Newco: trading loss, commercial gap, High Court. A familiar story unfolds


It doesn’t really matter to you or I who Newco buy or sell, but it is unedifying to see a campaign run over weeks to generate cash on the back of a guy who specialises in goals against the likes of Hamilton and St Mirren.  Yesterday we were asked to believe that Alfredo Morelos declined to go to China as part of a £30m deal.  The like of this story has not been seen at Ibrox since the last days of Oldco under Craig Whyte.

You would be forgiven for worrying that Newco have some cash issues.

In their most recent annual statement, for the year to 30 June 2018, they lost £14.3m.  That season did not include revenue from Europa League group stage qualifications, which the most recent season did, but when the next accounts are published, they will also show a significant increase in expenses.  I expect losses to be in the £7m to £10m region, before adjustments are made due to the recent High Court judgement in favour of Sports Direct.

That judgement, which is no longer subject to a potential appeal, has incredible commercial reach.  If you visit the Shop at rangers.co.uk you can buy match programmes, hospitality, Ibrox tours, pictures, bricks, TV subscriptions and lotto, but you cannot buy so much as a novelty duck, never mind a replica shirt.  Sports Direct are linked from the Partners page, where they sell Puma kit of 2017-18 vintage.

This lack of revenue from club merchandise will hit Newco directly, and indirectly, when their inability to perform to the terms of their contracts with Hummel and distributor Elite Group for this season are calculated.  This is in addition to the compensation they will pay Sports Direct for loss of profits last season and this season, and the compensation they will pay Hummel and Elite Group for their contracts for next season being set aside.

Then there are all the legal costs.  The total cost of Mr Lionel Persey QC’s judgement could easily top £10m.

Should Newco fail to qualify for the Europa League group stages, their top line will take another £10m hit, although expenses will remain well above the figures we have for the year to June 2018.  Under those circumstances, Dave King might consider a £14m loss a “favourable settlement”.

We have been here before, when Craig Whyte faced what looked like impossible obstacles at Oldco.  The biggest mistake observers made then, was assuming Whyte had a plan to keep the club solvent.  He didn’t, there was no such plan.  This fantasy chat about a player who scores against the wee teams in Scotland, despite Steven Gerrard’s confirmation that no bids have been received, looks like an all-too familiar scenario.  It looks like a ‘Hail Mary pass’, if you can conceive such a thing at Ibrox.

This club needs a huge investment to meet this season’s obligations, and will need ongoing financial support until expenditure is brought down to sustainable levels.  It is always possible someone will find the tens of millions required and that they will qualify again for the Europa League, but I see no appetite for living within their means – an enduring anathema at Ibrox.

That being the case, it is a matter of when, not if, reality bites.  None of this means we are going to win nine-in-a-row (we will address this tomorrow), Oldco won the league in 2011 when in dire financial circumstances, but it should inform us that not everyone makes decisions with due concern for the consequences.  It would be interesting to know if HMRC, Sports Direct and other commercial creditors constitute more than 25% of monies owed.

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  1. Said weeks ago that the right back farce could cost us a CL. place, just like the centre half situation did last season.


    It’s looking like this is going to happen

  2. Mike in Toronto on




    I think the zombies may end up following Ayr United’s lead … except instead of having the strips painted on the models for the reveal each year, naked zombie players will be painted blue before each game…



    bet you’re glad Terry Hurlock has retired!

  3. ST TAMS


    “Said weeks ago that the right back farce could cost us a CL. place, just like the centre half situation did last season. It’s looking like this is going to happen”



    Celtic 7 – 0 Aggregate score. Did we play without a right back in those 2 games, asking for a friend por cierto.

  4. Go tell the Spartim on

    Por Cierto



    I think people are entitled to be nervous having no right back for the more difficult games as part of the champions league qualification. As you recall the RB last year took most of the blame (on Celtic Internet) for us crashing out to a poor Greek team and now we dont have one. Personally i think we have enough to beat Cluj so its all or nothing in the next round (and who is to say that the RB weve bought by then would be up to speed).

  5. Ryan Kent



    His time is over for loans,” were the Liverpool manager’s exact words.



    If that wasn’t confirmation enough then Steven Gerrard followed Klopp up by stating: “The end of it? Where we are right now, yes.”






    Scott McDermott of the Daily Record thinks that despite “Rangers might struggle for funds to launch a permanent bid for the winger”.






    “Rangers put a package together that could coax Liverpool into a permanent deal? An offer based largely on add-ons and incentives, perhaps.”



    my suggestion for the first “add-on”. If we beat East Fife we’ll pay you an extra five hundred quid.



    Any other suggestions?

  6. !!Bada Bing!! on

    You can bet Sevco strips tonight will look as if they’ve been mauled by lions(again), Jimmy Bellend up all night, scraping off the Hummel badges,and unstitching those pesky trademark chevrons.

  7. Back to Basics - Glass Half Full on

    Another very insightful article Pablo. Many thanks.



    Although you have plenty of material available with that outfit !



    Your last sentence caught my eye.



    Consider if you will ….



    April 2019. No external debt. All debts to directors. Still reasonable control of all potential scenarios.



    August 2019. Debt for equity swap reduces internal debt. Potentially huge external debt comes out of a court judgement.



    Noise tightens.



    All – re Lawwell leaving SPFL board, I have no “in” but, if I may speculate, given he also recently left an SFA position, perhaps he doesn’t want to be associated with an organisation or two who may be subject to a judicial review?



    Hail hail




    We have a right back, he may not play against Cluj in the 1st leg, but I’m not nervous about the Cluj game por cierto.




    Or perhaps he wants no part in the shenanigans that are about to take place shortly, por cierto

  10. MiT


    I read your 2:44 post and was about to pen a post saying that those are the kind of post (Jeez. Too many `posts` !) that I like to read on CQN then my eye eas attracted to your 2:50 post offering.` How do I get out of this ?` I thought. Then I remembered PL does not have a ferrari ( I sold it ….oops!).


    Anyway, as regards your 2:44 EFFORT.


    ` I dont see how this business can survive.`


    The answer to that is: This particular business is located in Scotland and is a protected species here.



  11. Go tell the Spartim on

    Por Cierto


    Ralston ? Cause if your referring to big Tam


    Our Kris has played RB more times than he

  12. Mike in Toronto on

    Hot Smoked



    I am glad you took both posts in the spirit in which they were intended.



    I do sometimes feel like the crazy old uncle on here, who rabbits on about legal issues and why our Board has let us down… while most just sort of roll their eyes, and think ‘crazy old Uncle MiT is at it again… talking about the war again’….



    so, every so often, I have to post something like 2:50, just to show that I do have a sense of humor (well, at least I think I do) …. just so that everyone doesn’t automatically see my name, and scroll by, thinking, ‘not another bloody boring tome by him again’…



    but, on a more serious note … I do agree that the zombies are a protected business … the real question is (why) are Celtic part of the cabal that is protecting them? and what do we do about it?

  13. Rock Tree Bhoy on

    Hi Mike



    Seen this from last night and surprised no one picked you up on it….



    MIKE IN TORONTO on 31ST JULY 2019 8:08 PM



    ….”From what I have seen, Celtic and most of its fans did not want the game cleaned up because that would have meant getting rid of, or permanently crippling the zombies; they would rather preserve the status quo (particularly, as, at the moment, the ‘status quo’ has us on top).. I dont often agree with GFTB, but he has said, correctly, that what is most important for most Celtic fans is playing the zombies. It seems that, if that means we have to ignore the cheating, and the fact that they died, it is a price that most fans seem willing to pay”….



    I have only ever heard one Celtic Fan say we need the zombies and that was D D. Every other Celtic man I know wants them dead sooner rather than later. Maybe things are different in Canada. I’d like to hear from any CQNers who as Mike is suggesting thinks the most important thing for us is to be playing Sevco regardless of what’s what.



    ” perhaps he doesn’t want to be associated with an organisation or two who may be subject to a judicial review? ” 👍






    File under wont happen, ever. Have the past 7 years taught you nothing? Celtic will look the other way if something dodgy is going down.

  15. whitedoghunch on

    Rock Tree Bhoy


    my seat lay empty when they came to play us


    not seen them in the flesh since standing in the jungle

  16. Mike in Toronto on




    Like you, I was surprised I didn’t get a bit more push back on that one either …



    but, see my ‘crazy uncle MIT’ comment …



    In all seriousness, I do think there is a serious issue to be looked at …. dealing with notions of class and religion and hegemonic theory , etc. … that I think deserves serious consideration …



    Always happy to hear your thoughts….

  17. Back to Basics - Glass Half Full on

    Let me clarify the basis of my speculation.



    This JR would be initiated by someone outside Scottish football. Say …. a wealthy creditor of a club who are governed by two organisations (at least one receives public money) whose rules MAY infer “as long as you pay your FOOTBALL debts you can stay in the top flight regardless”.



    Hail hail

  18. I remember a Euro tie where we played our newly acquired CBs as a pairing.



    One was an ex- £4m man who had played for Hull, Wolves and Sochaux- and had made only one appearance for Celtic before this tie.



    The other was a big Dutchman bought for around £3m (later sold for £75m) making his debut.



    The result was Karagandy 2 Celtic 0



    In the replay they were both replaced by Lustig and Ambrose with Charlie Mulgrew playing LB instead of the specialist Izzaguire (also dropped from the first leg)



    We managed to win 3:0 with that team of bombscares but had to rely on an invisible man scoring our winning goal late on.

  19. David17



    The past seven years have taught me, the same as they’ve been teaching Celtic fans from 1888, that Celtic are a football club.



    Nothing Celtic say or do, can rewrite what happened to the original Rainjurz, they died.



    The End CSC

  20. Back to Basics - Glass Half Full on

    Tuechter ar la.



    Lol re Glasgow Empire. Scottish and American acts loved but English turns given a hard time.



    A young Des O’Connor famously pretended to faint on stage because he was bombing.



    Hail hail

  21. Rock Tree Bhoy



    I’m making the same futile gesture as Whitedoghunch.



    But, sorry to say, I have heard many young Celtic fans pining for them to be “back” playing us again, when Sevco were off on their “journey”. It surprised me, at the time, but their hunger to Gove out hunskelpings to a temporarily weakened team, outweighed any sense of disgust that cheats were back on our field.



    If PL and DD did collude to ease the passage of a tribute Act from Div.2 to the SPFL, after a 4 season absence, then they called it right commercially. Many Celtic fans, showed by their actions that they wanted to play them again. We could sell another 20 to 30k tickets for that fixture if we had the room.



    If they go into administration or liquidate again, the stitch up is already in, with rule changes, to ensure they can just go on shafting creditors whenever they want. The country of Scotland has colluded in demanding that we maintain a strong Ibrox team.

  22. SFTB



    Can you recall the last time Celtic bought a player ‘because’ we qualified for the CL and if so, who was it?



    The RB search has gone on too long, even for the happiest of clappers IMO

  23. Don’t think we should be leaving anything to chance this season. We’re still short in key positions going into the first league game and that’s careless imo.


    We need two right backs, one left if KT leaves, backup for Broonie, a left sided midfielder and a striker.


    Sevco will be throwing everything into this season, anyone banking on them going pop or tightening their belts hasn’t been paying attention. The sevs are like a kid with giant bar of chocolate. Tell it it’ll make them sick if they eat it, they still eat it.


    Back Lenny to the hilt and blow that mob out the water.


    Give NL the right tools and he’ll get intake them like a dug eating beetroot!

  24. BSR



    I would prefer a better right back than the options of Ralston or Ajer (maybe Big Tam will surprise us) but I don’t see O’Donnell as that improvement.



    Yes, we should have landed one by now, but we haven’t so we have to make do, with either Ajer or Hatem, for a bit longer yet. Even if we get one in the next few days I would not necessarily blood him in Europe straightaway before he has had a chance to learn about our team play.



    Best bet, for me, is to give Hatem 60 minutes on Saturday, if he is ready, and give Ajer the final 30 minutes, and choose whoever did best.

  25. Rock Tree Bhoy 5.48pm



    Since I was mentioned in original post by Mike and since you have reposted it … I wasn’t have never said that all Celtic fans want to play them but since 2012 and I would say nearly every fan under the age of 40 want some sort of a team from Govan to pump as much as possible … older Celtic fans might feel differently living through their decades of cheating and still cheating … but tickets, pubs, houses are always full of Celtic fans young & old going out there way for this fixture … am not saying my opinion is right but like the ReS12 the mass majority of Celtic fans that I know are more interested in pumping the Sevs and collecting titles … bhoy in my work actually says to me last week he was winding up his Sevs pals saying “you better no go down the leagues again” he is a season ticket holder



    Again am not saying any of this is everyone’s experiences but certainly is nearly every single Tim i know, all go out of their way as soon as the Glasgow derby is due to be played