LONDON (AP) — Scottish champion Glasgow Rangers was forced to seek bankruptcy protection on Tuesday, triggering a 10-point deduction for the 140-year-old club and effectively handing the title to crosstown rival Celtic.
Rangers are now 14 points behind as a battle with the tax authorities over an estimated bill of up to 75 million pounds ($117 million) led to it becoming the most prominent European club so far to go into administration.
Rangers are not only the most successful club in Scottish soccer, but their 54 domestic titles are a world record.
"I would like to express my deep regret that a Scottish institution should find themselves in the kind of parlous state that has necessitated today's course of action," Scottish Football Association chief executive Stewart Regan said. "This is a profoundly sad chapter in the history of Scottish football and we should not underestimate the potential ramifications for the image of the game as a whole."
Entering financial administration — the British term for bankruptcy protection — is the last attempt to save the club from liquidation.
"We fully recognize the great history of this club and what it means to people throughout the world," administrator Paul Clark said. "Whilst today is a sad day for Rangers, it also addresses the terrible uncertainty that has been hanging over the club. The administration period, while difficult for all involved, will give stability to the club in order to move forward."
The takeover by Craig Whyte last May appeared to be Rangers' first step toward financial recovery. He pledged to pay off debts of 18 million pounds ($28.4 million) left over from the tenure of former majority shareholder David Murray.
However, Whyte has been unable to solve the club's financial problems and tax authorities are demanding the settling of unpaid taxes "over a period of several years dating back to 2001." Whyte said the tax authorities could demand 75 million pounds ($117 million).
"Due to its cost structure, the club has been loss-making for many months," Whyte said. "This situation has resulted in increasing liabilities and the club has been in discussion with (HM Revenue & Customs) regarding these liabilities.
"These liabilities combined with the threat of the outcome of the first tier tax tribunal left the club no option but to formally restructure its financial affairs ... it remains our firm belief that the club's future can be secured and we hope this period of administration will be as short as possible."
Rangers, formed in 1873, won the now-defunct European Cup Winners' Cup in 1972 and lost to Zenit St. Petersburg in the final of the UEFA Cup — the forerunner to the Europa League — in 2008. The team has also won 33 Scottish Cups and 27 Scottish League Cups.
"I can assure all Rangers supporters that all aspects of the administration will be carried out with the interests of the club firmly in mind," Clark said. "As a first step, the administration team will ensure that Saturday's match at Ibrox will proceed as planned and all other routine club business will continue."
But there is uncertainty about whether Saturday's match against Kilmarnock will even go ahead, with police demanding assurances they would be paid for securing the event.
"Strathclyde Police is a public body and has a duty to make sure public resources are used appropriately," the force said. "We are seeking an urgent meeting with the administrators to ensure that any payment for policing costs at future Rangers games is guaranteed.
"Until we have such a guarantee we would not be in a position to commit public resources to policing an event unless we had a reassurance that our costs would be met."
Rangers had been four points behind in the Scottish Premier League standings. The 10-point penalty will leave the club in second place with 51 points, still nine ahead of third-place Motherwell.
"I'm not too surprised but still shocked," former Rangers chairman Alastair Johnston said. "This was something that we knew was inevitable but the expediency of the situation is still shocking to everyone else involved."
Rob Harris can be reached at www.twitter.com/RobHarrisUK