Murray takes on mantle of bona fide Blue Knight
Ticketus backing could be a decisive factor in consortium’s attempt to gain control of the Ibrox
EVENTS at Rangers have unfolded at such speed during the past four days that the predominant mood among the fans has been bewilderment. The flood of claims and revelations has generated a sense of disorder, but there was an underlying development that was clear enough: this was the week when Paul Murray began in earnest his move to buy the club.
As the head of the Blue Knights consortium, Murray has positioned himself at the front of what is currently thought to be a small list of serious bidders. Brian Kennedy, the owner of Sale Sharks, is believed to have held meetings with the administrators, but intends to step aside in favour of the Blue Knights bid. Despite reported interest from America, the only other party considered a serious potential candidate is from Singapore, but has yet to provide proof of funding. All groups have until Friday to make an indicative offer, but Murray has already started to prepare the groundwork.
He met Her Majesty’s Revenue and Customs officials on Tuesday, when the potential outcome of the first-tier tax tribunal into the club’s use of Employee Benefits Trusts under Sir David Murray will have been discussed. The following morning, Dave King, Rangers’ secondbiggest shareholder, announced his intention to sue Sir David Murray and to back the Blue Knights. Hours later, during a radio interview, Paul Murray declared his intention to make a conditional offer.
The announcements could still have been seen as posturing, but the revelation yesterday that Murray has the backing of Ticketus has the appearance of a pivotal moment. The details of their arrangement will be crucial, but it could be considered a decisive move by Murray. If Ticketus were considered to be owed money by Rangers, then their agreement with Murray removes them from the list of creditors who will need to vote in favour of a company voluntary arrangement, which would allow the club to move out of administration conventionally. Murray would also have increased the amount that the other creditors would receive. The only potential difficulty would be if the other creditors believe Ticketus are being favoured by receiving 100p in the £1 of their debt over time, while the CVA offers them only a reduced amount.
“If the other creditors believe Ticketus are being treated preferentially, then that might cause a legal challenge,” said a financial source. “But if Craig Whyte is saying, ‘I’ll give you my shares if these guys stop chasing me for the money’, you can see how it all hangs.”
The details of Ticketus’s deal with Murray are not confirmed, but it is understood the company will accept being paid a share of profits made on season ticket sales to recoup the £18m that Whyte used to pay off Lloyds. Their original agreement with Whyte, who borrowed a total of £24.4m from them, involved repayments of £8m over three years, but the new arrangement is likely to be for a smaller amount over a greater number of years, essentially a term loan.
Ticketus could then pursue Whyte for the balance of £6m, but could choose to write that off because the litigation would be costly and time consuming. If Ticketus are not creditors of Rangers, the deal still makes sense for them because they will recoup most of the money they lent to Whyte without having to legally challenge him.
The benefit for Ticketus of backing the Blue Knights is that they will receive profits to cover the loss of their previous arrangement with Whyte, and remain in a commercial relationship with Rangers; in some ways becoming the club’s bank. For Murray, the deal either removes a potential creditor, or plays a part in moving Whyte out of the way. Any purchase in conjunction with a CVA requires Whyte to agree to sell or pass on his majority shareholding. Whyte claimed to be personally liable to Ticketus for the £24m loan, but if that is no longer the case then he could walk away from the club with no future liabilities or court actions. In return, he might be willing to pass on the shareholding he bought for £1, allowing the Blue Knights to use their money to fund a CVA while also taking control of the club.
It has often been the case that the sale of football clubs attract publicityseekers, and the ultimate buyer emerges only when they are ready to finalise the deal. A stalking bidder may still exist around Rangers, but Murray seems a determined buyer. As a lifelong Rangers fan, a former director, and a partner with supporters groups in the Blue Knights consortium he also fits the bill of somebody not looking to profit from the deal but who has the club’s interests at heart.
“It needs to be an emotional investment for Rangers,” said Neil Patey, a partner with Ernst & Young who has been involved in six football club takeovers, including Chelsea and Liverpool. “The Old Firm have some sort of global brand, but with the best will in the world, you’re not going to become a rich man by exploiting that. Whatever you buy it at today, you are inheriting a club that is making a loss. So you’re either funding that loss or you’re having to restructure it.”
Murray might want to position himself as the club’s saviour, but that alone will not be enough to secure any deal. Ultimately, the administrators will sell to the highest bidder, since that generates the best return for the creditors. The dramas are only beginning.