13/02/2012 Newsnight Scotland

On Newsnight Scotland, as Rangers take a big step towards

administration, the club's owner says the tax bill could be as much

as �75 million. So where now for the Ibrox club? Good evening.

Rangers insisted it will continue with business as usual, but the

club could be within ten days of going into administration. This

afternoon it lodged papers at courts to appoint administrators. -

- Bailiwick the outcome of a long- running tax tribunal which could

see the club having to foot a bill of as much as �75 million. In a

moment we will discuss what this means Rangers the football club and

for Rangers the business. First, here is Julie Peacock.

Some fans called him the white knight when he bought Rangers. They

do not call him that tonight. is a difficult day for Rangers.

Thank you very much Compasses Inn Craig Whyte was heckled as Ekeland

administration would ensure the long-term survival of the club.

the moment, Rangers says it is still business at you -- as usual.

They have ten days to decide what to do. But by administration?

Rangers is waiting on the decision of a tax tribunal. In 2001, ridges

used to implement benefit trusts to pay players. Revenue and Customs

believe the club misused the scheme to avoid paying a significant

amount of tax. The disputed bill, at least �49 million. Although

Craig Whyte says the club could end up having to pay as much as �75

million. Won majors t b, he explained why this was Billy could

up play. -- could not pay. There were discussions be this the about

administration. There was no alternative. If you get rid of the

tax case, which has been hanging over us like a dark cloud for the

past couple of years, there will be a brighter future for Rangers. We

can then move ahead with confidence. This is not the first and the club

has gone into administration and played on. Pat Nevin was in charge

of Motherwell when they went bust. He believes rival clubs will not be

impressed with the move made by bridges. We to make, it is slightly

unfair. We might have debts but we are not writing them off. We are

trying to work for it. That is bordering on cheating. There is

another part of you that things, even so, you need to get out of it

and go forwards and find a way. I think it is morally bankrupt to do

it and they think it is an abuse of the position. But as a business

position, it is spot on. What next for Rangers? If administration has

confirmed, Rangers will automatically lose 10 points in the

league. The administrator will decide whether to make any players

redundant. But the team will play on. The decision is being seen as

one based on business, rather than football. The sadness is that

having basically torched any independent board or any

independent voices, there is plenty of people looking after the

interests of Craig Whyte, of HMRC, of Murray International, but I

wonder who is looking after the interests of Rangers Football Club.

The proposals put forward by Rangers today really marked the

start of a process of negotiation between the club and the HMRC. If

Revenue and Customs accept, they all meet receive a fraction of the

money they are owed. But the club will recover fairly quickly. If it

refuses, HMRC will get nothing but it has far more serious

implications for the club. While neither option is very appealing,

it is understood the intimacy would be reluctant to accept Rangers'

offer. With the voluntary agreement, the other options would involve

winding up a club that has been at the heart of Scottish football

since 1872. Even if a new company is Ford, it may not be able to play

immediately. The implications for Scottish football are huge. No Auld

from games, but he TV deals in jeopardy, affecting teams at every

level of the game. -- putting TV deals.

Joining the is Fraser Wishart and sports writer Graham Spiers. In

Edinburgh, the ball finance analyst Stephen Morrow. This new figure

tonight from Craig Whyte of a potential tax liability including

penalties of �75 million, does that sound credible? I think on many

levels, it is quite incredible. Previous figures sounded quite

incredible. If we're talking about �75 million, that is a staggering

figure. It shows the enormity of the task the club has. And Craig

Whyte seeing the club simply could not afford that kind of payout. His

administration therefore in your view the only option? If they were

to lose the tax case, whatever the figure, I think they will have to

go into administration, because that sort of money is very very

large compared to the turnover of Rangers. So I think administration

is the most likely outcome. Unless they talk about whether they can

come to a deal with HMRC. suggestion tonight is that HMRC

would not be interested in a deal. There has been controversy at the

end of last year the Commons committee accusing HMRC of being

unduly cosy with big business. Do you think that that may be a factor

in hardening their attitude to a club like Rangers? I think it

probably is a factory in that. I think Rangers is a big business --

isn't big business although we talk about it as if it was. HMRC are

under pressure to show they are tough on businesses. I think in any

social or public view, that is entirely justifiable. If it should

have been tax, there would be a lack of public sympathy for Rangers

if it finds itself having at the expense of a tax liability.

club has filed notice with the court's of its intention of the

possibility be going to administration within ten days. How

do you read that decision? Do you think they got wind of the way the

tax case is going? I think it is a certainty that they were going to

administration. I think Craig Whyte knows, he seems sure they will lose

the case and pinks the find will be hefty. And he is a up front. He

hopes administration will be a means by which you can kind of get

off with it. The question is, how much power will HMRC have? Well

they prolong administration? What they make it difficult for Rangers

to reach a deal with creditors? HMRC feel they have been shafted by

football for decades. But being unable to get what they regard as

they are due a tax. I think they will now make a real example of

Rangers. If Rangers go to HMRC am See, do you want to do 15p in the

pound? I think they will say, no, we want a pound of flesh. With the

end up with less as a result? think they are determined to make

an example of Rangers. If it turns out Rangers' back taxes, back to

2001 and they cannot vouch, I think they were probably improperly used,

plus you have Craig Whyte, let us use the euphemism, his colourful

history of companies winding-up, getting into debt, I think HMRC are

saying, this is a character we want to pursue. And we want to get our

money back. I think is that what we will do and create quite knows it.

Fraser Wishart, you have been here before. -- Craig Whyte knows it.

Smaller clubs going into administration. It is still a

little bit like history repeating? Yes, sadly I have been through it

and number of times. I think the difference here is the amount of

money owed to the Inland Revenue. That is the big killer for Rangers.

And the real issue that Craig Whyte will have to address. How to deal

with bad debt. The previous administration's of football clubs,

the owner, it was John Boyle in the case of Motherwell, he arranges CVA.

If it is more than to defy% of the total debt Rangers is owed to the

Revenue, they are immediately. Keeper of the ball are concerned

because previously, football clubs have survived. In this case, it

might not. You mention Motherwell, how many others? Dundee a couple of

times, Livingston, Clydebank. Morton. I think Graham hit a key.

Early on. About the bad reputation that football has, mainly because

of English clubs and the way they have treated HMRC in terms of debts.

There is always politics. A House of Commons as well with regards to

big business. This is difficult for Rangers to ride out. Graham, many

clubs that we have mentioned are still going strong. Some have

disappeared. What is your sense of the situation at Rangers?, a naive

or a traditionalist, I think it is inconceivable that Rangers FC will

not exist in a few years' time. But that is not to say they will not go

into liquidation. The time my might be broken, I think Rangers FC might

cease to exist the 24 hours and a new company might have to be reborn.

And at the scene of the crime there are a couple of principle felons,

Sir David Murray being one, who foisted his EBT system on Rangers,

and he has left a very bitter Craig White seems to me to be a

shambolic character. He came along with his colourful history in

business. It has been a double whammy of a disaster for Rangers

and they will definitely go into administration. They may well be

liquidated. If they do, they would have to be reborn. Let's just pick

up on those terms. Stephen, you are a guide to explain. If they go into

administration, essentially there is an opportunity for a recovery.

It gives somebody at chance to keep it as a growing concern, to

reorganise the company in a way that it has a sustainable future

but administration is a positive opportunity but it needn't

necessarily lead to a positive outcome because some companies will

not be able to saved and the next stage of that will involve

liquidation where the company goes out of business and at that point

of course, there are all kinds of implications but for a football

generally as well because you have the issue of the integrity of the

league seeing as people play against each other. You have a

knock-on impact here for other clubs. You say that but we heard

from the chief Executive at Celtic that if Rangers did go bust, it

effectively wouldn't have an impact on Celtic. Peter is a good guy but

I think he was talking nonsense. Rangers and Celtic really need each

other. How many times do we hear the phrase, we thrive on the Old

Firm rivalry? Peter has got to come out and say, we don't need Rangers.

He can't be bleeding heart about the demise of Rangers but if you

take one half of the Old Firm away from the other, it is diminished.

What is the title race but out the old firm? Suppose Rangers are

relegated to the Third Division and have to start again, is it a title

race? A lot of Celtic fans would be put off by the spectacle, they

would think it lost excitement, to say nothing of the loss of TV

excitement. I think the whole scene would be diminished if Rangers are

taken out of the equation and it would be the other way round if it

happened to Celtic. It is obviously Craig White's intention to keep it

going and build it up. What about the feeling inside Ibrox from your

past experience, what impact will all this uncertainty have on a club

and its staff? Fans of other clubs are enjoying the fact that Rangers

are having trouble but I think what we have to remember with then this

football club is that people are working and I am fortunate to have

the opportunity to talk with the players but there is a whole host

of people who work with them Rangers who might lose their jobs

here and some of the worst days I have had is at clubs when people

discover they are redundant. It has a major, major effect on the morale

of a football club so it is a painful process, particularly for

those at the sharp end. Well some of the players at that club be

saying to themselves, maybe it is time to look at my options, to

pursue my career elsewhere? I am sure they are. Players in this

situation are vulnerable, the same as anywhere else. The contract

cannot be terminated by the club or player but administration changes

that. They will get recompensed further down the line. Our players

at the club talking to you in those terms, seeking advice about their

future because of the uncertainty? Not to that level. They are

uncertain. I have spoken to a number of players but not about

their individual future. These contracts were signed on good faith.

Obviously there is a lot that could happen in the days ahead. What do

you think is most likely to unfold in that period? A I think they will

definitely go into administration, they will certainly lose the tax

case and the ball park fine will be �50 million. I think Craig White

has exaggerated the sum. I think they will be paid with a hefty fine

and there will be unable to pay it. I may be wrong but I think they

will play hardball with Rangers, not be pushed aside after 30 years

of being shoved aside by football clubs. They want to get their money

and I think there is a real threat of liquidation. What is

inconceivable to me is that after liquidation, some kind of free

constitution of a new club will not be formed. The problem is, what

will happen to the assets? Isn't it possible that some of them could be

sold off to try and shore up the club's chances? Yes, but I think

one of the things here is that we're not clear who has secured

which assets. The he would stand and of other creditors in terms of

the assets that could be realised. So, he will be all right? He is

certainly in a better position than some of the other creditors and I

think that is a question about the way in which this process has been

engineered since the takeover because if he has secured status,

that will be looked at very carefully because people will think,

this person has to give up something in order to get some kind

of deal or discussion of Rangers. There has been talk from Craig

White and the club about a company voluntary agreement as a route

forward, can you explain briefly what that is and whether it is a

realistic option? I think that would happen if they go into

administration and what they would like to do is put forward a

voluntary arrangement which essentially buys them some time.

They then put a proposal to the creditors and they hope that

somebody will think that is a very good idea. Her city allow them to

pay up what they go? That's right, they put forward a proposal but

will be looked at by all creditors but the major challenge here in

this case is that the creditor's debt, whatever the sum, is

significant and it is the big creditor and it changed the

dynamics of the administration process. A change in mood amongst

the fans? Absolutely, a lot of the fans have stood by Craig White. His

remarkable career and in a court case in London, he is described it

as thoroughly and fit. A judge in Scotland described him as incapable.

I think everybody is confused by the process. They just want clarity

and it may come if they go into administration. No doubt we will

spend more time on this on the days ahead.