Is the Rangers crisis undermining the false economy of Scottish football?

There’s always been something slightly delusional about football. Listen to a football fan talking, and it’s ‘we’ did this and ‘we’ did that. The truth is that the commercial relationship between fans and their clubs has long since been notional. These are big joint stock companies whose relationship with their fans is purely sociological. The Rangers FC crisis is living proof of that departure in the interests of club and fans.

The Glasgow Herald has discovered there is barely any money left to do anything with. Why? Because, it seems, the man who took over the club didn’t have the cash he said he had:

Whyte’s purchase included an undertaking to provide £5m of investment in the playing squad through his company, Rangers FC Group. The company also stated an “intention to invest” £20m on players by 2016. Whyte also had to provide £1.7m to fund capital expenditure in relation to improving kitchen and public address equipment at Ibrox.

He finally admitted this week that he sold off £24.4m of supporters’ season tickets to partly fund the takeover with £18m used to pay off the club’s debts to Lloyds Banking Group. His predecessor Sir David Murray required Whyte to show that he had £24.4m in working capital as a condition of the sale.

Mr Smith and Mr Russell lost their jobs as the administrators said the unpaid tax under Whyte’s regime was expected to be £5m higher than first thought. They originally said unpaid PAYE and VAT worth around £9m was not handed over to HMRC, and was used to keep Rangers running, prompting the club’s slide into administration.

The new tax liability, which has been built up since October, would take the total debt to the taxman to £14m. The club is already facing a tax bill of £49m, plus interest, if it loses the “big tax case”.

It should be said that the club was badly run long before Whyte took over. The fans are now rallying round and trying to do what they can. The Administrator has dispatched Ali Russell and Gordon Smith.

But this is a deep deep hole, that’s going to take some filling. Celtic FC, an infinitely better run club, still made only £177,000 in the last audited year of business and is carrying a debt of £9 million. And debt, as we now know, is relatively easy to carry when times are good, but much less so, when the climate changes.

A bit like the Greek debt crisis, this domestic fiasco threatens to take the whole economic underpinning of Scottish football with it.

Mick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty