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Newco admin unlikely in short term but traumas ahead

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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. glendalystonsils on

    ‘GG @ 2.58

     

     

    Same here . Also screen wouldn’t refresh until I logged in again.

  2. Hearing from a friend who worked with Rahmon gormleys father Jim has had a bad stroke ! Maybe in need of our prayers! BT maybe can update

  3. Saw this yesterday –

     

     

    ‘Occupying your time is easy even if you can’t go out.

     

     

    I’m puzzled, though why I have 6731 grains of rice in one bag and only 6729 in the other’.

  4. I see the British Boxing Board of Control have rescinded world champion Billy Joe Saunders licence for postIng a video on twitter on how to punch your wife promoting domestic violence.

  5. Sorry to hear that Wishaw Tim, Jim is a great guy. Met him on a few occasions, whilst helping with the Thai Tims charity. Prayers will most certainly be said today for a true gentleman.

  6. Back to Basics - Glass Half Full on

    Liked this from Chris McLaughlin’s latest …

     

     

    “The English Premier League is reportedly exploring a televised, behind-closed-doors event this summer.

     

     

    However, that is considered fanciful by senior figures in Scotland.”

     

     

    Translated – “It’s hard enough selling this crap when there is an atmosphere”

  7. JIMMYNOTPAUL on 30TH MARCH 2020 1:38 PM

     

    Big Jimmy.

     

     

     

     

    From previous thread.

     

     

     

     

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

     

    ………..

     

    Cheers mate…I thought I was going crackers when I thought about it this morning LOL ?

     

     

    i posted earlier that this is my 13th day of self isolation…its not…its my 12th Day.

     

    HH

  8. BACK TO BASICS – GLASS HALF FULL on 30TH MARCH 2020 4:12 PM

     

    Liked this from Chris McLaughlin’s latest …

     

     

     

    “The English Premier League is reportedly exploring a televised, behind-closed-doors event this summer.

     

     

     

    However, that is considered fanciful by senior figures in Scotland.”

     

     

     

    Translated – “It’s hard enough selling this crap when there is an atmosphere”

     

     

    —-

     

     

    I think the EPL bosses are desperate to get this season finished and not leave themselves open to a clawback of some of the lucrative commercial revenue.

     

     

    I can’t see it happening in any form before 30th June. The EPL will imo do as the SPFL will do, call the season finished as is and hope to get next season off the ground on time.

     

     

    Some money may have to be paid back or withheld but it’s the best of a bad situation.

  9. Paul67 et al

     

     

    I see the SNP government in Scotland, which up until now has largely taken its’ lead from London, (including leaking COBRA decision making) is now using the Corona virus crisis to stop screening/scans for diseases such as bowel cancer. Sturgeon, along with her CMO Calderwood, both use the language of “resources” to justify their decision, a disgracefu lone which cannot be justified on any kind of medical grounds, but can be justified in terms of costs, and of course “resources”.

  10. South Of Tunis on

    Covid 19 – Italy @ 6pm 30 3 20

     

     

    Cases-101,739

     

    Dead-11,951

     

    812 people died in the 24 hr period between 6pm yesterday and 6pm today.

  11. Aside from the worry about Corona and having to self isolate etc, there must be thousands of people like me who are having Hospital appointments cancelled etc all over the UK.

     

    I have had at least 3 appoints cancelled in the last two weeks, and the most worrying one was supposed to be with a Heart Surgeon, to advise me if I was to have a By Pass operation and perhaps part of my bowel removed ?

     

    At my last appointments I was advised that BOTH Procedures were too risky ?

     

    All this is on hold for now, but although I have no desire to be back in hospital at this time, I do feel ( sometimes) that Im not getting the care that I should ?

     

    However, I just need to wait until things improve I suppose, and hope that this Crisis is over sooner rather than later ?

     

    My Heart Nurse is due to visit me Tomorrow…what a wonderful job these people do.

     

    HH

  12. Celtic Fan Kevin on Pointless just got eliminated in first Round. Subject Royal family line of succession.

     

     

    Kevin said it was the worst possible subject.

  13. !!Bada Bing!! on

    Straight from the City of London Police fraud team – Extremely sophisticated scam going about this morning. Definitely Danske bank customers but possibly all banks. You get a message saying a payment hasn’t been taken eg O2,Vodafone or EE and to click here. As soon as you touch it the money is gone. They already have all your details and it’s the most advance scam the bank has ever seen. Pass this on to everyone. Please. This is from work this morning – they are being inundated with calls – thousands flying out of peoples accounts!

     

    Spread the word!

     

     

    Pal’s daughter got an email from her work saying that this is very active

  14. BADA BING!! on 30TH MARCH 2020 5:41 PM

     

    ………

     

    Cheers for that shout BADA.

     

     

    I get emails from Amazon and others who I have never had an account with, advising me about “Orders” that I have NEVER placed etc…so I just delete them right away.

     

    Likewise with those Scams pretending to be emails from my Bank, saying that my Online account is going to be suspended etc, and I have phoned the Bank right away and they tell me thats its a Scam…as the bank wouyld never send such emails etc….also the Scam emails from HMRC.. about “Tax Refunds”….just delete them straight away as I was advised by HMRC some time ago, that they would NEVER send emails like that…so thats another Scam.

     

    Bassa’s…hinging is too good for these Con men/women.

     

    HH

  15. glendalystonsils on

    I had amazon prime for a while then cancelled it but kept getting a a recorded message saying next months prime money would be coming out of my account . Then telling you to press 1 if you want to speak to someone. It’s just a way of trying to get remote control of your computer so if you get these calls just ignore them.

  16. With the lack of transparency at Hampden, my paranoia is kicking in.

     

    I’m beginning to think any decision on the title and finances will be skewed to favour the financially and morally bankrupt newcomer.

     

    We and Peter have the clout to prevent this but will we?

     

    80% of the season has been completed, Any thoughts of making it null and void is insane.

     

    We need to be prepared to spike any campaign from the media and authorities to deprive us of our rightful title.

     

    Any financial assistance or alteration or suspension of the rules should be done in an even handed and transparent manner. And not based on the basis of dodgy duly sanitized handshakes.

  17. fairhill bhoy on

    Is it possible to get these scams on your phone or iPad?I honestly haven’t a clue about stuff like this

  18. FB,

     

    just send me your bank details and password and i

     

    will make sure you are put on the spam blocking list.

  19. Fairhill Bhoy

     

    Yes. They are being sent via emails.

     

    I am very popular with the cough “Improve your performance” and claim your rebate from suppliers I don’t subscribe to.

     

    I just delete the emails.

  20. Reporting Scotland –

     

     

    Ramblers association spokeman, talking about walking in strathclyde park.

     

     

    Added to FF Banned list

     

     

    the brilliantly named ………………………….

     

     

    Brendan Paddy

  21. A list of feniany names that you couldnt have made up for a comedy about the huns going bust.

     

     

    Charles GREEN

     

    Craig WHYTE

     

    Douglas IRELAND Park

     

     

    who’s the others ? I am missing some really obvious ones

  22. GreeninbingleyinOslo on

    Have just heard the archive radio commentary on the 1967 European Cup Final that’s available now on BBC Sounds.

     

     

    Apparently the game was played on May 27, the second goal was scored by Bobby Murdoch, and we had a player called Jones playing for us.

     

     

    I’m honestly speechless.

  23. I got the Amazon Account scam phone call a while back.

     

     

    I managed to keep them on the phone for ages……………….before telling the gentleman to stick his scam up his jacksy.

  24. Great read back!

     

     

    MARSPAPA, BT and HT

     

     

    Great to see you all chatting as if you have never been away!

  25. HAMILTONTIM

     

     

    You posted last week that someone close to you needed our prayers.

     

     

    I hope our prayers are being answered.

     

     

    Take care.

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