“Who won the bloody war?” How the Celtic board drew the wrong conclusions from the events of 2012.

Yesterday, I wrote a lengthy piece on how Celtic had been affected by the events of 2012. This is the second part of my 2012 retrospective, looking at what happened, how it happened and what has happened since.

As I said in yesterday’s article, I by and large thought we had come out of it much stronger than we would have if 2012 had never happened. That moment forced our club to do things differently.

I’m not convinced we ever would have without the collapse of Rangers.

But there is one area where we didn’t change. One area where we actually doubled down. One area where we have continued to pursue a policy that some believe has held us back—one that remains in place to this day and, in January, certainly did us no favours. That policy is the deliberate limitation of our ambition by ensuring we finish almost every season with a major player sale.

Without it, we barely spend at all.

This was not something that changed after 2012—except in one key way. Our board emerged from that period even more convinced that this was the right approach. They took one major lesson from that era: that we had “won” the financial war by limiting our spending and keeping a tight leash on our managers. I thought it was a mistake then, and I think it’s a mistake now.

In fact, it was the worst possible lesson we could have taken from it.

We were not vindicated by 2012. Our financial strategy was not proven right by what happened. There was a vast middle ground between our approach and the insane way that Rangers was run. Somewhere in that space was a path where we could have shown ambition, backed our managers, and pushed the boat out—all while remaining well within UEFA’s financial parameters and our own capabilities.

Instead, we chose not to.

Prior to 2012, we had lost three league titles. I firmly believe that our limited ambition in the transfer market played a major role in those defeats. We had the chance to spend more, to ensure those titles ended up at Celtic Park, and to claim the Champions League revenue that came with them. But we left that money on the table, allowing the Ibrox club to win those three titles instead.

When Rangers went into administration and then liquidation, our board emerged convinced that their own cautious policy had been the right one. That was a huge miscalculation.

And you don’t have to look far for proof of that miscalculation, because even with those three years of Champions League revenue that we effectively handed them, Rangers still went out of business.

Because their policies were insane.

As far as I’m concerned, our board gets no credit whatsoever for simply not being equally insane. Nobody was asking them—then or now—to overextend, to spend beyond our means. But when we’re writing eight-figure cheques to the taxman because our profits are so high, while key areas of the pitch go neglected, then our priorities are simply wrong.

It was not Celtic’s sound financial management that won that war. It was Rangers’ reckless fiscal insanity that lost it for them. Yet our board drew all the wrong conclusions from what happened at Ibrox. Every single one. And this is one of the key areas where our thinking remains limited.

Some people at our club seem paralysed by the fear that we could end up like Rangers did. But that will never happen to Celtic. There is next to no chance of it. Rangers’ collapse was caused by decades of recklessness—recklessness that was only possible because, at the time, money seemed to be growing on trees over there.

Of course, we now know that almost all of it came from a single bank, one that was operating in a way that was ultimately to its own detriment and that of its shareholders. That bank had to be bailed out by the taxpayer to the tune of hundreds of millions of pounds.

Rangers’ reckless spending was a microcosm of the wider financial insanity at that bank. And when the easy credit dried up, they resorted to tax fraud to buy players they otherwise couldn’t afford.

The entire Rangers operation at that time was built on an unstable foundation—in fact, it was built on quicksand. Their whole model depended on the suspension of reality and the hope that the conditions allowing it would continue indefinitely.

Nobody—either then or now—was advocating that Celtic take such a reckless course.

No one has ever been held to account for the three titles we lost. The chief executive’s head should have rolled after the second of those was squandered. There was no universe in which he should have survived the loss of the third.

During that spell, Gordon Strachan resigned after losing the first of those titles. Tony Mowbray was sacked after losing the second. We didn’t conduct a managerial search or make a serious effort to find a top-class replacement. Instead, we handed the job to an untested youth team coach—solely because he had played for the club and captained it. That decision cost us the third title.

Part of the problem was the self-imposed limits under which we chose to operate. The strategy laid out by the CEO had delivered nothing but a disastrous spell. Even though Rangers were already operating under their own financial constraints at the time, they still managed to secure those key pieces of silverware. Yes, those titles turned out to be the last major trophies the old Rangers would ever win—but no matter what this board thinks, that had nothing to do with us.

Let’s be honest.

We were content with the Glasgow duopoly. We had become accustomed to trading titles with them every other year, and there were people on our board who wanted us to believe that this was just the reality of Scottish football. But in truth, that was only the reality they had chosen to keep us in—because they lacked the vision, the courage, and the ambition to take us beyond it.

We didn’t see ourselves as being engaged in a titanic struggle at the end of which Rangers would collapse into the black hole of debt they had created. We were not at war with them. We were merely coexisting. We weren’t tailoring our policies to defeat them; we weren’t even attempting to take advantage of their precarious position.

If there was a war involving Rangers, it was between them and the bank—at that point, Lloyds, which had acquired the toxic assets of the Bank of Scotland without fully grasping the size of the financial hole they had just inherited.

As Lloyds attempted to unwind that mess, the pressure fell on David Murray to start paying back the club’s enormous debts. They made it clear that the days of easy money were over and that his companies, including Rangers, would no longer receive loans on the favourable terms they once had.

That was who the Ibrox club was really fighting against. Their battle for survival wasn’t against Celtic. It had nothing to do with any policy we had undertaken. It was a war between those inside Ibrox who wanted to continue spending money they didn’t have and those who were desperately trying to rein in their insane levels of debt.

Their collapse had nothing to do with Celtic’s financial policies.

In fact, it has long been my belief—one backed up by plenty of evidence—that administration would have come for them years earlier had they been deprived of the Champions League revenue we effectively handed them on a plate. Their survival, for as long as it lasted, was directly linked to those very fiscal policies that our board still believes were the reason we were the last club standing.

But Rangers’ financial policies were so catastrophically bad that we were never going to be anything else. And had we only shown a little more imagination—had we used just a bit more of our own financial strength—their recklessness would have caught up with them much sooner than it did.

We didn’t win the war because we didn’t fight the war.

In fact, our reluctance to act was so glaring that it became the foundation of a widespread belief among Celtic fans: that our club did not actually want a world without Rangers. That we saw no sense in trying too hard if the result would be their financial collapse.

This is the infamous “Old Firm Inc.” theory.

For years, I have refuted that theory. I have argued that it does not accurately reflect the policies of our club, either then or now. The idea that the current Ibrox club is being kept afloat or given preferential treatment by Celtic is, to me, so ridiculous that it deserves mockery rather than serious discussion. Even if we wanted to, we could not prevent that club from engaging in acts of self-destruction.

But when you look back at how we behaved as a club in the three years after winning our third title in a row under Strachan, it’s hard to shake the feeling that some inside Celtic were wary of taking any action that might push Rangers off the cliff. And I know for a fact that people at Celtic were well aware of how precarious their situation was at the time.

Let’s not forget: the financial crash of 2007-08 had already triggered a global credit crunch. Real estate prices had collapsed. The expansion of the EU had devastated key industries like steel and ore—industries in which David Murray had built his fortune. His entire business empire was in serious trouble, and it was clear that this would have a direct impact on Rangers.

It was impossible to ignore the evidence.

And how can I say that with absolute conviction? Because in 2009, I wrote an article for Etims called The End of Rangers, where I highlighted these very issues. That piece was based on two earlier articles, one of which—The Fall of the House of Murray—was written in January of that year by the Irish journalist Phil Mac Giolla Bháin.

Even back then—three full years before the events of February 2012—the warning signs were everywhere. In October of that same year, Rangers’ own manager, Walter Smith, publicly admitted that the club was being run by the bank. The writing was on the wall.

All Celtic had to do was apply the necessary pressure, give them a push, and they would have been gone. I wrote as much in that 2009 article; in fact, I was sure that there were people inside Celtic who were more than willing to take that step.

I don’t think I’ve ever made a prediction as wrong as that.

By 2010, the scale of the disaster was even clearer. And again, it was Phil Mac Giolla Bháin who broke the story that shattered the status quo—the revelation that HMRC had hit Rangers with a tax bill for £49 million … the results of their EBT policy.

Celtic would not have been well-run at all if we had not had our legal team examining that situation, assessing the risks, and asking one very simple question: What were the chances of Rangers losing their battle with the taxman?

If it wasn’t clear to Celtic in 2009, by 2010 it was flashing in strobe lights for all of Scottish football to see. Rangers were being forced into cutbacks. They were facing a tax bill that could wipe them off the face of the earth—an entirely separate issue from their ongoing struggle to bring their debt under control.

They were staggeringly vulnerable.

Had we truly seen ourselves as engaged in an existential battle with them, that was the moment to press every advantage we had. The risk was minuscule. The upside was potentially enormous. And yet, we chose not to act.

Instead, we stuck with a policy that had already gifted them two titles—and so they won a third. Even then, it wasn’t anything Celtic did that shifted the balance. It was McCoist’s incompetence as a manager that finally dragged them down, with Rangers crashing out of Europe twice in the space of a fortnight.

At that point, they had no more wiggle room. Craig Whyte had no more options. He didn’t have the money to pay even the basic bills, so he started ignoring them—sticking them in a drawer, including the PAYE tax payments.

That decision, more than any other, made HMRC impossible to deal with. It was the final straw, convincing the tax authorities that rather than accept pennies in the pound, they would rather see Rangers collapse altogether.

It wasn’t Celtic that brought down Rangers.

There was no policy of ours that triggered their demise. In fact, the policies we pursued almost certainly prolonged their existence. That is the truth of it. That is the fact. And the ultimate irony in all of this is that, in the end, our board concluded that they had been right all along—and they have acted on that belief ever since.

Of course, all of us have been guilty, at times, of buying into this myth.

Even I have, on occasion, perpetuated it when it has suited me.

On paper, it sounds like a solid theory.

And as we’ve said on this blog many times, it is a good thing that Celtic have sound financial policies. It is right that we live within our means, that we spend only what we earn.

But it’s also true that our directors are risk-averse. It’s true that they lack strategic imagination. It’s true that they are small-c conservative to an unhealthy degree. Nothing sums that up more than the fact that we will send a hefty cheque to the taxman rather than put that money where it belongs—out on the pitch.

Yet the idea that our board is made up of financial geniuses stems, in no small part, from the events of 2012—events in which we played no active role, except in the campaign to stop the Ibrox newco from starting life as a top flight club.

In all the rest we were nothing but bystanders, just like everybody else.

Photo by Craig Williamson/SNS Group via Getty Images

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