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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. morning from a very cloudy south of spain feel quite fit now done the 4 bens yesterday ben the lobby ben the bedroom ben the living room and ben the lavy hail hail

  2. Dallas Dallas where the heck is Dallas on

    Jimmynotpaul at 9.36, my daughter although her exams have been postponed , is still keeping busy doing school work as she does not to get out the habit of working. She has received an unconditional from Glasgow University to do teaching. We are delighted and so proud of her. The hard work she has put in has been rewarded but whenever university starts this year , she knows what has to be done.

     

     

    It sounds like there has been a breakout of common sense in the Juniors with clubs wanting a place in the pyramid system and not doing anything obvious to jeopardise it. I know Clydebank are trying to get a place in it.

     

     

    My wife is still working and has left me a list of stuff for my son and I to do. She told me there have been some easements made for the thousands making a Universal Credit claim for the first time in order to get people paid no longer than the standard 5 week waiting period. If the claims are verified and accepted, the person can claim a new claim advance to help tide them over which is a small relief.

  3. Crackling tangible atmosphere at Hampden for the Leeds game reminded me of the atmosphere at East End park in 1968 when we had secured the championship and Dunfermline had just won the cup.

  4. Hey J.

     

    Brilliant news about your daughter.

     

    Be proud, indeed.

     

    Takes her brains after her mother, obviously. :-)

     

    That’s good, that they have changed UC guidance, there’s lots of people desperate out there.

  5. Mick’s Bog Roll Keepy Uppy

     

     

    2 for me.

     

     

    I’ll attempt again when my groin strain gets better!

  6. So Mick’s bog roll keepy uppy challenge leaderboard is as follows…

     

     

     

    Mick-15, Dbhoy-15

     

     

    David66-8

     

     

    Philbhoy-2

     

     

    HH

  7. Big Jimmy – no problem

     

     

    MM – I’m the same with technology. But I have other skills…. Where’s the burds.

     

     

    D. :)

  8. Dallas Dallas where the heck is Dallas on

    Jimmynotpaul, she does take it from her mother and her temper too lol.

     

     

    I was on the phones week beginning 16/3 and the desperation of some people for cash as their jobs had ended suddenly was hard to deal with but not as difficult as what they are going through . The number of phone calls from people seeking assistance has unsurprisingly rocketed. I just hope we can get every new claim dealt with and people paid what they are entitled when they are entitled to it.

  9. timaloy29 on 31st March 2020 10:45 am

     

     

    I’ve been having a look myself, its very entertaining, they are grabbing at every straw they can to try to devalue our current run of league titles. With everything that is going on at the moment I was not thinking that much about the end to this season but having read the huns desperation today its just confirmed that as soon as its possible I’ll be having a mega 9 in a row party.

     

     

    First drink will be a pint of hun tears.

  10. FAO DAVID66…

     

    My Heart Nurse has just told me that my wee local shop is Closed til further notice.

     

     

     

    I would be VERY Grateful if you can maybe pick me up and/or get some shopping for me maybe ONCE a week, and I will obviously still try and get Home deliveries from Tesco also ?

     

    Ive been self isolating for 13 days now, and I am NOT showing symptoms of Corona according to my heart nurse.

     

    I will obviously pay for your Petrol etc…would you like cash or to be paid in Toilet rolls ?

     

    LOL

     

    I know that we cant post our direct email address or phone numbers on here but I am sure that PAUL67 has my email address , so Plz feel free to email me to get this arranged for this Friday or whatever Day suits you ?

     

    I have plenty of food for now, so Friday or soon after would be ideal ?

     

    My home is just OFF The Saltmarket.

     

    Cheers mate.

     

    Stay safe.

     

    HH

  11. MARSPAPA on 31ST MARCH 2020 10:18 AM

     

    BIG JIMMY

     

     

     

    With due respect , you may well have isolated for a fortnight , leaving your home and being in the vulnerable bracket , whats to say someone with Covid19 infecting you either by not adhering to the 2 metre rule in your shop or you picking it from other sources, you more than others need to be more careful . …..hope you get the jist of what i m saying .

     

     

     

    take care .

     

     

    ———

     

    Marspapa- Whilst I respect anyone’s right to their opinion, I would ask, how does anyone who is housebound get help then?

     

    I totally get what you are saying as I have been OCD about this whole self isolation thingy and if I go out I am taking wipes to shops, wearing gloves and giving people a body swerve if I see someone coming toward me.

     

    But I go back to my point of how do people who are housebound get shopping?

     

     

    D. :)

  12. Marsapapa

     

     

    Read your post regards Harvey’s, made me laugh. Used to go in every Friday after 5’s at the pitz, this was about 20yr ago. Only stayed for a few pints, don’t remember ever staying to shutting time. But the boys from Whitehill we played with used to stay to shutting time and were known to be on top of table’s dancing on ocassion.

     

     

    HH

  13. Big Jimmy – No problem it will be Friday.

     

     

    Paul67 can you give big Jimmy my phone number please. Thanks

     

     

    Big Jimmy when you get my number call me.

     

     

    Cheers

     

     

    D. :)

  14. Paul67 – if it’s easier you could give Big Jimmy my email addy and give me his and we will get in touch, although again if you have phone numbers saved that might be easier to swap.

     

     

    Thanks

     

     

    D :)

  15. blantyretim is praying for the Knox family on

    It’s almost as if CQN goes in a huff with you, if you leave the site for a few minutes you have to log back in

     

    5 times in a row I’ve had to log in, bloody frustrating..

  16. DAVID66 on 31ST MARCH 2020 11:38 AM

     

     

    I’ll phone you if Paul67 sends me your number.

     

    My number ends in 9544…so you will know its me thats calling.

     

     

    You can email me if Paul67 does not have my phone number ?

     

    Cheers mate.

     

    HH

  17. glendalystonsils on

    Boris and Charlie have both made remarkably quick recoveries because they didn’t have the ‘common’ Covid 19 . They had the mild version reserved for royalty and graduates of Eton.

  18. bamboo on 31st March 2020 10:10 am

     

    Meanwhile in sensible Sweden life carries on as normal . No over-the-top restrictions and lock-down . And at the end of this their economy and infrastructure will be unscathed ………while we will have, at the very least a recession ,peoples livelihoods destroyed . At least we have a nice new police state . I think we have been conned.

     

     

    ####

     

     

     

    The Swedish state practised eugenics until 1976.

     

     

    I’d be wary about following their lead in how to tackle a disease that targets the elderly and infirm.

  19. Dallas Dallas where the heck is Dallas on 31st March 2020 10:59 am

     

    Jimmynotpaul at 9.36, my daughter although her exams have been postponed , is still keeping busy doing school work as she does not to get out the habit of working.

     

     

     

    ###

     

     

    I think the SQA has cancelled exams rather than postponed them

     

     

    It will be interesting to see how that pans out so far as the universities are concerned.

  20. MARSPAPA on 31ST MARCH 2020 10:18 AM

     

    ….

     

    With respect…IF I cant get home deliveries from supermarkets etc…and I cant get anyone to do my shopping for me…HOW do you suggest that I manage to eat ?

     

     

    NO Matter how much of a struggle it may be for me to get to a shop/supermarket..and walk around said supermarket with my disabilities…I WILL do it… if I have to get Taxis there and back etc !

     

    I will be FORCED to take my chances….Simples.

  21. Melbourne Mick on

    As some of you may have noticed i asked a few days ago if anyone

     

    had heard from or seen a post from BIGYINMILAN, i was worried

     

    that he hadn’t answered a few emails i sent.

     

    To let you all know, our BIGYIN Peter is a professor in the world

     

    health organisation, he lives in France and travels the world to give

     

    seminars etc.

     

    Just heard back from a Federique Delbar at the International Prevention

     

    Research Institute at Dardilly that Peter is very ill.

     

    Prayers said for this great Celtic man and that he makes a full recovery.

     

    H.H . Mick

  22. Big Jimmy

     

     

    Eh naw you wullnae.stay in.

     

    You simply ask here.

     

     

    Be patient.and if I read I will drop them outside your door,go back downstairs and then you can cuss me all you want for no getting you a beer.😊I jest Jimmy but don’t go oot.

     

     

    Tell me does Eddie have your number?

     

     

    HH

  23. AN TEARMANNN

     

     

    Gorgeous picture , The wild Atlantic way has been a great success for tourism.

     

    My pal has a hotel in Dungloe and is very busy normally with Scandinavian cyclists. Hope they can survive this disaster.HH

  24. AN TEARMANN on 31ST MARCH 2020 12:32 PM

     

    ………..

     

    I think Eddie may still have my number as he phoned me a few weeks ago before this virus.

     

     

    FAO DAVID66…

     

    If Paul67 does not have my email and/or phone number, I will post my email address on here tomorrow.

     

    If any Lurkin ugly Huns want to send me emails….bring it on LOL ?

     

    HH

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