The potential scenario of a Scottish Premier League club going out of business, becoming an ex-club, has played out in several places since we discussed it last month. As a result, we have all had an opportunity to establish our views on the matter, what would and would not be an acceptable reaction by the league and SFA.
The first ‘insolvency event’ of a failing club is likely to be the appointment of an administrator to protect the company from immediate creditors. This would draw a 10 point penalty. The choice of the administrator for a football club could be a controversial subject, especially if some creditors stand to lose a considerable amount of money through any rushed deal. For example, although Rangers have a considerable potential liability to HMRC hanging over them, their creditors might feel that a period of administration stretching several years into the future would enable all debts to be paid in full, a position not all administrators would necessarily agree with.
It’s normal for directors to appoint an administrator prior to a creditor getting to court but if creditors don’t feel the appointment is likely to serve their best interests they can apply to appoint their own. These battles can get acrimonious.
In the days after an administrator is appointed the club may not be in a position to fulfil its fixtures. When Gretna’s administrator informed the Scottish Football League they could not guarantee they would be able to fulfil the following season’s fixtures the league relegated them two divisions, to the bottom rung of the league structure. This proved to be a temporary position before the administrator admitted defeat and folded the company. Precedent suggests we should look out for a double relegation if a club in administration has to tell the league they cannot fulfil fixtures.
There is no point waiting until a well-organised administrator presents a fait accompli to the league before we look for precedents and debate an appropriate response. For the integrity of the Scottish game, football fans need to be ready for this debate. Where possibly, colours should be pinned to the mast.
One outcome of the online debate in the last couple of days (thanks to untiring work of our friend Phil) is that Celtic were forced to consider this question. I sought and received assurances that they will not vote to admonish owners of an ex-football club with a paltry point penalty, allowing them to reform as though nothing happened the following season.
The question is still-hypothetical, so clubs are not in a position to comment officially yet, but we are in a healthier position for the debate and should encourage high profile supporters of other clubs to engage the debate as some from our own club have recently.
Fans Against Criminalisation are holding a pubic meeting on Saturday, 12 November, at Whitehill Secondary School, 280 Onslow Drive, Denniston, with Michael McMahon, MSP, among others, speaking. Try to make it along to support this important initiative before you are criminalised by a combination of stealth and apathy.
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2010 Never Again
Cheers guys for the replies.
So in essence Dermot gets around a 6% return on his investment in Celtic per annum. Would that be correct?
cardiffbhoy says:
10 November, 2011 at 15:14
we agree on something! just below 40%, when it hits 40% he’d be obliged to make on offer for the remainder of the shares
i also agree with you on his attendance record at the agm.
Big Nan,
good shout, lumping everything together allows them to address only the points they want to, I expect there will be guidelines in their conduct and complaint procedures which are being ignored here.
Keep up the good fight.
Hail Hail
Sorry ,Ex Ludo.
That was a wee bit insensitive.
Imatim and so is Neil Lennon says:
When this issue was raised at an agm a few years ago, in explaining that there was little chance of certain shareholders ever getting a dividend; Brian Quinn claimed that Celtic had contractual obligations to pay other shareholders a dividend. What he avoided saying was whether or not these particular shareholders had contractual obligations to take the above dividends.
WHAT!
So Celtic owe me
(11000/8000000)*307,878*10 ~ $4,200 !!!!!
I am writing a letter right now…..
B&^%&^ds!!….just kiddin
It was an emotional investment like Imatim in Celtic unlike the Donut.
Imatim and so is Neil Lennon at 15:31
In it’s simplest form, a preference share differs from an ordinary share in so far that those shares don’t give the holder any rights in the running of the company by way of a vote at a general meeting (not really applicable in this case as DD owns so many ordinary shares) and in return for this, the shareholder has a guaranteed dividend each year (assuming the company makes a profit and gives a dividend).
In a regular company preference shares are usualluy held by more risk adverse investors as they don’t really care what goes on in the company but are happy to know they get a guaranteed dividend each year. An ordinary shareholde is not guaranteed a dividend but if they do get one, this isn’t capped so in a year of really high profits and ordinary shareholder can get more of a dividend than a preference shareholder.
Mort
pounds not dollars
If the huns get papped out of the SPL, how are the numbers brought back up to 12.
Does the bottom club not get relegated at the end of the season?
“Scotland Coach Kenny Black……….” says it all really….
PHILVIS.. now that you have won the ole podium chase so often..do you get to keep it?..if so will there be a ceremony? or just a simple laying on of hands from Paul 67 ?..I think we should be told.
and another thing your acceptance speeches are may I say rather on the short side,I think we would prefer something more emotional from now like joinin the burst oot greetin club or list of thanks just as ole Scarlett would do if she won the podium! Which reminds me hope she has finished her business on Rannoch Moor as Ive to go to Fort William again tomorrow. thumbs up!
Ernie
that would be the natural conclusion, although it clearly also provides a neat opportunity to go to a 10 team top league if no one much fancies a trip to Dingwall.
Imatim at 15:36
So in essence Dermot gets around a 6% return on his investment in Celtic per annum. Would that be correct?
Not at all. Only 6% on those 5,131,300 Convertible Cumulative Preference Shares. He makes nothing on his other 42,772,073 shares.
Mort
Look at yourselves. Some of you teenagers, students. How do you think I feel and I belong to a generation ahead of you – how do you think I feel to have to tell you, ‘We, my generation, sat around like a knot on a wall while the whole world was fighting for its human rights – and you’ve got to be born into a society where you still have that same fight.’ What did we do, who preceded you ? I’ll tell you what we did. Nothing. And don’t you make the same mistake we made….”
Hail Hail
2010 Never Again
So if Dermot Desmond and certain others get an annual 6% return from their shares where is the risk to their initial outlay as opposed to the rest of us?
Mort says:
10 November, 2011 at 15:44
Imatim at 15:36
So in essence Dermot gets around a 6% return on his investment in Celtic per annum. Would that be correct?
Not at all. Only 6% on those 5,131,300 Convertible Cumulative Preference Shares. He makes nothing on his other 42,772,073 shares.
Mort
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2010 Never Again
Sorry I didn’t see this before my last post
Last years former dutch player of the year Ruud Vormer (Roda Jc) will join Celtic in the next transfer window.
The 22 year old central midfield player is a great player to get the pressure
off the defence.
Another midfielder. Reported in the Dutch press.
LB
voguepunter says:
10 November, 2011 at 15:34
Ex Ludo says:
10 November, 2011 at 15:13
Where’s “Treme” showing (Steve Earle fan here)
I told you this last week,don’t bother watching,Steve has been shot.
Is this true? If so please be refraining from the spoilers mkay? Thanks (thumbs up)
celtic40me @ 15:37
we agree !!! i’ve just picked myself up off the floor …………
Be interesting to know what other large shareholders such as Chris Traynor and the Keane family think of our current policies. These people may be key to persuading DD to raise his game.
The share price can go down as well as up.
Affects DD like the rest of us.
The Battered Bunnet says:
10 November, 2011 at 15:42
Presumably then all the clubs in the relegation zone will have reason to oppose newco huns being allowed to remain in the SPL.
LiviBhoy says:
10 November, 2011 at 15:49
Brown will be on his way since he hasn’t signed new contract, wouldn’t be surprised to see one of our sellable assets (possibly Ki) also on their way.
Imatim and so is Neil Lennon
DD doesn’t get a return on his ordinary shares, just the same as any ordinary shareholder.
These type of shares (that pay a dividend) I look at them as a bond, when these shares where issued part of the deal was, they would pay out a return between 3-6% (I’m sure the PLC pays out 4% each year on them even the years we make the CL).
Over the last few years the PLC has paid out in dividend of about 500k per year.
Rocket Man says:
10 November, 2011 at 15:49
ooooooooooooops :O(
BSR
I thought they both looked identical.
Which begs the question: how did ole Lembit tell the difference?
Which begs the question: did ole Lembit tell the difference?
Oo-er…
Imatim at 15:49
There are over 16m of these type of shares in existence that guarantees the investor a dividend (but only in years the club makes a profit). All companies will have a mixture of types of share available to attract as wide a range of investors as possible.
Sure there will be some who are only in it for the dividend they receive but others, like the vast majority of us only want to own a piece of the club.
Mort
Would there likely be any reason why RFC couldn’t complete their fixtures?
for example, they couldn’t pay their players who then left, wouldn’t the huns just pay reserves instead at 200 quid a week or something like that to keep the club name intact
If Admin can last a few seasons, could the huns feasibly
Take an initial 10 point hit
Still win 4 in a row
Even continue to win subsequent league titles
Pay the tax man at 10 million quid a year for 5 years etc
Sell some shares to the general hun public
As long as they come to an agreement with the creditors/tax man which may involve the creditors/ taxman not receiving payment in full
For example if the owe the taxman 50 million quid and the also owe creditors another 18 million quid – are the folks likely to settle for say 10 million between them?
Im trying to gauge if they have a “get out plan” at all, such as sell ipox and sell half the players and then rent hampden in the future to raise some cash, and still officially not need to fold the club and change their name etc.
They / them owed 80 million quid (excluding their current tax bill) a number of years back but actually managed to reduce some of that 80 million while still winning 3 in a row at the same time.
Notably the mint took a 50 million quid hit for the bulk of that, and the CL money that we donated to them helped contribute as well
Ernie
Yip, which is why having Hibs, Dundee Utd and Aberdeen down there makes things a tad more interesting. Dunfermline and ICT know how to cut it in the SFL. The others? Petrified. Perhaps even Rod Petriefied…
I’d hazard a guess that a season following relegation would be more damaging to Hibs and Aberdeen than 3 seasons without Rangers’ travelling support. Remember also that if Rangers go down, the SPL’s TV deal can be extended at the end of this season for a further 2 years at the discretion of the SPL themselves – it’s a 5 year deal with a discretionary break point at 3 years – the end of this season. Rangers’ split will be distributed to the other clubs one way or another.
I’m Neil Lennon (tamrabam) says:
10 November, 2011 at 15:56
Naw, naw, naw, naw, naw and naw I think is the answers you are looking for.
goldstar10 says:
10 November, 2011 at 15:49
The share price can go down as well as up.
Affects DD like the rest of us.
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2010 Never Again
In 1998 I think my shares were worth around £20,000……they’re now worth around £1,900 I do believe.
Somehow I can’t see them increasing to the 98 level anytime soon <:-((
Mcnair
they are definetely the answers im looking for
but i cant help but feel if motherweel can sneek out of it, then so can they?
just gonnay bankrupt them noo, gonnay?
I’m Neil Lennon (tamrabam) says:
10 November, 2011 at 16:05
Mcnair
they are definetely the answers im looking for
but i cant help but feel if motherweel can sneek out of it, then so can they?
just gonnay bankrupt them noo, gonnay?
Here’s hoping!!
Has anyone else heard that Spain have requested permission from FIFA to wear slippers and smoke cigars v England?
(copyright, N.90 / ttt)
LiviBhoy says:
10 November, 2011 at 15:49
Last years former dutch player of the year Ruud Vormer (Roda Jc) will join Celtic in the next transfer window.
is there a link for this story ?
Mort says:
10 November, 2011 at 15:54
Imatim at 15:49
There are over 16m of these type of shares in existence that guarantees the investor a dividend (but only in years the club makes a profit). All companies will have a mixture of types of share available to attract as wide a range of investors as possible.
Sure there will be some who are only in it for the dividend they receive but others, like the vast majority of us only want to own a piece of the club.
Mort
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2010 Never Again
You’re right about the majority of us. Pity it isn’t a voting majority on block…<:-))
The best box sets are The West Wing and Chuck! The finest TV shows ever made
I’m Neil Lennon (tamrabam) says:
10 November, 2011 at 15:56
I would not think that a ragers team who have stated they have to cut the wage bill by 7m before the tax case is decided ,could afford to pay 10m pa to the tax man .
I suspect lizzies tallymen will have to do without I’m afraid
hail hail
VP- Its nearly that time of year when you break the bad news tae the weans about Santa.
spoilsportcsc