If you haven’t heard the rumours of a pending administration at Ibrox then you’ve not been online much over the last few weeks, because that story is everywhere, including on some of their fan forums. A lot of them think it will happen within weeks.
But then, others think the same about an alleged multi-million pound “investment” and I can say with utter certainty that won’t happen.
Glasgow is a rumour factory, and there’s been so much insanity at that club nothing would surprise most of us anymore.
Administration though … could it actually be about to happen?
In a word, yes.
It’s on the cards, eventually, at some point, and not a one of us can tell you when the critical moment will come, but it will.
Nothing is surer.
If this was any other club the press would be tracking it weekly. Their silence doesn’t mean there’s nothing to see. They are perfectly good at choosing not to see or acknowledge bad news over there and that’s why the Whyte plan back in 2012 caught many of them cold.
But yes, it could happen, and it will happen, and because none of us can get a clear picture of what the situation inside Ibrox is, the only thing we don’t know is how close to the edge they are skirting on a week-to-week and month-to-month basis.
Remember when I wrote some weeks ago about that game, The Long Dark? It’s a little like that; when the food stores are full and you’ve got enough firewood to keep you content it can put off all thoughts of having to go out into the cold and scavenge for supplies. But it always comes back to the same thing; the food gets used up. The firewood pile starts to dwindle. Finally you simply don‘t have a choice but to venture into the snow.
And that’s during a good run. For most players, they rarely if ever see full stores and a period of calm. The game is a constant fight to stay alive one day at a time. Every effort to set medium term goals – for me, it comes in trying to find the elusive white birch sapling and enough arrowheads to make a bow and a good supply of ammo, at which point I can see self-sufficiency of a sort – you’re hit with one disaster or another and it’s game over.
Disaster comes at Sevco from every angle, so much so that it wouldn’t be terribly surprising to see the Breaking News bar come up on SSN any second. Their stockpile of resources – cash, in this case – runs low towards the end of every month. Then they can hear the cold wind blowing outside, rattling the walls.
Someone inside the club constantly tops up the cash reserves, to keep on the lights, but this is a fool’s ploy and certain to end at some point. There are people on their board who have been doing this constantly for the last two years and with no end in sight.
That will end. It has to.
When they stop that’s the ball burst.
A lot of Sevco fans haven’t grasped this, haven’t grasped what I wrote here some months ago, that companies don’t necessarily enter administration because of debts. They enter administration when they can no longer meet their financial obligations as they come due; in short, when bills start piling up because no-one will pay them.
Significant debt does not need to exist before this point is reached; administration happens when clubs run out of money, it’s as simple as that.
A lot of people don’t understand why Sevco hasn’t already accepted defeat here and logged the necessary papers; there’s a simple answer to that. It will not help them.
Let me say that again; administration cannot help Sevco here.
For one thing, it won’t break the Sports Direct deal. Only a liquidation would do that. If they lose the court cases against Ashley and the management team then administration could be used to offset the amounts the club would have to pay, but that’s about it.
The job of the administrator from that point on would be to cut costs enough that the club could continue to trade as a going concern. Aside from that, there’s the 15 point penalty from the league and the cancellation of any European license they were hoping to get, and that’s it.
Administration would not be a Year Zero event; in these circumstances the impact on the club, in visible terms, would be negligible. Under the surface it would be a catastrophe. People would have to be paid off, entire departments downsized, the wage bill slashed dramatically and any number of hitherto dismissed ideas re-evaluated including the sale and leaseback of the ground, in order to generate a temporary influx of capital.
Directors would certainly quit, and take with them whatever emergency funding they were providing. It’s not inconceivable that the club would have to be wound up but I think it would take a pretty substantial underlying problem for that to become necessary.
If issues with Ibrox and the safety certificate came into play, and they were forced to confront an eight figure repair bill then that would probably do it … but if that happens, hey-ho, you’re looking at a scenario where a Rangers III would no longer be a viable project and they’d be gone, never to return.
I’ve heard all the rumours that this is imminent, and it might well be. It could be that the directors have simply run out of patience and have told King this. It might be that their legal team has told them the Ashley and Warburton cases have the power to bankrupt the club and that they are going to be nearly unwinnable. If either Ashley or Warburton is going for an arrestment or ring-fencing of assets then that really is a disaster that could bring this on.
I’ve even heard rumours that the club has gone to the SPL again and asked them to advance prize money … what a brass neck that would take, but it’s not outside the realms of possibility that they have people on the board so delusional as to chance their arm.
But I repeat; the very fact that this isn’t about substantial debts to secured creditors means that there’s no quick fix. Administration would allow them to slash costs but it wouldn’t tackle their problems in the bigger picture.
Except in one circumstance, and if it’s being considered this will be why.
Administration could be used by the board as a mechanism to force the unpalatable truth on their supporters at last that their club is in dire straits, that no major investment is likely and that it will have to live on what it earns and stop with the insanity. Season tickets could be marketed not on the basis of “competing with Celtic” but as a cold necessity if the club is not to die; as nothing short of an act of pure survival, however limited their existence would be. A new share issue could be prepared, with the knowledge that no institutional investors will come along, with the onus on raising the money just to keep the club going.
Fans could be easily swayed into buying into that project.
In those circumstances they would also have to accept whatever names the board appointed to the Director of Football and management roles, no matter how inexperienced or below the standards fans evidently expect.
Those guys could be given the room to work and develop their plan without the huge burden of expectation which weighed so heavily on Warburton and his team. If it happened right now, with Murty in the dugout, the board could do a quick rush-job appointment of some Real Rangers Man and the fans would need to like it or lump in.
As a dose of reality there would be nothing like it, and it would have the added advantage of giving directors who wanted out the cover under which to sell up and leave … King included.
I’m not saying this is what will happen, but I know there have to be people in that boardroom who are thinking along these lines.
They also know the media would help them to spin it, potentially even serving up Warburton and Ashley as the bad guys who forced it on the directors.
That could easily be sold to the most gullible fans in world football, and in the drama of the moment, with speculation about new owners (all of it fake) and a thousand things up in the air it might well be that no-one in the press stops long enough to apportion blame; many, in fact, will dismiss that as a pointless exercise when the survival of the club itself is at stake.
It’s clear that as a pure PR exercise administration has its advantages. It could be used to cover a multitude of sins and what would otherwise be an embarrassing climb-down on the standards of their coming managerial team appointments.
But all of that would be disguising the unalterable fact that another administration event at Ibrox would be a catastrophe for the club and for the SFA which allowed King and his board to take over without a business plan or viable strategy for going forward. The reputational damage it would do over there could take a generation to fix.
There are no easy outcomes any longer. There is no quick fix to the trouble they are in. All that’s really left is to make fans understand how serious the situation is, and how much worse it could get. Administration would let them do that, at least.
When it comes watch how the media spins it.
Something on this order of magnitude is inevitable over there, but is it imminent? That depends on the mood around the boardroom table. Because King will have already told his fellow directors that a new management team has to be appointed before the summer and the inevitable sending out of the season ticket forms, which means one of them will have to pay for it, on top of the potential legal costs that are about to hit the club like a hammer.
And the appetite for writing cheques that size might no longer be there.
You get the sense that a crisis point like that is looming.
I wouldn’t be surprised at all if we were on the brink of it.