The position of the Scottish football authorities on Rangers FC's status has been clear for years now. The SPFL's CEO clarifying, "absolutely", that Rangers FC is the "same club" was not news.
However, the stooshie his public clarification caused is no surprise, given the refusal of many to accept that status - evidentally including Rev. Stuart Campbell, of "Wings over Scotland" notoriety . I'm active on twitter (@bryce9a), but I think the inaccuracy of this article and the position it represents warrants a longer piece to put a few myths to rest.
Two sections to this response:
- A. Inaccuracies of this piece & its representation of the authorities/Lord Nimmo Smith's position
- B. Reasons proving a football club (eg Rangers FC) is in fact distinct from its legal entity/company (OldCo, NewCo, etc)
A1. Quoting from dubious sources.
Wings quote from BBC articles from the time that employed phrases like "new Rangers", "old Rangers", "new club" etc that clearly imply the 'new company = a new club' position. However, the BBC Trust's Editorial Standards Committee, the organisation's top-tier standards body, upheld complaints against this use of language by BBC Scotland, concluding: "where the BBC had made the distinction between an “old” and “new” Rangers in output referring to football & the club as opposed to the “old” and “new” company, the BBC had not used clear, precise language and due accuracy had not been achieved such that the Guidelines on Accuracy had been breached". http://downloads.bbc.co.uk/bbctrust/assets/files/pdf/appeals/esc_bulletins/2013/apr_may.pdf
A2. Misrepresentation - Wings: "...if the demise of the company didn’t affect the club..."
No-one on the 'same club' side claims this is the case, and would in fact argue the exact opposite. However this absurd inaccurate premise is used to justify subsequent assertions regarding consequences that are unexplained if the distinction between club and company is maintained. However the questions are moot, because the initial premise is simply untrue.
A3. More misrepresentation - Wings: "Old Rangers and New Rangers – the football clubs, not the companies – CANNOT be the same, because both existed at once and one voted on the fate of the other."
No-one is claiming there are two football clubs, which are the same football club - that would be utterly absurd. The claim he is seeking to oppose is there was one football club, the ownership of which transferred between two companies. Merely asserting that there were two football clubs as a premise can never justify a claim that there were two football clubs, as it's circular, fallacious reasoning.
A4. Errors regarding Player contracts - Wings: "...why were its players allowed to walk away from their contracts?"
Wings seems to insist that if the ownership of the football club transferred between two companies, then players would have been unable to leave the club mid-contract. This reveals a fundamental misunderstanding of TUPE, where the Law protects employees rights when a business changes legal entity. Those regulations actually permit employees from declining to transfer their contracts from one legal entity (company) to another, in effect resigning. It is perfectly in accordance with the 'same club, different company' position that players would be permitted to walk, as the Law regulating such transfers of a business - like a football club - between companies allows them to do so.
A5. Mispresentation of Lord Nimmo Smith - Wings: "...then [the club] became a limited company in 1899 (note “became”, not “was purchased by”)"
Here's the first (it won't be the last) occasion where Wings quotes Lord NS, then misrepresents what he says. Wings asserts, himself, that the club "became" a company, & therefore is not distinct. However Lord NS didn't state that, he merely says the football club incorporated, "...as The Rangers Football Club Ltd".
A6. BLATANT Misrepresentation of Lord Nimmo Smith - Wings: "...Nimmo Smith says the club IS the company."
This is an astounding mistruth. His Lordship bases his entire judgement - spread across two separate documents released months apart, in September 2012 & March 2013 (the former Wings didn't even realise existed) - from explaining jurisdiction, to outlining his punishment, on the basis the Club is distinct from the company. Consider the following quotes (a selection, there are others) from Lord Nimmo Smith:
- "...directors of Oldco as a company, as distinct from the football management or players of Rangers FC as a club"
- "... the financial penalty lies only upon Oldco and does not affect. Rangers FC as a football club under its new ownership"
- "...capable of affecting Rangers FC as a continuing entity now owned and operated by Newco"
- "...Rangers FC remains liable to the imposition of sanctions for breaches of the Rules committed while it was owned and operated by Oldco, even though it is now owned & operated by Newco".
All four of those make clear that the club, Rangers FC, is distinct from the company ("OldCo", "NewCo"). No need to spin, no need for weasel words, it's clear - unambiguous - that Wings wildly misrepresents Lord Nimmo Smith in making the above claim.
A7. And a bit more misrepresentation of Lord Nimmo Smith - Wings: "The Commission stated unambiguously that the “club” has no separate legal status [LNS actually uses the term "legal personality"] to the “company” – the polar opposite of what Doncaster told Chris McLaughlin it said."
This is another straw-man argument. No-one claims the Club is a separate legal entity to the company that owns it. Stating it has no separate legal personality is not equivalent to arguing there is no distinction *in any respect*, evidently so considering his Lordship's entire judgement rests on such a distinction, as proven above.
B1. The Rules.
Football is a sport that many have vastly varying opinions on: from offsides, to penalty decisions, to punishments of players and clubs who misbehave. That's why we have Authorities governing our game by enforcing a Rulebook. Clearly then, what the Rules say regarding the distinction, or not, between a Club and a Company is important, and ultimately decisive. In Scotland the presiding bodies over the professional clubs are the SFA and the SPL(then)/SPFL(now). So it is their rules that are relevant to Rangers FC.
The SFA don't elaborate on the distinction, or not, between a football club and a company. The league bodies are more explicit. The SPL Articles then, and the SPFL Articles now, define a Club as "the undertaking of an association football club". The "body corporate" (Company) is defined as the Member which holds the share in the SPL/SPFL Limited Company, and "owns and operates" the Club. These definitions are not, and do not seek to be, exhaustive. But they have use in, at least, determining clearly that Club and Company - as defined in the Articles - are distinct, as one owns and operates the other - they cannot be the same entity! What is more, as Lord Nimmo Smith notes above, something that is owned/operated by a company can be transferred to another company to own/operate.
B2. The Law.
Given that its been established above that the Rules define the Club as an "undertaking" owned/operated by a company, the Law regarding the TUPE-relevant transfer of employees, which occurred between the two companies in 2012, entails the Club - as defined in the Rules - transferred and continued.
The Law describes how TUPE regulations only apply (as they did in 2012) in the case of a "Relevant Transfer", specifically
- "a transfer of an undertaking, business or part of an undertaking or business...where there is a transfer of an economic entity which retains its identity".
The "economic entity" is clarified to mean:
- "organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary."
Therefore, the fact TUPE applied to the Rangers sale (a fact attributable to literally 100s of reference to the event, and more particularly the controversy when some players utilised TUPE regulations to escape their contracts) determines that, in respect of this aspect of Law, an "undertaking", specifically an economic entiy that "retained its identity", transferred to NewCo. Taken together with the definition of Club employed in the Rules above, along with the fact the intellectual property/branding/identity assets were included in the sale, this indicates that entity did indeed comprise the transaction between the two companies.
B3. Incorporation.
The majority of professional football clubs have incorporated (some havent, eg Stranraer). Legally, incorporation is essentially the formation by an individual(s) of a registered company, which is recognised as a legal entity in it's own right, and therefore takes on the liabilities previously shared by individuals. In respect of football, the process involves the transfer of the assets, liabilities and undertaking previously owned and operated by the unincorporated, committee-lead constituted body - which is subsuquently wound up.
One thing about incorporation that is universally accepted is that an entity we call the "football club", which existed prior to incorporation, continues to exist after the process (Celtic FC's formation year is 1887/8, not 1897 when it's legal entity/company was formed). Considering that the former (unincorporated) constitued body is killed off during the process, and a new (incorporated) constitued entity is formed, clearly the "football club" - however one chooses to define it - cannot be synonymous/equivalent to either of those two constitued bodies, the unincorporated one, or the company that followed.
B4. Evidence of other NewCo-ing football clubs
The twitter account @NewcoFCs lists numerous examples of established football clubs (Leeds, Wolves, Bradford City, Portsmouth, Crystal Palace, Hull City, Hearts), universally accepted - by fans and football authorities - to have existed for decades, that have gone through the process of incorporating/forming a company, that company being liquidated/dissolved, and the football club continuing despite a new company taking over. The evidence is from Companies House websites, and is undeniable. An OldCo, with its formation date, the link to that companies status being "dissolved" or "liquidated", and then a link to the NewCo, and it's formation date.
Clearly, if club/company were synonymous, those established long-running football clubs (including interestingly Notts County, accepted as the oldest League Club in the world) could not survive those NewCo-ing events. The evidence proves overwhelming to the contrary, a football club is an entity distinct from the company that owns/operates it, and can transfer to a new company.
Any questions, let me know. Signed off, @bryce9a.
1 comment:
Fantastic.
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