Jelavic Transfer: What is at stake

The proposed move of Nikica Jelavic from Rangers to Everton has predictably stirred much debate. Much of the chatter has focused on what the receipt of fresh cash would mean for Rangers FC.  As we told you three months ago, Rangers cannot get to the end of the current season on their own cash-flow.  Without some combination of external capital investment from owner Craig Whyte, selling assets, or dramatic cost-cutting, Rangers would have faced- based upon the budget in place in August- certain bankruptcy before the season’s end.

Companies in dire financial straits stop paying their bills until forced to do so. Craig Whyte’s Rangers have seen more court than Andy Murray in recent months. It seems likely that had Rangers paid their bills on time and kept current with PAYE, National Insurance, and VAT that the club would have already folded. Depending upon your perspective, Craig Whyte is to be applauded for ducking and diving to prolong Rangers’ life or he is to be pilloried for avoiding the legitimate consequences of insolvency- technical and actual. Only Craig Whyte will know for sure whether he had access to sufficient funds to pay the club’s bills as they fell due (and has simply chosen to not do so).

The Jelavic transfer (if actually concluded) is a form of liquidation in place. They are digesting themselves for sustenance. Rangers will convert an intangible asset to cash. They will probably get to meet their next payroll without needing to bring in more of Whyte’s own cash. We do not know how much of the £6.7 million Craig Whyte promised to invest in Rangers has actually been delivered.  However, we do know from the unaudited accounts released that it was not delivered by 30 June 2011. (For any sports hacks reading, get an accountant to explain it to you).  It is understood that Whyte has been bringing in some cash to meet recent pay requirements, but since information security has tightened recently at Ibrox, we have not been able to get detailed reports on how much.

Rangers’ management indulged in farcical efforts at the end of the last transfer window to convince the world that Rangers had rejected a £9 million offer for one of their few sellable assets. Even the claimed £6.5 million offer from Leicester City is believed to have not gone further than an enquiry. Rangers are reported in the English media to be now ready to accept an offer of £3.5 million. To accept such a bid only a few months after rejecting much better offers would represent comically poor asset management- or it might be the first glimmer of truth to emerge in the Jelavic saga.  Succulent lamb supply is apparently scarce in England. Rangers’ ability to control how the story is reported there is limited.  Of course, here in Scotland, they have no such problem. The deal will be reported in our press in whatever way Rangers demand “£3.5 million now with add-ons and bonuses- let us just call it £6 million. A 50% profit on a player? What a deal!”

There has been a lot of speculation over how much of any transfer fee Rangers will see. My only source on this is from documentation prepared for Whyte in late May 2011, just after the takeover.

This excerpt seems to indicate that from the original £4 million transfer fee, that €2.4 million ( £2 million) remained to be paid at the end of May 2011.  Since that time, we have heard reports that Rapid Vienna had been threatening legal action to get Rangers to make good on a milestone payment. So it looks like the ‘ring-fencing’ of these funds did not actually take place under Whyte.  Reports in the Austrian press back in early November claimed that Rangers had fallen behind on a stage payment of €500k. We have no information on how many such payments were paid between May 2011 and now, but it is possible that Rangers still owe Rapid Vienna as much as £1.4 million from the deal. Furthermore, without access to the transfer contract, we do not know if any outstanding amounts must be repaid immediately on the player being re-sold or whether Rangers can take the £3.5 million now and stick to the original payment schedule.

There has also been chatter about Rapid Vienna’s claims over sell on fees. It would be a surprise if Martin Bain (a very experienced football negotiator) had agreed to anything other than the Austrian club receiving a percentage of profits. If Jelavic is sold for £3.5 million, Rapid Vienna would not see any additional fees.

Given Rangers’ reluctance to pay bills without  fuss, it seems reasonable to assume that there were no additional payments to Rapid. If this is the case, Rangers’ net haul from the deal could be as low as £1.9 million.  Although, if Rapid’s share can be delayed per the original payment schedule, Rangers might be able to use all of it as working capital prior to a result from the tribunal. In this case, Rapid would join the queue of unsecured creditors who will get stiffed should the tax case go “as well as expected”.

In summary, Rangers’ inexperienced management team botched the marketing of their star player in the summer (and will have infuriated creditors awaiting on payment last summer with stories of rejecting fabulous offers). That Rangers’ title hopes are being dented for such a relatively small amount should ring the alarm bells of reality for any of Rangers’ supporters who still believe that all is well at their club. Is it enough to get Rangers’ through to season ticket renewals? That depends on how much in the way of external funds Mr. Whyte can access.

About rangerstaxcase
I have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications for what was (updated) one of the largest football clubs in Britain.

677 Responses to Jelavic Transfer: What is at stake

  1. pjanduncan says:


    haha, I know, just dawned on me, should have read the full thing before I posted, I see Murray and instantly think SDM, after years of torment at his hands I think I have a few under lying issues regarding auld moonie.

  2. steve-b says:

    Quote from DR
    “But the Ibrox club’s support will be shocked by the detail of invoices and letters now in the revenue’s possession. It is claimed these show Whyte sold off massive chunks of Rangers’ future season-ticket ”

    anyone know which invoices and letters they are referring to?

  3. steve-b says:

    Quote from DR
    “But the Ibrox club’s support will be shocked by the detail of invoices and letters now in the revenue’s possession. It is claimed these show Whyte sold off massive chVnks of Rangers’ future season-ticket ”

    anyone know which invoices and letters they are referring to?

  4. Greener says:

    Whilst it’s nice to see a bit of magnanimity to the odd supporter of the Cash Strapper South Side Tax Dodgers appearing on here – personally, I AM LOVING THIS.

    To those of you of the Green persuasion – remember, before your sympathy goes to far we are talking about a Club who have continually rubbed our noses in their ‘superiority’, in them, ‘being the People’, a Club whose support have stood at Parkhead and screamed abuse at Jock Stein’s memory, and Hampden chanting illegal and racist slogans en masse and completely unchallenged.

    Glasgow and Scotland will be a far better place, for their lack of a place in it.

    Today’s the day the Teddy Bears have their pitch nicked – AND I AM LOVING THIS.

  5. Chris D says:

    just had a quick gander over at Rangers Media (Head in the Sand Loyal) and saw these 2 comments. Gave me a LOL anyway

    “It’s no wonder murray wanted rid asap. I actually feel sorry for CW for the stick he is taking.
    The only way that the criticism of CW can be justified would be if he does what murray did and jumped ship.
    My dad just came to me and goes “he’s a con-man” 😦
    How many con-men do you know that go into the stands to speak to the people you’re about to steal from?”

    Oh dear. That’ll be the same kind of con-man that goes into pensioners homes and fleeces them of their life-savings

    “Of course, there is another view you can take on all this, especially given who was doing the “investigating”, why are HMRC allegedly looking at this?
    Its completely unrelated to EBTs, so irrelevant to their “case”
    Maybe they arent quite so confident about getting a result on the EBT aspect, so, they are trying to look at this new VAT thing instead, just to get something”

    Haha, they really don’t get it do they.

  6. famous song says:

    Let’s not forget the hapless and officeless Misha Sher in all of this. He Tweeted early yesterday evening: “What can I say can see our global strategy already delivering results!!” Comedy gold.

  7. joemc says:

    The DR is regurgitating all the headlines accompanying the Whyte Knight’s triumphant takeover of RFC.

    ‘Billionaire Scot to buy Rangers for £30m’

    ‘Walter’s Whyte Knight Warchest’

    Jacko goes on to describe how Whyte’s takeover was presented by his PR team.

    ‘Describe him as a billionaire was the reply’

    Jacko runs with this as an EXCLUSIVE without any question or investigation into TWK’s billionaire status………………Jacko then adds his own words as he welcomes TWK to RFC.


    I wonder if that is how Jacko still views the great pretender?

  8. VertWolf says:


    Does the unpaid VAT on the ST predate the June 30th 2011 date for all taxes to be paid up in order for the UEFA licence to be granted?


  9. Edgar Blamm says:

    Stolen from CQN:


    To the tune of American Pie

    A long long time ago
    I can still remember how
    The tax case used to make me smile
    And I knew if I had my chance
    That I could make our people dance
    And maybe we’d be happy for a while
    But February made me shiver
    With every paper they delivered
    Fab news on the doorstep!
    I couldn’t take one more step

    I’m sure I laughed until I cried
    When I read about that football side
    The laughter could be heard worldwide

    **The day the Rangers died**

    So they’ll be singing:
    Bye, bye down Edmiston Drive
    All the Tims will have a bevvy ‘cause the coffers are dry
    And sad, fat Ally with his Fray Bentos pies
    Singin’ this’ll be the day that we die
    This’ll be the day that we die

    And so on and so forth…

  10. duggie73 says:

    Are Rangers on course to set a new world record for the largest amount of money owed by a club at the time of its winding-up?

  11. k3lly says:

    Well done to RTC and all the clever people who have made this blog compulsive viewing – it’s always a pleasure hearing or reading experts explain the complicated stuff to the layman.

    Amazed that these kind of shenanigans are legal. Not amazed the story was only acknowledged (a year late) in the Press, just shocked they finally printed it. To much sense and too many facts being aired on here is why. Must have been quite a fallout down Ibrox way though, to finally turn the cheerleader agin them.

    A day to be proud of for all you forensic detectives 🙂 Still no cracked crests in the DR, but we can’t have everything we wish for. To the Bears, it’s up to you now, at_least_do_something. To the Orcs; buy yer Hearts scarves cheap, I think Mad Vlad’s staying..

  12. Paranoid Timdroid says:

    Just a thought with regards to administration over receivership…

    Would the ticketus debt be sufficient with all other debts that it would outweigh HMRC’s debt, making a CVA a possibility? ticketus would be likely to accept something as opposed to nothing. Unlike HMRC they don’t want a high profile victim to scare other clubs into behaving.

  13. easyJambo says:

    Paranoid Timdroid says: 31/01/2012 at 11:06 am

    I’m not sure about the setup of the deal with Ticketus. It may be that the Ticketus debt lies with “Group” rather than the PLC.

  14. pjanduncan says:

    interesting piece here, just goes to show the recklessness of spending by rangers despite being in a financial crisis, kinda puts to bed the old Walter shoe string theory. Also quite impressed with the Edinburgh cubs activity, although Hibs could do with a trophy and Hearts were a bit over zealous in the wage department.

  15. Not The Huddle Malcontent says:

    Paranoid Timdroid says:
    31/01/2012 at 11:06 am
    Just a thought with regards to administration over receivership…

    Would the ticketus debt be sufficient with all other debts that it would outweigh HMRC’s debt, making a CVA a possibility? ticketus would be likely to accept something as opposed to nothing. Unlike HMRC they don’t want a high profile victim to scare other clubs into behaving.


    why would ticketus vote for a CVA?

    They hold the floating charge now (most likely) so why wouldn’t it be THEM that calls in the receiver to take the assets

    they would probably want the club to make it to close season, sell whoever can be sold, sell season tickets for the following season – prolonging administration

    worst case, they could take the fixed assets in lieu of cash.

    THEN an administrator could be called in to pick over the bones

  16. TheBlackKnight says:

    new thread up chaps!

  17. tilhotdogsbark says:

    Not The Huddle Malcontent says:

    31/01/2012 at 10:31 am

    Looks to me someone wants CW to take teh fall for killing RFC BEFORE the tax case hits

    In One.

    Would certainly be convenient if the tax case was put on the back burner. The Rangers Reincarnation Campaign (RRC) would be on a firmer foundation if it used Whyte’s mismanagement as the principal reason the club went under. Was a bit suspicious of their motives when they marketed the story as “bigger than the tax case”. The recent re-emergence of SDM, Smith and now ex Director Murray could not possibly be coordinated, could it?

  18. Casual Observer says:

    So, HMRC personnel read Rangers Tax Case. That’s what I’m figuring. Of course, they may have clocked the Security paperwork lodged at Companies House themselves, but why ruin a good story?

    Thanks to Paul Murray, we know HMRC are in possession of a number of documents that relate to the deal with Ticketus. These go back to March 2011, prior to the takeover being concluded.

    I expect Ticketus had an inspection lately! It’s the only place where original documents reside in one location. The Rangers plc and Wavetower Ltd originals will be filed at various locations around the country including Ibrox, Collyer Bristow, and Aldermary House. Only Ticketus have all of the documents in the one location: The executed contracts, the invoices, the remittances. The whole audit trail.

    Interestingly, HMRC also seem to have the statements from Collyer Bristow’s client account for Wavetower. This is out of the ordinary. Not only does HMRC have the account statement, they also showed it to Paul Murray for his comments. Paul was kind to share this information with The Daily Record, motivation unknown:

    “”Collyer Bristow were acting for Craig Whyte during the takeover and I have been shown their client account, from the opening of it until today.”

    So, it appears as though HMRC have obtained authority that supercedes the protection afforded under Legal Professional Privilege. I’ll leave examination of that issue to Paul McConville and Paulie Walnuts because it is so hugely significant that I could not hope to address it with any accuracy.

    I don’t normally use hyperbole in my posts, but from this perspective, there are very few things that would release a Law Firm from the obligations under Legal Professional Privilege, and they are all hugely significant.

    A wee VAT inspection is not one of them.

    CO, Casually Observing ;¬)

  19. JD says:

    The rag and bone man is off down Edmiston Drive wae the Big Gates.

  20. Tecumseh says:

    Ticketus is linked to Octopus, according to the Daily Ranger……

    Is this Octopus related to the famous (Goldman Sacks) Vampire Squid, that has wrapped it’s tentacles round the head of world finance and is sucking the life out through the Face of the Planet…????

    Ghastly…..and to think it probably gulped down the slabber coated flutes first……then the eye balls…..then the baws, sucked up through the erse…….and it’s just past breakfast time…..

  21. Rangers Nil? Who Missed the Penalty? says:

    easyJambo says:
    31/01/2012 at 9:58 am

    CW very carefully worded his promises in the June circular to shareholders:

    …… nor is it the intention of The Rangers FC Group to redeploy any of the FIXED assets of
    the Club

    The Rangers FC Group has stated its intention to invest, or PROCURE an investment of, £20
    million by 2016 for investment in the playing squad.

    The Rangers FC Group has undertaken to provide or PROCURE the provision of up to
    £5,000,000 of additional working capital facilities to the Club;

    It is clear that re PROCURED the funding from Ticketus by mortgaging the STs which could not be classed as FIXED assets. …………. and he didn’t need to use a penny of his own money.
    I was tempted to just use the often quoted Scooby Doo soundbite but that would have diluted the serious nature of my post.

    But for all the fantastic forensic work done by RTC and the many heavyweights on this blog HE WOULD HAVE GOTTEN AWAY WITH IT and it’s a disgrace that this FACT is unlikely ever to be acknowledged by any mainstream media outlet in Scotland.

  22. patrick says:

    From the bottom of my heart sir THANK YOU for what you started and along with many others. Far to many to mention kept chipping away till the dam burst.
    This would never have been achieved without yous so again just a simple THANK YOU.
    May your days be blessed RTC.

  23. Oor Wullie says:

    How can a company who is £100mill+ in debt before the big tax case is even considered, continue to trade?

    I understood that any company who cannot meet their debts would be considered insolvent, and could not carry on trading.

    Can any accountant fill in the picture?

  24. casper says:

    Craig whyte delays publication of rangers holding company accounts . !!!!!!!!!!!!!!!!!!!!!!!!!!!! looks a wee bit dodgy , all the pieces of the jigsaw are nearly there.

  25. casper says:


    Craigy boy has managed to LEGALLY delay publishing accounts of the holding company , buying himself 9months breathing space …..

    Wonder where hell be in 9 months?

    Rangers owner Craig Whyte has moved to delay publication of the first accounts of the holding company for his investment in the club (which was incorporated on September 2010) until April of this year.
    Craig Whyte delays publication of Rangers holding company accounts
    Going public: Craig Whyte wrote an open letter to Rangers fans on the club’s website yesterday Photo: ACTION IMAGES

    By Ewing Grahame and Roddy Forsyth

    10:30PM GMT 31 Jan 2012


    Intriguingly, Whyte has also shortened the accounts to include just the first six months of its existence.

    Documents lodged with Companies House state that it will only reveal the accounts until April 2011. Those accounts will now be published on April 16.

    Wavetower Limited, the original holding company, was renamed The Rangers FC Group Limited after buying control of the club from Sir David Murray for £1 the following month.

    It is not illegal to shorten accounts but the decision to do so means that Whyte has nine months’ grace to provide full disclosure of the company’s subsequent financial dealings.

    As a result, they do not now need to be made public until January 2013. Rangers will shortly discover the verdict in their court battle with Her Majesty’s Revenue & Customs, with the club potentially facing a £49 million bill if they lose.

  26. Paolo says:

    if CW delays publication of the accounts until January 2013, legally or not, surely he would need to make advance payment of taxes (based on HMRC predictions) and he would also effectively be preventing a subservient SFA/SPL from issuing RFC/Newco with a UEFA licence?

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