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Introducing the SPL's new team for 2012/2013 - Govan Rangers

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Gabby

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Firstly a disclaimer: I do not want this to happen and if it does happen it will prove once and for all that the people running Scottish Football are morally corrupt. But in saying that I am certain this is going to happen. Govan Rangers will take their place in the 2012/2013 SPL season they will have a mostly blue kit and play out of Ibrox.

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:

  1. 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.
  1. 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).

http://www.kilmarnockfc.co.uk/staticFiles/71/72/0,,10291~160369,00.pdf


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A Rangers FC living within it's means and without the possibility of income from European football isn't going to come anywhere close to competing with Celtic...certainly no more so than any other team in the SPL, or any team that would be added if SPL were booted out.

For that reason, the argument that Rangers should be kept to secure TV and Sponsorship deals does not hold water.

Sadly I have to agree with you that the decision makers are far too short sighted to see this and will find themselves caught in their own hype and rules will be bent. changed and people will bend over backwards to keep Rangers in the SPL.

Sad reflection of just how screwed up the game is in this country.

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The income that Rangers get (or not get) from European Football or their ability to compete with Celtic has nothing whatsoever to do with my argument. The income from Euro football goes to Rangers.

However No Rangers (Govan or Glasgow) means no TV deal which means no 13 million pounds to be distributed to all SPL members.

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Of course the Euro income goes to Rangers, that's my point.

Without that income then Rangers are going to be no more able to compete with Celtic than I would be able to compete with Bolt over 100 meters. How interested are TV going to be in that? Not very!!!

So, either way, TV are going to lose interest and as an income stream it will be heavily reduced.

Thus removing a large part of the "financially good for the SPL to have Rangers in it" argument.

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You may have a point, I suppose no Rangers guarantees no TV cash. Rangers included at least offers the higher probability of TV cash and the SPL are nothing if not optimists.

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Guest Why no tv deal

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Why is there an assumption of no TV deal. There is no interest anywhere outside Scotland in our domestic league due to the duopoly of Celtic and Rangers. No Rangers means a new shape, competition initially for 2nd place but with more equally distribution of available cash the gap will close.

Scottish football needs to get real, realise we are a 3rd rate league like Wales and Ireland and live with that.

To try to compet higher, you get the Rangers scenario, living outside your means.

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I have made the assumption of no TV deal or a heavily reduced TV deal for the following reason:

All media broadcasters place a value on a sporting product based on the number of additional subscribers they can attract. in other words, the revenue they get must exceed the amount they pay.

With the SPL product, 90% of the viewers want to see Celtic and Rangers games. I am not making this up - if this wan't the case why do games involving Celtic and Rangers make up over 90% of the games they show.

Without Rangers, at least 40% of their audience is lost. Therefore the value of the product is drastically reduced. As a result Sky/ESPN need to make a commercial decision to determine whether they can get a return from the SPL.

One of the other strange arguments is that no TV coverage means more stadium attendance. This is not true for at least 2 reasons:

1. the other 10 clubs have limited HOME games on Sky. For the remaining home games, TV has no effect on attendance. Tat is to say there are fans watching the game on TV instead of attending. It is therefore reasonable to say that there will be additional income from attendance due to no TV.

2. Subscribers will watch other leagues (especially EPL) instead of attending games. This is the single biggest barrier to getting people to attend games. Why attend a game when you can watch a superior product from the comfort of your own home or local pub.

I agree with your comments re where Scottish football is at. I can never compete with EPL, La Liga etc. I think a switch to summer football where there is less competition for the consumer is an idea worth considering

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