Introducing the SPL's new team for 2012/2013 - Govan Rangers
Why am I so certain of this? Because the SPL has form. The SPL has set up as a commercial entity to generate as much income for the league as possible at the expense of lower leagues. Since they didn’t have the best interests of Scottish Football at heart then, why should we expect it now?
In 2002 the SPL politely declined Sky’s offer 45 million pounds because they thought they would get a better offer, as we know they didn’t. The consequences were that the total debt of all the SPL clubs in 2001/02 was 132 million pounds. Rangers debt could blow out to 134 million pounds , to quote the great bard Alanis Morrisette – “isn’t it ironic?”.
That commercial decision ended up costing money and contributed (not entirely though) to administration of Motherwell, Livingston and Dundee. Let’s be clear, these three clubs need to take the bulk of responsibility for administration. Especially Dundee. A league without Rangers would very likely see the same happen.
Fast forward to 2012 and the SPL now find themselves making another very important decision. Here are the options available to them:
- Rangers are liquidated, and 2 teams from Division 1 are promoted. This will result in the current TV deal to become null and void because the contract stipulates 3 old firm games per season. That means 13 million pounds less, per season, will be available to the clubs. The TV money distributed for finishing 10th is 600 000 pounds. Without the TV deal that is 600 000 pounds less that ICT would have coming in. This would have a devastating effect on the club.
TV companies pay that money to show Old Firm games and games involving the Celtic or Rangers.This is a commercial reality.TV companies would walk away or offer a vastly reduced offer.My instinct is they would walk away.
My personal belief is this is the best option from a purely football and football fan perspective, but it comes with huge risks.There would be huge financial pain and clubs like Hibs, Kilmarnock, Hearts and possibly ICT may find the conditions very challenging.Some people may say we survived relegation; we did thanks to a parachute payment which wouldn’t be available without the TV cash.This would be a sudden and possibly catastrophic reduction in the League major source of income.
I have heard the argument that we survived before TV money and we can survive without it.Yes we can, but like any business their expenditure would be based on an anticipated amount of revenue.To bring budgets back would require large scale player and staff redundancies.
- Govan Rangers are admitted to the SPL. This would appease the broadcasters and would maintain the income levels of the game to a point. The big downside for this is that it sends the message that if you don’t want to pay your bills, just liquidate and you will be invited back into the league. This is a dangerous precedent and will risk alienating fans.
The rebel 10 clubs also know this is going to happen which is why they are making noises about income splitting and voting rights. Because they really hold Govan Rangers’ survival in their hands and they should ask a very high price.
I believe this will happen because this is typical of the type of short term decision making that the SPL is famous for. Just like the Sky decision, and just like the Sky decision it will be wrong.
2 July 2012 - Update:
In this blog I made the following statement "TV companies pay that money to show Old Firm games and games involving the Celtic or Rangers.This is a commercial reality.TV companies would walk away or offer a vastly reduced offer.My instinct is they would walk away."
The following link provides the viewing audience numbers for ESPN/Sky for the SPL. The audience drops by more than 60% for games that do not involve Celtic or Rangers (or the Edinburgh derby).