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 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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    Lots of rule changes this season. That is one of them.



  2. Theoriginalsadiesbhoy –


    Yes and that’s one of a number of rule changes introduced by FIFA for this season. Others include the attacking team’s players not being allowed to be part of a defending team’s ‘wall’ at a free kick, changes to the drop ball rules, and others.


    On googling the changes, various sites came up. THis one caught m eye imediately because of it’s ‘advertising plea’ in the red box at the top right corner!!!!!!

  3. It’s absolutely murderous trying to post on CQN these days.



    Anyhoo, apologies if it’s been discussed already but has there been a rule change governing bye kicks? Previously ball had to leave the penalty box before anyone could play it but that didn’t seem to be the case tonight during the Sevco game.

  4. From the BBC :



    `… as Gerrard’s side struggled with the troublesome artificial surface. `



    Rugby Park next? Hmm…



    Definitely off now.





    It’s absolutely murderous trying to post on CQN these days. I keep getting kicked off and losing my posts.



    Anyhoo, apologies if it’s been discussed already but has there been a rule change governing bye kicks? Previously ball had to leave the penalty box before anyone could play it but that didn’t seem to be the case tonight during the Sevco game.





    Yes, it was changed, ball no longer has to leave pen area.


    I agree about the blog, I’m find myself posting less, as its a hassle.


    Logs you out mid post, doesn’t update for 2 hours if you’re not logged in.

  6. Thanks for your replies lads. I was aware that there are over 40 changes and saw some of them on Copa America but I hadn’t seen any teams take short bye kicks inside the box until tonight.



    I don’t know if it’s just me but CQN is all over the place tonight.

  7. AN DUN:


    Now 10 men apiece and 5-3 to the Romanians on aggregate. Your comment. Is still valid, however.



  8. BRIDGEVIEW, Ill. (Aug. 1, 2019) – The Chicago Fire Soccer Club announced today that it has acquired $50,000 in 2019 General Allocation Money (GAM) from FC Cincinnati in exchange for the rights to defender Andrew Gutman and the Club’s natural third-round selection in the 2020 MLS SuperDraft. Additionally, the Fire could receive up to an additional $150,000 in GAM if Gutman is added to FC Cincinnati’s roster and meets certain performance-based metrics. The Fire will also receive a percentage of any future revenue should FC Cincinnati transfer or loan Gutman outside of MLS.



    The Men in Red will return to league play on Saturday, Aug. 3 when they take on the Houston Dynamo at BBVA Stadium. Beginning at 8:00 p.m. CT, the match will be broadcast live on ESPN+ and transmitted locally on Univision Radio WRTO AM 1200. The ESPN+ pregame show, presented by CIBC, will begin at 7:45 p.m. CT.



    Transaction: Chicago Fire Soccer Club trades the rights to defender Andrew Gutman and its third-round selection in the 2020 MLS SuperDraft to FC Cincinnati in exchange for $50,000 in GAM (May 15, 2020 expiration), future considerations and a percentage of any future revenue should FC Cincinnati transfer or loan Gutman outside of MLS



    Anybody got any idea what that is about,



    I think he is moving up to the MLS as far as I can make out.The transfer system is convoluted in America.He is still our player,so no idea what this means for us.I like this guy.

  10. Hunderbirds are Gone on

    Hard to judge when you are unsure of the merits of the opposition, but I thought that Gutman looked pretty handy during the pre-season camp in Austria. Great engine.



  11. Once upon my working life, I had a decent view of rangers 1873s death. Their own hubris eventually saw them off. (Along with the wrong sort of ‘help’ from well meaning brethren. Enough rope and all that)



    With this version of the gers, I have absolutely no working knowledge. None. I am retired, non dom and the accounts are now with an entirely new bank.



    2 things, however…..



    Stories of certain businessmen / sevco directors being in financial troubles would appear wide of the mark. I am not aware of any bus magnate having his dealings overseen. Having had a passing interest in this one previously, I’d be surprised.



    Current banking- this is a biggie. Phil often talks of a ‘loss making business without a credit line from a bank’. This could be the downfall (excuse any copyright infringement). Very interesting. What if your only lender was also a supplier or retail partner. How would those terms stack up? A meeting of equals? As many have said before, hhmmmm

  12. coefficient update.



    now scotland on three points. equal with the total for the whole season 4 years ago. might mean a wee move up to 18th which is a good deal better than the 26th last year.



    Automatic CL places getting close if scottish teams keep this up.



    Question- new huns go bust or celtic straight into CL without qualifiers. I asked the similar question on here ten years ago and the answer was huns bust. enjoyed the jelly and ice cream but starting to feel that was a very parochial attitude.

  13. It looks like Cincinnati are paying 50k for Gutman plus 150k add ons subject to conditions plus a percentage of transfer fees if Gutman is transferred outside of MLS. How can they do a deal like that if he is our player.


    Something very strange here.

  14. CL groups we just get humped anyway so at least I get some laughs with the Huns going bust :O)

  15. QF on 1ST AUGUST 2019 10:12 PM



    I’d go for Celts through to CL.



    Huns bust is a certainty whatever else happens. :-)

  16. Sevco Black Jack:


    Dealer; 9


    sevco; twist


    Dealer; 4


    sevco; twist


    Dealer; 3


    sevco; twist


    Dealer; 4


    sevco; twist


    Dealer; are you sure? you have twenty?


    sevco; twist


    Dealer; Jack, bust.


    sevco; twist


    Dealer; you’re bust and you have no stake left


    sevco; twist


    Dealer; you’re bust, have no stake left at the table and your credit here has been cut off


    sevco; twist?

  17. Corkcelt



    Cinninati have acquired the players MLS rights



    doesn’t make him an FC Cincinnati player — he’s still at Celtic. But if he moves stateside, FCC have the first option.

  18. The Huns going bust again, hopefully pushes Celtic towards leaving Scottish football.



    We should’ve bit the bullet, what was it 5/6 years ago, and muscled our way into the bottom tier of English football. We’d be in the EPL by now.

  19. QF if it wasn’t obvious from my post – them going bust. It’s sport- the old club cheated everyone(including outside of the sport), the new club is cheating everyone. It what they deserve.



    We’ll be fine irrespective.

  20. macjay1 for Neil Lennon on

    QF on 1ST AUGUST 2019 10:12 PM



    ” parochial ”


    Quite complimentary.



    The end of the huns would benefit the Parish.


    ie the community.

  21. Given that I have very mixed feelings about our particpation in The Champions League (as explained in a minute) then it’d have to be Huns Bust for me.


    Recent experience shows that if we do qualify for the Champions League we will face 6 (or at least 4) very nervous nights of football. All very well looking forward to the razamatazz of PSG or Barca but that excitement can turn to complete fear as goals number 3, 4, 5 rain in. At least in the Europa we saw 6 pretty competitive games against similar level opposition.


    Ah, but what about the money? Well, the millions earned from the Champions League might help to soften the pain of the defeats if (and only if) we actually spent some of it. Even if it was to fund an extended Main Stand or Almore’s Cafe I’d understand the logic. But as things stand we appear to have so much in reserve that we don’t know how to spend it!


    So do we really need another £30M or whatever sitting in the bank?


    My dillema isn’t helped by the fact that I do always want Celtic to win every game they play in. So, for as long as we are trying to qualify for the Champions League then obviously I do want us to continue winning. Beating Cluj means we will definitely have another 8 European ties this season. Whether 6 of those are in the Champions League or Europa League remains to be seen.


    So, who would win a fight between the “Champions League earns the Club millions” and “I’m really looking forward to tonight’s evenly matched game”?


    Bed time.

  22. bournesouprecipe on 1st August 2019 10:44 pm



    If Sevco were to go bust, under the new rules drawn up in 2012 when Rangers went bust, they start again in the same League Division.




    What is the actual ruling here? That’s been posted a few times recently but what is the wording of the rule?

  23. I often discuss football with people whom support English football teams – they all without exception recognise that KT is a terrific footballer, and would be delighted if he signed for their team. This despite the fact that they don’t particularly rate Scottish football that highly.



    The zombies are a different animal altogether though, going by their opinion of KT when on occasion I read their pathetic forums.



    Decidedly average to rank rotten or crippled is the scale.



    They thought Moussa Dembele wasn’t very good either.



    I alway rated Michael Mols a brilliant striker of the old club – More or less is a decent wee footballer as well when he stays on the park.



    That shower refuse to give any Celtic player any semblance of credit regardless.



    Hateful, spiteful, jealous rats the lot of them.



    The sooner they go to the wall, the better for all decent human beings.

  24. Bourne- it’s a rotten rule, and they are thick as Sh*t but I really don’t see their supporters propping up a mark 3 like they have this time. The continuity myth would be difficult enough for even level 5. It would be the ultimate embarrassment and would surely show up the poor business credibility of their “real r*ngers men” . They would the forever laughing stock.

  25. Huns bust – so so much fun and belly laffs…..



    Life is short, and it’s always later than we think.



    Hell scud it intae thum.



    We’ll survive withoot thum and thats our best revenge.