Tag Archives: EBT

Some more questions for Rangers and Sir David Murray…

19 Mar

From a legal point of view, what is going on at Rangers Football Club is fascinating and in many ways, a case study in UK Corporate Law, something in which I am really fascinated. For the clubs support, they care less about separate legal personality, liquidation, trusts, and administration, so this post won’t be for them. However, I am interested in what is going on at Rangers from a purely legal point of view. Rangers accounts certainly lead to many unanswered questions.

Here is a copy of Glasgow Rangers accounts for 2008 – the last ones available. If you look at note 6, Rangers were still using the EBTs as recently as 2008. Accordingly, Rangers and Sir David Murray must answer some obvious questions.

Q. When did the use of EBTs come to an end at Glasgow Rangers?

Q. In what time periods were EBTs used by players and staff? When did the use of the EBT come to an end? Are there currently any players that are currently paid by means of an EBT?

Q. The Report of the Directors (available here)  shows that the Blue Knights are basically the old guard.  If they were David Murray’s friends – why did he sell to Craig Whyte instead of the Blue Knights themselves originally?

Q. Note 15 shows that Rangers had £13m of what they describe as “trade creditors – payable within one year”. Is any of this amount owed to Ticketus?  Of course a club like Rangers would have creditors – but £13m worth? The comparable figure for 2007 is £6m so there was some hike!  There are several other places that could be Ticketus too.

One of the Scottish tabloid papers printed a copy of what Rangers called a “letter of Intent” – an agreement between the Club and the players for payment for playing for Rangers. Note the second box  on the right hand side makes reference to a clause in the letter that states that a player will received “payment” of £122,000 with the terms of the agreement redacted. Of note, is that the document contains a clause that states payment will be made “subject to you being a registered Rangers player on those due dates”.


Rangers wage bill jumped dramatically between 2007 and 2008.  In 2007, it was around £24m. The accounts have the comparable figures for 2007.  In 2008 it was £34m – so almost £3m per month – so perhaps the administrators aren’t exaggerating as to how deep the cuts they were forced to make really were.

It has been reported that Rangers highest player received £25K a week. It has also been reported that there are some 30 players on the Rangers roster. So lets do some math. The administrators Duff & Phelps made very publicized statements about having to cut £1Million a month from payroll in order to maintain the club to the end of the season.

4 weeks in a month

£25,000 a week

30 players on £25K a week

4*25000*30 = £3,000,000

Now we all know that some of the young boys are nowhere on £25K a week. But I used this as an example.

Lets say for argument sake that they were, this brings the monthly cost of paying the players to £3,000,000.00

If all the players took a 75% pay cut, that reduces the payroll to £750,000

Now what we do not know is what each player was on, but lets assume there are 5 players on £25K, 15 players on 10K a week, and 10 players on 5K a week. How does the math work out then?

5*25000*4 = 500,000 (Most likely Davis, Papac, McGregor, Naismith, Whittaker)

10*10000*4 = 400,000

10*5000*4 = 200,000

All of a sudden, we are down to £1,100,000 in players monthly salaries and Duff and Phelps claims don’t make any sense whatsoever. Where is the other nearly £2,000,000 a month salary costs going?

Will Duff and Phelps release the actual costs of players and their financial obligations to pay into EBTs as recently as 2008? Do even they have access to this information?

Why is this relevant? Current players McCulloch, McGregor, Papac, Naismith, Alexander, Broadfoot, Whittaker, Lafferty, and Edu all played in the Season 2008-09.

A strict interpretation of the wording of the Letter of Intent implies that The Murray Trust may STILL be paying the players. EVEN now. There is no limitation. Read that clause again. The only demand is that the party to the contract still be registered as a player with Rangers. Thus, the payments from the Murray Trust to the players may still be ongoing.

Q: Is the trust still making payments to any players? Does it have any contractual obligations to fulfill?

Q. Is one of the reasons none of Rangers accounts from 2009 onwards available because they show the ongoing use of EBTs?

Clearly, this story is not going to die any time soon….