Back in February Glasgow Rangers Football Club entered administration. The administrators claimed there were short-term problems and the club would be back to normal shortly. In the period since there have been almost daily revelations about toxic bank debt, tax avoidance, cheating on the football field and legal investigations that may result in charges of fraud and corruption. On 14 June Rangers’ creditors refused to accept the administrators’ offer of a 3p payment for every pound owed. The result was the liquidation of the club. How did this happen?
Rangers were one of Scotland’s footballing giants. But they encapsulated a very particular image of Scottish society. Formed in 1872 their success and strength developed in the 1890s and early 20th century when they became an exclusively Protestant club. This was partly due to the fact that the Northern Irish shipbuilders Harland and Wolff opened a yard in the Govan area of Glasgow and brought many of their sectarian employment practices with them. Rangers reflected the values of conservatism, Unionism, Protestantism, due reverence to the crown and both anti-Catholicism and anti-Irish racism.
It’s hard to imagine now, but for much of the early 20th century the “Conservative and Unionist Party” (as it was called) was the dominant electoral force in Scotland. The Protestant Orange Order was strong and the upper echelons of the judiciary, media, civil service and church in Scotland were all dominated by a shared culture of Presbyterianism. Rangers were the football club that reflected all this.
But in the 1960s and 1970s much of this started to break down. The Tory party went into decline; the church became far less significant in social and political life and many of the anti-Irish and anti-Catholic barriers began to erode.
The same was true in football. The decades from the mid-60s to the mid-80s were hard for Rangers, who were no longer dominant in the way they had been in the inter-war years. Their great rivals Celtic won the European Cup in 1967 and were league champions nine times in a row. Aberdeen and Dundee United started to challenge Glasgow’s big two clubs and perform with some distinction in European competition.
By 1988 Rangers, with dwindling crowds and only one league win in the previous ten years, were in trouble. In August that year they were bought by David Murray.
Murray’s vision for the club was to make it one of Europe’s superpowers. He wanted to construct a team that would dominate Scotland, win the European Cup and put Rangers at the top table in any discussions about a European Super League.
As part of that agenda Rangers needed to ditch some of their old baggage. In July 1989 the signing of Catholic and former Celtic player Maurice Johnston marked an end to the sectarian signing policy. This was partially an attempt to “rebrand” Rangers in an increasingly “Europeanised” football market. Using the stadium, the players and latterly the training facilities as collateral, Murray borrowed huge sums from the Bank of Scotland.
The money was used to bring highly paid English and European internationals to the club.
But by the 1990s Rangers found it harder and harder to attract international stars to the club because of the influence of Sky’s TV money going into the Premiership. The wages on offer in England are unmatchable by any Scottish club. Last season Celtic got significantly less television money when they won the Scottish Premier League than Bolton, Blackburn or Wolves did – each of which was relegated from the English Premier League.
It is now clear that, in an attempt to compete, Rangers paid transfer fees and wages that they simply couldn’t afford.
Ten years ago, in the face of a resurgent Celtic, the Rangers management embarked on a tax scheme called an Employee Benefit Trust (EBT) that allowed them to recruit and pay players without paying their tax, PAYE and National Insurance liabilities. The final outcome of the investigation into this scheme by HMRC has not yet reported. The evidence suggests “old Rangers” will be found to have additional debts of up to £94 million.
But the EBT scheme is a problem for a further reason. At least 60 players were part paid via an EBT. But to implement the scheme the club effectively gave the players two contracts. An official contract was lodged with the football authorities (as required by football rules and regulations) but players were given a second “side contract” confirming their EBT.
These side letters appear to prove that Rangers fooled the footballing authorities and football fans for a decade and were involved in what has been termed “financial doping”. The penalty, according to the rules at least, is that they should be stripped of all the trophies they won during the cheating years.
We are regularly told that sport rests on something called “sporting integrity” and fairness. The squalid attempts to get the “new Rangers” phoenix into the top division in Scotland has shown in practice that sport is all about money and is tied into the drives of capitalism. It is contaminated by immoral practices, corruption and fraud, all of which clash with its stated values and ethos.
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