Tangled Up in Blue

by Stephen O'Donnell

  A redoubtable defender who won 77 caps for Scotland, McLeish was famously excused by Ferguson, along with his partner Miller, after a tame Aberdeen performance in the Scottish Cup Final against Rangers in 1983, which saw the Pittodrie men lift the trophy but only after Eric Black’s extra-time winner against John Greig’s struggling side. ‘We’re the luckiest team in the world. That was a disgraceful performance,’ Ferguson fumed about his players on live TV minutes after their victory. ‘Miller and McLeish won the cup for Aberdeen. Miller and McLeish played Rangers by themselves. I’m no caring, winning cups doesny matter. Our standards have been set long ago and I’m no gony accept that from any Aberdeen team. There’s no way we can take any glory from this,’ the grumpy manager moaned, ten days after his side had beaten Real Madrid and lifted the Cup Winners’ Cup as well.

  As a manager, McLeish had impressed in spells in charge of Motherwell, whom he led to a second-placed finish behind Walter Smith’s Rangers in 1995, and, latterly, Hibernian, after guiding the Easter Road side out of the First Division and back into the Premier League. But there was little McLeish could realistically do to stop the Celtic juggernaut by the time he took charge of Rangers in December 2001 as the championship was already seemingly destined for Parkhead.

  Following on from the Treble, won in Martin O’Neill’s first season in charge, Celtic improved their domestic form in 2001/02, running up an astonishing tally of 103 points in the league, leading the title race from start to finish, although by the end of the season the Rangers fightback was seemingly on. McLeish had an immediate effect on the Ibrox club’s morale and, after a 2-2 draw with Motherwell at Fir Park in his first game in charge, which left his team 16 points off the pace, Rangers won ten of their next 11 league matches under the new manager, until a 1-1 draw at Ibrox against Celtic in March stopped the rot in terms of the Parkhead men’s previous dominance of the fixture. This was underlined with another 1-1 draw between the sides at Celtic Park on 21 April, which punctured Celtic’s 100 per cent record at Parkhead in their final home game of the season.

  Admittedly Celtic, coasting towards the title and having won the first two meetings between the clubs, would probably have been content with two further draws in the league, but it was a different story in the cup competitions, as the sides met in the semi-final of the League Cup in early February. In an enthralling game, Rangers took the lead when Lovenkrands scored on the stroke of half-time, before Baldé scrambled an equaliser for Celtic in the second half. Almost immediately Rangers were awarded a penalty, which Arveladze struck against the crossbar, and with the tie heading into extra time there were further chances at both ends until Dutch defender Bert Konterman scored an absolute screamer, firing home an effort from distance that was still rising as it hit the back of the net, to send Rangers into the final and handing McLeish a victory in his first tussle with O’Neill.

  In addition, there would be a sixth meeting of the season between the teams, in the Scottish Cup Final, which again looked to be heading for extra time at 2-2 until Lovenkrands, who by now had scored five goals in five games against Celtic, popped up again in the final minute to seal that trophy for Rangers too. Still working largely with Advocaat’s players, McLeish had reinvigorated his squad and restored their fighting spirit, which despite the two cup wins, was perhaps most clearly illustrated by the award for Scottish PFA Player of the Year going to Lorenzo Amoruso, who had previously been a target for the boo-boys at Ibrox after a string of calamitous errors in high-profile games.

  McLeish had salvaged a decent campaign for Rangers, but over the close season, David Murray decided that he could no longer continue as chairman and stepped down from the role, telling the club website, ‘I feel a change of management style would be beneficial for the club, as the whole industry faces new challenges.’

  It was an effective admission that keeping a tight ship and running a business properly were not in his skillset, and Murray’s position had been further weakened by the Halifax/Bank of Scotland (HBOS) merger in June 2001, which saw the eventual retirement, on a £250,000 per annum pension, of the Bank of Scotland’s treasurer and managing director Gavin Masterton, a long-term Murray ally. Masterton, despite his bank’s refusal to lend Fergus McCann’s Celtic more than £2.5m, which prompted the Canadian to immediately take his business elsewhere, had nevertheless squandered an estimated £200m in bad loans to Scottish football clubs during his time at the bank, most of it to Murray’s Rangers, but also to his local team, Dunfermline Athletic, where he had been a director since 1990. Murray was replaced in July by his deputy, John McClelland, although the former chairman remained the largest shareholder and owner of the club, retaining the ill-defined title of honorary chairman.

  As the media geared up to offer their departing eulogies, there was one man, former Ibrox director Hugh Adam, who had already delivered an ominous rebuke to the chairman, after selling his 59,000 shares in the Ibrox club, on the grounds that they would soon be worthless. Adam, who had operated the Rangers Pools since the early 1970s, raised an estimated £18m from the venture, which was popular even with Celtic fans, money which was put towards the reconstruction of Ibrox Park following the disaster of 1971. He was appointed a director at the start of the Souness era as part of the restructuring of the club which was taking place at the time, but his relationship with Murray, after the industrialist acquired Rangers in 1988, was fractious and twice he stepped down from the board only to be reappointed.

  In an article which was published in The Scotsman in February 2002, Adam criticised Murray’s chairmanship of the club, and, in one of the first open references to the possibility of an insolvency event at Ibrox, he suggested, ‘That’s the logical conclusion to a strategy that incurs serious loss year on year… The banks are well known for being a bit more tolerant of companies whose core business is a popular pursuit like football. But there is a limit to how far back they can bend to accommodate you.’

  Speculating that he was unlikely to be the only stakeholder who was unhappy at the depleted value of Rangers’ share price, with ENIC’s £40m investment in 1997 now worth roughly £15m and falling, and the money itself having long since been squandered, Adam also contrasted the competent way in which rivals Celtic were being run, alleging, ‘Rangers, with Murray, is a one-party state and the man in power has an allergy to any form of personal criticism. But he’s not a businessman in the long-term sense of planning and prudence, he’s more of an impresario.’

  With Rangers now under new leadership, McLeish splashed out £4m in the summer of 2002 to bring Spanish midfielder Mikel Arteta to Ibrox from Barcelona, although the club’s only other acquisition was Australian hard man Kevin Muscat, who arrived from Wolverhampton Wanderers. After a solid start in the Ibrox dugout the previous year, McLeish’s first full term in charge would turn out to be Rangers’ best domestic season since Advocaat’s first year in Glasgow, with the Ibrox club eventually completing a clean sweep of the three available trophies, although it was a contrasting story in Europe, as Rangers suffered an away goals defeat to the uncelebrated Prague side Viktoria Žižkov in the first round of the UEFA Cup. The loss left McLeish with a record of two European defeats out of two, after Rangers had crashed out of the previous season’s UEFA Cup in February following a fourth-round defeat to eventual champions Feyenoord.

  Domestically, the first Old Firm game of the season was at Celtic Park in October and a thrilling match ended 3-3, with both sides at one time holding the advantage but being unable to shake off the other. The next encounter between the sides in December saw Celtic take the lead at Ibrox after just 19 seconds, the fastest recorded goal in the fixture, but Rangers came storming back to lead 3-1 by the interval with goals from Moore, de Boer and Mols, before the game finished 3-2 to the home side, a result which sent Rangers to the top of the league.

  ‘It’s very tight between the two of us,’ McLeish admitted afterwards and with both sides dropping very few points against their other opponents, the season came to a h
ead in March; Celtic beat Rangers in the league, Hartson’s winner inflicting a first defeat in the fixture on McLeish at the seventh attempt, but the following week Rangers made amends, beating their old rivals 2-1 in the League Cup Final at Hampden after Hartson missed a last-minute penalty. Then, with Celtic continuing their run in Europe all the way to the UEFA Cup Final in Seville, Martin O’Neill’s team took their eye off the ball in the Scottish Cup, with the Parkhead manager fielding a weakened side against First Division Inverness Caledonian Thistle and losing. Celtic’s previous four fixtures had seen them play Rangers twice and Liverpool twice, so the resting of players was understandable, but the defeat left the Ibrox men as overwhelming favourites to collect the Treble.

  The race for the title came down to the last day of the season; at one stage Rangers had been eight points clear but Celtic’s win in March was followed by another victory at Ibrox in late April in a match which had been scheduled, following the announcement of the post-split fixtures, three days after the second leg of their UEFA Cup semi-final against Boavista, much to O’Neill’s chagrin. When Rangers then dropped points in their next match, drawing 2-2 against Dundee in a game in which they were awarded three penalties, two of which were missed by Ferguson, the two rivals found themselves level on points. Even goal difference could not separate the sides going into the final fixture, although Rangers held the advantage by virtue of their greater number of goals scored. The season therefore came down to a final day shoot-out between the pair; Celtic, four days after losing a gruelling UEFA Cup Final 3-2 after extra time to Jose Mourinho’s Porto, beat Kilmarnock 4-0 at Rugby Park, but that result was bettered by the 6-1 scoreline inflicted on Dunfermline at Ibrox, with a last-minute penalty from Arteta securing the title for Rangers.

  After the defeat, Celtic striker Chris Sutton accused Dunfermline of ‘lying down’ in the game, claiming that the East End Park side, managed by the Rangers-affiliated duo of Jimmy Calderwood and Jimmy Nichol and with Gavin Masterton installed in the boardroom as the Fife club’s majority shareholder, had not given their all in the Ibrox fixture. It later emerged that Calderwood believed he was being groomed for the Ibrox manager’s job after being tempted back from Holland to Dunfermline on the back of a promise, ultimately never fulfilled, from David Murray. Regardless of the circumstantial evidence, however, Sutton’s comments were without foundation and he later apologised. The following week, a tired-looking Rangers fell over the line to secure the Treble with a 1-0 victory over Dundee in the Scottish Cup Final, Amoruso marking his last game for the club by scoring with his head from a set piece.

  Regardless of the on-field success, Rangers lost a staggering £30m in 2003, with debts at the spendthrift Ibrox institution rising to a mammoth £68m by the end of the financial year, despite the hidden benefits of the EBT scheme and the desperate efforts of chairman John McClelland to try and reduce the club’s overheads. The message being put out by McClelland at the time was that there was no danger of an insolvency event at Ibrox due to the value of the club’s assets, chiefly the playing squad, the stadium and the training ground at Auchenhowie, the combined worth equating to more than the net debt figure. The problem with the chairman’s theory, however, was that it depended on Rangers’ own preferred valuation of the tangible assets, with the stadium and training ground, by a neat accountancy trick, revalued in 2003 at £130m, up from £93m, and crucially, McClelland’s calculations failed to factor in the ticking time-bomb of the EBT scheme and the huge potential tax bill that was being stored up which, if it crystallised and HMRC could make it stick, would call the chairman’s safe assumptions into question.

  After the highs of 2003, by the end of which Alex McLeish had secured all five of the domestic competitions realistically available to him, came the lows of 2004, when the Ibrox club finished the season without a trophy, in the process losing five times to Celtic with the Parkhead side, after an opening day draw with Dunfermline, reasserting their pre-eminence of the domestic game with a run of 25 consecutive league victories. It was a season in which Rangers, in reduced circumstances, were casting around desperately for players, after seeing such luminaries as Amoruso, Flo and McCann all leave. Numan also departed, the Dutchman choosing to retire rather than accept a new contract and suffer the indignity of playing for Rangers on reduced terms, as did Barry Ferguson, who decided that he fancied a crack at the English Premier League and joined Amoruso at Blackburn.

  Ferguson would return with his tail between his legs 18 months later, but in the meantime the club, in the hope that they might find value for money in among the journeymen available in the Bosman market, had been experimenting with a whole troop of players, some of whose names even the most enthusiastic Rangers fans will struggle to remember, such was the minuscule significance of their contribution to the club. Following on from Norwegian international Dan Eggen (no league appearances, no goals for the club) and Frenchman Jérôme Bonnissel (three games, no goals) who arrived in January 2003, Rangers signed a whole host of lesser lights over the next year or so, including such instantly forgotten names as Federico Nieto (3/1), Bajram Fetai (1/0) and Dragan Mladenović (7/0), who cost £1.1m from Red Star Belgrade but failed to settle at the club. On it went; José-Karl Pierre-FanFan (7/1), Derek Carcary (0/0), Moses Ashikodi (1/0), Bojan Djordjic (5/0), Filippo Maniero (0/0), Dany N’Guessan (0/0) and Marc Kalenga (0/0).

  It all seemed a far cry from the days when Rangers were signing players who were meant to win them the Champions League, although other arrivals were quite high-profile, such as Nuno Capucho (22/5), who cost £650,000 from Porto where he had won the UEFA Cup in 2003, Egil Ostenstadt (11/0), Henning Berg (20/0) and the Brazilian Emerson (14/0). Frank de Boer (15/2) even turned up at the end of the winter transfer window in early 2004, although poor Frank was on less than £5,000 per week, whereas his twin brother Ronald was still benefitting to the weekly tune of £35,000 from his pre-austerity era contract, but even the combination of the talented Dutch duo couldn’t prevent Rangers, who had also ended the European campaign by finishing last in their Champions League group, from completing the season without a domestic trophy.

  Results on the park were disappointing for everyone associated with Rangers in 2004 but, far more seriously, as the new season was set to get under way in earnest, the Ibrox institution faced its most grave financial crisis to date, as the burden of the club’s continuing losses became too much for the company to bear. Rangers’ spending in the transfer market had dropped from a sum in excess of £30m in 2000/01 to less than £11m in 2001/02, and the figure fell further, to roughly £6m in 2002/03, before bottoming out at under £1m in 2003/04, a year in which almost £10m was recouped from player sales. The club had also been transformed over the same period from one of the most prodigal spenders on players’ salaries in Britain to a team hunting bargains at the basement end of the market, but these measures proved to be too little too late.

  Behind the scenes, the chairman, the owner and the board of directors had utterly failed to grasp the urgency of the situation and, even while the club was suffering colossal losses year after year, the priority had always remained to keep a winning team on the park and to try not to lose face, rather than get to grips with the crippling debt, which stubbornly refused to come down, peaking at £73.9m in 2004. The financial predicament at Ibrox worsened further when, at the start of the new season, McLeish’s side failed to qualify for the group stages of the Champions League, losing 3-2 on aggregate to CSKA Moscow, a result which cost Rangers an estimated £8m in prize money, gate receipts and television revenue.

  It was at this point that owner David Murray made clear his intention to return to frontline business with the club, resuming the chairmanship of the Ibrox institution with immediate effect from 1 September. ‘We do not like being second best, but we got it wrong,’ the once and future chairman admitted, although he had previously tried to get at least one journalist sacked for trying to tell him as much. ‘We obviously spent far too much money. We can’t let
it happen again because that would be total mismanagement,’ he added.

  Murray’s reappearance was accompanied by the announcement of a £57m rights issue, which MIH, through a subsidiary company called Murray MHL, would underwrite to the tune of £50m, money which was intended to be used solely for the purpose of addressing the club’s mountainous debt, with Murray confidently predicting that the business would be back in the black within a year. The rights issue, which invited existing shareholders to purchase new shares, valued at £1, on a one for one basis, as well as being open to fresh investment, faced an initial obstacle in the form of Murray’s forgotten partners ENIC, who were unwilling to allow the dwindling value of their stock to be depleted further and who certainly weren’t going to take up the offer to buy any more shares. Murray therefore had to first acquire their 20 per cent stake in the company, paying £8.7m for the shares which cost £40m in 1997, increasing his personal holding to over 90 per cent of the business.

  In the end, £51.4m was raised from the rights issue, well short of the £57m target, and with £50.3m coming from the underwriters, MIH, the uptake from new and existing shareholders amounted to little more than £1m, a disappointing outcome. Nevertheless, the rights issue had addressed the immediate problem of the unsustainable level of debt and the club’s effective insolvency, although with the uptake so low, Murray was merely moving vast amounts of debt around his group of companies, borrowing money with one hand and paying off Rangers’ liabilities with the other. But with MIH showing a healthier overall balance sheet than its sporting subsidiary, despite its own debt burden increasing to £500m from £164m over the course of the next year, the bank held greater security over its claim now that the debt was off Rangers’ books and transferred to the parent company.