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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. gordybhoy64

     

     

    How about Mastermind?

     

    Must have had a favourite subject on there at some point.

  2. Twice I have got the link on Only Connect at the first clue.

     

     

    First time it was a picture if Celtic Park so I guessed Paradise. Second clue was John Milton so I knew I was correct.

     

     

    Second time was about things banned by the advertising standards authority.

     

     

    So that’s twice in about 10 years.

  3. Celtic Mac

     

     

    You are correct but the other answer was Ganymede which Aiden turned into Grannymede to torment his Gran to our amusement.

  4. Philbhoy on 30th March 2020 7:46 pm

     

     

     

     

    ‘Anyone else like to punch Victoria Coren Mitchell in the face…’

     

     

    ###

     

     

    You’d need a fair reach.

     

     

    She has an impressive embonpoint.

  5. lets all do the huddle on

    did anyone catch a glimpse of the space station as it raced across the sky half an hour ago

     

     

    i know it just looked like a fast moving light but it was enough to impress me these days

     

     

    and hopefully it will give us the most accurate assessment as to whether the rangers are actually coming or not

  6. Tobago Street

     

     

    It does sound a lot better for John Prine. He has been in my thoughts all day.

     

     

    Many tributes have been paid to him today including by Joan Baez on YouTube

  7. Dallas Dallas where the heck is Dallas on

    Jimmynotpaul, I hope you and the family are well. I gather you will be off work the due your ongoing health issue. I am as two of the medicines I’m on affect my immune system.

     

     

    Has any decision been made about promotion for Paddy and his team mates yet or dithering like our league is doing .

  8. Lenny has come out tonight and said salary cuts are a possibility at Celtic.

     

     

    Neil has to learn not to answer every question put to him and frankly, he should know better.

  9. macjay1 for Neil Lennon on

    AN DUN on 30TH MARCH 2020 10:55 PM

     

     

    Absolutely agree .

     

     

    Caw canny , Lennie .

  10. It’s so sad ,our wee town has so many shops and houses boarded up , all the window cleaners now carry sanders😊HH

  11. AN DUN on 30TH MARCH 2020 10:55 PM

     

    Lenny has come out tonight and said salary cuts are a possibility at Celtic.

     

     

     

    Neil has to learn not to answer every question put to him and frankly, he should know better.

     

     

    ——–

     

     

    Dont see the problem tbh.

     

     

    Bayern, Barca and Juve players have taken pay cuts. Lenny only said it is possible.

     

     

    There are many, many people in this country worried about their future at this difficult time. A difficult time during which Celtic will soon be requiring £666 for the privilege of watching football next season, football that may or may not commence for some time. Also note that potentially 4 home mates this season, already bought and paid for, could be written off.

     

     

    If exceptionally wealthy footballers need to take a pay cut for a few months to support those on lower incomes then they should do so without hesitation.

  12. Greggs have announced plans to start a delivery service using drones. All sounds a bit pie in the sky to me.😊HH

  13. macjay1 for Neil Lennon on

    Render unto P.L. the things that are P.L.`s and unto Lennie the things that are Lennie`s .

  14. A old pal of mine in hospital has been put on one of those new Dyson ventilators. He seems to be picking up nicely now.😊HH

  15. Three nuns lost and starving in the desert, and all they have is a bag of flour on them.

     

     

    mother superior said , we could open the bag of flour up , lay it on the sand and we could pee on it , the sun will bake it and we’ll have bread.

     

     

    first nun suggests she’ll do it , lays the flour on the sand lifts up her cassock crouches over the flour and presses , after a few tries nothing , dry as abone .

     

     

    second nun says , i’ll do it , again crouches over the flour and presses, nope nothing she too is dry as a bone .

     

     

    a frustrated Mother Superior says , as usual its left to me , she lifts up her cassock and squats over the flour, Farted …….

     

     

     

    and the other two pissed themselves laughing !!

  16. MARSPAPA

     

     

    Good one liked that,nice to have a little humour,and as you can see from my attempts it is a little humour.HH

  17. macjay1 for Neil Lennon on

    Hell`s bells.

     

    Why do I respond to this BS ?

     

     

    AN DUN on 30TH MARCH 2020 10:55 PM

     

    Lenny has come out tonight and said salary cuts are a possibility at Celtic.”

     

     

    =============================================================

     

     

    Show us where Lenny says ” salary cuts are a possibility at Celtic ” .

     

     

    Lenny says ” Peter Lawwell and the board will review it ”

     

    That`s all .

     

    Nowhere does he say that salary cuts are a possibility .

     

     

    ====================================================================

     

     

    Covering his interview with Chris Sutton on Five Live The Sun reported Lennon’s reply to the question of whether Celtic could face wage cuts:

     

     

    Yes, we’ll probably have a look at things at the end of April in terms of the club as a whole. Peter Lawwell and the board will review it then. At the minute, we are okay.

     

     

    For Scottish clubs, this is the time of the year when they are putting out season tickets but obviously the general public are very wary and reluctant to part with their money.

     

     

    They don’t know what they are paying for yet and we still haven’t finished this season yet. We don’t know whether that’s going to happen or not. We need to get a decision sooner rather than later on that.

     

     

    There has to be a backstop date at some stage so we can start to plan ahead. We’re financially robust, but are still feeling the hit.

     

     

    We’ve been told by the chief medical officer here it’s going to be 12 to 13 weeks in this situation.

     

     

    So it’s really difficult to plan for the future and you have to prepare yourself as best you can for whatever the outcome is going to be.

     

     

    Celtic’s last home match was against St Mirren on March 7 with four more home matches scheduled as well as a Scottish Cup semi-final against Aberdeen at Hampden Park.

     

     

    The SFA and SPFL have kept relatively quiet about their plans for the season but on Wednesday UEFA will host a video conference call with all 55 national associations to discuss the current crisis.

  18. PAPAJOE55 on 31ST MARCH 2020 1:01 AM

     

    MARSPAPA

     

     

     

     

     

     

    Good one liked that,nice to have a little humour,and as you can see from my attempts it is a little humour.

     

     

     

    PAPAJOE55 every little bit helps , we can blame BADA ,he started it lol

  19. From David 17 above

     

    “ A difficult time during which Celtic will soon be requiring £666 for the privilege of watching football next season.”

     

    Shirley not.

  20. Hopeful news

     

    The U.S. Food and Drug Administration (FDA) has approved the use of two anti-malaria drugs to treat patients infected by the new coronavirus.

     

     

    On Sunday, the U.S. Department of Health and Human Services (HHS) said in a statement that chloroquine and hydroxychloroquine could be prescribed to teens and adults with COVID-19 “as appropriate, when a clinical trial is not available or feasible,” after the FDA issued an Emergency Use Authorization. (EUA) That marked the first EUA for a drug related to COVID-19 in the U.S., according to the statement.

     

    I just saw a video of Dr Mehmet Oz, a well known doctor here on the east coast, saying he had spoken with a French doctor who conducted a trial with 80 patients that had extremely positives outcomes.

  21. From Bob Crampsey’s Mr. Stein.

     

     

    On the day he left Hibs to take the Celtic job, this from an article in the Scotsman from John Rafferty…

     

     

    “ With Jock Stein in charge at Celtic Park and with his influence being vigorously carried forward by Willie Cunningham and Bob Shankly in the east, no longer will Rangers find titles and cups so easy to win. From now on Rangers will be unable to claim that home competition is too soft. Their easy reign is over. Jock Stein will see to that and at the end of the day that will be one of the best things that ever happened in Scottish football.”

     

     

    ————————

     

     

    How prophetic!

     

     

    HH

  22. ‘GG on 31ST MARCH 2020 2:29 AM

     

    Hopeful news

     

     

    They should have listened to you earlier.

  23. Good morning, friends from a grey cloud covered but dry and calm East Kilbride. One of my working from home days. Suited and booted, obviously as I try to make my 3 working days as near to normality as possible. Did think of cycling to work this morning but just remembered that we cleaned the living room floor yesterday so better just walk. Stay safe.

  24. GuyFawkesaforeverhero on

    Ahead of this week’s decisions, here’s when history was made;

     

     

    1894 1st Scottish League Champions two seasons in a row: Celtic

     

    1901 1st Scottish League Champions three seasons in a row: Rangers

     

    1902 1st Scottish League Champions four seasons in a row: Rangers

     

    1909 1st Scottish League Champions five seasons in a row: Celtic

     

    1910 1st Scottish League Champions six seasons in a row: Celtic

     

    1971 Only Scottish League Champions six seasons in a row twice: Celtic

     

    1972 1st Scottish League Champions seven seasons in a row: Celtic

     

    1973 1st Scottish League Champions eight seasons in a row: Celtic

     

    1974 1st Scottish League Champions nine seasons in a row: Celtic

     

    2017 Only Scottish League Champions six seasons in a row three times: Celtic

     

    2018 Only Scottish League Champions seven seasons in a row twice: Celtic

     

    2019 Only Scottish League Champions eight seasons in a row twice: Celtic

     

    2020 ??

     

    2021 ??

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