The sale of financially-struggling Rangers is being expedited by administrators to circumvent implementing “very severe” cost-reduction measures.
Duff & Phelps initially anticipated that discussions with players, their agents, manager Ally McCoist, and PFA Scotland would lead to wage reductions, as the club requires a savings of $6 million this season.
Following the halt in talks earlier this week, administrators are now set to engage with potential buyers aimed at securing new investment for Ibrox.
It has come to light that without ‘adequate’ cost-cutting measures or significant unforeseen income, fulfilling the season’s fixtures will be impossible for the club.
“On Wednesday, we will announce that we are accelerating the sale of Rangers football club,” said David Whitehouse, one of the joint administrators, on the club’s official website.
“The financial condition of the club is critical and should not be taken lightly.
“Unfortunately, we have not been successful in reaching an agreement with the playing staff regarding cost-cutting measures that would maintain the business’s value. We recognize the players’ standpoint since the extent of the required wage cuts to secure these savings without layoffs is indeed considerable.
“Consequently, we are confronted with the prospect of instituting redundancies within the playing staff to a degree that could significantly diminish the value of the squad. Our aim is to find a balance where cost-cutting measures can be executed without undermining the integrity of the playing squad to the point that it hampers the potential for a sale.
“Nevertheless, it must be clearly understood that if sufficient cost-cutting measures or major unplanned income do not materialize, the club will not be able to fulfill its fixtures for the remainder of the season.”
In the meantime, Rangers will have little to no chance of fulfilling UEFA’s licensing criteria before the deadline of March 31 set by the European football governing body.
On February 14, administrators were appointed to the club after British tax authorities sought a court order for the payment of an outstanding bill of £9 million ($A13.5 million) accrued since Craig Whyte took control at Ibrox in May.
Additionally, Rangers are waiting for the outcome of a tax tribunal that could impose a liability of up to £75 million ($A112m), according to Whyte.
The club, with a history of 140 years, was penalized with a 10-point deduction for entering administration, a sanction that effectively awarded the SPL title to their Glasgow rivals, Celtic.
Administration is the process through which a distressed company seeks independent expert financial assistance in order to continue operating.
by Buford Balony
