Archive for the ‘moral hazard’ Category

It wisnae me! I didnae ken! A big boy did it and ran away!

April 28, 2012

I am scunnered. Not with Glasgow Rangers but with the Scottish press.

Rangers have had years of financial mismanagement and tax avoidance that has come back to haunt them. Yet the Scottish press, certainly from what I read online, seems only too keen to dump the blame on one man. That this man – Craig Whyte – was only in charge since 2011 seems to be irrelevant. But the roots of Rangers dire financial situation go back into the 1990s. But to read the nonsense spouted in the likes of the “Daily Record” and even “The Herald” you’d be left thinking, “Jings, crivens help ma Boab! A big boy did it and ran away!!!!!”. Infantile stuff. Rangers problems stem more from actions predating Mr Whyte’s involvement in the club. Maybe if the “succulent lamb” types in the likes of the “Daily Record” had actually been real journalists rather than “sports writers” then Rangers might not be staring the very real prospect of liquidation in the face. Indeed, if anyone is complicit in this mess it is the “succulent lamb” brigade – if they had reported the truth this whole mess could have been avoided. But they are playing along with the whole, “I didnae ken! It wisnae me!” charade. Not at all unlike the banking collapse, “Too big to fail”, a compliant/complicit press and the risk of moral hazard.

So why am I scunnered? Not with Rangers. For them I am just sad. Really. This is a horrible mess and I don’t do “schadenfreude”. I am scunnered with the Scottish press, and “The Herald” in particular – but only because I have such low expectations from everyone else – especially the tripe from the “Daily Record”. My comments to “Herald” articles get stuck in moderation and are never approved. I never use profanity. I never even use phrases like “succulent lamb”. All I point out is the grotesque level of financial mismanagement that go back into the 1990s and how Rangers burned through cash. How if their FTT appeal to the HMRC EBT ruling fails then liquidation is inevitable. How creditors are getting shafted. How the administrators seem keener to get Rangers to the end of the season than actually act to bring resolution. How the SFA sanctions were trivial by comparison to Rangers own self-inflicted problems. How UEFA could take a flamethrower to our game, and may well do so regardless – and who could blame them? The moral hazard of deals being cut. And lastly how pathetic the press in Scotland has been in covering Rangers. Why no questions to key individuals about their EBTs? Is this a condition of interviews being granted?

Whether or not Rangers survive, in whatever form, the Scottish game will badly suffer. I support Kilmarnock and the likelihood that I will set foot into Rugby Park again will be sorely diminished if it is blatantly obvious that our game is rigged. And I’d want UEFA to step in. If Rangers cannot continue as anything other than a “newco” or fold completely a lot less money will come into the game. Kilmarnock and other teams could well end-up folding, too. But if that’s what has to happen to restore integrity then it has to happen. Scottish football will never be the same again.


Glasgow Rangers & Moral Hazard

April 25, 2012

The malfeasance and associated fiasco surrounding Glasgow Rangers reminds me of “too big to fail” and the banking crisis. Greed, incompetent decision-making and questionable business practices resulted in the likes of RBS and Citigroup collapsing. Complicity from the regulators thrown in for good measure. Denial on the part of the perpetrators. Collapse. We are there with Rangers. This is a tragedy for Scottish football, and the perpetrators seem unable to admit their responsibility. Contrary to what one might think from the main Glasgow tabloid, this is not about the actions of simply one man over the last year. Rather, the problems have been systemic, going back at least to the ’90s and largely hidden by a compliant press. Actions by the Bank of England or Federal Reserve to bail-out their chums in the City or Wall Street created moral hazard on an unprecedented scale. RBS, Citigroup, AIG, etc. never faced the ultimate ramifications of their actions. If Rangers don’t face theirs by, say, HMRC cutting them a deal, then a layer of moral hazard is created that is simply unacceptable. The SFA also have to be seen to act, UEFA would have them if they didn’t – and rightly so. (I’d say exactly the same if it were my team, Killie.) And, honestly, why the hysterical reaction to the fines/sanctions from the SFA? They really are trivial in comparison to Rangers other self-inflicted problems. Or is it more blaming others for your own problems? It really is time for those that wrecked Rangers to face their responsibility, and those “sports writers” in the media that aided and abetted the shenanigans to quit. It’s not as if they were real journalists anyways, their partaking of “succulent lamb” and failure to report actual facts long betrayed them. When it falls to a blog – Rangerstaxcase – to explain to supporters of Scottish football what is really going on it really is a damning indictment of the state of the Scottish press.
And Rangers? Its really hard to see any other outcome rather than liquidation. The administrators seem to be more interested in getting them through the end of the season and an infusion of SPL prize money. Then what? Airdrie United II?