Manchester City have been found guilty of all charges relating to serious breaches of the Premier League’s financial rules between the 2009-10 and 2017-18 seasons. With the question of sanctions still unresolved, attention has turned to whether any earlier case can indicate what comes next. City have appealed against the verdict and deny any wrongdoing.
The Premier League found that the club arranged “sham contracts” with a number of commercial partners as part of a scheme to disguise more than £830m of funding. Against that backdrop, some have pointed to the financial collapse of Rangers in 2012 as the closest available parallel, while conceding that the very word “unprecedented” makes a direct comparison difficult.
In their origins, the two cases are quite different. Rangers’ troubles ultimately became an insolvency event, driven by huge tax liabilities, with the Employee Benefit Trust scheme at the centre of it. Under former owner Sir David Murray, the club paid money into EBTs for employees — players, managers and directors among them — for about a decade at the turn of the millennium. In total, more than £47m came out of the trusts to more than 80 individuals. HMRC argued that the payments should have been taxed as earnings and that Rangers therefore owed substantial sums. After lengthy court and tribunal proceedings, the Supreme Court ruled definitively in favour of HMRC — five years after the old company had been liquidated.
On the pitch, the consequences arrived quickly. Rangers entered administration in February of the 2011-12 season, which triggered a 10-point deduction. They finished that campaign second, 20 points behind champions Celtic. No further penalties were applied, and liquidation followed in June 2012. Rangers were never stripped of any honours won during the years they used EBTs, which were ruled not to have given them “any unfair competitive advantage”.
Where the picture becomes more tangled is the distinction between Rangers the club and Rangers the company. After the liquidation, the football assets — Ibrox, the training ground, the name and the brand — were acquired by a new company led by Charles Green. The team continued to play at Ibrox in the same colours and with the same badge, although rival supporters still question whether it is the same club.
A vote then took place on whether Rangers could remain in the top tier. Ten of the 12 top-flight clubs voted against the application, with Kilmarnock abstaining and Rangers voting in favour. Rangers had to apply instead to the lower leagues, then governed by the Scottish Football League, a body separate from the top flight. That structure mirrors the current set-up in England, where the Premier League is separate from the EFL, which runs the Championship, League One and League Two. The Scottish FA recommended that Rangers enter the second tier, but the majority of SFL clubs rejected that, with 25 of the 30 voting for the fourth tier instead. Expulsion from the Premier League has been discussed hypothetically as a potential sanction for City, which could in turn mean applying for acceptance into the EFL — just as Rangers did with the old SFL.
There were fears that a top flight without Rangers, and without Old Firm derbies, would put television deals under threat and place clubs at financial risk. Neil Doncaster, the league’s chief executive, initially described the reduction in broadcast income as “slight”, but acknowledged that “there will be money coming out the game as a result of Rangers not being in the top flight”. The English equivalent of that question is what the loss of Manchester derbies would do to the Premier League.
Ally McCoist stayed in post through the demotion and led Rangers through the fourth and third tiers with relative ease. He has recently described the 2012 ordeal as “absolutely horrendous” because of the job losses it brought. “You’re not talking about your centre-forward or centre-back,” he said. “I had one of the older lads in tears, not a player, just someone who had a wee job, because he was losing his job. It was heartbreaking.”
On the pitch, McCoist recalled a bizarre but “unbelievable” journey through the lower leagues, praising the commitment of the fanbase. One of the opening games, against Brechin, was delayed because the ball got stuck on top of a hedge. He was also dragged off the team bus by the Peterhead chairman to speak to supporters in a marquee, and did the half-time draw in a social club before a match against Annan Athletic.
McCoist left midway through Rangers’ first Championship season, which ended with the club denied a third successive promotion when they were beaten 6-1 on aggregate by Motherwell in the play-off final. Mark Warburton arrived in the summer of 2015 and was the man who guided Rangers back to the Premiership. In the decade that followed, only one league title has come their way, delivered under Steven Gerrard in 2020-21.
Translating that experience directly to Manchester City is complicated by the gulf in finances between English and Scottish football. Even in the fourth tier, the budget Rangers were operating with still allowed them to attract some of the Premiership’s top talent, and that continued throughout their rise through the divisions. Picturing City enticing Premier League players to join them after a severe demotion is far harder. Because of the nature of Rangers’ plight, they lost a host of integral players without recouping a penny — Steven Davis, Steven Naismith and Allan McGregor were among those who lodged objections to a transfer to the “newco”. City, by contrast, would at least be able to bring in cash for departing stars, contract clauses permitting.
City supporter Matt Mellor joked that he “can’t wait to see Erling Haaland bag a hat-trick against Grimsby” in League Two next season. McCoist is not convinced. “When you go down there, you’re effectively starting from scratch, because the players won’t stay,” he said. “If you’re talking about Manchester City, you’re starting again. You’re officially starting again.”