10 November 2015

Rules, morals and affordability


by James Black | Guest Contributor

The demands to strip Rangers of trophies are growing by the day. Small groups of fans of several Scottish clubs are taking to social media to demand "justice" be done and Rangers be stripped of all trophies won during the 'EBT years' between 2001 & 2010. 

A few high profile journalists have jumped on the bandwagon too, with Channel Four's Alex Thomson leading the charge.

Bizarrely, despite all these groups demanding action nobody seems to be able to explain just what rules Rangers broke. Some point out that tax avoidance is morally wrong, and I'd agree, but football and morality were divorced a long, long time ago. 

Is it morally correct to advertise gambling and alcohol products to kids? What about trading children for money because they have particular physical skills? You can't punish a football club for a perceived moral issue. You can only punish them for breaking rules.

Others claim the club fielded players, who by virtue of not having properly disclosed contracts, were ineligible. Some bad news on that one guys. Rangers have been punished for non-disclosure of side letters to the relevant footballing authorities.

Lord Nimmo Smith, in his commission's findings, said:
Rangers FC did not gain any unfair competitive advantage from the contraventions of the SPL Rules in failing to make proper disclosure of the side-letter arrangements, nor did the non-disclosure have the effect that any of the registered players were ineligible to play, and for this and other reasons no sporting sanction or penalty should be imposed upon Rangers FC.
Add to that the fact that there is no mechanism in either the SPL or SFA rule book to revoke the registration of a player retrospectively then there's really not much more to discuss around eligiblity.

Then there's the affordability stuff. Could Rangers have afforded to sign the players it was at the time? Some, including the Law Lords at the Court of Session questioned exactly that. The idea is, in part, backed up by evidence given to the Tribunal by "Mr. Black" (thought to be Sir David Murray) where it's noted that due to the use of EBTs the club were able to "attract players of a certain standard that, perhaps, we may not have been able to otherwise."

To try get an idea of whether the club could have afforded to sign the players without the use of EBT's, I decided to treat the amount the player earned as wages. Now, this is by no means scientific and is only intended to give a rough indication of what the cost might have been each year on wages instead of the club putting the same money into EBT's.

So, to calculate the players "Annual EBT Wage" I took the full amount each player earned and simply divided it by the number of seasons they were at the club between 2001-2010. There are players who spent part of the season at the club however for this it counts as a full season. 

Also, if a player left during the Summer window but made an appearance he is counted for the full season. If he didn't appear before leaving then he isn't counted. As was said earlier, this is in no way scientific.

(Total EBT Amount/Number of seasons = Annual EBT wage)

Here's the year-by-year change to the wage bill:

Season 01/02 - £4.8m

Lorenzo Amoruso, Michael Ball, Jesper Christiansen, Ronald de Boer, Billy Dodds, Barry Ferguson, Tore-andre Flo, Andrei Kancheslkis, Stefan Klos, Bert Konterman, Peter Lovenkrands, Bob Malcolm, Neil McCann, Michael Mols, Craig Moore, Christian Nerlinger, Arthur Numan, Tero Pentilla, Fernando Ricksen, Maurice Ross.

Season 02/03 - £7.2m

Lorenzo Amoruso, Mikel Arteta, Michael Ball, Jerome Bonnissel, Claudio Caniggia, Jesper Christiansen, Ronald de Boer, Billy Dodds, Dan Eggen, Barry Ferguson, Tore-andre Flo, Alan Hutton, Stefan Klos, Bert Konterman, Peter Lovenkrands, Bob Malcolm, Neil McCann, Michael Mols, Craig Moore, Christian Nerlinger, Arthur Numan, Fernando Ricksen, Maurice Ross, Stevie Thompson.

Season 03/04 - £5.3m

Mikel Arteta, Michael Ball, Chris Burke, Nuno Capucho, Jesper Christiansen, Ronald de Boer, Barry Ferguson, Alan Hutton, Zurab Khizanishvili, Stefan Klos, Peter Lovenkrands, Bob Malcolm, Michael Mols, Craig Moore, Christian Nerlinger, Egil Ostenstad, Gavin Rae, Fernando Ricksen, Maurice Ross, Paolo Vanoli.

Season 04/05 - £5.3m

Marvin Andrews, Michael Ball, Jean-Alain Boumsong, Thomas Buffel, Chris Burke, Barry Ferguson, Alan Hutton, Zurab Khizanishvili, Stefan Klos, Sotirios Kyrgiakos, Peter Lovenkrands, Bob Malcolm, Craig Moore, Nacho Novo, Dado Prso, Alex Rae, Gavin Rae, Fernando Ricksen, Maurice Ross, Stevie Thompson, Paolo Vanoli, Gregory Vignal, Ronald Watterreus

Season 05/06 - £4.1m

Marvin Andrews, Olivier Bernard, Kris Boyd, Thomas Buffel, Chris Burke, Barry Ferguson, Alan Hutton, Stefan Klos, Sotirios Kyrgiakos, Bob Malcolm, Ian Murray, Federico Nieto, Nacho Novo, Dado, Prso, Alex Rae, Gavin Rae, Julien Rodriguez, Maurice Ross, Stevie Smith, Stevie Thompson, Ronald Wattereus.

Season 06/07 - £2.6m

Kris Boyd, Thomas Buffel, Chris Burke, Barry Ferguson, Alan Hutton, Stefan Klos, Ian Murray, Nacho Novo, Sasa Papac, Dado Prso, Gavin Rae, Julien Rodriguez, Libor Sionko, Stevie Smith.

Season 07/08 - £1.7m

Kris Boyd, Thomas Buffel, Chris Burke, Carlos Cuellar, Steve Davis, Barry Ferguson, Alan Hutton, Nacho Novo, Sasa Papac, Stevie Smith.

Season 08/09 - £1.4m

Kris Boyd, Chris Burke, Steve Davis, Barry Ferguson, Pedro Mendes, Nacho Novo, Sasa Papac, Stevie Smith.

Season 09/10 - £1m

Kris Boyd, Steve Davis, Pedro Mendes, Nacho Novo, Sasa Papac, Stevie Smith.

Bear in mind that this does still leave the outstanding tax but looking at these figures is there any year that there's a realistic argument that Rangers couldn't have met their tax obligations while still meeting their players' financial demands?

I'm sure someone will come up with a new reason for trophies to be removed but, it certainly won't be for any of the above.

2 comments:

  1. Your article is ok, however it glosses over the fact that Rangers actually did pay said "wages" into the Trust accounts, therefore that part of the "wages" have already been afforded. The attraction actually to the player was that THEY didn't have to pay the tax on those "wages". At the very most Rangers' liability was a percentage for Benefit in Kind and/or NI employer contributions depending on how the payments would have otherwise been processed so the actual "tax" bill will be much less than what is outlined above.

    ReplyDelete

Keep it civil, lads.