The Financial effect of Rangers in 3rd div

Reported in the Scotsman today...in the coming SPL season clubs will receive only 10% percent of the prize money that they received in the 2011/2012 season. . And when you consider the other financial implications below such as SKY/ESPN re-negotiating the terms of the CURRENT deal, only 5 clubs becoming insolvent sounds optimistic !...

Dear oh dear...the turkeys have roasted themselves good and proper

They were well aware of the financial impact as St.Mirren Chairman Gilmore has conceded. But thankfully they put "shporting integrity" above their own survival


"....The ramifications of sending Rangers to the Third Division were spelled out to the SFL delegates shortly before they made their fateful decision, and those ramifications are severe with a potential loss of between £16-17 million in sponsorship and television income. Under the scenario outlined by the SPL, the prize money each SPL club will receive at the end of next season will be less than 10 per cent of that which they received at the end of last season.

So Celtic got £2,957,000 for being champions last season and would have got £2,141,000 had Rangers gone into the First Division – but next year they would receive just £287,000 were they to win the SPL. For smaller clubs at the bottom end of the SPL who are already struggling, the implications are potentially disastrous: the second-bottom team would have received £870,000 last season; with Rangers in the Third Division that figure goes down to just £84,000.

Several of the smaller SPL clubs are run on such a shoestring that Rangers’ demotion could well put them out of business. Dunfermline, for instance, were unable to pay their players in February when Rangers failed to pay them £80,000 owed from a cup fixture. Motherwell have already stated that they face going out of business following Rangers’ demotion. Nor are they alone: heavily-indebted Kilmarnock, Dundee United and Hearts can all scarcely afford any reduction in income, while even Celtic have started cutting their playing budget.

The nub of the issue is the SPL television rights deal with Sky and ESPN, which is worth £80m over five years from 2013. The deal includes a clause which insists that both Rangers and Celtic must play in the SPL. The deal is now expected to be renegotiated downwards, or even be scrapped altogether, although there have been calls for First Minister Alex Salmond to use his much-vaunted influence with Rupert Murdoch to apply pressure to ensure that the deal remains in place (see page 1, News). The Clydesdale Bank’s £10.5m sponsorship of the SPL ends next summer, and the likelihood of a procession for Celtic (who are 1-33 to win the SPL with bookmakers) will make it even more difficult to find a successor.

Nor is is just all about sponsorship and TV rights. The loss of Rangers to the SPL will cost the average SPL club just over 2 per cent of its turnover through the loss of ticket sales for home games to Rangers. While clubs such as Hearts and Aberdeen will be relatively well insulated, the clubs with smaller crowds will be hit hard. Had St Johnstone not played Rangers in 2010-11, its turnover would have been down by 5.18 per cent; for Dunfermline that figure was 4.02 per cent and for Inverness Caley Thistle the figure was 3.39 per cent.

It is not just the SPL clubs which face financial hardship. The SFL clubs currently benefit from a trickle-down sum of £2m a year, which was agreed when the SPL was formed. This, however, comes almost exclusively from the television rights deal and the SPL sponsorship deal, both of which are now in question. The SFL clubs will not countenance a reduction in that sum, yet SPL sources insist it will be stopped if the TV and sponsorship deals come to an abrupt halt. We could yet see an ugly legal spat over this one, with the financial survival of a whole raft of SFL clubs at stake..."