:00:14. > :00:19.On Newsnight Scotland, as Rangers take a big step towards
:00:19. > :00:24.administration, the club's owner says the tax bill could be as much
:00:24. > :00:28.as �75 million. So where now for the Ibrox club? Good evening.
:00:28. > :00:33.Rangers insisted it will continue with business as usual, but the
:00:33. > :00:39.club could be within ten days of going into administration. This
:00:39. > :00:42.afternoon it lodged papers at courts to appoint administrators. -
:00:42. > :00:46.- Bailiwick the outcome of a long- running tax tribunal which could
:00:46. > :00:51.see the club having to foot a bill of as much as �75 million. In a
:00:51. > :00:55.moment we will discuss what this means Rangers the football club and
:00:55. > :01:00.for Rangers the business. First, here is Julie Peacock.
:01:00. > :01:06.Some fans called him the white knight when he bought Rangers. They
:01:07. > :01:12.do not call him that tonight. is a difficult day for Rangers.
:01:12. > :01:16.Thank you very much Compasses Inn Craig Whyte was heckled as Ekeland
:01:16. > :01:21.administration would ensure the long-term survival of the club.
:01:21. > :01:25.the moment, Rangers says it is still business at you -- as usual.
:01:25. > :01:31.They have ten days to decide what to do. But by administration?
:01:31. > :01:35.Rangers is waiting on the decision of a tax tribunal. In 2001, ridges
:01:35. > :01:39.used to implement benefit trusts to pay players. Revenue and Customs
:01:40. > :01:44.believe the club misused the scheme to avoid paying a significant
:01:44. > :01:48.amount of tax. The disputed bill, at least �49 million. Although
:01:48. > :01:54.Craig Whyte says the club could end up having to pay as much as �75
:01:54. > :02:04.million. Won majors t b, he explained why this was Billy could
:02:04. > :02:04.
:02:04. > :02:10.up play. -- could not pay. There were discussions be this the about
:02:10. > :02:14.administration. There was no alternative. If you get rid of the
:02:14. > :02:19.tax case, which has been hanging over us like a dark cloud for the
:02:19. > :02:23.past couple of years, there will be a brighter future for Rangers. We
:02:23. > :02:27.can then move ahead with confidence. This is not the first and the club
:02:27. > :02:31.has gone into administration and played on. Pat Nevin was in charge
:02:31. > :02:36.of Motherwell when they went bust. He believes rival clubs will not be
:02:36. > :02:41.impressed with the move made by bridges. We to make, it is slightly
:02:41. > :02:47.unfair. We might have debts but we are not writing them off. We are
:02:47. > :02:51.trying to work for it. That is bordering on cheating. There is
:02:51. > :02:56.another part of you that things, even so, you need to get out of it
:02:56. > :03:01.and go forwards and find a way. I think it is morally bankrupt to do
:03:01. > :03:06.it and they think it is an abuse of the position. But as a business
:03:06. > :03:09.position, it is spot on. What next for Rangers? If administration has
:03:09. > :03:12.confirmed, Rangers will automatically lose 10 points in the
:03:12. > :03:17.league. The administrator will decide whether to make any players
:03:17. > :03:23.redundant. But the team will play on. The decision is being seen as
:03:23. > :03:26.one based on business, rather than football. The sadness is that
:03:26. > :03:31.having basically torched any independent board or any
:03:31. > :03:38.independent voices, there is plenty of people looking after the
:03:38. > :03:41.interests of Craig Whyte, of HMRC, of Murray International, but I
:03:41. > :03:45.wonder who is looking after the interests of Rangers Football Club.
:03:45. > :03:51.The proposals put forward by Rangers today really marked the
:03:51. > :03:57.start of a process of negotiation between the club and the HMRC. If
:03:57. > :04:01.Revenue and Customs accept, they all meet receive a fraction of the
:04:01. > :04:04.money they are owed. But the club will recover fairly quickly. If it
:04:04. > :04:10.refuses, HMRC will get nothing but it has far more serious
:04:10. > :04:14.implications for the club. While neither option is very appealing,
:04:14. > :04:18.it is understood the intimacy would be reluctant to accept Rangers'
:04:18. > :04:22.offer. With the voluntary agreement, the other options would involve
:04:22. > :04:27.winding up a club that has been at the heart of Scottish football
:04:27. > :04:31.since 1872. Even if a new company is Ford, it may not be able to play
:04:31. > :04:36.immediately. The implications for Scottish football are huge. No Auld
:04:36. > :04:40.from games, but he TV deals in jeopardy, affecting teams at every
:04:40. > :04:45.level of the game. -- putting TV deals.
:04:45. > :04:50.Joining the is Fraser Wishart and sports writer Graham Spiers. In
:04:50. > :04:56.Edinburgh, the ball finance analyst Stephen Morrow. This new figure
:04:56. > :05:01.tonight from Craig Whyte of a potential tax liability including
:05:01. > :05:05.penalties of �75 million, does that sound credible? I think on many
:05:05. > :05:12.levels, it is quite incredible. Previous figures sounded quite
:05:12. > :05:18.incredible. If we're talking about �75 million, that is a staggering
:05:19. > :05:25.figure. It shows the enormity of the task the club has. And Craig
:05:25. > :05:30.Whyte seeing the club simply could not afford that kind of payout. His
:05:30. > :05:36.administration therefore in your view the only option? If they were
:05:36. > :05:40.to lose the tax case, whatever the figure, I think they will have to
:05:40. > :05:46.go into administration, because that sort of money is very very
:05:46. > :05:51.large compared to the turnover of Rangers. So I think administration
:05:51. > :05:58.is the most likely outcome. Unless they talk about whether they can
:05:58. > :06:03.come to a deal with HMRC. suggestion tonight is that HMRC
:06:03. > :06:08.would not be interested in a deal. There has been controversy at the
:06:08. > :06:14.end of last year the Commons committee accusing HMRC of being
:06:14. > :06:19.unduly cosy with big business. Do you think that that may be a factor
:06:19. > :06:26.in hardening their attitude to a club like Rangers? I think it
:06:26. > :06:30.probably is a factory in that. I think Rangers is a big business --
:06:30. > :06:38.isn't big business although we talk about it as if it was. HMRC are
:06:38. > :06:43.under pressure to show they are tough on businesses. I think in any
:06:43. > :06:51.social or public view, that is entirely justifiable. If it should
:06:51. > :07:00.have been tax, there would be a lack of public sympathy for Rangers
:07:00. > :07:05.if it finds itself having at the expense of a tax liability.
:07:05. > :07:08.club has filed notice with the court's of its intention of the
:07:08. > :07:14.possibility be going to administration within ten days. How
:07:14. > :07:18.do you read that decision? Do you think they got wind of the way the
:07:19. > :07:22.tax case is going? I think it is a certainty that they were going to
:07:22. > :07:27.administration. I think Craig Whyte knows, he seems sure they will lose
:07:27. > :07:31.the case and pinks the find will be hefty. And he is a up front. He
:07:31. > :07:37.hopes administration will be a means by which you can kind of get
:07:37. > :07:40.off with it. The question is, how much power will HMRC have? Well
:07:40. > :07:45.they prolong administration? What they make it difficult for Rangers
:07:45. > :07:49.to reach a deal with creditors? HMRC feel they have been shafted by
:07:49. > :07:52.football for decades. But being unable to get what they regard as
:07:52. > :07:58.they are due a tax. I think they will now make a real example of
:07:58. > :08:03.Rangers. If Rangers go to HMRC am See, do you want to do 15p in the
:08:03. > :08:07.pound? I think they will say, no, we want a pound of flesh. With the
:08:07. > :08:17.end up with less as a result? think they are determined to make
:08:17. > :08:17.
:08:18. > :08:23.an example of Rangers. If it turns out Rangers' back taxes, back to
:08:23. > :08:29.2001 and they cannot vouch, I think they were probably improperly used,
:08:29. > :08:36.plus you have Craig Whyte, let us use the euphemism, his colourful
:08:36. > :08:40.history of companies winding-up, getting into debt, I think HMRC are
:08:40. > :08:44.saying, this is a character we want to pursue. And we want to get our
:08:44. > :08:52.money back. I think is that what we will do and create quite knows it.
:08:52. > :08:55.Fraser Wishart, you have been here before. -- Craig Whyte knows it.
:08:55. > :09:00.Smaller clubs going into administration. It is still a
:09:00. > :09:03.little bit like history repeating? Yes, sadly I have been through it
:09:03. > :09:08.and number of times. I think the difference here is the amount of
:09:08. > :09:11.money owed to the Inland Revenue. That is the big killer for Rangers.
:09:12. > :09:16.And the real issue that Craig Whyte will have to address. How to deal
:09:16. > :09:26.with bad debt. The previous administration's of football clubs,
:09:26. > :09:30.
:09:30. > :09:36.the owner, it was John Boyle in the case of Motherwell, he arranges CVA.
:09:36. > :09:40.If it is more than to defy% of the total debt Rangers is owed to the
:09:40. > :09:44.Revenue, they are immediately. Keeper of the ball are concerned
:09:44. > :09:50.because previously, football clubs have survived. In this case, it
:09:50. > :09:59.might not. You mention Motherwell, how many others? Dundee a couple of
:09:59. > :10:02.times, Livingston, Clydebank. Morton. I think Graham hit a key.
:10:03. > :10:07.Early on. About the bad reputation that football has, mainly because
:10:07. > :10:14.of English clubs and the way they have treated HMRC in terms of debts.
:10:14. > :10:18.There is always politics. A House of Commons as well with regards to
:10:18. > :10:23.big business. This is difficult for Rangers to ride out. Graham, many
:10:23. > :10:29.clubs that we have mentioned are still going strong. Some have
:10:29. > :10:33.disappeared. What is your sense of the situation at Rangers?, a naive
:10:33. > :10:37.or a traditionalist, I think it is inconceivable that Rangers FC will
:10:37. > :10:41.not exist in a few years' time. But that is not to say they will not go
:10:41. > :10:45.into liquidation. The time my might be broken, I think Rangers FC might
:10:45. > :10:49.cease to exist the 24 hours and a new company might have to be reborn.
:10:49. > :10:56.And at the scene of the crime there are a couple of principle felons,
:10:56. > :11:06.Sir David Murray being one, who foisted his EBT system on Rangers,
:11:06. > :11:10.
:11:10. > :11:16.and he has left a very bitter Craig White seems to me to be a
:11:16. > :11:21.shambolic character. He came along with his colourful history in
:11:21. > :11:26.business. It has been a double whammy of a disaster for Rangers
:11:26. > :11:32.and they will definitely go into administration. They may well be
:11:32. > :11:42.liquidated. If they do, they would have to be reborn. Let's just pick
:11:42. > :11:43.
:11:43. > :11:49.up on those terms. Stephen, you are a guide to explain. If they go into
:11:49. > :11:55.administration, essentially there is an opportunity for a recovery.
:11:55. > :11:59.It gives somebody at chance to keep it as a growing concern, to
:11:59. > :12:04.reorganise the company in a way that it has a sustainable future
:12:04. > :12:07.but administration is a positive opportunity but it needn't
:12:08. > :12:12.necessarily lead to a positive outcome because some companies will
:12:12. > :12:14.not be able to saved and the next stage of that will involve
:12:14. > :12:21.liquidation where the company goes out of business and at that point
:12:21. > :12:25.of course, there are all kinds of implications but for a football
:12:25. > :12:34.generally as well because you have the issue of the integrity of the
:12:34. > :12:40.league seeing as people play against each other. You have a
:12:40. > :12:47.knock-on impact here for other clubs. You say that but we heard
:12:47. > :12:53.from the chief Executive at Celtic that if Rangers did go bust, it
:12:53. > :12:58.effectively wouldn't have an impact on Celtic. Peter is a good guy but
:12:58. > :13:03.I think he was talking nonsense. Rangers and Celtic really need each
:13:03. > :13:10.other. How many times do we hear the phrase, we thrive on the Old
:13:10. > :13:16.Firm rivalry? Peter has got to come out and say, we don't need Rangers.
:13:16. > :13:22.He can't be bleeding heart about the demise of Rangers but if you
:13:22. > :13:27.take one half of the Old Firm away from the other, it is diminished.
:13:27. > :13:34.What is the title race but out the old firm? Suppose Rangers are
:13:34. > :13:40.relegated to the Third Division and have to start again, is it a title
:13:40. > :13:47.race? A lot of Celtic fans would be put off by the spectacle, they
:13:47. > :13:52.would think it lost excitement, to say nothing of the loss of TV
:13:52. > :13:56.excitement. I think the whole scene would be diminished if Rangers are
:13:56. > :14:01.taken out of the equation and it would be the other way round if it
:14:01. > :14:09.happened to Celtic. It is obviously Craig White's intention to keep it
:14:09. > :14:14.going and build it up. What about the feeling inside Ibrox from your
:14:14. > :14:19.past experience, what impact will all this uncertainty have on a club
:14:19. > :14:27.and its staff? Fans of other clubs are enjoying the fact that Rangers
:14:27. > :14:31.are having trouble but I think what we have to remember with then this
:14:31. > :14:34.football club is that people are working and I am fortunate to have
:14:34. > :14:38.the opportunity to talk with the players but there is a whole host
:14:38. > :14:45.of people who work with them Rangers who might lose their jobs
:14:45. > :14:50.here and some of the worst days I have had is at clubs when people
:14:50. > :14:53.discover they are redundant. It has a major, major effect on the morale
:14:53. > :14:58.of a football club so it is a painful process, particularly for
:14:58. > :15:02.those at the sharp end. Well some of the players at that club be
:15:02. > :15:07.saying to themselves, maybe it is time to look at my options, to
:15:07. > :15:12.pursue my career elsewhere? I am sure they are. Players in this
:15:12. > :15:15.situation are vulnerable, the same as anywhere else. The contract
:15:15. > :15:22.cannot be terminated by the club or player but administration changes
:15:22. > :15:27.that. They will get recompensed further down the line. Our players
:15:27. > :15:33.at the club talking to you in those terms, seeking advice about their
:15:33. > :15:39.future because of the uncertainty? Not to that level. They are
:15:39. > :15:46.uncertain. I have spoken to a number of players but not about
:15:46. > :15:53.their individual future. These contracts were signed on good faith.
:15:53. > :16:00.Obviously there is a lot that could happen in the days ahead. What do
:16:00. > :16:05.you think is most likely to unfold in that period? A I think they will
:16:05. > :16:12.definitely go into administration, they will certainly lose the tax
:16:13. > :16:16.case and the ball park fine will be �50 million. I think Craig White
:16:16. > :16:21.has exaggerated the sum. I think they will be paid with a hefty fine
:16:21. > :16:26.and there will be unable to pay it. I may be wrong but I think they
:16:26. > :16:30.will play hardball with Rangers, not be pushed aside after 30 years
:16:30. > :16:34.of being shoved aside by football clubs. They want to get their money
:16:34. > :16:38.and I think there is a real threat of liquidation. What is
:16:38. > :16:42.inconceivable to me is that after liquidation, some kind of free
:16:42. > :16:50.constitution of a new club will not be formed. The problem is, what
:16:50. > :16:58.will happen to the assets? Isn't it possible that some of them could be
:16:58. > :17:03.sold off to try and shore up the club's chances? Yes, but I think
:17:03. > :17:13.one of the things here is that we're not clear who has secured
:17:13. > :17:15.
:17:15. > :17:21.which assets. The he would stand and of other creditors in terms of
:17:21. > :17:24.the assets that could be realised. So, he will be all right? He is
:17:24. > :17:30.certainly in a better position than some of the other creditors and I
:17:30. > :17:35.think that is a question about the way in which this process has been
:17:35. > :17:41.engineered since the takeover because if he has secured status,
:17:41. > :17:45.that will be looked at very carefully because people will think,
:17:45. > :17:50.this person has to give up something in order to get some kind
:17:50. > :17:55.of deal or discussion of Rangers. There has been talk from Craig
:17:55. > :18:00.White and the club about a company voluntary agreement as a route
:18:00. > :18:05.forward, can you explain briefly what that is and whether it is a
:18:05. > :18:08.realistic option? I think that would happen if they go into
:18:08. > :18:15.administration and what they would like to do is put forward a
:18:15. > :18:21.voluntary arrangement which essentially buys them some time.
:18:21. > :18:25.They then put a proposal to the creditors and they hope that
:18:25. > :18:31.somebody will think that is a very good idea. Her city allow them to
:18:31. > :18:34.pay up what they go? That's right, they put forward a proposal but
:18:34. > :18:41.will be looked at by all creditors but the major challenge here in
:18:41. > :18:45.this case is that the creditor's debt, whatever the sum, is
:18:45. > :18:55.significant and it is the big creditor and it changed the
:18:55. > :18:57.
:18:57. > :19:05.dynamics of the administration process. A change in mood amongst
:19:05. > :19:09.the fans? Absolutely, a lot of the fans have stood by Craig White. His
:19:09. > :19:18.remarkable career and in a court case in London, he is described it
:19:18. > :19:22.as thoroughly and fit. A judge in Scotland described him as incapable.
:19:22. > :19:28.I think everybody is confused by the process. They just want clarity
:19:28. > :19:32.and it may come if they go into administration. No doubt we will
:19:32. > :19:39.spend more time on this on the days ahead.