Rangers Newco

We refer to the above and take this opportunity to make a statement on behalf of the club. Firstly we appreciate that there have been numerous calls for us to produce such a statement specifically outlining our voting intentions with regard to Rangers Newco entering the SFL. We have been of the opinion that we did not wish to issue a statement when a) we had no actual proposal and therefore no decision to make, and b) more importantly, until we were in full receipt of all the facts. We are now in a more enlightened position.

Many clubs have made statements, some shorter than others. We believe that in this statement, we have set out clearly the options that are currently facing the game with regard to Rangers Newco and the impact this situation will have on the game.

As a Board of Directors, our first priority is the wellbeing of Stenhousemuir Football Club.  Therefore, in assessing the various options, we have evaluated each in the following order of priority, a) the impact on Stenhousemuir Football Club, b) the impact on the Scottish Football League (SFL)c) the impact on the overall game in Scotland including the impact on the Scottish Premier League (SPL). Our statement therefore is lengthy but we felt you would appreciate this level of detail given the complexities.

As you will be aware, the club was represented at a meeting on Tuesday 3^rd July at Hampden with our fellow SFL members. This meeting was called purely to provide members with a thorough account of the facts and presentations were delivered by David Longmuir (Chief Executive of the Scottish Football League), Neil Doncaster (Chief Executive of the Scottish Premier League) and Stewart Regan (Chief Executive of the Scottish FA). It was not a call to vote on any proposals despite media suggestions to the contrary.

David Longmuir presented us with the options from an SFL standpoint but the main factual presentation in terms of finance was delivered in detail by the SPL, information which was verified by the other associations. The financial information set out by the SPL summarized the impact on the SPL clubs firstly and the subsequent impact on the SFL clubs.

In essence there were two main options outlined in terms of their financial implications:

1. Rangers Newco playing in Division 3 of the SFL

The financial impact of this would be:

• Loss of Sky broadcasting payments of circa £10m/season
• Loss of ESPN broadcasting payments of circa £5m/season
• Loss of Sportfive broadcasting payments of £2.7m/season (overseas broadcasters)
• Loss of sponsorship of £1m/season
• Additional new broadcasting deal with income of £3m/season

The net loss of income therefore would total £15.7m/season. The above is on the basis that each of the contracts have termination clauses should either of the Old Firm not be involved in the SPL.

The financial effect on most SPL clubs would be a reduced income of around £1m/season. More importantly for us, the settlement agreement payment (the annual payment from the SPL to the SFL agreed when the SPL was established) of approximately £2m would not be paid.  The reason this would not be paid would be due to the reduced SPL income, the money to meet this obligation would no longer be there.

2.Rangers Newco playing in the second tier of Scottish Football.

(This would be either Division 1 of the SFL or a newly formed SPL 2)

The financial impact of this would be:

• Sky and ESPN have committed to retain their deals but include Rangers Newco content during the season
• Loss of Sportfive broadcasting payments of £2.7m/season (no requirement if no Old Firm games)
• Loss of sponsorship of £1m/season

The loss of income therefore would total £3.7m/season. The SPL confirmed that in this situation the settlement payment between the SPL and the SFL would be paid.

Should Rangers Newco be in Division 1 of the SFL, in order to satisfy Sky and ESPN, the SPL would make a payment to the SFL of £1m/season for the broadcasting rights for Rangers Newco matches for as long as Rangers Newco remain in Division 1. This therefore was not a payment for accepting Rangers Newco into the SFL division 1 but instead a straight business deal to purchase SFL broadcasting content.

Subsequently there was a lengthy discussion on the impact of these options and we take this opportunity to set these out together with the likely impact on our club.  Again, we have evaluated each option in the following priority, a)the impact on Stenhousemuir FC, b) the impact on the SFL, and c) the impact on the SPL and the game in general.

Rangers Newco in Division 3

The impact for Stenhousemuir FC of this option would be the loss of the SFL central payment aligned to the SPL settlement payment. That would total £50,000/season. This is a significant amount of money for the football club and we would have to find ways to cut our costs to cover this shortfall. Given that we have made commitments to playing staff for this season the playing budget cannot be reduced, therefore, the only option open to us to make significant savings would be in scrapping our youth system to release the pitch for hire to the general public, together with a reduction in staff who oversee our community programme.

Dependent on the success of hiring the pitch we would potentially reduce the playing budget in year 2. We are also unclear on the impact of the changes on East Stirlingshire FC which may affect their ability to meet the hire costs of Ochilview.

The impact for the Scottish Football League will vary from club to club and it is clear from the meeting that some clubs would be unable to accommodate this reduction in income and others would reduce their costs in a similar manner to us. Many clubs suggested their youth development element would be a most likely casualty. Some smaller clubs suggested this reduction would lead to their inability to meet their costs for the season with administration a possibility.

The impact on the SPL clubs is well documented with a number of them admitting they would move to administration very quickly as their debts to the banks in particular could not be serviced. Whilst this may be of lesser significance to our supporters, it is reasonable to assume that the standard of player in our game will reduce significantly, leading to further and future erosion of TV contracts and sponsorship. Again, youth development expenditure was seen as an area for cost savings.

Rangers Newco in Division 1

The impact for Stenhousemuir FC would potentially be financially positive given the additional media rights payment and the retained settlement agreement.

The impact for the Scottish Football League would potentially be positive from a financial position given the media rights payments. However, it is acknowledged that the implications of supporters not returning to the game due to the adverse reaction of this could have a financial and lasting impact.

The impact for the Scottish Premier League would be a reduction in their income of approximately 30%, a reduction which the SPL appear ready to accept and accommodate.

Rangers Newco in SPL2

This option is less clear and although it was not used as a threat, it is a genuine option for the SPL. A limited number of clubs would be invited from the SFL to join the SPL2 which would incorporate Rangers Newco. It was clear from the meeting and subsequent discussions that if the SFL clubs were faced with this option then a sufficient number of full time clubs could take up this invitation to form a viable SPL2 despite the many statements being made by clubs who would most likely be invited.

In this scenario the settlement payment from the SPL to the SFL would be reduced proportionately to the number of clubs who have left the SFL. On the surface therefore it may be assumed that there would be no reduced benefit to Stenhousemuir FC.  However, the reduced payment would be a serious reduction in income for the SFL and threaten its ability to cover its running costs. In addition, the SFL would be unable to organise and run the Scottish League Cup, further reducing the SFL income. It is unclear what the actual financial impact on the club would be but is expected to be at or greater than the impact of Rangers Newco in Division 3. Our need therefore to reduce our running costs as set out in the Division 3 scenario would be similar.  In football terms, if Stenhousemuir was not part of the new SPL2 which is almost certain, then the club would in effect drop down to playing in the third tier of Scottish football.

The impact on the Scottish Football League could potentially lead to its demise. It would be very difficult to retain the organisation as it stands and ultimately would lead to some new structure or league being agreed, potentially with the existing non-league organisations. Should this happen then the implications for Stenhousemuir FC would eventually to be part of another league structure.

The impact on the SPL would appear to be minimal other than agreeing a new payment regime with the SPL2 clubs.

The meeting was then addressed by Stewart Regan. He set out the SFA position very clearly. As the governing body they considered that the punishment forRangers Newco needed to be significant.  The punishment they are proposing of relegation from the SPL, a one year transfer embargo, a significant fine and the related EUFA 3 year ban from Europe was fair and just. This did not include any subsequent punishments which may or may not be raised re the dual contracts enquiry.

Due to the financial implications, the Scottish FA stated that they cannot allow Rangers Newco to be relegated to Division 3, given the likely ramifications for the game including a number of clubs either moving to administration and potentially subsequent liquidation as well as the impact on the playing standards etc which would emanate from reduced investment. Scottish Football would ‘wither on the vine’ and the Scottish FA could not, in their position, allow that to happen.

The SFA stance is that Rangers Newco moving to Division 1 is absolutely the only decision to be made but that it must come with a resultant list of structural changes in the league set up including:

• Merging the two league bodies (SPL and SFL) into one new league
• Newly structured governance to a more equitable approach
• Potential new payment distribution model
• Introduction of play-offs into the top division

This would lead to a better future for the game and potentially a stronger overall position from that previous to the start of this episode.

Should the SFL vote not to accept Rangers Newco into Division 1, the Scottish FA would expect the SPL 2 proposals to be tabled. Whilst this is not the preferred option of the Scottish FA it would be the most likely outcome. In this situation however the Scottish FA would allow Rangers Newco current appeal against sanctions to be heard by the appellate committee.

With the Scottish FA’s position fully laid out it was evident that some of the options which were under consideration would not be supported by them and in fact limited our ability to affect the final outcome.

In reality therefore the only decision open to us and the other clubs is to a) accept Rangers Newco into the SFL, or b) refuse Rangers Newco admittance to the SFL. If accepted then Rangers Newco would be in Division 1. If not accepted into Division 1, it is apparent that SPL 2 will be the outcome.

Our view

The Board members have therefore discussed the above options.  We have also taken into consideration the comments and views put forward by the Trust and our supporters.  These comments were very effectively asserted at the meeting, similar as they were to the majority of other clubs.

In deciding how to move forward and given the two straightforward options now available, the club does not feel any decision should be based on ‘punishing’ any other football clubs; that is neither our role nor our priority.  Instead, we believe we have a duty to move forward with whichever option we believe will be in the best interests of Stenhousemuir Football Club.  In this situation and having considered the consequences for the club primarily, but also that of the many other clubs who would suffer significantly, we will support Rangers Newco joining the SFL on the strict proviso that the various elements of restructuring and merging of the league are agreed to our satisfaction.  For the reasons stated above, we would anticipate that the Rangers Newco would be entering at Div 1.

We have met as a board formally on two occasions to discuss this in depth and there have been numerous other communications between Directors.  Be assured that the implications for the club represent an honest assessment of the scenarios and are not over dramatised or overstated.

 

We are a strong club with our own initiatives and identity which would be heavily impacted by any other outcome. However, the positives of this can be a stronger and more equitable league structure going forward and you have our assurance that we will apply every pressure to the authorities to achieve this outcome.

 

Bill Darroch

Chairman