A self declared ‘sports finance expert’ has warned angry Ibrox fans that their club is on course to fall foul of UEFA’s Financial Sustainability Rules.
The real issue facing the 2012 Tribute Act is that after UEFA now audits accounts rather than accepting the word of sympathetic national associations afraid to step in and do their job properly.
In the summer of 2011 the SFA brazenly breached UEFA rules by providing a licence to Rangers while they refused to pay a £2.75m tax bill owed on the disguised remuneration paid to Tore Andre Flo and Ronald de Boer.
Had the SFA applied the rules properly either the tax bill would have been paid or fans would have been alerted to the scale of the financial distress at Ibrox, effectively the club required to play in the Champions League to break even.
Unfortunately for Craig Whyte he inherited Ally McCoist and his contract for his £1 purchase, the cheeky chappy failed miserably in Europe which was followed quickly by administration and liquidation.
The Tribute Act failed to take note of the business model that killed Rangers but are now faced with UEFA licensing as Dan Plumley from Sheffield Hallum University explained to Ibrox News as he examined the disastrous accounts for the 23/24 season:
One other interesting takeaway linked to the European side of things and UEFA’s new regulations.
Their football cost at the minute loosely from what we can see in the accounts, player wages and player amortisation is about 85 per cent of revenue, and we know that UEFA are looking at getting that marker down to 70 per cent by the 2025-26 season.
So, there is a little bit of work to do there and be mindful of the cost.
After failing to reach the Play Off round of the Champions League and the costs of playing four home matches at Hampden turnover for the 24/25 season will be significantly down. At a time when they need to raise income and cut down on costs which is mainly the wage bill.
There has been a small reduction in wages but players like James Tavernier, Cyriel Dessers, Danilo, Jack Butland, Ridvan Yilmaz, Ben Davies, Nicky Raskin and Rabbi Matondo are all under contract until at least May 2026.
How UEFA will deal with clubs failing to comply with their Sustainability Rules is still to be determined. Fines, squad reductions or expulsion are all options open to ensuring Fair Play across their three competitions.
By losing £17.2m last season the Ibrox club denied Hearts a place in the Champions League qualifiers with the other clubs being pushed up one place to put Dundee into the qualifiers for the UEFA Conference.
With no Sustainability rules in place in Scotland clubs that run their businesses to break even are penalised but there has never been a clamour to install financial fair play in the domestic game.
Just like in 2012 it looks like it will take bodies from outside of Scotland to impose fair play, last time around it was HMRC those letters could be changed to UEFA with the loss of European football dealing a fatal blow to Scotland’s newest senior club.
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