Quantcast

Newco admin unlikely in short term but traumas ahead

262

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.

Click Here for Comments >
Share.

About Author

262 Comments
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7

  1. FAIRHILL BHOY

     

     

    It’s fair to say that lots of absent posters have been on recently which is great to see.

     

     

    The fact that I was at HT’s Stag, had a few beers with BT and let MARSPAPA beat me at golf (mibbe naw) has nothing to do with it!

     

     

    Hope you are good and give your good lady a hug from me and mine.

  2. fairhill bhoy on

    Hare Hare Hear Hear Hair Hair Here Here ,just pick one that is near enough 😉😂

  3. FAIRHILL BHOY

     

     

    I knew what you meant!

     

     

    I was 12 before I realised my name was not “see you”!

  4. fairhill bhoy on

    PHILBHOY-HT &BT need no introduction on here/hair/hear 😉

     

    That other guy 😉🤔 though needs explaining 🍀

  5. All sitting round the telly waiting on Only Connect and Uni Challenge.

     

     

    Anyone else like to punch Victoria Coren Mitchell in the face………………..two or three times?

     

     

    Or is oi just me?

     

     

    :-(

  6. FAIRHILL BHOY

     

     

    Aye, just met him for the first time on the golf course.

     

     

    Beat me 10 and 8 then says well played at the end!

     

     

    I thought he was Tiger Woods in disguise!

  7. glendalystonsils on

    PHILBHOY

     

     

    there are numerous scams such as this , particularly phone calls. They will give you certain commands which enable them to take remote control of your computer .From there , it is an easy matter for them to access all your data , passwords etc , and to clean out your account/ max out any credit cards . You are quite right to give them laldy in the most unchristian language imaginable (since you canny physically give them a good boot in the hawmaws).

  8. philbhoy

     

     

    Hasn’t been in a wee while. License suspended.

     

    Cannot think of one good reason why that has happened.

     

    You?

  9. Re the League and who will win it!!!!

     

    My experience would suggest that the powers that be at Humpdump, Aybroke and of course all the ludges in Scoddland, will be getting a plan together to stop. us winning the league. As sure as there is shit in a goat.

     

     

    KINGLubO

  10. Back to Basics - Glass Half Full on

    No more Only Connect for a while.

     

     

    Am I the only person who cheers on the team that doesn’t say hor-NED viper?

     

     

    Oh !

  11. Up until today I was pretty confident we would be awarded the league as it is or we would play the remaining games behind closed doors

     

     

    Now I think the null and void option is being pushed

  12. Good evening CQN I bring you an update on your efforts to support TET’s Son, Niall and his Fiancée, Sharon.

     

    To date you have donated £633.88. Go fund donations stand at £1,770.00. Total to date £2,403.88, a fantastic effort.

     

    Given Jan’s health issues it is unlikely she will be able to see Niall get married. So the plan will be to put any money left over to have the wedding streamed so that Jan and other family and friends can watch the wedding live.

     

    We’ll keep the donations open until Tuesday 31st March as it is pay day for most people.

     

    Thank you on behalf of TET, Jan, Niall and Sharon for your support:

     

    For those wishing to make a donation to support The Exiled Tim for his bhoy Niall then you can do so by:

     

    bank transfer to:

     

    o Account name: Walk With Shay

     

    o Account number: 15326765

     

    o Sort code: 80-22-60

     

    o Bank: Bank of Scotland

     

    o Ref: Enter your name or moniker

     

    · By cheque to Walk With Shay (please contact me for address details)

     

    · By paypal to walkwithshay@yahoo.com.

     

    If anyone would rather use the go to page the link below.

     

    https://www.gofundme.com/f/hotel-kept-wedding-money

     

    Until we meet again

     

    Keep the Faith!

     

    Hail Hail!

  13. !!Bada Bing!! on

    Aberdeen have given season ticket holders free access to sheep tv, we should be doing this for CTV.

  14. Lap of honour round the living room,

     

    got 2 questions right on University Challenge

  15. !!Bada Bing!! on

    CATHOLIC HORSES.

     

     

    A punter was at the Horse Races playing the ponies and all but losing his shirt.

     

    He noticed a Priest step out onto the track and blessed the forehead of one of the horses lining up for the 4th race.

     

    Lo and behold, that Horse – a very long shot – won the race.

     

    Next race, as the Horses lined up, the Priest stepped onto the track. Sure enough, he blessed one of the Horses.

     

    The punter made a beeline for a betting window and placed a small bet on the Horse. Again, even though it was another long shot, the horse won the race.

     

    He collected his winnings, and anxiously waited to see which horse the Priest would bless next?

     

    He bet big on it, and it won. As the races continued the Priest kept blessing longshots, and each one ended up winning.

     

    The punter was elated. He made a quick dash to the ATM, withdrew all his worldly savings, and awaited for the Priest’s blessing that would tell him which Horse to bet on.

     

    True to his pattern, the Priest stepped onto the track for the last race and blessed the forehead of an old nag that was the longest shot of the day.

     

    This time the Priest blessed the eyes, ears, and hooves of the old nag.

     

    The Punter knew he had a winner and bet every cent he owned on the old nag.

     

    He watched dumbfounded as the old nag came in last. In a state of shock, he went to the track area where the Priest was.

     

    Confronting him, he demanded, ‘Father, Father..! What happened..??? All day long you blessed horses and they all won. Then in the last race, the horse you blessed lost by a mile. Now, thanks to you I’ve lost every cent of my savings”…!

     

    The Priest nodded wisely and with sympathy.

     

     

    ‘Son,’ he said,

     

    “That’s the problem with you Protestants, you can’t

     

    tell the difference between a simple Blessing and The Last Rites”

  16. GORDYBHOY64

     

     

    A few weeks ago my grandson got his first question right on University Challenge at the age of 5 years and 3 weeks old

     

     

    The question was which moons in the solar system have a radius greater than Mercury.

     

     

    Aiden says Titan which was a correct answer.

     

     

    Glad he knew as I didn’t.

  17. gordybhoy64

     

     

    A guy in China ran a marathon in his own flat…..

     

    He musta got three right

  18. Hrvatski Jim,

     

    fantastic stuff,

     

    I took my grandson then 4 to a dinosaur park last year,

     

    he was pointing out and naming dinosaurs i had never heard of.

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
Do Not Sell My Personal Information