Rangers’ 2012 collapse offers limited clues to Man City’s future

Manchester City’s unprecedented guilty verdict has prompted comparisons with Rangers’ collapse in 2012, although the Scottish case offers only limited guidance. Rangers were forced to rebuild after a financial crisis, while City have appealed their verdict and deny wrongdoing. The scale and nature of the two cases are fundamentally different.

Rangers’ insolvency followed major tax liabilities linked in part to Employee Benefit Trusts. Over roughly a decade, more than £47m was paid from the trusts to more than 80 employees, including players, managers and directors. HM Revenue and Customs argued the money should have been taxed as earnings, and the Supreme Court eventually ruled in its favour, five years after liquidation.

City have been found guilty of serious financial-rule breaches covering the 2009-10 to 2017-18 seasons. The Premier League said the club used sham commercial contracts to disguise more than £830m in funding. Rangers, by contrast, entered administration in February 2012, received a 10-point deduction and finished second, 20 points behind Celtic, before liquidation followed in June.

Rangers were not stripped of honours won during the EBT period. After liquidation, a new company led by Charles Green acquired Ibrox, the training ground, name and brand. A vote blocked the club’s return to the top flight, while 25 of 30 Scottish Football League clubs backed entry into the fourth tier. The absence of Rangers also raised concerns about broadcast income and the loss of Old Firm matches.

Ally McCoist remained manager and guided Rangers through the fourth and third tiers, before Mark Warburton led their return to the Premiership in 2015. Only one league title followed, under Steven Gerrard in 2020-21. City would face a far greater sporting and financial challenge if demoted: key players could leave, although their departures might generate transfer income.

ColdMath take

Rangers’ experience illustrates that a severe sanction can affect a club’s league status, finances and squad for years. Manchester City’s appeal means the eventual consequences remain uncertain, and the Scottish precedent cannot reliably predict the outcome.

A demotion would create major sporting disruption for City, especially if leading players leave. Unlike Rangers, however, Manchester City could potentially receive transfer fees for departing stars, depending on their contracts.