Quantcast

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

332

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.

Click Here for Comments >
Share.

About Author

332 Comments

  1. macjay1 for Neil Lennon on

    TRADITIONALIST88 on 2ND AUGUST 2019 9:29 AM

     

     

    Perfectly reasonable and logical question.

  2. TRADITIONALIST88

     

     

    And before you come back with some gay wit and repartee, it’s called faith. All religions are built on faith. If I knew the answer to the question you posed I wouldn’t need faith but I live with it – another one of my many shortcomings

  3. traditionalist88 on

    POGMATHONYAHUN AKA LAIRD OF THE SMILES on 2ND AUGUST 2019 9:38 AM

     

     

    Beats irrational blind acceptance, I suppose.

  4. macjay1 for Neil Lennon on

    The blinding hypocrisy of anti capitalists who support a full on unreconstructed unapologetic capitalist business called…….

     

     

    CELTIC.

     

     

    And some of them own…….wait for it……..

     

     

    SHARES

     

    in said business.

  5. @NCCeltic GB tifo information for flag day tomorrow, full North Curve including upper tier, please hold up the materials placed on each seat when YNWA finishes. Please share.

  6. traditionalist88 on

    POGMATHONYAHUN AKA LAIRD OF THE SMILES on 2ND AUGUST 2019 9:42 AM

     

     

    I’m well aware it is referred to as belief without evidence (faith).

     

     

    It just struck me that the guy doing the judging could be accused of underachieving himself, given the apparent extent of his capabilities.

     

     

    But each to their own of course.

     

     

    HH

  7. The blinding hypocrisy of anti capitalists who support a full on unreconstructed unapologetic capitalist business called…….

     

     

    CELTIC.

     

     

    And some of them own…….wait for it……..

     

     

    SHARES

     

     

    in said business.

     

     

    That would be a guess wouldn’t it? Which as you said is a sign of ignorance. So you’ve just called yourself ignorant. I had guessed that anyway but thanks for confirming. Well done.

  8. Something strange is happening.

     

     

    Making arrangements for a pre match pint midday Saturday for a 3 o’clock kick off.

     

     

    What kind of weird time is that to play a football game?

     

     

    :-)

     

     

    QF

  9. TRADITIONALIST88 on 2ND AUGUST 2019 9:42 AM

     

    POGMATHONYAHUN AKA LAIRD OF THE SMILES on 2ND AUGUST 2019 9:38 AM

     

    Beats irrational blind acceptance, I suppose.

     

    ——————————————————————

     

    Aye, he/she who doesn’t ask questions learns feck all.

     

    I have asked many questions throughout my life and still wonder if some of the answers I was given were 100% correct.

  10. macjay1 for Neil Lennon on

    FRANKTERRY on 2ND AUGUST 2019 9:50 AM

     

     

    Good lad.

     

    Keep plugging away and shifting the goalposts .

     

    Reasonable effort , Frank.

     

    Sadly not quite up to the mark.

     

     

    No. Not a guess.

     

     

    Now . From memory on CQN.

     

    Try Cana…..

     

    Perhaps Ham……

  11. macjay1 for Neil Lennon on

    POGMATHONYAHUN AKA LAIRD OF THE SMILES on 2ND AUGUST 2019 10:05 AM

     

     

    The mystery of Faith.

     

     

    No mystery……..

     

    Having Faith is a blessing.

  12. Canamalar it looks like OCD obsession on

    Can someone remind me where it says gambling is no allowed in the socialist handbook?

  13. MACJAY

     

    Sorry,in which version of Christianity am I not expressing myself,

     

    as far as i can make out I have upwards of 30.000 to choose from,

     

    Orthodox today,Heretic tomorrow, who would of thunk it….Giordano Bruno

     

    HH.

  14. Canman,

     

    You gamble as much as you like.

     

    It’s when you see gambling as a possibility of getting yourself out of the poverty trap or you are addicted to gambling that’s where the problem arises. Nothing to do with a socialist handbook.

     

    Ask any family who have a gambling addict as a member, I’m sure they’ll tell you life is indeed wonderful.

  15. macjay1 for Neil Lennon on

    SHUGGIEBHOY67 on 2ND AUGUST 2019 10:15 AM

     

     

    Am I my brother`s keeper ?

     

     

    Catholicism is fine for me , but it may not suit you.

     

     

    And with the recent scandals , who could blame you ?

  16. Canamalar it looks like OCD obsession on

    Or is socialism only what Macjay decrees it to be.

     

     

    It’s a bit like their free health care bullshit, no one but capitalists refer to it as free, everyone else is clear that it is centrally funded and the most efficient and effective method of ensuring health care for any nation. The capitalists problem is that it restricts their efforts to exploit human misery.

     

     

    Over 50% of bankruptcies in the US are caused by health care bills, and Macjay reckons we should emulate that model.

  17. Canamalar it looks like OCD obsession on

    Pog..,

     

    Buying shares is gambling no?

     

    Regardless of motives

     

     

    Macjay has it in his skull that only capitalists are allowed to gamble or speculate,, which is 100% wrong, the great experiment was the biggest gamble in the history of mankind that brought about vast improvements in living standards and health of the cast majority of western societies and now China.

  18. macjay1 for Neil Lennon on

    So was Nazi Germany.

     

     

    Have you seen the Peoples fascists massing on the border of Hong Kong ?

  19. Canamalar it looks like OCD obsession on

    Again, your definition is somewhat removed from reality but it’s to be expected from a revisionist

  20. Ghuys can you take your little political spat to some other medium. Ta, asking for a friend. H H Hebelt

  21. Canamalar it looks like OCD obsession on

    Hong Kong is China, so not sure about the question.

     

     

    Does the UK have and extradition treaty with the Isle of Man ?

  22. macjay1 for Neil Lennon on

    HK

     

    Desperate to maintain a semblance of democracy.

     

     

    Xi Jinping

     

    Desperate to clamp down Tiananmen style.