When I last wrote about following the beautiful game attempts were being made to shoe-horn the successor club to Glasgow Rangers into the first division of the Scottish Football League (SFL), the second tier of the professional game, having been prevented from crow-barring them into the first tier – the Scottish Premier League (SPL). As I said then, this attempt flew in the face of everything a sport is suppose to be about – a game played by common rules the results of which are determined solely by the sporting endeavour of the teams. The parachuting of an entirely new club, leap-frogging dozens of others, would do away with the inconvenience of playing football matches and winning them.
The reason for the Scottish football authorities attempt to do this was the claimed Armageddon that would befall Scottish professional football if one of the biggest clubs were to lie outside the top flight. Speculation was rife that TV broadcasters would walk away and sponsorship would fall massively. I covered it on this site not because of my own interest but because it appeared to present a transparent case of money-making triumphing over a corner of human activity which had not yet been completely subordinated to the drive for profit that otherwise determines so much of life.
The pressure of football fans of all SPL clubs compelled their owners to reject the parachuting of the new Rangers into the division and the equally strong reaction of the fans of the SFL ensured that the new club was not able to unfairly jump ahead of many of its member clubs into its division one. Instead it started out life in the bottom tier, division three, another victory for fan power and defeat for money and bureaucratic interests.
The victory however was only partial. By right the new club should also not have been allowed into the third division since it did not qualify to be there by virtue of it not having three years of audited accounts. The rule was broken by the football authorities claiming the new club was availing of an endowment of the old dying club, a very dubious justification in itself, except the old club hadn’t got any audited accounts for its most recent year either.
The reason it didn’t was because it had been embroiled in a long-standing dispute with the tax authorities over its payments to players by way of employee benefit trusts (EBTs), which gave players untaxed income. This allowed Rangers to sign players they could not otherwise afford, win matches and trophies they might very well not have won and deprived every other club in the SPL of deserved income, the amounts involved reaching tens of millions.
Under its last ownership Rangers simply stopped paying all taxes, including PAYE and National Insurance. In fact it stopped paying anyone, including other clubs it owed transfer fees to and the local newsagent. A liquidation process quickly followed when it could not come to an arrangement with its creditors to pay them only a fraction of what they were owed.
New owners bought the assets of Rangers at a fraction of what they had been valued, including the club ground and training complex, through a process that saw the words ‘gratuitous alienation’ (look it up) become common parlance of many more familiar with terms such as zonal marking. This new ownership then proudly declared that the new club was, unlike most others, debt free!
While the directors of Amazon, Google and Starbucks have tried their best to look contrite when confronted publicly with their tax avoidance the directors of Rangers complained about the unfairness of them having to play football in the third division. There was a bigoted agenda against them apparently, although this did not appear to include the Scottish Government which, it was reported, had lobbied on behalf of the tax dodgers. The future independent Scotland that is simultaneously claimed would be a social-democratic alternative to a Tory UK and a haven of low corporate taxation had some confirmation that the latter was closer to the truth, should such an eventuality arise.
The First Tier Tax Tribunal eventually reported, and to the surprise of most found that the EBT scheme was legal although in the fog of Scottish media comment the fact that tax evasion was otherwise proved was lost. Rangers had been vindicated ran the headlines! If only Starbucks could rely on such a sycophantic press.
The decision effectively meant that money to players were loans not income and thereby not taxable as such. The decision, unusually, was not unanimous and the dissenting opinion had rather more to say on why the EBTs should have been taxed than the majority had to the contrary. The precise legal hair-splitting that enabled such a majority decision can be pursued on the net.
On this front however it isn’t all over yet – HMRC is appealing the decision.
A second threat existed to the new club. Rangers had failed to lodge the terms of the ‘loans’ with all the other contractual information required by the Scottish Football Association (SFA) to properly register a new player. Beyond a precaution to ensure that clubs are really independent and the sport corruption-free the rules in this respect are, or were known to be, particularly strict in application. Non-league Spartans had been thrown out of a cup competition and fined a quarter of its annual revenue because it had failed to date a form submitted to the SFA. It had submitted the date but was required to do it twice and hadn’t done so. Just imagine the magnitude of the punishment to Rangers for failing to declare in full the documentation in relation to players’ contracts for over a decade!
Well this week we no longer had to use our imaginations. This was left to the lawyers. The dead club was fined £250,000 it will not pay because .. well ..it’s dead. The whole thing was an administrative error that gave Rangers no sporting advantage according to the independent tribunal set up by the SFA. They did of course embark on this course deliberately but the learned panel pondered that they didn’t know what other clubs were doing and that it had “received no evidence from which we could possibly say that Oldco [Rangers] could not or would not have entered into the EBT arrangements with players if it had been required to comply with the requirement to disclose the arrangements as part of the players’ full financial entitlement or as giving rise to payment to players.”
The ruling appeared to say that once having registered the players wrongly the player was properly registered and eligible to play and only by it being disclosed could the registration be revoked. You are innocent until you are caught! Except even now that you have been caught a slap on the fingernail is the limit of punishment.
Normally incorrect player registration turns the result of every game the player appeared in into a three- nil defeat. But, according to the panel since no sporting advantage arose no sporting penalty should be imposed. What exactly Rangers were attempting to do buying players they couldn’t afford if not to gain sporting advantage the learned panel did not say and dared not imagine.
The decision on the case might appear decisively influenced by the evidence of an SFA official, whose responsibility it was to police the registration process. How convenient then that this rather strange interpretation of the rules also appears to absolve the SFA of culpability for Rangers cheating. The claim of other club’s fans that the SFA showed itself once again to be a Rangers protection racket are indeed hard to deny – so they will be ignored and when not ignored ridiculed.
Once again however this story of money and bureaucracy versus sporting integrity and the wishes of fans may not be over. A future article on this site reporting another victory for the latter may depend on these fans uniting across their various club rivalries to demand that the crimes of Rangers are properly punished and the Augean stables of the SFA are cleared out. In a sport increasingly dominated by money interests and self-serving bureaucracies such an event would be an inspiration to the millions of working people around the world who love the game and would like to see it beautiful again.