I think everyone on SFM knew that when the new club won its first trophy, whatever that trophy was, the old “same club” mantra would surface. Over the years, and since the nature of the debate is in the “santa exists” ballpark, we have largely discouraged discussion of it.
On the “old club” side, that reluctance to debate is largely because there is little value in arguing the toss with someone who either ;
- knows the idea is preposterous, but won’t admit it for whatever reason; or
- has been lied to by the person at (a) above and can’t be bothered to look at the facts for themselves.
On the “new club” side, the discouragement to discuss is mainly because we are in the main already equipped with the facts, and there seems little need to go over them again and again.
So why republish stevensanph’s blog and Hirsute Pursuit’s response from almost a decade ago?
Well firstly because it is an excellent piece of forensic scrutiny cutting through the fog which had begun to be induced by the MSM merely weeks after they had unanimously heralded the death of the old club.
Secondly because it was written as a response to the (at the time very unpopular) decision we made on SFM to close down the debate on the subject (for the reason stated above.
And lastly because the course of the truth – even if it is only shifted by a few degrees – can get completely lost as time goes by. Consequently, there are possibly many who take sides because of a leap of faith. This is a course-correction that demonstrates the absence of any need to do so.
So here then is a reprise of stevensanph’s remarks from 2013, on his own blog.
The Newco/Oldco debate has been ended over on TSFM, with the deletion of the excellent post from HirsutePursuit marking the end. While some think we need to keep reinforcing the message that its a totally new club, others are bored of the subject, so I can’t blame TSFM for wanting to move on.
Personally – I have read all the arguments – I am yet to be shown any factual proof that Green’s Gers are the old club. People will, and can believe whatever they want. For Rangers fans who want to believe its the same club, then, as long as they are happy, then fine. However, on paper, and in law, its a new club, and thats all that I care about!
TSFM posters wanting to continue the debate can do so below following on from HP’s excellent deleted post!
This blog, as far as I have been concerned, is widely regarded as a forum for people who wish to highlight the inequalities and skewed reporting of the issues within the Scottish football arena. If it is not, perhaps you can make it clear what you see as its purpose.
Perhaps the biggest ever story within the Scottish game has been the circumstances surrounding the demise of Rangers Football Club. It is a multi-layered story and one that that is still moving. In many ways, it may be a story that is only just beginning.
Central to the debate (that should be completely on-topic) for this blog, is whether or not the authorities (at all levels) have acted in an equitable manner and whether or not the “free press” have given life to events in a truthful and balanced way.
With absolute regard to these matters, there is a fundamental issue surrounding the status of the club incorporated in 2012 and currently playing in the 3rd division of the Scottish Football League.
If you genuinely believe that the club incorporated in 2012 are the same club as was founded in 1872/1873 then you have every right to be outraged at the behaviour of the footballing authorities. You will probably accept that UEFA were right to “ban” the club from European competitions because of its holding company’s insolvency event; but feel completely persecuted by your fellow Scottish clubs who demoted your team to the arse-end of the game. You will see this “demotion” as a punishment far too severe for the actions of the rogue ex-owner of the club’s former “holding company”. To compound matters, you will see the LNS enquiry as just another opportunity for the clubs who have already revelled in meting out a severe punishment, to have another fly-kick. You would, no doubt, believe that whatever the previous owner of the club’s “holding company” did in terms of player payments, the trophies were won fairly by the club on the field of play and can never be taken away. You will be – in the main – satisfied with the narrative of the “free press” in referring to your club as the same entity as played in the SPL.
All of the attitudes and beliefs rely 100% on the tenet of a “club” existing as a separate entity from the legal entity (“company”) responsible for a football team.
If you genuinely believe that the club incorporated in 2012 are a different club as was founded in 1872/1873 then you will still have every right to be outraged at the behaviour of the footballing authorities. UEFA would rightly refuse European Club Licence for the new club – if one was applied for – as the new club do not meet the criteria; but you will feel completely let down by the self-serving nature of the SPL and the weakness shown by the SFA in attempting to place the new club in the top tier of Scottish football. You will see the new club’s fast-track acceptance into the SFL as without precedent and their award of full member status (of the SFA) as against existing rules. You will wonder how – when the members of the SFL voted to give them associate membership as new club – the SFL executive list them on their website as the old club. As the old club had ceased footballing activities in June, there should have been no SFA membership or SPL share to transfer in August. Since the old club is no more, you will not recognise any punishment for the actions of the rogue ex-owner of the club. You will see the LNS enquiry as an opportunity for some sort of justice in relation to years of outrageous cheating by the now dead club. You will think that trophies and prize-money were stolen from clubs who played by the rules. You will think that a correction of results is simply a consequence of the old club being found guilty of cheating. You will probably think that the LNS enquiry has nothing to do with the new club; but may wonder if the enquiry orders the repayment of the old club’s prize-money, would this create a new “football debt” that has to be repaid by the new club to continue using the old club’s SFA membership? You will be aghast at the apparent repeated mis-reporting of the situation by the “free press”.
All of the attitudes and beliefs rely 100% on the tenet of a “club” being the legal entity (“company”) responsible for a football team.
You may feel that these positions are “just a matter of opinion” and do not ultimately matter.
I disagree. The indeterminate status of the club incorporated in 2012 is a huge sore in the Scottish football landscape. This is the biggest story that just cannot go away. If the schism created by this sense of injustice is not resolved, Scottish football will implode. Attitudes may already be too entrenched; but that should not stop us trying to find a way forward.
The principal difficulty (again totally on topic) is that it appears – from both sides of the debate) -that people in positions of power within the game have made decisions that cannot be justified by their rules and articles of association.
We can – as you wish us to – stop talking about the status of the club incorporated in 2012, or we can continue to argue our respective positions as a crucial factor in this controversy.
In my view we can only hold the SFA, SPL and SFL to account if we insist that a definitive answer to all of the important questions are given.
The status of the club incorporated in 2012 is – in my view – a simple matter of fact. It is only because it is being considered to be a matter of opinion that we are where we are.
The Origins of the concept of a football club having an owner from whom it can be separated and its subsequent misuse by the SPL/SFA in 2012.
The following are taken from a well informed contributor to SFM who points out that pre 2005 no such concept existed in SPL rules and the meaning subsequently applied by LNS and The 5 Way Agreement is a danger to the fundamental integrity of the Scottish football industry and its member clubs.
The very short version of what follows is this:
The SPL articles state that its definitions and expressions need to be given the meanings as described in the Companies Act 2006.
The Companies Act 2006 says that an “undertaking” is “a body corporate” i.e. a company.
Lord Nimmo Smith has ignored this definition and instead accepted (or created) an alternative meaning for “undertaking” (as used in Article 2) which is fundamental to the concept of being able to separate Club from Company.
The principle of Club and company being distinct entities was expressly stated in the commissions terms of reference.
Lord Nimmo Smith has accepted the terms of reference as “facts”.
The SPL articles and rules apply to Clubs and to their “owners & operators”.
LNS asserts that the Club “Rangers FC” was owned & operated by Rangers Football Club plc.
He asserts that the Club “Rangers FC” transferred from Rangers Football Club plc to Sevco Scotland Ltd.
The Club (if found guilty) is still liable for the alleged breaches of SPL rules, even though the Club is no longer a member of the SPL.
He asserts that Sevco Scotland Ltd – as the new owner & operator of the Club – have a material interest in his commissions findings.
Instead of his accepting LNS logic that allows the ethereal Club to be transferred between companies, the truth is – read in conjunction with the Companies Act 2006 – Article 2 really says that the Club is the “body corporate”. The Club is the Company.
The Club is Rangers Football Club plc. That Club is in liquidation.
Since Sevco Scotland Ltd did not purchase Rangers Football Club plc, Sevco Scotland did not buy the Club.
*On the simple basis of Sevco Scotland’s purchase of Rangers FC’s assets, the Commission cannot legally apply sanctions that would fall to Sevco Scotland for remedy.
This issue should have been fairly straightforward. We need to understand why it is not.
It is surprising to me that an experienced high court judge accepted the commission’s terms of reference without first checking its validity. It would be interesting to understand if the statement of reasons was really his own thoughts or a re-hash of the SPL legal advice that framed the commissions work.
It does not surprise me that the SPL have framed the commission in the way that they have. The “transferable Club” logic was first used to unsuccessfully argue that Newco should have Oldco’s share in the SPL. They are acting in their own commercial interest. Sporting Integrity has never been high on their agenda. We know what they are about.
It is hugely disappointing – but perhaps not surprising – that the SFA have not stepped in to clarify matters. Conflicted and/or incompetent probably best sums up its contribution.
The SPL – essentially as a trade association – will correctly do what they can to maximise revenue for their members. It falls to the SFA – as the game’s regulators – to ensure that the SPL’s existing procedures, articles and rules are adhered to.
It is almost without dispute that the SPL have not functioned well in following protocol. The SFA have been incredibly weak in insisting that they do so. In fact the SFA – by being party to the 5-way agreement – are themselves seemingly complicit in going off-plan. Again, regardless of your own beliefs and agenda, the SPL (by their actions) and the SFA (by their inactions) are not TRUSTED to act as fair brokers.
Lord Nimmo Smith is due to reconvene his enquiry in just over a week’s time. When writing my previous (and quickly deleted) post earlier in the week, my mind was already moving towards (what I consider to be) the insurmountable difficulty the retired High Court judge will face in steering his commission to a logical conclusion.
In football parlance, I fear that the SPL have given him a “hospital pass” that will eventually leave him just as damaged as the game. I had already prepared an outline of why I think his enquiry will ultimately flounder; but, wonder if this topic too will fall foul of the new censorship policy on this blog.
As I think Lord Nimmo Smith’s remit is an important point that needs discussion – and out of respect to those people who have supported this blog as the spiritual successor of RTC – I will attempt to post my thoughts here first. If this post gets removed or doesn’t get past moderation, I’ll do as TSFM (Big Pink?) suggested earlier and find another, more open, forum to engage in.
I apologise in advance for the length of this post; but the points, I think, are fairly straightforward. Please do bear with me.
We should probably start at the SPL Press Release of 12th September 2012:
Independent Commission Preliminary Hearing
The Commission has considered all the preliminary issues raised in the list submitted by Newco and points raised in letters from solicitors acting for Newco and for Oldco. It has decided:
1. The Commission will proceed with its inquiry in the terms of the Notice of Commission and will now set a date for a hearing and give directions.
2. Oldco and Rangers FC, who are named in the Issues contained in the Notice of Commission and alleged to have been in breach of SPL rules, will continue to have the right to appear and be represented at all hearings of the Commission and to make such submissions as they think fit.
3. Newco, as the current owner and operator of Rangers FC, although not alleged by the SPL to have committed any breach of SPL Rules, will also have the right to appear and be represented at all hearings of the Commission and to make such submissions as it thinks fit.
4. Written reasons for this decision will be made available in due course.
Further to the decision made today the Commission make the following procedural orders:
1. We set a date for a hearing to commence on Tuesday 13 November 2012 with continuations from day to day as may be required until Friday 16 November 2012. We will also allocate Tuesday 20 and Wednesday 21 November 2012 as additional dates should any further continuation be required.
2. We direct that the solicitors for The Scottish Premier League Limited lodge any documents, additional to those already lodged, together with an outline argument and a list of witnesses by 4 pm on Friday 19 October 2012.
3. We direct that Oldco, Newco or any other person claiming an interest and wishing to appear and be represented at the hearing give intimation to that effect and lodge any documents together with an outline argument and a list of witnesses, all by 4 pm on Thursday 1 November 2012.
4. We direct that intimation of the aforesaid decision and of these directions be made to the solicitors for Oldco and Newco.
No further comment will be made.
Couple of points worth noting:
1. The Commission will proceed with its inquiry in the terms of the Notice of Commission and will now set a date for a hearing and give directions.
2. Oldco and Rangers FC, who are named in the Issues contained in the Notice of Commission and alleged to have been in breach of SPL rules
So it is clear here that Oldco and Rangers FC have, in the terms of the Notice of Commission, been described as separate entities. It is important to realise that this distinction is made before the commission has had any opportunity to consider the circumstances.
This is a non-negotiable “fact” – as supplied by the SPL – that LNS either accepts or stands aside. He has chosen to accept it.
This “fact” was later given reasoning by way of the Commission’s Statement of Reasons and carried the names of the Commission members:
 Rangers Football Club was founded in 1872 as an association football club. It was incorporated in 1899 as The Rangers Football Club Limited. In recent years the company’s name was changed to The Rangers Football Club Plc, and it is now called RFC 2012 Plc (in administration). In line with the terminology used in the correspondence between the parties, we shall refer to this company as “Oldco”.
 The SPL was incorporated in 1998. Its share capital consists of sixteen shares of £1 each, of which twelve have been issued. Oldco was one of the founding members of the SPL, and remained a member until 3 August 2012 when the members of the SPL approved the registration of a transfer of its share in the SPL to The Dundee Football Club Limited. Each of the twelve members owns and operates an association football club which plays in the Scottish Premier League (“the League”). The club owned and operated by Oldco played in the League from 1998 until 2012 under the name of Rangers Football Club (“Rangers FC”).
 It is now necessary to quote some of the provisions of the Articles of the SPL. Article 2 contains definitions which, so far as relevant are:
“Club means the undertaking of an association football club which is, for the time being, entitled, in accordance with the Rules, to participate in the League
Company means The Scottish Premier League Limited
League means the combination of Clubs known as the Scottish Premier League operated by the Company in accordance with the Rules
Rules mean the Rules for the time being of the League
Share means a share of the Company and Share Capital and Shareholding”.
 It is also necessary to quote certain of the Rules. Rule I1 provides definitions of various terms in the Rules. Of these, we refer to the following:
Club means an association football club, other than a Candidate Club, which is, for the time being, eligible to participate in the League and, except where the context otherwise requires, includes the owner and operator of such club
 It will be recalled that in Article 2 “Club” is defined in terms of “the undertaking of an association football club”, and in Rule I1 it is defined in terms of an association football club which is, for the time being, eligible to participate in the League, and includes the owner and operator of such Club. Taking these definitions together, the SPL and its members have provided, by contract, that a Club is an undertaking which is capable of being owned and operated. While it no doubt depends on individual circumstances what exactly is comprised in the undertaking of any particular Club, it would at the least comprise its name, the contracts with its players, its manager and other staff, and its ground, even though these may change from time to time. In common speech a Club is treated as a recognisable entity which is capable of being owned and operated, and which continues in existence despite its transfer to another owner and operator. In legal terms, it appears to us to be no different from any other undertaking which is capable of being carried on, bought and sold. This is not to say that a Club has legal personality, separate from and additional to the legal personality of its owner and operator. We are satisfied that it does not, and Mr McKenzie did not seek to argue otherwise. So a Club cannot, lacking legal personality, enter into a contract by itself. But it can be affected by the contractual obligations of its owner and operator. It is the Club, not its owner and operator, which plays in the League. Under Rule A7.1.1 the Club is bound to comply with all relevant rules. The Rules clearly contemplate the imposition of sanctions upon a Club, in distinction to a sanction imposed upon the owner or operator. That power must continue to apply even if the owner and operator at the time of breach of the Rules has ceased to be a member of the SPL and its undertaking has been transferred to another owner and operator. While there can be no question of subjecting the new owner and operator to sanctions, there are sanctions which could be imposed in terms of the Rules which are capable of affecting the Club as a continuing entity (even though not an entity with legal personality), and which thus might affect the interest of the new owner and operator in it. For these reasons we reject the arguments advanced in paragraphs 2 and 6 of the list of preliminary issues.
Here we were introduced to a few new ideas:
1. That SPL members “own and operate” association football clubs
2. That “Rangers Football Club” was “owned and operated” by Oldco (Rangers Football Club plc).
3. Club means the undertaking of an association football club
4. An “undertaking” is “a recognisable entity which is capable of being owned and operated, and which continues in existence despite its transfer to another owner and operator. “
5. “A Club cannot, lacking legal personality, enter into a contract by itself. “
6. “A Club is an undertaking which is capable of being owned and operated.”
So, the principle, by which Lord Nimmo Smith, purports to connect Oldco and Newco is by the alleged transference of a non-corporate entity between the two owners and operators of the “Club”. The Club is the non-corporate entity he identified as the “undertaking” referred to in Article 2.
However, this is where he gets into some very serious difficulty. It is very strange that – when quoting the relevant articles – the retired High Court Judge did not notice or think the following did not have a part to play.
2. In these Articles:-
2006 Act means the Companies Act 2006 including any statutory modification or re-enactments thereof for the time being in force;
4. Unless the context otherwise requires, words or expressions contained in these Articles bear the same meaning as in the 2006 Act but excluding any statutory modification thereof not in force when these Articles or the relevant parts thereof are adopted.
The SPL articles make specific reference to the Companies Act 2006. Specifically “words or expressions contained in these Articles bear the same meaning as in the 2006 Act”
So when the articles refer to “undertaking” we must refer to the 2006 Act to check what meaning we should apply. If we do so, we find:
1161Meaning of “undertaking” and related expressions
(1)In the Companies Acts “undertaking” means—
__(a)a body corporate or partnership, or
__(b)an unincorporated association carrying on a trade or business, with or without a view to profit.
(2)In the Companies Acts references to shares—
__(a)in relation to an undertaking with capital but no share capital, are to rights to share in the capital of the undertaking; and
__(b)in relation to an undertaking without capital, are to interests—
____(i)conferring any right to share in the profits or liability to contribute to the losses of the undertaking, or
____(ii)giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a winding up.
(3)Other expressions appropriate to companies shall be construed, in relation to an undertaking which is not a company, as references to the corresponding persons, officers, documents or organs, as the case may be, appropriate to undertakings of that description.
This is subject to provision in any specific context providing for the translation of such expressions.
(4)References in the Companies Acts to “fellow subsidiary undertakings” are to undertakings which are subsidiary undertakings of the same parent undertaking but are not parent undertakings or subsidiary undertakings of each other.
(5)In the Companies Acts “group undertaking”, in relation to an undertaking, means an undertaking which is—
__(a)a parent undertaking or subsidiary undertaking of that undertaking, or
__(b)a subsidiary undertaking of any parent undertaking of that undertaking.
Everything that LNS uses to connect Newco to Oldco relies on a Club being a non-corporate entity. Without that interpretation, his original acceptance of the commissions remit would look very foolish. In my opinion, the commission’s statement of Reasons were always poorly framed
Using the 2006 Act – as it appears it is bound to do – I cannot see how any interpretation of “undertaking” can be used in the context of the SPL articles, other than “a body corporate”.
If I am correct and the correct interpretation of an undertaking in this context is “body corporate”, SPL Article 2, specifically (and quite clearly) states that a Club is the company. Since the Club that played in the SPL is in liquidation and the current version of Rangers has never been a member of the SPL, any attempt to sanction the new club for the sins of the old will be laughed out of court.
The real question – for me at least – is why has this ridiculous proposition has been put forward in the first place? Perhaps we can assume that the SPL chose to frame the commission’s remit in this way for purely commercial reasons; but, more worryingly, why have the SFA allowed it to progress?