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Can someone from the UK explain this?

As best I understand the story below, Glasgow Rangers, one of the two powerhouse teams in the Scottish Premier League, has just declared bankruptcy, and seems to owe the UK government about 50 million pounds in unpaid taxes. Their latest owner bought the team for one pound, agreed to take on the team's debt, and borrowed against season ticket sales.

It's puzzling, but I think that means the team has no income from gate receipts for the next three years...only source of revenue would be TV plus jerseys, hats, mugs, doormats, etc.

One story at:

http://uk.reuters.com/article/2012/02/2 ... RA20120221

Yes, I'll happily take great delight in explaining it to you.

There is, at present, no salary cap or revenue related expenditure limit in football (by which I mean soccer) although the governing body of European football in trying to bring one in over the next few years.

A lot if the big clubs in Europe have spent heavily on players chasing success. In countries like England, Italy, and Spain the share of the TV money is substantial for clubs and they can therefore afford bigger transfer fees for players and pay higher wages.

In Scotland it's very different. There are two MASSIVE clubs, Rangers and Celtic, and then there is everyone else. It's an historical thing, Celtic were formed in 1888 by Irish immigrants in Glasgow working around the shipbuilding docks. The immigrant population was poorly treated and the team was formed by a Christian Brother of the Catholic Church to help raise funds for the impoverished.

The Celtic support retains strong Irish links and enjoys support from all over Scotland, Ireland and England in particular, and indeed all over the world.

Rangers are the club that the protestant locals backed, and in reaction to the growth of Celtic, Rangers have grown into the pro-unionist club of Scotland. There support comes from all over Scotland, half of Northern Ireland and England.

When Celtic meet Rangers it is essentially a religious battle steeped in history, with both sets of fans enjoying a sometimes violent hatred for each other.

This, of course, is very attractive to TV companies as the worldwide audience for these games is massive.

But this is all Scottish football has to offer, so the TV deals are modest in comparison to other leagues in Europe.

Therefore both clubs have struggled to bring in top talent to ensure they beat the other to the title in Scotland and also make an impact in European competitions.

Celtic have had financial issues in the past, particularly in the 1990s when the flirted with bankruptcy and suffered as Rangers won a record equalling 9 titles in a row. But they emerged from all that with a rebuilt stadium and a sound financial standing. Despite temptation they work within their means.

It has not been the case over at Rangers, whose chairman pledged "to spend £10 for every £5 Celtic spend" in an effort to stay on top. It is this attitude coupled with financial incompetence that have led Rangers to where they are know, the verge of bankruptcy.

Many issues need to be addressed, including should Rangers keep the trophies they won whilst trading insolvently. Its not an even playing field for the other teams if they are playing by the rules and Rangers were not.

The club will not go out of business however, it is too big for that. And although they will never admit it, Celtic need Rangers around to attract TV money and sponsors from their games with them.

A lot will come out over the next weeks and months. In the meantime Celtic fans, like myself, are "Having a party while the rangers die" and really sticking it to them as best we can....

Rangers players agree wage cut deal to save the club


BBC Scotland has learned a broad wage cut agreement with Rangers players has been agreed to keep redundancies down.

Steven Whittaker and Steven Naismith have already struck deals to take a 75% wage cut.

It is being suggested that they made the decision to help administrator Duff and Phelps avoid major redundancies at the Scottish champions.

The administrator had delayed until Friday an announcement on job cuts in order to agree a deal with the squad.

Joint administrator Paul Clark said on Thursday that he was confident a deal would be reached.

He thought it would thereby justify the time it has taken to impose cost-cutting measures.

"We're in the final stages of that process and it's going to deliver very substantial cuts," he told BBC Scotland.

Rangers players will gather at the Murray Park training ground on Friday

"We're looking to deliver cost-cutting of around £1m per month and that's something I think we will have achieved by this weekend."

On Tuesday night David Whitehouse - Clark's fellow administrator - said a failure to agree to certain clauses with players' advisers had blocked the deal.

However, Clark said: "We will vary certain contracts such that there will be trigger points at which they can move.

"I don't think that should be considered that any or all of the players are considering that they want to leave the club in the summer.

"It's just a safety mechanism from their point of view, in exchange for the very substantial amounts they're giving up, to give them some flexibility depending on what the new ownership structure looks like when the club comes out of administration.

"I can understand the players' concern, but I don't think the fans should assume that means a bunch of the players are going to go in the summer or, indeed, at any point in the future for little or no value."

Captain Steven Davis and Scotland internationals Whittaker and Naismith were locked in negotiations on Tuesday night when it emerged that seven or eight players had not yet agreed to the proposed cuts in salaries.

The BBC had learned that the club's biggest stars were being asked to take wage cuts of 75%, middle earners 50% and the lower paid members of the squad 25%.

Wingers Mervan Celik and Gregg Wylde this week had offers to leave the club accepted, while Australia midfielder Matt McKay arranged a move to South Korean club Busan I'Park earlier in the administration process.

Meanwhile, uefa events chief executive David Taylor says Rangers will have to meet the 31 March cut-off for securing a licence to take part in European competition next season.

Rangers' administrator has admitted there was "no realistic prospect" of the club meeting the deadline but hoped to appeal to the Scottish Football Association, which uses Uefa rules to determine whether licences are issued.

However, former SFA chief executive Taylor said: "They have to make the deadline. There will be no extensions.

"It's a great shame that such a major football club and a major Scottish institution is in such disarray at the moment.

"A club that has that massive level of support shouldn't be in the financial position that it's in just now."

In brief:

There is no collective bargaining agreement in European football. There is no salary cap. Clubs pay huge percentages of their income (in some notable cases, they spend more than their income) on player salaries. Although the football associations are responsible for the overall running of the game, their power to control club expenditure is limited at present - there is no franchising system, where the teams only exist as part of a collective like the NFL. In order to secure more power and establish more sustainable management of football clubs, the football associations would need to obtain the consent of those very same football clubs - if Manchester United, for example, were sufficiently unhappy with any attempts by football authorities to constrain their expenditure on salaries, they would soon find many willing partners around Europe to set up a breakaway league and competitions. If the New York Giants wanted to do such a thing in the US, their ideas would be dead before birth, because of the strength of the NFL's collective bargaining position and the lack of competitors.

Rangers have been poorly run for many years, and their future has now been mortgaged by the latest unsatisfactory owner (who had already been ruled as unfit to act as a director, but still ended up as owner). There is a very real possibility of the club being liquidated and ceasing to exist in its current form. As a knock on effect, it would be unlikely that Scottish football would be sustainable, and Celtic would soon be in major trouble.

I don't know how this all ends, but it's a mess brought about by incompetence, and maybe criminal negligence.

At the same time, Portsmouth FC in England have entered administration, and not for the first time. The problem is not exclusive to Scotland, not by a long way.

UK Skins Fan wrote: As a knock on effect, it would be unlikely that Scottish football would be sustainable, and Celtic would soon be in major trouble.

Not so. Scottish football sustained itself perfectly well when Rangers were getting crowds of 7,000 in the 80s and Celtic were getting 12,000 in the 90s. Clubs would just learn to cut their cloth accordingly. My won team, Motherwell, has just posted a half million quid profit for last year and is currently forming the Well Society which, I think, is some kind of Barca-esque scheme whereby the fans become part-owners. But, that is a positive story about Scotland so, likely, you haven't read it or heard about in the "British" media.

Well, where "sustainable" simply means to continue to exist in some form, you're right - it will go on. But if Scottish football aspires to be anything other than a footnote to European football, then I would suggest that it is on the verge of crisis.

Having said that, there is a view that, from the competitive sporting viewpoint, Scottish football would be far better off with the Old Firm anyway. It just wouldn't be of much interest to anybody else.

As soccer is so pervasive in the worldwide sports scene it seems impossible to ever cap spending. If say, the English Premier League does it, players could play in Italy, or Spain, or something...

How much power does FIFA have to regulate these things worldwide?

Here in the states, we are practically the only football playing nation. Players can't simply just go to Canada and make anything close to their present salaries. Same can be said for baseball and basketball. Japan has a very respectable pro baseball league, basketball is gaining popularity worldwide... but players can't get the same kind of money anywhere else but in the US.

As we've seen, despite the fact soccer doesn't register very highly on the American sports consciousness... David Beckham was still able to make about half a bazillion dollars playing for Los Angeles.

"Competitive balance" has been scoffed at on this board given the most recent example given by the league but I would think it's a serious issue with soccer. Teams simply have to pay top dollar for talent... if they don't, there's any number of professional leagues around the globe that will.

It was shocking, they have a great set of players who took cuts to save them. I'd be devastated if this were to happen to newcastle

As best I remember, soccer-football was hit by the "Bosman ruling", which seems to have allowed the equivalent of free-agency.

The key advantage that the NFL has is that the NFL is a locked-in organization. The owners can apply a salary cap as long as players cannot walk away to another league.

Incidentally, my son, Redskin Dan v1978, who has been a Skins fan since he was a toddler, somehow began to follow Glasgow Celtic. A few years ago, we drove from Killeen, TX to Austin about 6 am to watch Celtic demolish somebody not-Rangers.

welch wrote:As best I remember, soccer-football was hit by the "Bosman ruling", which seems to have allowed the equivalent of free-agency.

The key advantage that the NFL has is that the NFL is a locked-in organization. The owners can apply a salary cap as long as players cannot walk away to another league.

Incidentally, my son, Redskin Dan v1978, who has been a Skins fan since he was a toddler, somehow began to follow Glasgow Celtic. A few years ago, we drove from Killeen, TX to Austin about 6 am to watch Celtic demolish somebody not-Rangers.

Quality! That's good to hear. Redskin Dan sounds like an inteligent chap with impeccable taste I must say!

If you send me a PM with your address I'll put some Celtic stuff in the post to you and you can give it to him.

Hail!

(which is something that Celtic and the Redskin have in common by the way)