The Elephant in the Room – The Scottish Football Monitor

The Elephant in the Room

A Guest blog by @heavidor:       

Given The Takeover Panel’s success in procuring a Court of Session order to compel Dave King to make an offer for all Rangers International Football Club Plc shares not owned by the Concert Party it would be impossible for King to remain a director unless he complies with that Order.

The co-option of Barry Scott to the board and the elevation of Alistair Johnston as a person with significant control could be construed as repositioning, however it will be whether King makes an offer of 20 pence per share to all the shareholders not included in the Concert Party or not that will determine what happens next and we shall know later this month.

(King resigning) is the correct thing to do and should have already occurred. Instead, Rangers financial reputation has been dragged through the mud by association.

Irrespective of whether King complies with the Court Order or not this story is far from over, and it will continue to hamper Rangers’ prospects until it is conclusively resolved. A King resignation as a director of RIFC would reduce the prospect of contaminating the club, its directors and advisors from the full effect of cold shouldering should he decline to make an offer.

That would mean that King, as distinct from RIFC, had financial pariah status and not the club. That is the correct thing to do and should have already occurred but, instead, Rangers’ financial reputation has been dragged through the mud by association with King.

What should not be underestimated is the reality of cold-shouldering, not for just the offending party, but for those involved in business with the offending party. The consequences are dire for the individual or organisation who falls foul of the rules, making it impossible to carry out normal business activities within the sphere of influence of The Panel, and the same consequences face those who shelter the cold shouldered.

It should be appreciated that there are members of the RIFC that are members of regulated financial professions who would be further prejudiced through association with a cold shouldered non-resident King.

Perhaps unfortunately for a large slug of the mainstream media and football authorities, financial pariah status pursuant to cold shouldering in the UK coming on top of criminal convictions in SA would be impossible to spin in any positive way or to maintain continued fit and proper status. I mean, we could have the SFA cold shouldered, couldn’t we? All said though, the cognitively dissonant will carry on regardless.

If King does the right thing by resigning from the board, it is still important to appreciate that the ‘4 Bear’ Concert Party as determined by The Panel will continue to exist irrespective of how Kings deals with the instruction to make an offer for the shares. This is the elephant in the room that remains.

The Concert Party via their shares and loans will retain the same level of control they currently have, and therefore remain compelled to abide by The Panel’s rules.

King’s resignation would not remove that impediment.

It doesn’t end there. By challenging the authority and insulting the intelligence of The Panel and the Court, King has ensured all large share transactions in RIFC will be scrutinised and questioned and could additionally determine, for example, that the Concert Party is increased to include Club 1872 and Barry Scott on the basis they are working in concert with King and/or other concert party members.

There are some who think that The Panel has been slow to respond and impose sanctions and that they are all bark and no bite. It would be wrong to think so. The reality is that King has moved the whole dispute into uncharted territory. There has been no precedent for such continued brazen and naïve flouting of Panel rules. Accordingly, The Panel has chosen to move at its own pace, dotting the ‘i’s and crossing the ‘t’s and I suggest they’re being methodical rather than indecisive in dealing with the estimable Mr King.

The true value of RIFC shares was a key point in the recent court case with all kinds of claims being made. Some think that the lack of significant arm’s-length trades makes it impossible to arrive at a correct price, and others say that the price paid to Mike Ashley in recent trades is the benchmark. In my opinion, neither is correct. Current and prospective shareholders have the financial figures in the accounts to work with, and can determine the real worth from there. On that basis it is clear to me the shares are not worth anything like the last alleged trading price on Jenkins. Rather it seems that the shares only have nominal value given the business has never declared a profit, continues to lose money and is reliant upon ongoing shareholder loans to stay in business.

Any subsequent share issue – even with King gone – could muddy the waters further; The Concert Party members may expose themselves to another Panel instruction to make another offer should any of its members acquire more shares without coming to an arrangement with The Panel beforehand.

To illustrate such an arrangement, Dermot Desmond got Panel permission to increase his shareholding above 29.9% the last time Celtic had a share issue. This is preferable to trying to hoodwink the financial authorities with tall tales.

It should be clear to all followers of RIFC’s financial travails that the status quo is unsustainable. So, the question is ‘what’s next’? The chairman’s statement that accompanied the annual accounts once more talked about loan to equity conversion without reference to the impact of the existence of a Concert Party amongst the RIFC Board of directors and providers of loans. This is remarkable any such conversion cannot take place without the permission of The Panel and/or without dragging the other directors and lenders in the quagmire with another possible offer for the shares not owned by the Concert Party.

.. the shares only have nominal value given the business has never declared a profit, continues to lose money and is reliant upon ongoing shareholder loans to stay in business

So, what should happen and what is required for RIFC to rid itself of this terrible yoke? The answers are pretty obvious; King should make an offer of 20 pence per share to all those shareholders not included in the Concert Party. He has said the shares are worth more than that and that no one would accept. If he’s correct he has nothing to worry about and he would create a clear path forward for Rangers. He would also resolve the dispute with The Panel, creating the conditions for a debt to equity conversion.

So, why might that not happen? Because if the shares are worth 27 pence as the directors have suggested that means the loan to equity conversion would have to be at the same price and, of course, if the shares not worth anything like that there would be a rush to accept 27 pence and the ball would be on the slates, so to speak.

It appears to me the board is stuck between a rock and a hard place, that King will resign, and that there will be no offer.

If this happens the position would be precarious. The current board doesn’t have the credibility, money or experience to take Rangers forward. Being a true blue should not be the defining characteristic of what’s required to make Rangers competitive but it appears to be the preferred qualification of most of their customers.

I believe Rangers need a need owner with a controlling shareholding and deep pockets to sort out this mess, and I have reason to believe this view is shared by some of those with influence.

That is not to say that a solution is imminent, but the reality check is at least a start.

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1,315 Comments
  1. Homunculus

    Homunculus


    HIGHLANDER
    JANUARY 27, 2018 at 18:33

    Charming. Personally I’m not averse to change, but only if it is for the greater good, and not just to pander to two clubs.
    ====================================

    What about the existing 10 clubs in the division. If I have read it correctly they would get guaranteed away sales of 250. That could be higher if more people wanted to watch their colts team play.

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  2. paddy malarkey

    paddy malarkey


    Stan , what’s wrong with my idea of clubs releasing players into a general pool, from where they are allocated to teams in the lower divisions? That way it would be the players who benefit from game time. Otherwise the big two will probably hoover up all the available talent at the wee clubs to deny them a chance to compete . I don’t hark back to the fifties for the golden age of football . I prefer the 80’s, when the talent and the trophies were more evenly spread . Don’t forget that those two have been agitating for years to abandon Scottish football so anything they suggest for our benefit should be treated as suspect . On a personal level, I’ve supported the Jags no matter where I’ve stayed, not just because they were local to me . I’m happy to embrace change , but why not have suggestions from all clubs and reach a consensus on the way forward . It might even turn out to be something like the colts proposal ,but it might not . Scottish football’s dependency on those two is, in my opinion , one of the things that is holding it back .

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  3. Christyboy

    Christyboy


    But does Kings personal guarantee of protecting Accies from insolvency not leave them open to influence from another team in the division who will will take care of them financially if it comes to the worst? I don’t think any team by way of grubby deals or not should be able to come out and say we’ll keep you going, just give us the player. I think this behaviour stinks and can’t believe it’s being allowed to happen. They don’t have any money to keep themselves afloat but are allowed to guarantee another team won’t go under over a transfer they can’t afford. I think this is shocking. 

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  4. Stan


    some good points, I did think could we have a pool of players as well, but i assume there would be issues regarding management, insurance etc. Highlanders position seems to be he will only ever support something in Scottish football if it is detrimental to Celtic and Rangers. all I am asking is if you disagree fine but bring something sensible to the table rather than just being seen to have a chip on your shoulder. There are lots of our smallest clubs who are supported far less than junior teams – i would have a new 3rd division filled with junior teams which would eventually help them to reach their level and some of the division 2 clubs could also find their true level. The Colts teams could also be added or not…

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  5. Highlander

    Highlander


    HOMUNCULUS
    JANUARY 27, 2018 at 18:48

    What about the existing 10 clubs in the division. If I have read it correctly they would get guaranteed away sales of 250. That could be higher if more people wanted to watch their colts team play.

    The proposed guarantee of 250 tickets is a blatant bribe to those who can least afford to turn it down.

    Stan mentioned the possibility of the colts being from the top two clubs, whoever that might be, but the proposal is that the two clubs whose colts would play in the league would be Rangers and Celtic, nobody else!

    How can that possibly be for the betterment of Scottish football as a whole? Clearly it would only be for the benefit of Rangers and Celtic, and I’ll ask again, if it’s not going to benefit them, why are they so keen to do it?

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  6. redetin


    jean7brodieJanuary 27, 2018 at 14:50
    Redetin, I wish you well and hope that your health improves.
    _________________________________________________
    Many thanks, jean7brodie.
    It’s “one day at a time” for me these days. I got the diagnosis that everyone fears.

    Looking forward to the day that I get a run down to Brechin or Montrose in the warmer weather for a match. See some goals scored. No crowd separation. Nae hassle fitba; nae polis in sight; no abuse, or angry scenes. The occasional outburst fae a manager in the dugout to add a spark.

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  7. Homunculus

    Homunculus


    HIGHLANDER
    JANUARY 27, 2018 at 19:29
    ==============================

    Of course it’s for their own betterment, did someone suggest otherwise. Did someone suggest it was a totally altruistic suggestion.

    However that does not actually answer my point.

    How does it only benefit two clubs if the other ten already in the division get a guaranteed income from it.  

    And I will say again, if the majority don’t want it it won’t happen anyway. 

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  8. jimbo

    jimbo


    Redetin.  Posted a couple of songs for you over on the
    music forum to keep you cheered up.  (Just noticed I
    spelled your name wrong! Sorry)

    Post No. 175 I think.

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  9. Stan


    can’t find any link to your music forum Jimbo ?

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  10. jean7brodie

    jean7brodie


    StanJanuary 27, 2018 at 18:06
    A lot of people on these forums are either retired or live outside Scotland. Scotland needs forward thinking people not those living in past.
    ____________________________________________________________
    Really think you are out of order with this comment (cheeky barsteward)

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  11. Stan


    JEAN7BRODIE, you are probably correct that was wrong.

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  12. jimbo

    jimbo


    Stan,

    The black band along the top of the page. 
    Forums
    Forums < ernie bee chat
    Music tastes on SFM

    Your very welcome, as all are.

    View Comment
  13. Highlander

    Highlander


    HOMUNCULUS
    JANUARY 27, 2018 at 19:48
    How does it only benefit two clubs if the other ten already in the division get a guaranteed income from it.

    There would be a small financial incentive to those clubs, or bribe in everyday parlance, but even the detail of that guarantee is misreported as being £15,000 per club per season, when in fact it would in most instances be much less. As I understand it, the derisory £15,000 figure is the maximum that would be paid, but the maximum would only apply if absolutely nobody turned up. The payment each club would receive is the difference between the actual attendance and 250, times £10, although I’m happy to be corrected.

    However, my main gripe is the principle being proposed that only Rangers and Celtic’s colts should be accommodated – nobody else’s.

    Surely on a forum that regularly chastises our football authorities for pandering only to the current Govan club’s every desire, we should steer well clear of supporting any pandering to two clubs.

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  14. Homunculus

    Homunculus


    HIGHLANDER
    JANUARY 27, 2018 at 20:32
    ===============================

    I’m not really sure why you are so annoyed about this suggestion. Like I say if the majority don’t want it then it won’t happen anyway. 

    For clarity, yes it’s a bribe. The clubs involved want their colt teams developed so they are willing to pay money to the clubs in the bottom division in order to facilitate that.

    I would suggest that is symbiotic rather than parasitic. 

    My preference, as I have said before, would be re-instating a reserve league. That would be the best scenario for my own club (Celtic). It would achieve everything the colts suggestion would achieve, without having to bribe anyone. 

    What’s your thoughts on that. 

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  15. Highlander

    Highlander


    HOMUNCULUS
    JANUARY 27, 2018 at 20:44
    The clubs involved want their colt teams developed so they are willing to pay money to the clubs in the bottom division in order to facilitate that. I would suggest that is symbiotic rather than parasitic

    It may be symbiotic between Rangers/Celtic and the 4th tier clubs, but what about every other Premiership club, including Aberdeen, Hibs, Hearts, Killie, Partick Thistle? What about all the Championship and Division 1 clubs? Do they not matter? A return to reserve leagues would at least lead to resolving the issue of excluding those clubs I’ve just mentioned.

    Like Stan, I’ve had my say on the matter, so I’ll leave it at that for now.

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  16. ernie


    I hoped that SFM would be past the point that financial imperative could ever outweigh sporting integrity? Old firm colts may well make a few bob for lower league teams but come on, it’s easy to come up with ways to make a few bob if that’s all that counts.  Here’s one off the top of my head: lower league teams to be guaranteed away draws at ibrox or parkhead in the first three rounds of both cups. Brilliant isn’t it?  No one loses and the lower leaguers get cash bonanza.  OK the Old Firm get a wee benefit versus the rest as well but hey, good of the game and all that.
    I have no idea if AFC have any ambitions to get a colts team in the SPFL but if they do a pox on them. We, in SFM, surely need to get beyond “my team right or wrong”?

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  17. Homunculus

    Homunculus


    There really is a lot of anger on here about something that isn’t going to happen.

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  18. Cluster One

    Cluster One


    ERNIE
     OK the Old Firm get a wee benefit versus the rest as well but hey, good of the game and all that.
    I hoped that SFM would be past the point of even Mentioning anything called OF
    ===============01

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  19. incredibleadamspark

    incredibleadamspark


    CHRISTYBOY, I found that a bit puzzeling too but I took that to mean King would, apparently, personally guarantee the payments to Accies if there was an insolvency event at Ibrox. Seems a bit ambigious that bit. 

    But then I suppose the football creditors arrangement would mean Hamilton get their money in full anyway. And we all know there is no issues with Rangers finances…..

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  20. Darkbeforedawn


    How about a solution whereby the first and second place teams the previous year get the option to put in a colt team for the following season? So Celtic and Aberdeen would be given the opportunity for this year etc? That is the only fair way to do it I would suggest. Then next year it would be Celtic and (hopefully) Rangers, or Hearts or Aberdeen? 
    I also must be in the minority for thinking its good that the Old Firm are finally on a united front after so many years of toxic hatred between the two. 

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  21. jimbo

    jimbo


    Darkbeforedawn,

    Your a funny man!

    “I also must be in the minority for thinking its good that the Old Firm are finally on a united front after so many years of toxic hatred between the two. ”

    120212

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  22. easyJambo


    redetin January 27, 2018 at 19:31
    Looking forward to the day that I get a run down to Brechin or Montrose in the warmer weather for a match. See some goals scored. No crowd separation. Nae hassle fitba; nae polis in sight; no abuse, or angry scenes. The occasional outburst fae a manager in the dugout to add a spark.
    ============================
    That is the norm for Junior football, but I ventured to deepest, darkest Ayrshire today to watch Cumnock in their local derby against Auchinleck, in the Junior Cup.  Separate entrances for the rival fans, de facto segregation on either side of the pitch, eight police that I counted inside the ground, plus a few other stewards.

    Despite a history of bother between the fans it was pretty low key, probably due to Talbot dominating and winning 5-1.

    I was at another (more local) Junior Cup derby last week between Bonnyrigg and Newtongrange, but that was much more as you described, complete with one of the managers being sent off after disagreeing vehemently with a penalty decision.

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  23. Bogs Dollox


    HomunculusJanuary 27, 2018 at 19:48 ==============================
    Of course it’s for their own betterment, did someone suggest otherwise. Did someone suggest it was a totally altruistic suggestion.
    However that does not actually answer my point.
    How does it only benefit two clubs if the other ten already in the division get a guaranteed income from it.  
    And I will say again, if the majority don’t want it it won’t happen anyway. +++++++++++++++++++++++++++++++++++++++
    Democracy is fine but sometimes there is more than one way to bribe a cat.

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  24. jimbo

    jimbo


    I’ve heard about a local rivalry which is very heated.  Bo’ness Utd. v Linlithgow Rose.

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  25. Homunculus

    Homunculus


    BOGS DOLLOX
    JANUARY 27, 2018 at 22:45
    +++++++++++++++++++++++++++++++++++++++
    Democracy is fine but sometimes there is more than one way to bribe a cat.
    ================================

    I’m sure you have a good point.

    For the life of me I can’t think what it is. 

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  26. John Clark


    DarkbeforedawnJanuary 27, 2018 at 22:03
    ‘… in the minority for thinking its good that the Old Firm ‘
    ___________________________
    Quite  a long time ago DbD, someone on this blog  posted this entry from the Intellectual Property Register at this link     https://trademarks.ipo.gov.uk/ipo-tmcase/page/Results/1/UK0002181523B
    Trade mark numberUK0002181523B
    Status DEAD

    Display content without tabs
    Overview List of goods Names and addresses Publications
    Owner(s) name:Celtic F.C.Limited and The Rangers Football Club plcCeltic Park, Glasgow, G40 3RE, and, Ibrox Stadium, Glasgow, G51 2XD, Scotland, United KingdomCountry of IncorporationUnited Kingdom ”

    Note the word I have emphasised.

    There is no longer an ‘Old Firm’ except when referring to a time before the Liquidation of The Rangers Football Club plc.

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  27. easyJambo


    jimbo January 27, 2018 at 22:48
    I’ve heard about a local rivalry which is very heated.  Bo’ness Utd. v Linlithgow Rose.
    ========================
    They certainly don’t like one another but I haven’t witnessed any trouble at the games, a few chants from rival fans, but nothing more than that.

    I attended a couple of their games, maybe four years ago, that were played back to back (a junior cup game and a likely league decider), there was 1,750 at the first game and around 1,600 at the second.  Most League 1 & 2 sides would bite your hand off for attendances like that.

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  28. Bogs Dollox


    HomunculusJanuary 27, 2018 at 22:54
    BOGS DOLLOX JANUARY 27, 2018 at 22:45 +++++++++++++++++++++++++++++++++++++++ Democracy is fine but sometimes there is more than one way to bribe a cat. ================================
    I’m sure you have a good point.
    For the life of me I can’t think what it is. 
    ++++++++++++++++++++++++++++++++++++
    You have constantly repeated on here that “the clubs will decide” which on the face of it sounds democratic.
    Is this the same democratic decision making where the Old Firm accrued so much power that the voting system wasn’t democratic?

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  29. jimbo

    jimbo


    EJ,  Never been to one but I am friendly with a man who was in the SJFA? (The Juniors part of the SFA).  He said there used to be quite a bit of police presence for a junior game.  Don’t know about crowd trouble to be honest.  I take your word for it obviously.

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  30. easyJambo


    @JC
    There are other active trade marks owned by the clubs that still use “Old Firm”
    https://trademarks.ipo.gov.uk/ipo-tmcase/page/Results/1/UK00002264673

    The one that is “Dead” only relates to one specific class of goods. I think that class of goods is covered by the one above anyway.

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  31. Stan


    enjoying the music forum Jimbo, at this stage, enjoying listening rather than contributing.

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  32. easyJambo


    jimbo January 27, 2018 at 23:07
    EJ,  Never been to one but I am friendly with a man who was in the SJFA? (The Juniors part of the SFA).  He said there used to be quite a bit of police presence for a junior game.  Don’t know about crowd trouble to be honest.  I take your word for it obviously.
    =============================
    Crowds for all but the top sides in the Junior ranks have fallen over the last few years, but all credit to those teams that survive on a hand to mouth existence.  There is no need for a police presence at any game, barring the odd derby or big cup game that is likely to attract four figure crowds.

    I’ve been to a lot of junior games over the last few years and haven’t seen any trouble between fans, other than the odd distasteful chants from small groups of “buckie” boys.  There is generally much more trouble on the pitch.  Heaven knows how many red cards I’ve seen on my visits round the ground of the lower level clubs.

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  33. ernie


    I realise I’m being a pain in the neck but not only is someone making a few bob being no good reason to bias the game towards the old firm* but also a “democratic” vote doesn’t make it right either.  If this was the case we’ve been wasting our time alll these years arguing the toss about the democratic treatment of the old and new Rangers in general.  Stewarty Milne and the other lickspittles don’t talk for me.
    * I have joined in with the avoidance of this terminology since 2012 but I can assure you that from where I’m sitting it bloody well looks like the old firm to me again!

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  34. Darkbeforedawn


    JC, I previously made my point on the OC/NC debate and don’t believe this forum is the place for constantly revisiting the argument. 
    For the purposes of the subject I refer to Old Firm as the two big clubs in Glasgow – a term widely used in the MSM and between most Rangers and Celtic fans I know. I feel there has been so many years of hatred both sides that it’s nice to finally see a united front. That said I don’t want to see it going back to a stage where decisions are made solely for the benefit of two clubs above the greater good of the league. As someone who was brought up a Shire fan I actually like the idea of colt teams playing in the bottom rung, but it has to be an open house for any team which is why I think my idea of the top two clubs from the previous year taking those places. To be honest, to avoid the accusations of Old Firm bias I would personally prefer if it goes ahead that next season it be Celtic and Aberdeen (based on last seasons finish) that took these places. Hopefully Rangers finish second and take the place the following season, but I feel it would give the top two from the league a nice prize and also much needed revenue for the smaller teams. I would have loved to have seen the Shire come up against a Rangers or Celtic colt team when they were still playing in league 2. It would have been a glamour fixture not often witnessed 

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  35. Homunculus

    Homunculus


    ERNIE
    JANUARY 27, 2018 at 23:20

    I realise I’m being a pain in the neck but not only is someone making a few bob being no good reason to bias the game towards the old firm* but also a “democratic” vote doesn’t make it right either.  If this was the case we’ve been wasting our time alll these years arguing the toss about the democratic treatment of the old and new Rangers in general. 
    ====================================

    Democratically the SPL (as was) voted that the new club could not get into that league.

    Democratically the SFL (as was) voted that the new club could join that league, in the bottom division.

    Whilst I disagree with the SFL decision I fully support their right to make that decision.

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  36. jimbo

    jimbo


    EJ,  My friend was on disciplinary panels for the junior SFA.  The stories he could tell.  No names mentioned of course – as if I would know them anyway! – but very funny reasons (excuses) given.  I think fines of £10 were commonplace.

    Talking about money.  Shotts Bon Accord have a social club which during the 70s and 80s was packed out.  Not sure of the arrangements but the football club must have been pretty well off in that era. Like social clubs all over the country now they are dying in their feet.  I wonder how they survive nowadays (the football club) without that income stream.  Haven’t been to a match in years.

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  37. Stan


    Would highlander and his fellow cohorts be advocating the return of the dirty Champions league money received for doing sweet FA, or is that ‘dirty money’ acceptable ?

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  38. Smugas


    Homunculus @ 21.27
    There really is a lot of anger on here about something that isn’t going to happen.

    i don’t think it’s fair to suggest the anger is solely related to the proposal per se.  Rather it has a lot to do with it’s origins, it’s stated purpose (the biggest sticking point for me for pretending it’s something it’s not), the particular avenue of presentation taken (apparently by two clubs with an historic affiliation going it alone) and the relative urgency with which it’s being brought to bear.  How many other proposals, particularly those from individual clubs as opposed to a united offering are heard in January to start in July?

    i think as a fan I have every right to be suspicious and, sorry, as a non old firm fan, every right to be particularly suspicious!  And the reason I’m using the OF tag is because this is exactly the crap the old cheeks were up to.  I’ve stated before I’m amazed Celtic in particular didn’t anticipate exactly this reaction TO THE ROUTE CHOSEN, not necessarily the proposal itself (which in itself is flawed).

    just on this btw was it ever confirmed if the vote was a majority in each division as someone proposed earlier?  Sorry if I missed it.

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  39. scottc

    scottc


    I have to say, I quite like Jimbo’s idea of the player loan pool; not involving ALL the available players but certainly a number. It could be run the the NFL draft system to spread the good younger players right through the game while retaining their ‘home’ club connection

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  40. Big Pink


    New blog by Auldheid

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