out to be more substantial, then the downside could have been fatal for some clubs.
The strength of feeling among many fans groups was very strong. SPL chairmen were in a better position than you or I to judge to likely impact of any threatened boycotts and they took the view that to admit Rangers to the SPL would have a greater impact on them than admitting them to the fourth tier. I think the fact that the impact overall has been relatively small suggests the decision was correct in purely economic terms but – who knows?
I think it’s also important to point out that much of the fans’ objection was not based on sectarianism or “Rangers hating” (although it also has to be acknowledged that there is a vocal and unpalatable number where that is the case). For most Scottish Football fans a decision to admit Rangers would have been making different rules for them as compared to Livingston. Whilst I acknowledge what you have said before about economic justification for this and precedents down south, most fans are attracted by the sport, not the economics. Fairness and consistency are integral to sport and so fans were understandably asking the authorities to apply the rules in the same way they had done before. To adopt a hypothetical, if highly unlikely analogy, if Rangers or Celtic (or Man Utd from the Premiership for that matter) were ever to be relegated then there could be significant arguments for league reconstruction to avoid the economic fallout. If club chairmen decided to restructure the league to avoid the relegation then it may be economically better for the league but the inevitable anger of the fans in such a situation would again be based primarily on the principle that the rules should apply fairly to all or else what is the point?
This may all seem like depressing naval gazing and to a point it is. However, the inward looking basis for many of the decisions made is a reflection of the economic reality that, other than the occasional Champions League windfall, almost all of the revenue for SPL clubs is generated from fans from Scotland. The fans on both sides made their views known and the clubs made the decision they thought would harm them the least. Personally, I think they got it right in economic terms.
I also think you make a number of fair points and maybe the chairmen did know best (how often can we say that ;-)).
I think perhaps the interesting contrast with the English experience, is that while the League has often threatened to expel clubs if they could not be placed on a sound financial basis within a given deadline, in the event someone always comes up with the money, and even if this involves the creation of a new company and the liquidation of the old one, the league is satisfied so long as their are financial guarantees. As I understand it Sevco acquired the Rangers assets on June 14 2012, and was refused readmission to the SPL on July 4. In England, as far as I know, in every case where a new company has acquired the club it has been with the express agreement of the league – threats of expulsion only arose if no buyer could be found for the club.
But also as far as I know there’s never been a case where there was so much uncertainty generated because of a court case.
I think the key issue that there has never been a club in England which has gone through the phoenixing process which generated anything like the animosity (rightly or wrongly) shown toward Rangers by the fans of rival clubs. It might be a different story if it were to happen to, say, a Chelsea or a Manchester City- but even then I don’t think feelings run so high.