Rangers in Administration: It Just Doesn’t Add Up

Sources are adamant that it was season 1999/00 that Rangers first started using Employment Benefit Trusts (EBT) to secure players who would not normally be on their radar in terms of wages. And yet, there are still many people out there who claim that the success Rangers had before that time had been tainted because of it.

It just doesn’t add up!

Let us start then at the start of season 1997/98. The previous League campaign had saw Rangers win the title for the 9th time in a row. In an attempt to retain the title in season 1997/98 Walter Smith went continental, bringing in Stale Stensaas, Lorenzo Amoruso, Sergio Porrini, Marco Negri, Tony Vidmar, Jonas Tern, Rino Gattuso, Antti Niemi and Jonatan Johansson. He also brought back Richard Gough to the club in October. By the end of the season though Rangers failed to win the League and the times were a changing. By the time Walter Smith left Rangers as manager, to be replaced by Dick Advocaat, players like Paul Gascoigne, Ally McCoist, Andy Goram, Stuart McCall, Richard Gough, Brian Laudrup, Ian Durrant and Joachim Bjorklund had also left the club. Anyone with any knowledge of Scottish football will know that that last list of players had been influential to Rangers during the 9-in-a-row period. 

Season 1998/99 had not even started before new manager Dick Advocaat started to splash the cash. Arthur Numan, Gabriel Amato, Giovanni Van Bronckhorst, Andrei Kanchelskis, Lionel Charbonnier, Rod Wallace, Daniel Prodan, Colin Hendry, Stephane Guivarch, Neil McCann, Stefan Klose and Claudio Reyna were just some of the players that Dick Advocaat splashed out on during his first year as Rangers manager. 

And that was still before season 1999/2000 – before Rangers started to use Employment Benefit Trusts!

If it is a fact that the first season Rangers made use of any Employment Benefit Trusts was season 1999/00 then NONE of the above named players signed by Rangers in the previous two seasons, at the point of originally signing their contacts, took advantage of any Employment Benefit Trusts.

And yet, time and time again there are those, whose persuasions lie elsewhere, who are adamant that Rangers cheated their way to 9-in-a-row and that the Treble won by Dick Advocaat in his first season as manager was won by illicit means.

It just doesn’t add up!

If we then consider that any player signed by Rangers prior to season 1999/00 did not benefit in any way from Employment Benefit Trusts, we only then have to look at what happened from that point forward to get a better idea of what was really going on.

Today’s issue of the Daily Record contains all the information about what they call ‘The EBT Years’ – starting from the year 2000 until 2010 they list every player that Rangers signed and how much they cost. What they don’t mention though was how much money Rangers brought in from selling players over the same period. So here are the total figures for those seasons.

• 1999/2000 Players In: £5.6 million Players Out: £9.05 million
• 2000/2001 Players In: £30.9 million Players Out: £4.2 million
• 2001/2002 Players In: £11.2 million Players Out: £21.575 million
• 2002/2003 Players In: £6 million Players Out: £6.75 million
• 2003/2004 Players In: £1.12 million Players Out: £10.4 million
• 2004/2005 Players In: £8.45 million Players Out: £10.825 million
• 2005/2006 Players In: £1.4 million Players Out: £0.75 million
• 2006/2007 Players In: £6.025 million Players Out: £3.3 million
• 2007/2008 Players In: £10.32 million Players Out: £9 million
• 2008/2009 Players In: £17.8 million Players Out: £12.3 million
• 2009/2010 Players In: £0.00 million Players Out: £4.3 million

Looking at the transfer fees paid and received for players over the period that Rangers made use of Employment Benefit Trusts a story starts to reveal itself. Only one of those seasons really stands out where expenditure far outweighed income, in terms of purchasing players – 2000/2001 – the season that Dick Advocaat went ‘crazy’ and signed, amongst others, Tore Andre Flo for £12 million, Bert Konterman for £4.3 million, Fernando Ricksen for £3.6 million and Ronald De Boer for £4.5 million. Having said that though, if one was to look at the bigger picture, over that 11 season period Rangers spent £98.815 million on players and brought in £92.45 million selling players.

For a club, over an 11 year period, to make a loss of just over £6 million in transfers is very reasonable – sometimes the value of a player may increase when he hits his peak, but it is just as likely to depreciate too! Over the same period of time, just for comparative purposes only, Celtic spent less on players coming in but brought in a lot less money for outgoing players – in fact the transfer deficit over the same period was over 4 times that of Rangers! Such a comparison is really neither here nor there though.
While transfer fees paid and received for players may highlight the financial clout of a club in some respects, it is the wage the club pays that really affects the cash flow. The over spending of Dick Advocaat from his second season onwards saw the wages at Rangers rocket and perhaps that is why they started using the Employment Benefit Trusts. But in more recent years, surely, Rangers have done all that they can to reduce their wage bill. So where has all the money gone?

It just doesn’t add up!

Over the 11 season period that the Daily Record claimed as ‘The EBT Years’ Rangers transfer deficit was only £6 million. Murray Park was built in summer of 2001 at a cost of £14 million. Despite using the Employment Benefit Trusts, the wages at Rangers had spiralled out of control, because of which and other things, not so long ago their debt stood at over £70 million, but that, apparently, was reduced to a more manageable £18 million by reducing costs (especially wages) and that was the case when Craig Whyte took on ownership of Rangers.

The threat of a ‘tax bill’ from HMRC has been hanging over the club for a number of years, of that there is no doubt. But the very moment that Craig Whyte came in as owner and declared the club debt free surely things were going to be all rosy at Ibrox! Nine months on from that Rangers are in administration. And the HMRC ‘tax bill’ case has still not been decided. To make matters worse, it appears that Craig Whyte has ‘mortgaged’ off future season ticket money to the value of £24.4 million.

It just doesn’t add up!

Setting aside a potential £50 million ‘tax bill’ as it is still an outstanding matter, how can a football club who have reduced their debt from £70 million to £18 million, then bring in £24.4 million from mortgaging off future season ticket sales not be in a position to avoid going in to administration?

It just doesn’t add up!

Perhaps pushing Rangers in to administration was something that Craig Whyte always intended to do but that just raises more questions than it answers. If administration was something that he wanted then he must be sure that Rangers are going to lose their case against HMRC because if Craig Whyte thought Rangers had any chance of winning their case against HMRC then administration would not even be on the table.
Something about the whole scenario at Rangers just doesn’t quite add up, but it will certainly be interesting to see what the future holds!