Newco admin unlikely in short term but traumas ahead


I had lot of questions over the weekend about Newco going into administration in the coming days or weeks, following Dave King’s resignation on Friday when he simultaneously announced funding plans have “been put on hold”.

To recap:  In their most recently available accounts to 30 June 2018, Newco recorded an £11m annual loss.  Since then they have gone one stage further in European competition, but also spent significantly in the transfer market.  My expectation is that losses would be higher this season, even before the current crisis.

In a statement on Friday, interim chairman Douglas Park and vice-chair and John Bennett indicated they would continue to support the club financially.  It is unlikely they would have made this commitment if they were planning to put the club into administration in the short term.

While the coronavirus will devastate the P&L of every club in Europe, government provisions will help Newco, who, like every other business in the land, will be able to defer payments to HMRC.  They will also be able to furlough the vast majority of non-playing staff.

Even with players and coaches remain on the payroll, cash required to get through the next three months could be as little as £6m (assuming they defer paying every other bill they can).  Led by Barcelona (or Herats, if you prefer), some clubs across Europe have taken unilateral action and suspended or curtailed player wages for the duration of the crisis.  Before next month’s payroll is due, there may be a coordinated effort by clubs to push a rule like this through.  If not, Newco could come to an agreement with high-earning staff to take a pay cut, or postpone wages.

A few million may be enough to see the club limp to the summer, when they hope to see season ticket renewal money.  With these possibilities still in play, and bearing in mind the funding commitment by Park and Bennet, I don’t see a convincing argument to suggest they will press the administration button immediately.

While it is clear they can (if they choose) survive until the summer, they still need to address the fact that they are trading beyond their means and incurring unsustainable losses.  An open transfer window gives them an out.

The market for footballers will open hugely down on where it closed in January.  Fanciful valuations that appeared in newspapers for Newco players will not be met, but to survive, all they need to do is get high earners off the wage bill, even if it means accepting low or zero compensation.

The first thing an administrator normally does on taking over a distressed company is to keep creditors at bay while he tries to salvage the business.  Newco’s creditors are not applying pressure – and the quantum is nothing like what it was when Oldco went down.  The next thing an administrator would do is try to cut costs while turning non-key assets into cash where possible.  This can be done by management without the need to go through administration.

The one caveat to this – as long as the directors are prepared to cough up a few million, and they said on Friday they were, I don’t see the benefit of administration before the transfer window opens.

All the underlying issues remain.  This club has lived beyond its means for all its eight-year history.  It will need to downsize quickly and significantly to have any future.  The Sugar Daddy daydream cannot help them, as funding continuous losses is inconsistent with Uefa FFP – and the most recent Knight on a White Charger has just tailed it back to Hong Kong.

Newco can have a future as a smaller football club, one that pays its bills and develops players in the same way Motherwell, Hibs and others do.  Living within their means is their only viable future, but that would necessitate giving up on fantasies of catching Celtic, and I suspect they would prefer liquidation than take that bitter pill.

The auction for Roy Keane’s signed Ireland shirt closes tomorrow, keep an eye on it.  Proceeds to towards Glasgow South East Foodband at this difficult time.

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  1. I read somewhere that the owners of Liverpool are interested in putting a Stake into Sevco. Would that be at midnight, at the crossroads, wearing a garland of Garlic ?

  2. ‘As little as 6 million…..’ ,and where will they get that from? They will still be paying instalments of last couple of years transfers, as well as that wee Kent,add the Ashley money plus legal fees,Memorial Wail (sp),and you can be sure King will have taken any cash that was available.

  3. There’s a programme on BBC sounds at the moment hosted by Colin Murray, it contains archive commentary from the European Cup Final, Colin seems to think the final was played on the 27th May, below is the synopsis from the article…




    “Celtic beat Inter Milan to become the first British team to win the European Cup in 1967. The Scottish champions were 0-1 down at half-time, but late goals from Archie Gemmell and Stevie Chalmers brought European club football’s most prestigious prize to British shores for the first time”…




    Unbelievable, talk about lazy journalism.

  4. Tobago Street & Hrvatski Jim



    Sad news about John Prine- one of the many singer songwriters in the 70’s like Springsteen, Loudon Wainwright and Steve Faubert to be lazily tagged as the next Dylan.



    I have been listening to John’s work since I heard Sam Stone on a Sampler Album (Atlantic label I think). I agree Bruised Orange and Hello in there are great works but there are so many to choose from



    Here are mine:- some fine wee bits of metaphysical poetry



    Lake Marie



    Unwed Fathers



    Blue Umbrella

  5. More importantly IMO



    CELTIC legend Billy McNeill’s daughter has issued an urgent and heartbroken plea more than a fortnight after her son Matthew went missing while on holiday in Amsterdam.



    Matthew McCombe, who was in the Dutch capital to celebrate his 21st birthday with his friends, has not been seen since two hours after leaving his hotel around 6.15am on March 14.



    His mum Paula is now “begging” the Celtic family for their help to find him.



    CCTV captured Matthew exiting his hotel before being later spotted at Amsteldijk at 6.44am, wearing a light grey or white Northern Rock jumper.



    He was later seen on the Berlagebrug heading east at around 8.15am.



    Now, his desperate mother has issued an appeal to try and trace him.



    She posted on Facebook: “I am the daughter of Billy McNeill.



    “I’m reaching out to you, the Celtic family, begging for your help to find my son, Matthew McCombe.



    “He has been missing in Amsterdam for over two weeks now and we are desperate to find him and bring him home. Our hearts are broken.



    “I beg you all to please share the post below, publicly, on your own social media pages and to as many groups as you can, so that it reaches as many people as possible in the hope that somebody somewhere has seen Matthew or can give us any information at all of where he may be.”



    Paula added: “If you have or know of anybody with connections in Amsterdam or kind of links to Amsterdam PLEASE ask them to also share the post below.



    “Words cannot explain how desperate we are to find our son. PLEASE, please help us.”



    Paula and her husband Charlie also appeared on Dutch television last night as they continued their appeal.



    Charlie said: “For some reason, we don’t know why, he left the hotel room at 6.15am.



    “I had a text at 1.36am. I’d asked him earlier, ‘How was it?’, and he texted back saying, ‘Class night’.



    “We don’t know what’s happened. We just ask the people if they can jog their memories back to that Saturday – and if they have seen him, let us know, so we can find out where he might be.



    “And if anybody has Matthew, please give him back to his mum and dad. We need to have him.”



    Breaking down in tears, he added: “We can’t cope without him. He’s all I live for. He has to come home.”



    Celtic previously urged people to keep a look out for missing grandson of their club great.

  6. Enjoyed the clip of BGFC & Wee BGFC singing on last thread, pity it was late at night & didn’t get any reaction but I enjoyed it anyway.


    Great to see a lot of old Posters coming back in recent days, like a family coming together in a time of crisis,.


    Maybe Paul should consider a general amnesty for all or red carded Brigade, If they feck up again they can be red carded again,

  7. GlassTwoThirdsFull on

    “Living within their means is their only viable future, but that would necessitate giving up on fantasies of catching Celtic”




    And yet we seem to buy into all this “rivalry” stuff and act as if finishing ahead of them is the be all and end all. Where is the vision and ambition to compete in the Champions League?

  8. Torturous story about Billy McNeill’s grandson .


    Still missing in Amsterdam.


    My heart goes out to them .




  9. Back to Basics - Glass Half Full on

    Superb analysis Pablo.



    A couple of observations ….



    Good luck HMRC pursuing deferred payments when the world is back up and running.



    Administration or liquidation won’t impact the control of specific assets Close Brothers and SDI currently have.

  10. Paul67



    What are your thoughts on Scotland’s richest man , Jim McColl, and his statement to the press insinuating that he is interested in investing in Sevco?




  11. PAUL67:


    What’s your views on what will be decided on the outcome of the current season?


    Some are of the view that UEFA will give guidance on this. Some are of the view that UEFA will leave it to the respective governing bodies in each country. If the latter wouldn’t it be ironic if they put an asterisk against this season!


    Keep the Faith!


    Hail Hail!

  12. I genuinely hope they do not go into administration. In the normal cut and thrust of football it’s fair game when your rivals falter, but in the current status, when people’s incomes are so under threat, a furlough which protects 80% of salary for lower paid workers has to be a better option. If to achieve that they do not seek to enter administration then so be it.

  13. SFTB @12.46 and Tobago Street @ 3.15. (I had not read back so missed your post)



    Yes – so many great songs which are so unique from John Prine. Sadly the prognosis does not sound good but let us hope and pray for a recovery.

  14. Lennybhoy


    I fear the worst if the title decision is taken by a panel at Hampdump.


    Hope this finds you, M and C well.



  15. Tinytim, the Record article on Jim McColl can be reduced to one comment:



    “And, in fact, we were approached recently to see if we were interested in looking at it again. Not that I’ll ever do it, but it’s nice to think about them being 22 points ahead of Celtic.”



    Confirmed he was asked to invest recently, confirmed he didn’t, confirmed he won’t.



    Lennybhoy, Uefa’s working party has still to report, they will not comment before then. Every chance will be given but the leagues want cover for their decision, and Uefa need league places to be confirmed to allow the European draws. I expect Celtic to be champions whatever happens. Cannot see a serious alternative ending.

  16. My friends in Celtic,



    Unfortunately I have to agree with Paul 67’s deduction that the huns will not go into administration in the short term.



    £6 m to keep the club going. Surely they will have already sold circa 12, 000 season tickets @ approximately £500 each for the next season.



    HH to all.



    PS : Totally agree with Corkcelt that all CQN red cards should be rescinded. After all it is unprecedented times.

  17. fairhill bhoy alec forsyth was indeed in charge of the bar in tte auld hoose inew him through footall think he stayed in the gow he cme from baillieston i played with bailiston when i was 16 alec trained there whwn he got released from arsenal lot of my family came from there they were a wee bit naughty some still drink in the log cabin hail hail

  18. !!Bada Bing!! on

    French professional football will not receive TV rights for matches which no longer take place. Canal + and BeIn Sport will no longer pay the professional football league (LFP) the € 152,000,000 they would have paid on April 5, 2020

  19. Big Jimmy.


    From previous thread.


    No you weren’t hallucinating, a Morton’s roll van did get held up.

  20. fairhill bhoy on

    JC2-I replied to you from yesterday on the last page from this morning,canny do p&p thingy😉

  21. Afternoon all, i hope everyone is in fine fettle and staying healthy. It seems the way to beat this horrible disease is to stay home in isolation just like mrs weefra and me. HH

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