This post was originally posted at the now defunct Canadian sports blog, “The Barnstormer”. it was an attempt to explain the saga to uninitiated Canadians.
“I have information on Rangers’ tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications are for one of the largest football clubs in Britain.”
From “About Rangers Tax Case” – rangerstaxcase.wordpress.com
On the 30th of July, 2012 a massively influential blog in the world of Scottish football posted its last entry, having exposed the gross financial mismanagement of Rangers FC (1872-2012) over the ten years that preceded its first entry in on March 27, 2011. In its nearly 18 months of existence, the Orwell Prize winning Rangers Tax Case (RTC) blog did something remarkable: by shining a light on Rangers financial misdemeanors and the intricacies of what became known as the Big tax case and the wee tax case, it brought together supporters of all football clubs in Scotland, united in their sense of outrage.
In the anonymous writer’s 2nd post, entitled “What is Rangers’ Tax Case All About”, he states at the outset, “Unfortunately, any discussion of tax law is unlikely to become a best-seller, and this will be no different”. The writer turned out to be very wrong on that point, even if s/he was right on just about everything else. With most of the Scottish mainstream media reduced to being little more than copy writers for Rangers PR department, the average football supporter in Scotland hungered for more information on the story, which turned out to be the biggest case of financial mismanagement and tax evasion in the history of the Scottish game. The blog got millions of hits and many tens of thousands of comments in its relatively short existence. A discussion of tax law may indeed be “unlikely to become a best-seller”, but this is Rangers, one of the oldest and most domestically successful club teams in the history of football.
The implications of Rangers’ tax case for other British and European clubs is still to be determined, but some believe it is a canary in a coal mine for the bigger European leagues, most notably Spain. Spanish clubs currently owe a combined €752m to the Spanish government, prompting the President of Bayern Munich to state in an interview, “We pay them [Spain] hundreds of millions to get them out the shit and then the clubs don’t pay their debts.” It would seem that for some European football clubs, paying tax is optional if you consider yourself too big to fail and too important as a “cultural institution”. Spain’s “La Liga”, like the Scottish Premier League, is dominated by two clubs, Real Madrid and Barcelona. If either of these two clubs failed in the manner of Rangers, you can be sure the ensuing crisis that would engulf the Spanish game would include much talk of the cultural significance of either/or, and all would be done to ensure that they would be saved because they are too big to fail.
Certainly, Rangers management would seem to have been of the mind that they were a “Scottish institution”, and behaved as if it was unlikely they would ever be held to account for evading tax. The problem is that Rangers pay tax to Her Majesty’s Revenue and Customs (HMRC), which cares little about Scottish institutions if they don’t pay tax. It might care about English institutions like Manchester United, but that’s another story.
The source of the outrage felt by football supporters of other Scottish clubs was that Rangers already held massive financial advantages over every other club in Scotland, with the exception of its rivals, Celtic. These two clubs, forming what is perhaps the most intense club rivalry in the history of sport, have dominated the landscape of Scottish football throughout its history. While many other clubs in Scotland have struggled to remain solvent in this brave new world of Big Money Football, with their average attendances hovering between 5.000-10,000, Rangers and Celtic have usually drawn upwards of 45,000 to their home games. For the average supporter of a small club in Scotland, it was obscene that one of the biggest clubs in Britain, let alone Scotland, felt it had to evade tax and breach the rules of the game in order to win Scottish championships.
According to a BBC documentary, “The Men Who Sold the Jerseys”, Rangers had broken strict rules regarding player registration by issuing side-contracts to players indicating that they would receive additional payment via a legal tax scheme. While complicated (this is the Big tax case, after all), it would seem they used the scheme to pay certain players and executive directors a portion of their wages tax free. These payments were also undeclared to the Scottish Football Association, which is a major breach of rules throughout professional world football. Additionally, in their last year of operation, they deducted various taxes at source but used the money to fund the operations of the club. Eventually, the amount of taxes owed in both cases led to the demise of one of the two biggest clubs in Scotland, and the most successful club in domestic competition in the history of the game. Rangers FC were the club that was too big too fail, but fail they did. On the 14th of February they went in administration and by the 12 of June, they were forced into liquidation and will go down in the annals of Scottish company history as the largest insolvency event in the history of the country. Normally, this would mean extinction, as it did for Third Lanark in (1872-1967) and Gretna in (1946-2008).
But this is Scottish football, where many have suspected for decades that Rangers had the deck stacked in their favour. The story of what followed after the demise of Rangers (oldco) is still being written, while the history of a Rangers NewCo is exactly two games old at the time of writing. The Scottish mainstream media (MSM), true to form, have generally not been able to come to terms with the fact this new club is not the same as the old. This is an understandable position for fans of Rangers, but unacceptable for those entrusted with reporting the facts impartially and without bias. So it was left to what the MSM called the Internet bampots (Glaswegian for headcase) to elucidate the facts and provide much needed analysis and perspective on events as they unfolded.
These Internet bampots, led by RTC and other blogs and their army of posters were not only proven right on the issues, they were proven spectacularly right. They now wear this slur as a badge of honour because they know that, collectively, they had the power to influence the Scottish football authorities who seemed determined to bend every rule in order to accommodate the new version of Rangers. Fans would accept nothing less than the bottom tier of Scottish football for Rangers or desert the game, but the authorities wanted them in the top flight of Scottish football, the Scottish Premier League. That failed. Then they tried for the Scottish Football League’s Division 1, and that failed. Finally, they wound up at the bottom tier, and whether that was legitimate remains questionable (normally, liquidation would mean extinction), but it satisfies most supporters in Scotland, including Rangers fans.
While some have seen this as unfair, it bears noting that Rangers are going into liquidation owing an estimated 120 million pounds, and the idea that a club that held every advantage over every other club in Scotland could be liquidated and start out in the top division of the game in Scotland struck most fans as outrageous. But for the authorities and the MSM, Rangers were too big to fail, even when they were liquidated.
Still, these Internet bampots have been an inspiration to me and many others for what they’ve been able to achieve. I lurked on the RTC blog for many months, a WordPress blog that would eventually get over 5,000 comments per post with no means to sort or search through comments. It was an unwieldy but fascinating read that took many hundreds of hours of my life, but somehow it was worth it and my interest justified. I feel as if I’ve watched history in the making in the small but proud country of my parents and grandparents. Scotland is one of the two founding nations of football, and at least one expert has stated that it “is the country which invented football….The English might have written the rules but they didn’t know how to play it. Look at the record of the first 14 of the world’s oldest international football fixture, Scotland v England. England won 0, lost 10 and drew four [matches]. For a long time, Scotland had the highest spectator per thousand population at football matches than any country in the world.” Football is the Scottish game, and while Rangers comitted suicide and the authorities seemed unable to imagine the Scottish Premier League without them, the fans dared to imagine other scenarios that were deemed impossible.
So a new era has begun in Scottish football. Rangers will be in the lower leagues for a few years, assuming the new version do not suffer another insolvency. The Scottish professional game will have to be reconstructed in a way that the fans want, because the fans have been fed up with the current setup for many years and have spoken loud and clear. These fans were told that Scottish football would suffer “a slow, lingering death” without Rangers, but we shall see about that. It might just revitialize the game in a way no one ever expected. Whatever else, the reform of the game in Scotland will require imagination from all stakeholders.
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See:
First Rangers Tax Case post:
http://rangerstaxcase.wordpress.com/2011/03/27/hello-world/
Last Rangers Tax Case post:
http://rangerstaxcase.wordpress.com/2012/07/30/wrapping-it-all-up/
Paul McConville’s post “An Appreciation of Rangers Tax Case
http://scotslawthoughts.wordpress.com/2012/07/31/an-appreciation-of-the-rangers-tax-case-blog/
A discarded football blog 