Rangers’ fans should be thanking their pantheon of heroes from the past that Craig Whyte is the owner of their club.As a “keen Rangers fan” Whyte will, no doubt, act with a mixture of emotion and the business acumen that has seen him amass such a fortune for a man just turned forty.
Celtic fans had better get used to the sounds of celebration coming from Ibrox.
Mr.Whyte means business.
It could, of course, have been easily so different for the Ibrox club.
Had Rangers been taken over by someone who just saw the financial opportunities of a distressed company, rich with under-productive assets and a loyal customer base, the club would have been vulnerable.
The following scenario COULD have happened had someone else, an asset stripper, taken over Rangers.
Buying the company for one pound he could have also purchased Rangers’ debt from the bank.
Once in charge, an asset stripper intent on squeezing the most profit from his investment could then try to “securitise” revenue streams.
He might try to borrow money against future season ticket sales, say, for the next four years.
Securitising £40 million of future season book income would allow the club to receive about £30 million in cash now.
An owner like Mr. Whyte, who has Rangers’ best interests at heart, would use that money to either invest in players or to pay any tax bills that crystallise in the future.
Had someone else bought Rangers and securitised future season ticket money, he might feel tempted to just pocket that cash for himself.
That sounds like a scam to most, but it is usually perfectly legal. This hypothetical other owner could have forced Rangers to lend that £30 million in cash to its new parent company.
The parent company would be then free to use that borrowed money as they saw fit, such as paying all of it as a dividend to its own shareholder(s).
If the club was then to become insolvent, an administrator would try to pursue the parent company for the repayment of the loan.
However the parent company would have no cash to repay the loan after paying the dividend. It would then have to file for bankruptcy too.
The loan from Rangers to its parent company simply could not be repaid. In this entirely hypothetical and fictional scenario, the Rangers season ticket money would be in an off shore account supporting a billionaire lifestyle.
Fortunately for Rangers this could not happen with Craig Whyte and the club’s own new parent company. Mr. Whyte’s circular yesterday included a pledge that Rangers’ parent company would only borrow from the club if it was “principally for the Club’s benefit”. The penalty for breaking this pledge is that Rangers’ £18m debt to its parent company would be cleared.
A different owner might have seen an opportunity to pocket £30m cash in return for giving up his right to get £18m repaid.
A different owner, if he was exceptionally greedy, might pocket the £30m cash and then try to argue that the loan to the parent company was “principally for the Club’s benefit” or might have had his legal team insert a loophole in the documents that rendered “the pledge” null and void. He would then also be able to demand the first £18m from the sale of the club’s assets in administration.
Rangers FC and its many supporters can consider themselves very lucky. In their vulnerable state, they were delivered to an owner who is both a shrewd businessman and a “keen Rangers supporter”, Craig Whyte.
It would be churlish to not acknowledge the good fortune of the blue half of Glasgow.
There is now truly light at the end of their dark financial tunnel.
Roddy MacKay
and we laughed, and we laughed, and we laughed.
April 5, 2013 at 1:38 am
Janey67
Whats the lotto numbers for the weekend ? Lol brilliant
September 20, 2012 at 7:27 pm
Jockyspants
You’re a wee gem Phil….ya cheeky wee rascal!
Love ya xxx
June 9, 2012 at 11:35 am
James Queen
Truly amazing that you came up with this accurate chain of events Last year.You make Nostradamus look like Charlie Green(A dreamer).Fantastic stuff keep it up.Hail Hail
June 9, 2012 at 7:22 am
Walter Harvey
Great piece …should we call you Phil “Nostradamus” Mac? Of course you wont get the recognition that you deserve from the SSM however there are a great many appreciative Celtic fans who will worship you forever for gems like this.
Keep up the very good work.
Hail hail
May 14, 2012 at 3:37 am
Happyhoopsdownunder
Have only just discovered your terrific site after finding the rangerstaxcase.com site on the weekend (following his great article in the guardian). Saw several mentions of your site on his blog and have been ecstatic reading both blogs over the past few days! It beggars belief that you and rtc have been able to establish the facts and the ‘succulent lamb’ crowd still appear to be toeing the party line. You both deserve to have stands at the piggery named after you for your efforts in trying to save them. Although you can’t both get the Celtic end so you might have to have a fight to settle it. Or maybe a game of scabble.
Talking of which, all this is making me very nostalgic for ‘the bunnet’. Surely it is time the hoops properly honoured fergus mccann for a) ousting the old board b) rebuilding the ground c) allowing the fans to buy shares in the club d) backing the rebuilding the team that stopped ten in a row e) doing everything he said he would at the start of his takeover including selling up with his well deserved profit bang on his five year deadline and setting the club up as a well run business. He should be regarded as an absolute legend and I’d love to hear what he is thinking on our troubled foes – not surprised the Scottish media haven’t bothered trying to find out his opinions
February 20, 2012 at 8:46 am
gerard reilly
very astute of mr phil to print that scenario , and miles ahead of “POCKET N TUBBS ” ie, traynor and keevins ? watch this space , those two owned clowns will claim the story as their scoop ? aye , and only a year behind someone with hindsight and the guts to tell the dopey hun press that they are getting taken for mugs ? well, maybe the mugs preferred to listen to the clowns , m m m ? ale , ale !! —
February 19, 2012 at 10:15 am
Jerry
Phil i think we should start calling you the oracle.
February 18, 2012 at 3:38 pm
Mark
That’s what you call journalism. Shame there isn’t more like you, I can’t believe how accurate this was from almost a year ago. Take a bow, and hopefully those “journalists” who work for rags actually do some research and not write the same regurgitated rubbish every weekend.
Also, let’s all laugh at Rangers. Wealth of the radar?? Soon Mr Whyte will be off the radar with alot of angry bears greeting and not being able to find him.
February 18, 2012 at 8:41 am
craig over salmon
ally was on the news tonite saying “FUKEN HELL WHAT NEXT? AM A GONNY WAKE UP THE MORN WI GINGER HAIR?”he wishes!!!!!!!!!!!!!
February 17, 2012 at 7:47 pm
Mark
Those who predict the future are usually ignored, well at least we took notice of it, lol. Rangers fans were taken for a ride.
February 17, 2012 at 12:41 pm
cary g
what next?
February 1, 2012 at 9:44 pm
Kaden
I didn’t read the date of this article before I read it, via a Facebook link not ten minutes ago, and was astounded when I scrolled up and found it almost a year old.
Now that is what you call journalism, if only those of the red tops in scotland had an ounce of your ability sir they may have uncovered this and exposed Whyte long ago.
Not that i’m too bothered, they laughed and gloated as my own football club where facing oblivion, and their fears will gain no sympathy from me.
February 1, 2012 at 2:52 pm
renfrewdave
rather than tesco ibrox
what about cash convertors ibrox… “we convert cash to dust” would be their motto.. naw maybe on second thoughts it wouldnt as at least you can still have the dust at the end of the day ……
January 31, 2012 at 10:51 pm
renfrewdave
my goodness arent rangers lucky…
bloody hell phil great stuff.. has anyone sent a link to the daily record, SSB and follow follow to show how lucky you realised rangers were months ago?
January 31, 2012 at 10:49 pm
Micher
Always nice to read back over an old ( almost 7 months) piece that called the shot.You can be proud of this one Phil.
January 31, 2012 at 10:10 pm
Killing Joke
Thats sounds very real. I am struggling to comprehend the hypothetical part! Ibrox Tesco anyone?
January 31, 2012 at 5:43 pm
Arfurfuxake
So very very funny. hail hail
January 31, 2012 at 2:22 pm