The end is nigh: Insolvency expert sees no outcome at Ibrox but liquidation

In the dark, depressing world of football insolvency, miracles can happen.

Back in the summer of 1999, administrator Donald McGruther was resigned to Clydebank becoming the first senior Scottish club to die since Third Lanark in 1968 – until last-gasp salvation arrived through the post from Bermuda, in the form of an unexpected cheque for 200,000 from absentee owner John Hall.

While Clydebank were to perish three years later, it was not on the watch of McGruther, who has a 100-per-cent track record of saving clubs – including hauling Falkirk back from provisional liquidation against the odds in 1997 and saving Livingston, who were 24 hours from folding in 2009.

Shock turns to anger: Rangers fans
erected an inflatable message for
Whyte

But even a man with such heartening first-hand knowledge of great escapes by financially-ruined Scottish clubs was unable to offer even the merest shred of hope for Rangers.

For the 'showstopping' revelation at the Court of Session on Tuesday that discredited Ibrox owner Craig Whyte has cheated the taxman of 9million since taking over nine months ago has left McGruther and his peers convinced there is no way back now for once-proud Rangers.

'Everyone in the Scottish insolvency profession with any experience of the sporting industry is of the mind that Rangers will end up in liquidation,' McGruther told Sportsmail.

WHAT THEY SAID

I’m not surprised what happened at Rangers. That was on the cards for a quite a while from since that lad took over. It is a tragedy because it is a great football club. I don’t know what will happen there.

SIR ALEX FERGUSON

You wouldn’t think something like this would happen to a club like Rangers. They are of such a size you tend to assume they will find some way out of their troubles. It’s hard to imagine this league without Rangers.

MOTHERWELL'S KEITH LASLEY

No one should take any pleasure from Glasgow
Rangers being in this situation but maybe it’s a
warning to all clubs that football is a business and you have to run a business right.

ST JOHNSTONE BOSS STEVE LOMAS

Down south and across Europe they must be shaking their heads in disbelief to see Rangers, a great institution, in such trouble.

ABERDEEN MANAGER CRAIG BROWN

I hope they find a solution as Scottish football needs a strong Rangers.

HEARTS MANAGER PAULO SERGIO

The club is too big and has too many people behind it to see it die. I’m sure they will do what’s right for it now. It’s a difficult situation for my pal Ally McCoist now, all the focus is on
the off-field stuff.

BRISTOL CITY BOSS DEREK MCINNES

If you think of the actual turnover at Rangers — a club that can turn over so much money, have a worldwide fanbase and the amount of revenue that comes in — for them to be
suffering financially is peculiar.

HIBERNIAN MANAGER PAT FENLON

'Any idiot can go into administration but the real trick is to come out of it and be able to trade properly. The big problem now for Rangers is that HMRC won't compromise on the money they are owed. The news that came out about the new 9m new tax bill was a real showstopper.

'That was unknown until Tuesday and suddenly it becomes fully apparent why HMRC are spitting nails in the direction of Ibrox. To them, that unpaid tax represents hospitals, unemployment benefit, nurses, teachers.

'And if they let Rangers away with it to any extent, what message does that send out, if they are chasing clubs down south for similar offences

'If Rangers are to emerge from administration, and preserve 140 years of history, they must get 75 per cent of unsecured creditors to accept a CVA (Company Voluntary Agreement) deal giving them pence in the pound on what they are owed.

'And if Rangers owe HMRC 50m – and not even the 75m figure floated by Craig Whyte himself – then there must be 150m of other debt somewhere, which creditors are willing to waive. And that is simply not going to be the case.'

Given that Whyte has no money and that the best offer for Rangers Sir David Murray could secure in the five years the club was for sale was a mere 1, the idea of a mystery benefactor riding to the rescue seems ridiculous.

But even if that did happen, McGruther would expect Whyte to be as intransigent as controversial Roman lawyer Angelo Massone was at Livingston.

Hammer blow: Craig Whyte (left) owes HMRC 9m more then first thought

'If the man who owns a football club in administration won't sell his shares then the club is finished,' said McGruther, who is director of insolvency at Glasgow firm Mazars.

'What would happen then is that the people taking over Rangers would have to go cap in hand to the SPL to get them to go against their own rules and agree to what is called a “hive-down” – transferring the football licence from Whyte's major shareholding to another company.

'And that is exactly the same process that would need to happen if Rangers went into liquidation.

'Any new “phoenix” company would have no licence to play in the SPL, so Rangers would need to seek a licence from the other clubs.

'Whatever happens from here, it looks to me like Rangers will soon be needing an urgent meeting with the other clubs to get a licence to keep playing in the SPL.'

And that is where it gets extremely interesting for non-Old Firm clubs who, for years, have been frustrated in their attempts to secure a fairer distribution of SPL income.

Uncertain future: Rangers can take heart from other Scottish clubs' past

Hearts are currently owed 800,000 by Rangers for the transfer of Lee Wallace last summer, while Dunfermline and Dundee United look like having to forego 80,000 and 100,000 they are owed respectively for ticket revenues from recent games.

Inverness Caledonian Thistle, whom Rangers visit on February 26, have already provided Rangers with tickets for their fans and are in discussions with the SPL over recouping the money.

Yet while sympathy for Rangers from fans of these clubs is in short supply, a strong Ibrox side is worth much to SPL clubs, from ticket sales to the share of the 80million television deal with Sky Sports and ESPN, which runs until 2016-17 and whose value is based on four Old Firm matches a season.

And instead of anger within the top-flight board rooms at monies owed in the short term, McGruther believes there will be a growing realisation of the chance to stage a long-awaited revolution.

With Rangers in administration being unable to form their usual voting power block with Celtic, together the other clubs can guarantee the Ibrox club's future participation in the SPL – but at a high price.

Troubling times: Gers manager Ally McCoist (left) is stuck in the middle

He said: 'After years of wanting better shares of television revenue and a fairer split of the gate, I suspect the clubs outwith the Old Firm will be viewing this chance with relish.

'Rangers in administration won't be able to vote and the other clubs may be able to exact a high price for their favour – by starting a Scottish football revolution from below.'

It is a situation which has not escaped Dunfermline chairman John Yorkston.

'It's vital to have a healthy Rangers in the SPL and whatever is to come in the future I hope there is a Rangers in the SPL at the end of it,' he told Sportsmail.

'Would smaller clubs seek to reclaim more powers It's a possibility. But then anything is a possibility right now until things become clearer. This is uncharted territory.

'What would happen without Rangers We would survive. And that would be the same if Celtic moved to another league as well.

'The First Division survives without the Old Firm. It would be just a different level of football. The game would not die without them but the SPL, of course, would be a stronger, more attractive proposition for television and sponsors with a strong Rangers and Celtic. And that is what we hope happens.'