Rangers on verge of administration

Rangers (Reuters Pictures)

One of Europe's more storied clubs finds itself in serious financial jeopardy, and a trio of U.S. internationals could be directly impacted by the repercussions.

Glasgow Rangers, the Scottish power that is home to U.S. internationals Carlos Bocanegra, Maurice Edu and Alejandro Bedoya, is on the verge of going into administration. The club, which reportedly filed the initial papers in the administration process to the Court of Session in Edinburgh on Monday, has five days to officially appoint an administrator to take control of the organization.

In that time, the club can attempt to negotiate its debts in hopes of staving off administration, an act not typically reserved for perennial league champions but one that is far from foreign in the Scottish game.

Should Rangers enter administration, the club would be docked 10 points the league table (which would keep the club in second place in the Premier League but turn its deficit to rival Celtic from a manageable four points to an overwhelming 14) while having an embargo put on signing new players as the club struggles to fight off its financial troubles.

Rangers was already sweating out a major financial dispute, as they could be forced into paying £49 million to Her Majesty's Revenue and Customs after allegations that the club used money from an employee benefits trust to pay personnel wages. An unfavorable ruling in that case would set the club back even further and cause even more dire consequences that could end with a firesale of the club's assets.

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52 Responses to Rangers on verge of administration

  1. Tony in Quakeland says:

    So, what were those complaints about MLS’s financial structure?

  2. Sean M says:

    The Huns are going bust, The Huns are going bust, you really should believe us you really should believe us the HUNS are going bust!

  3. ChrisTheLSUTiger says:

    Don’t know how this will affect Boca and Bedoya, but let’s hope it helps to get Edu out of there a bit faster.

  4. ChrisTheLSUTiger says:

    I’m not even a Rangers fan, but every Celtic fan I have ever met annoys me. Huns? Really?

  5. BamaMan says:

    There’s a model that combines the financial restraint of MLS with the market freedom of Europe. It’s called a salary cap and the NFL has used it to become the most financially successful pro sports league in the history of the world. I’m all in favor of avoiding Euro-excess; I just want to see teams and not the league in charge of personnel decisions. Time to take off the training wheels: ratify a CBA that caps player wages and transfer fees at 50-60% of revenues, let teams – not the MLS – own the rights to their players and watch the league grow like wildfire.

  6. Stephen says:

    Sounds like another rich American can go buy another storied Euro Club. If only I had a few extra billion laying around.

  7. eurosnob says:

    Promotion and relegation! Tell the SPL to implement promotion and relegation! It would solve all the SPL’s problems. The near bankruptcy of your league’s most storied club can be solved with promotion and relegation right? Or maybe moving to an international calendar? Would that help?

  8. Tony in Quakeland says:

    Maybe. I do think that MLS can loosen the constraints (while at the same time beleiving that it’s unique structure is the reason it has survived and begun to thrive). One of the benefits of the league owning contracts is that it prevents teams from bidding against each other. Would it really help the league grow if New York or LA could cherry pick players from RSL, KC or Columbus? Would intra-MLS player movement be a good thing (because I beleive it would be an inetivable result)? Yes, the salary cap could mitigate that somewhat, but I don’t know if we are there yet.

    I do think MLS is closer to the tipping point. Maybe your suggestion is the right one. I think we need to finish expanding first and maybe see some weaker franchise relocate. Once the foot print is right…maybe then?

    In the meantime, people need to give the league some credit for how it has built itself and survived so long.

    Right now

  9. ben in el cajon says:

    Yah, I had expected someone to make some sort of sectarian/ethnic/club insult on this thread. It’s disappointing for it to happen so quickly. I’d back Rangers because I don’t like Celtic fans, but Rangers had a long-standing policy of refusing to sign Catholics, which is just sick, and I worry about Bocanegra’s and Bedoya’s every time they cross themselves on the sidelines. Since the rest of the clubs don’t seem to have anything to do with the outcome of the league, except as speed bumps for the Old Firm, I prefer to pretend that the SPL doesn’t exist.

  10. Charles says:

    Where are those guys that say Pro/Rel weeds out the weak teams by relegating them away from the top league….they are still in second place.

    Must be the international calendar.

  11. isaf says:

    what does this mean exactly? will they be forced to leave? or could they stay for much lower pay? will they be docked points and thus lose the title?

  12. isaf says:

    do they really cross themselves? who does that?

  13. DWE4 says:

    The keys to the NFL’s success are its salary cap and its revenue sharing model, which is the antithesis of how the major European leagues share revenues (skewing distributions to the clubs at the top of the tables).

    MLS clubs have a lot of autonomy in their abilities to sign players and to sell players. There’s been a lot of progress on that front over the past 5 years. The interesting aspect of MLS’s single-entity structure is that the other owners retain authority to drop the hammer on an under-performing ownership group. MLS has a unique form of brand preservation that has sustained it through a couple rough patches while also having enabled the league’s rapid expansion.

    That said, it’s sad to see Rangers on the brink. They should have sold Edu when they had the chance.

  14. CrazyJon85 says:

    come to colorado carlos!!!

  15. Buddle-icious says:

    Reading
    Is
    Fundamental

  16. Annelid Gustator says:

    A huge number of players. Watch soccer much?

  17. CSD says:

    The key to the NFL achieving those successes is a weak labor union that is subject to large amounts of physical abuse and is in constant turnover.

  18. Jamie Z. says:

    Catholics.

    That one was easy. Ask another question.

  19. CSD says:

    Just go bankrupt relieve your debts and join the English structure at the bottom tier and get on with. In a few years they will at least be in the championship. The SPL in its current format with 2 real teams just needs to go away.

  20. Jya says:

    To be fair German football is in great shape financially. There are ways to have a good financial structure, parity among clubs even with promotion and relegation.

  21. Gazza says:

    Dear BamaMan,

    UMMMM players wages and transfer fees are way above 60% of revenues. The teams are in charge of personnel decisions (that’s why clubs have GM’s or Technical Directors) and what difference does it make who holds the piece of paper the player signs?

    MLS is the NFL model just with less revenue. As in income rises player compensation increases. MLS doesn’t spend way past their means then hope the money is there later.

  22. GSScasual says:

    you could buy rangers for much, much less

  23. GSScasual says:

    it seriously takes 60 seconds to find out those answers.

  24. VB says:

    How will this affect our US players there? Will there be a ‘fire sale’ of players? If we can get our Yanks out of SPL, I see this as a good thing.

    Sorry, I can care less about Rangers/Celtic, their history, and SPL as a whole.

  25. ChrisTheLSUTiger says:

    “I prefer to pretend that the SPL doesn’t exist.”

    If the league didn’t get automatic CL spots via being part of Europe, no American would pick the SPL over MLS. FACT.

  26. McQ says:

    I’m not even an Alabama fan but every LSU fan I have ever met annoys me. College, classes? Really?

  27. Scott says:

    I’m a Celtic supporter and your comment is offensive to me. Leave the “Huns” nonsense out of this, and out of football period.

  28. The Imperative Voice says:

    If you look at the recent history of financial woes in the SPL, the lure of promotion and success is what often causes teams to overspend and end up either defunct or in administration. Gretna went from non-League to SPL/Scottish Cup final, then exploded financially. The team no longer exists. The rebranded Livingston team shot up to SPL, went into administration, went back down.

    But Rangers has been a perennial leader in SPL, so it’s not quite a propos. I actually think Rangers is a more useful cautionary tale for those who want to encourage “tiering” within MLS, ie, having teams like LA (through, say, winners’ allocations) act as international “champions” of the league with spending on another level. If you build international play into the business model you best not lose in the early rounds.

    IMO, they are high in the table precisely because they spend so much. They may be spending themselves into heavy duty debt to do so but all you have to do is look at the EPL and Man City of late to see what a little cash will do. The reality is these leagues are tiered by the cash they spend, and depending on their resources, gunning for particular tiers may be unwise. MLS had done well by limiting teams’ ability to buy success, but is cratering of late on the issue. This is a reminder what can happen when competitive considerations override cold maintenance of the bottom line. Rangers knows full well it “has to” keep up with Celtic’s spending to fight for the title. It’s an arms race.

  29. Dillon says:

    Administration is the U.K. equivalent of bankruptcy. Companies in the U.K. cannot declare themselves bankrupt and must enter into insolvency proceedings commonly called Administration. They essentially have gone bankrupt already.

  30. Eurosnob says:

    True, but most German teams are owned by the fans, a-la-Green-Bay-Packers style. The ticket and beer prices are very favorable for attendance and the teams actually budget reasonable amounts to spend on the players. Plus German economy is probably the strongest economy in Europe, which helps with advertising revenues, etc.

  31. The Imperative Voice says:

    When you look at an entry draft and “single buyer” league contracting approach the clear intent is to keep competition and wages down. I bluntly don’t see how it helps the teams be more successful to pay more for the same players. That’s the whole reason the system is what it is……people seem to be crying socialism (“free the teams”) but their motivation is the opposite end, it’s monopolistic. Collude to keep salaries down and the bottom line blacker.

    This is why the PLAYERS sued the league for antitrust.

    Now if we institute what you suggest unless you raise the salary cap you will have players bidding up their prices and teams able to afford less players under the cap, resulting in more players going abroad. Which would weaken rather than improve the product. The drive to increase the caps to keep the same talent at higher prices then defeats much of their point……by keeping salaries in check American soccer stays healthy, so the argument goes.

  32. Bandeeto says:

    Edu, boca, and bedoya to MLS!!!!!!!!!!!!! You heard it here first. That is all.

  33. TC says:

    you are a weegie, a silly weegie, youre only happy..on giro day! your mums a stealer, your dads a dealer..please dont take my hubcaps away! hahahah

    ABERDEEN FC!

  34. Helium-3 says:

    Can’t believe Rangers have fallen this low. Long time ago they had the likes of Gazza and (Brian) Laudrup playing for them and these days a bunch of nobodies.

    Not a slight on guys like Bocanegra, but he isn’t exactly a top player in his class.

    Guess all those years of not getting past the Champions League group stage have hurt their finances.

  35. CSD says:

    Yes and No?

    “In that time, the club can attempt to negotiate its debts in hopes of staving off administration,…”

  36. theakinet says:

    The real problem is Scotland has fewer people than 2nd tier US cities like Baltimore. Market’s too small. Cardiff/Swansea did the right thing ~30 years ago…Re pro/rel: Supporters, like me, don’t argue it immunizes clubs from failure. We point out no pro/rel *system* has collapsed.

  37. Jason says:

    So the SPL is set to just have one Harlem Global Trotters team in a league of Washington Generals instead of two?

  38. vik says:

    Think it’s better for Edu than the other two. His stock is high and he’s had offers that his club has refused.
    Boca was hoping to use his starting position to keep him fit throughout WCQ and maybe to 2014; he was only getting annual contracts in France. Still, he should get picked up somewhere for now.
    Bedoya hasn’t really had a chance to show himself too much. There should still be some buzz after his great seasons in Sweden, hopefully he’ll go to a more technical league like either of the low countries.

  39. The Imperative Voice says:

    The pro/rel bunch are European xerox copiers not even considering the practical application here. We have basically stripped the minors clean of 95% of their well-attended, successful franchises. Other than Rochester (based on attendance back in the day, not so much recently) or maybe Puerto Rico just for novelty’s sake, who’d we even want? The teams down there don’t look like MLS fan bases, and there’s arguably such a gap from even NE or Dallas-type teams in MLS to them that it would be cruel and dangerous to drop teams from here to there, worse than the English drop…..next thing you know you’re in a $30K/yr./player league that’s barely better than semipro with a $2.5 million roster. Your fans would disappear and so would your players.

    Conversely, the jump up would be so big as to pose a financial risk in reverse. Suddenly I need to replace all my cheap players with $2.5 million in talent, fast. Strikes me as ripe for teams over-extending themselves, particularly if some plucky Atlanta-type side that’s never been well-attended sneaks in somehow on merit. They either stand pat and get killed or roll the dice on staying up…which sounds like the real risks of pro/rel as opposed to the “invisible hand” structuralism that finesses what happens to the actual teams involved, who sometimes pull a Pompey or Gretna and just blow up. The “system” doesn’t fail….just the teams within it. No surprise “parachute payments” and other subsidies have come in to try and evade the actual consequences of a pure “system.”

    Maybe when we have 30 Seattles or at least 10 Seattles and 20 Houstons we can talk. But at present all that’s really possible is MLS1 and MLS2 with all/most current MLS teams anyway. I don’t see how divying up a league that’s finally making money into haves and have-nots — thus removing half the league from Beckham and Henry visits — would improve the bottom line. It might be used to justify changing the salary caps mindful of only certain teams being able to afford DPs, but that wouldn’t make pro/rel teams any more able to afford them if they made it back up, and it’s really just a device to allow the league to “tier” itself without conscience. I really don’t think re-creating the EPL or SPL by tiering a finally somewhat solvent MLS is a bright idea…..with more liberal rules LA, NY, and maybe Seattle dominate, and everyone else is along for the ride.

  40. David St. Hubbins says:

    This should give serious pause to everyone in MLS and the soccer media who think that letting NY and LA become superclubs is a good model for growing the league.

  41. ryan says:

    what more motivation does Edu need to leave Rangers? You have already won everything in Scotland, he should have left last summer/ this winter. See if not getting paid does the trick.

  42. theakinet says:

    I dare pro/rel critics to name ONE euro-style pyramid that’s collapsed. And we pro/rel supporters advocate a multi-yeaq transition. Japan took 6 years. Korea announced 2013 start date last Oct. If we’re debate pro/rel please quote your opponents accurately.

  43. RLW2020 says:

    preferably all three leave!

    Edu to Lige1 or EPL
    Bocanegra to MLS (Chivas USA DP)
    Bedoya to anywhere he can play.

    Joking aside they could use a change.. and how does Rangers’ budget get out of control they are competing against (besides Celtic) Motherwell and St. Johnstone… not like the need to spend too much to keep the others down.

  44. SD says:

    Rangers are probably wishing that they accepted the bid for Edu. They thought the French team was lowballing them. Imagine how many teams are going to lowball them now.

  45. BamaMan says:

    The problem is that single entity artificially suppresses wages and effectively eliminates true competition in the league. That’s why gambling (a huge revenue stream for Euro clubs that MLS for some reason shies away from) tends to avoid MLS like the plague.

    Hard salary cap. The time is here for it. NFL has shown that it is the best model for keeping salaries in check and increasing profits. Moreover, I’d like to see the Super Draft scrapped in favor of an MLB-style 18-and-up draft. Let players who are drafted too low opt for college instead if they want.

  46. fish says:

    i second this notion

  47. fish says:

    Wow. One of the best comments I’ve read on Ives right here

  48. derrick says:

    the complaint about MLS isn’t that it’s not allowed to overspend it’s that teams that can afford to spend more like the Galaxy, seatle and some others are not allowed to. It’s that the structures that does’t allow teams to truly benefit from selling players gives them little incentive to develop talent, as why do it, they don’t get all the money if they sell and may not have final say anyways.

    it’s not so simple as an all or nothing all good or all bad. there is plenty that is good with mls and wrong in europe. For example it’s much better to have revenue sharing, shared tv money so you don’t end up with too many have nots. But it’s not all or nothing and those that want to boil things down to simplistic conclusions are telling partial truths.

  49. Alex says:

    Celtic supporter here…+1 to you Scott

  50. BamaMan says:

    I’m with you on pro/rel. It’s hard for me to ever see the US/Canada ever really having the financial support there for pro/rel beyond a simple two-tiered system (i.e. say a 40-team MLS and MLS2 with pro/rel between them, but no dropoff after that).

    It would be awesome if there was a system by which local pub teams could spend and play their way all the way into the MLS. It’s just hard for me to see that being possible without a global change in player compensation.

    That said, I stand by my earlier comments in favor of replacing single entity with free agency and a hard salary cap.

  51. The Imperative Voice says:

    I have no problems with caps, I like them. My issue would be more of the allocation/DP-type exceptions that are being carved out. LA is on a whole ‘nother plane of spending these days. Landon, Keane, and Becks probably make $10 million-plus together. That’s like 4 normal salary cap teams spent on 3 players.

    That being said, I don’t think equality of rules equals equality of outcome. What with the knockout tournament, someone has to win, and IMO they’re usually pretty good to get that job done. Some teams operate better within the cap than others, some sign dogs or the old or lame. The teams may be tightly bunched compared to freer spending leagues but I don’t necessarily want a big 5 being chased by mere European hopefuls and then relegation fighters. I like the idea that everyone besides a few hopeless cases has a chance each season, if they set up the team right in the fall.

    It bears reminding that this league has historical swum in red ink and is just starting to compete with the other major leagues on attendance. Now does not strike me as the time to go laissez faire. Keep it tight, establish the sport, make some money with the new SSSs.

    Like I said, I think if you remove the indirect methods of keeping salaries down and then introduce a hard cap at a low number like $3 million, you will drive talent out. People whom LA or NY can no longer afford will not necessarily go to Columbus, they may just flee MLS. If the response is for the cap to go up, you will improve the lot of the players at the expense of teams’ financial health.

    I agree on a harder cap, but I think holding salaries down under it is the better approach. I don’t think there should be more than 2 DPs per team for competitive fairness reasons.