A World Without Rangers?

Hitthebyline proudly presents our latest contributor, Edward Champagne. In “A World Without Rangers?”, Edward explores the potential pro’s and con’s of Rangers’ hypothetical expulsion from the SPL, given the problems that could ensue as the HMRC tax case draws to a conclusion.

By Edward Champagne

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As Rangers continue to wallow in the perpetual mire thrust upon them by the HMRC tax case and financial misery, one could be excused for beginning to ponder exactly how Scottish Football would be affected by the loss of one of its most successful and well supported teams.

In recent times Scottish football has been dominated by both Celtic and Rangers, with every SPL title since the league’s inception in 1998 having been won by one of the two Glasgow giants. This, however, hasn’t always been the case. In the 80’s both Sir Alex Ferguson’s Aberdeen and Jim McLean’s Dundee United won the league title. Who could also forget the memorable 1985 season? – When Alex McDonald’s Hearts side were pipped to the post by Davie Hay’s Celtic
Alex McDonald’s Hearts came so close in 1985 only to be pipped on the line by Davie Hay’s Celtic with the assistance of Dundee’s Albert Kidd.

The question on many fans’ lips in recent weeks is how would Scottish football fair if a Rangers “phoenix” club were not allowed to pick up the SPL licence from the club in administration and to continue to play in the Scottish top flight. Many argue that the loss of TV revenue provided by the Sky TV contract, and the reduced gate receipts would force SPL chairman to accept the new phoenix club back into the SPL, with at worst, a points deduction as punishment.

So for that reason it’s worth looking at the revenue available to SPL clubs. All revenues generated by the SPL in respect of TV, Radio and sponsorship are effectively put into one big pot. A support payment to the SFL and parachute payments to assist relegated clubs are then deducted from that pot.

The money left in the pot is then split to provide each club with 4% of the total revenue based on league participation and with the rest subsequently awarded to the club depending on their league position. The bonus system is heavily weighted towards the teams finishing as SPL winners and the team in the runners up position, with 32% of the overall budget going to these clubs.. Only once in the SPL existence have these slots failed to be filled by Celtic and Rangers when Hearts managed to knock Rangers into third position in season 2005/2006.  In season 2007/2008 which was ironically the last season were a SPL member club in Gretna went out of business, the SPL had £18m to distribute amongst its member clubs. It was split in the following manner:

Club SPL Revenue
Celtic £3.06m
Rangers £2.70m
Motherwell £1.71m
Aberdeen £1.53m
Dundee Utd £1.44m
Hibs £1.35m
Falkirk £1.26m
Hearts £1.17m
Inverness £1.08m
St Mirren £0.99m
Kilmarnock £0.90m
Gretna £0.81m

The table shows that although Celtic and Rangers shared 32% of the budget, the SPL commercial revenue split doesn’t explain the financial gulf between the big two and the rest of Scottish football.  This is more explained by the average attendances and commercial power that the Glasgow clubs have over their rivals and the fact that they are the only ones to ever receive the UEFA Champions League bounty. In season 2010/11 both Celtic and Rangers had 3 times more paying fans on average than nearest rivals Hearts.

Club

Average Attendance in 2010/11

Celtic

48968

Rangers

45305

Hearts

14185

Hibernian

11756

Aberdeen

9129

Dundee Utd

7389

Kilmarnock

6427

Motherwell

5255

Inverness CT

4526

St Mirren

4450

St Johnstone

3841

Hamilton

2898

The SPL board made up of Ralph Topping (SPL Chairman), Neil Doncaster (SPL Chief Executive), Eric Riley (Celtic FC), Stephen Thompson (Dundee United FC), Derek Weir (Motherwell FC) and Steven Brown (St Johnstone FC) have to decide what punishment the Rangers phoenix club should endure although the first penalty would be taken out of their hands by parent association UEFA.

UEFA rules do not allow a club who has faced financial administration to participate in any of their European competitions for a period of 3 years. This UEFA financial Fair Play ruling was the reason that Harry Rednapp’s Portsmouth were not allowed to participate as an English representative in the UEFA Cup following their FA Cup win in 2008. This would mean that an extra SPL club would have the chance to gain a European place and the associated revenue which they maybe would have seen as beyond their reach

So the SPL Board have to decide if they want to punish Rangers with or without  a points deduction and grant the transfer of the league licence to play in the SPL or make the phoenix club start again at the bottom of SFL Division 3.

In the scenario that Rangers are demoted to Division 3, it would seem given Celtic’s financial advantage and recent points finishes in comparison to other SPL clubs I think it’s fair to say that they would start as overwhelming favourites to win the SPL but how could other clubs try to bridge the gap whilst Rangers worked their way back up the leagues? Increased attendances? Higher league finishing positions bonus?

When you take into account the limited SPL commercial revenues listed above it would seem that they couldn’t be used to bridge the massive revenue gap especially with a reduced TV contract caused by the lack of the 4 Old Firm TV games so attendances would need to drive the revenue increase.  A look at recent attendances in the SPL show little fluctuation amongst top six clubs e.g. Hearts figures show that regardless of league position they finish somewhere between 14 to 16 thousand and its unlikely they would increase beyond 20 thousand even with the potential of 2nd place.

If we look back to when the Old Firm didn’t dominate Scottish football in season 1983/84, the crowds were not dissimilar to the ones that some clubs are achieving now. This was despite the fact the Aberdeen were holders of the European Cup Winners Cup and their fans had recently seen them defeat the European giants of Real Madrid and Bayern Munich.  Scottish football fans of a certain vintage will also remember the excellent Dundee Utd team of the time who were the league champions and had exciting times in Europe beating Barcelona in the Nou Camp and reaching the Uefa Cup final against Gothenburg.

It would seem that for the other teams in Scottish football success would bring increased supporters no doubt but their average attendance would always have a ceiling due to their demographic. When you take into consideration the difference in football now and the absence of live TV the average attendances at the time are quite surprising

Average attendances 1983/84:

Rangers – 21,996
Celtic – 18,390
Aberdeen – 17,138
Hearts – 11,914
Dundee Utd – 10,894
Hibernian – 8,334
Dundee – 7,442
Motherwell – 5,566
St. Mirren – 4,900
St. Johnstone – 4,859

I think everyone in Scottish football would love to see the return of a competitive SPL and have teams from all parts of the country challenging for honours but this looks, given the evidence, to be wishful thinking. Football has changed dramatically since Aberdeen, Dundee United and Hearts were able to challenge the Old Firm and the financial gap is surely too large to bridge given the SPL winner each year would only move further away with the potential of Champions League money.

In summary, a large proportion of SPL fans will agree with the feelings of many Celtic fans that during the well documented period of Rangers’ financial mismanagement, the Ibrox club had an unfair spending advantage, and as such should be punished by the football authorities. The question is however, would that punishment be best served by demoting Rangers into Division 3?

There is no doubt that the dominance of the Old Firm in Scottish Football has caused the competition to become stale and I for one think the other teams would quite enjoy a shot at 2nd or 3rd place if only for 3 seasons. The new Rangers 2012 club clear of debt and with the sizeable support would inevitably return up to the SPL and return it back to a sense of normality in three seasons. One negative facing the SPL chairman would be the loss of 2 potential visits by Rangers to their ground for 3 seasons. However, this would only effect top six finishing clubs and in recent years only Hearts have enjoyed anything close to a full house with a game against Rangers so there is the potential to plug this gap with increased crowds due to their own team performance

The punishment to place Rangers in Division 3 will not change Scottish football dramatically and return it to past glories but it will give the other clubs a chance to compete for the reward of top places finishes, the chance to compete in Europe , give Scottish football a time to cool down with the absence of 4 Old Firm games a season and most importantly maintain sporting integrity

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