Got into a brief conversation last night about whether administration and liquidation were likely at Newco Rangers.
The club’s creditors will be few and of comparatively low value, nothing like their predecessor club’s £100m debts. They will owe HMRC vat and PAYE money, utilities and other trade creditors will be owed no more than a small number of money’s month. Newco have not been able to secure bank borrowing, so that’s not a worry, but there may be directors’ loans, as well as wages in arrears.
The upshot of this is that money saved by ditching creditors is limited and unlikely to offset the damage administration would do to a club with less than two years trading history. The only significant action that could be taken in administration would be redundancies. Playing staff could have their contracts terminated by administrators, bringing to an end the Charles Green extravaganza.
Liquidation is an unlikely to occur as a consequence of the short or medium term challenges.
The most surprising element of yesterday’s news is that players were asked for such a modest pay cut. 15% of player salaries will not change the fundamentals and will save very little (circa £300k) between now and season ticket renewal time.
Keep your eye on the sale and leaseback of properties we discussed here since 2012. If Ibrox and Murray Park are sold (potentially to existing investors looking for their payback), Newco could get some relief between now and being able to reach the Premiership, while the investors would become less anxious.
The cynic would say that being able to lay blame for selling Ibrox on players for not taking a modest pay cut is a convenient line. Selling your main/only fixed assets to a commercial investor is a horrendous prospect as you will left to pay the consequences in perpetuity, you also lose collateral, making future borrowing more difficult and expensive, but, right now it’s a decent option for Newco. Their future is screwed, not because of a land deal (delightful irony), because of what has happened on that land over the last two decades.
The fundamentals remain:
Running a football club the size of Celtic, under normal conditions, costs anything between £17m and £22m – before you employ a footballer. Utilities, rates, policing, stewarding, insurances, maintenance, ticketing, PR and the tasks circa 200 people carry do not come cheap for a club of this size. When budgeting for football operations, start to count your football income after you’ve banked money around this level.
Newco Rangers will be a fraction below this at the moment, but if they are to continue to operate a business capable of entertaining (sic.) >30,000 people several times per month they will not be able to eat into these costs significantly. Insurance, rates, police and other costs need to be met; face painting is optional.
A club the size of Newco Rangers, or Celtic, is not viable without regular Champions League income, and is not possible short term without splurging into higher debt. If Celtic slip away from the group stage for an extended period, they will have to downsize all areas of operations. Football budget would be much more like Aberdeen’s.
Keep in mind the words of the magnificent Blue Knights. While ensuring Charles Green was left in an invidious position to start his new enterprise from, they were clear, only a CVA, leaving Rangers in top flight football with access to Europe, was viable.
This BBC article adds insight into what I referred to yesterday about former Southampton chairman, Nicola Cortese: “A presentation to the players in April last year did not ask if Southampton can win the Premier League, but how can they win it?
“Players were asked to fill out questionnaires. What time did they wake up at home? What were their habits? Did their children wake them, did the dog? The results were analysed and changes were made.
“When Southampton travel away from home, the hotel is often booked for two nights rather than one. On the first night, club staff arrive and clean the already pristine rooms. They vacuum up every particle of dust that might cause illness or carry a bug.”
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T4
No that much, about 300 mts2, got it for free when I filled it up, the water man has put a stop to that though, there was a pipe from the mains that I managed to tap into >}
Funny you should mention that, the past few days the water level in the pool has been rising, about an inch a day, can only put it down to water attracting water, I would worry if it was losing the same.
HH
glendalystonsils-VP-I get the impression the Board are trying to supress the Irishness of the Club,if you see what i mean…
T4, research has shown that SSB will almost certainly lower your IQ. Eminent psychologists warn that even one programme will do brain damage equivalent to constant blows to the head delivered by a top-class professional boxer.
justafan- go to the website it is in the background of all the articles
For those who read KDS Big_Bobo_Balde has just posted on the Huns thread.
Tonto anyone?
HT
Ditto .. im even going to the souperstore tomorrow to buy a celtic shirt for my wee pal in goa
Btw
I think the zombies should organise a big card display tomorrow on the 15th minute ;)
Just read this on twitter from the DR legend Heavings, C&P so DR get no clicks. This guy must have a Crystal ball!
Hugh Keevins: Rangers pre-season training shows they have more money than they’re letting on
HUGH reckons Rangers are playing down their strength as Smith and McCoist look to combine just like the good old days at Ibrox.
21 Jul 2013 11:48
McCoist and Smith are putting together a side to take Gers back to top form McCoist and Smith are putting together a side to take Gers back to top form
SNS Group/Jeff Holmes
CALL me an old cynic if you like but I think Walter Smith and Ally McCoist are at it.
The chairman tells us he’s nowhere near astute enough to hold down that lofty position at Ibrox.
The manager says Rangers aren’t ready to play with the big boys, such as you-know-who across the city from them.
So what was that opulent training ground in the German countryside all about then?
Take one charter flight, the cost of hiring premises the cream of German and English football use to train on and, with other expenses, it comes to the annual budget for some of the clubs Rangers face in the Second Division.
And they left behind a £14million complex of their own on the outskirts of Glasgow to train abroad for a week.
Not bad for a club who have a declared need of money.
You don’t do all that in order to beat Brechin City on the opening day of the league campaign, do you? Is this not Rangers tooling up for an assault on one of the cup competitions so they can take great delight, and deservedly so, for being the lower league club who gave a red face to the beaten finalist from what will soon be called the Scottish Premiership?
And wouldn’t their fans revel in that moment. It would keep them warm for the next two years until Rangers are back in the top division.
Now Ally can relax and focus his full attention on the team because he’s not required to hold the club together
whenever some fresh irritation arises off the park.
And how much of that has he had to do, and to the detriment of the team, over the last 18 months?
When news broke that Charles Green, Rangers’ former owner, might have colluded with disgraced Craig Whyte to buy the club the manager delivered one of his legendary one liners on the subject of personal happiness.
“I’m not exactly outside on a unicycle wearing a big red nose,” he said, meaning his funny bone might as well have been surgically removed at that point. (my favourite bit, I would for £825,000!)
He can get the clown’s outfit on for amusement now if he likes as Walter’s the firewall between the team and any matters that are none of the manager’s concern.
He’s shouldering the responsibility that once weighed down on McCoist and he’s better at it than he lets on.
Smith says he’s not the club’s conscience but he’s the face of Rangers and the glue that holds them together.
He arrived in Germany on Tuesday with chief executive Craig Mather and was clearly able to mix with the players and the management with equal ease.
He also managed to deliver yours truly a little light touch chastisement in the midst of his busy schedule.
There was a difference of opinion arising from the interpretation of something I’d written about Rangers last week and the chairman took me aside for a quiet word.
Nothing so vulgar as a row, simply the subtly-put expression of the club’s standpoint accompanied by that cold-eyed stare that reporters used to get when Walter was running the team and had been caused upset.
An ear bashing but without any visible scarring that would show up in court, if you know what I mean.
And no concessions for the over 60s, not when the one advancing the club’s point of view was a year older than me.
No harm done. Happens every day in this line of work. Nothing to see here. There were sporting handshakes all round at the end of our conversation and Walter went off to be statesman-like with his
genial hosts from FC Gutersloh.
He says he’s not suited to the boardroom because he doesn’t have a proper handle on generating the level of finance Rangers need to challenge Celtic one day.
The gap between them at the bank is massive and growing in Celtic’s favour every year – but everything stems from the team on the park.
Ally can get on with attending to that side of the business.
The “auld yin”, as he calls him, can give Rangers an element of stability while they sort themselves out behind the scenes.
Somehow I think Walter will be the chairman for longer than he’s letting on and it’ll be no bad thing for the club.
I look forward to the next tug on my jacket for a brief word.
Reading back and seen a few posts about the albion car park. From memory (read/told/or dreamt) the planning permission for the clubdeck at the theatre of dreamers was conditional on the provision of additional car parking capacity. Both are linked – nae car park, nae opening the clubdeck. Would make mista charles rush to secure purchase, and eddies assumption about it’s worth, make a bit of sense.
Big Happy Friday to you all.
HH
What’s with all this “alistair” and “Walter” carry on
Is it some subservient Masonic malarky
Sandman
I seen Kieth Gillespie on SSN as well and immediately thought of Charles Kennedy on the telly just before the lib dems got rid.
GlassTwoThirdsFull
18:25 on
17 January, 2014
Billiam Dodds – “Lee Wallace is worth a couple of million”. What – Turkish Lira?
Hoy,thats enough of that!!!!!!!.
torontony
19:26 on 17 January, 2014
Hey amigo, glad to see you posting. Remember I am partial to a Guinness next time you are here.
Keep the Faith!
Hail Hail!
Marrakesh @1816
Brilliant mate :)
Well….apart fi wrong song ;p
http://t.co/HBYPqmvBsE
A classic. Sevco players reject pay cut, might be a sweary word or two but….
Much as I can’t stand listening to them, I think we owe guys like Keevins and his pals a debt of gratitude for their hun sycophancy.
He reassures the hordes, puts them at their ease, offers them false hope.
He gets them lying back on the deck of the Titanic, listening to the band, instead of getting into the lifeboats.
Happy birthday to big CQNer, former TKFer and lurkin Bassa, Kingoh!
HH
TTTT
PFAyr/Torontony
Hello lads
Just taking my afternoon break and skimming through CQN, and saw that you both had just posted, so I thought I would say hello.
I had taken a bit of a break from posting (there was too much sniping on CQN for a while there … and since too much of my days are already consumed with sniping, I wanted a break from it when I wasn’t working, so haven’t been posting much).
But, I had a nice break in Jamaica last week, and recharged the batteries, and since I saw you two online, I figured I would make my CQN return and say hello.
PF …. how are things? how’s your lad doing? Is he still thinking of coming over here?
Tony … how ya doing? I’ve been trying to convince Kath that she needs to get into the whole Celtic/CQN thing (she was amazed at how many Celtic shirts etc. we saw in Jamaica, and what a good reaction it got when people saw mine …. and no Sevco shirts!) … but if you go posting things like I know she is too good for me (as true as it certainly is!), and she happens to read that on CQN, you are going to make my life very difficult indeed!
Are you at the club tomorrow? If so, I may swing by and say hello.
HH
Turkey
I think doddsy means a couple of million shares
Trying seriously not to get too worked up about the huns.Very difficult.Dont want to get the hopes up too high,while chewing the fingernails.
Great news from Celtic on the Amsterdam fans.Well done.Everything going along damn swimmingly at the moment.A wee cheeky goalgrabber,and another disaster story from the huns would be wonderful.And a gubbing of Well tomorrow would be nice.
Pukki will become a very useful player for us,he has got something about him I like.Moves like a thoroughbred.Not a striker,but Lenny knows that..
A few po pooing the idea of Grffiths.Not saying we should buy him,but the boy scored a barrowload up here,and has a great scoring record for Wolves.A striker is a guy who puts the ball in the net.Fits that bill.When you see Jelavic being punted in England for £6.5 million,it makes you wonder.Maybe we are a bit too picky.I have always said,dont care what he costs,if he does what it says on the tin,I will be happy.
A great start to the weekend.
McCoist is hailed as a great rangers man but has put his own ego first.
Giving journeymen five grand plus a week to beat East Stirling, Clyde and Forfar to merely cover up his own shortcomings as a manager.
A great rangers man – earning a big fat salary – maybe not.
WBA sponsor Zoopla have threatened to cancel their shirt sponsorship deal immediately re: Anelka’s anti-Semitic actions – if they are not dealt with pre-Everton game.
southside
19:46 on
17 January, 2014
What’s with all this “alistair” and “Walter” carry on
Is it some subservient Masonic malarkey
…………………………………..
Truly boakworthy show of lapdog succulent lamb feeder behaviour which is widespread in the media
HH GMB.
That’s at least twice Sally has been reported as having taken a wage cut. But hasn’t.
What is it with sevconians and word meanings?
Cut – deferral
Liquidation – administration
Skint – minted
Hoopy Birthday Kingoh…
Keep the Faith!
Hail Hail!
You have your entire life ahead of you!!
https://twitter.com/CollectCelticFC/status/424269348488749056/photo/1/large
Anyone thinking of going to Turkey this year on hols,fill yer boots.The Lira is trading at 3.61 to the pound.Last summer it was 2 70..Packet of cigs now £1.60,a big beer the same.Really cheap if you stay out the tourist traps.
Lennybhoy – You’re never far from my thoughts amigo and i appreciate all the good work you have been doing recently. You will indeed be on the list for a guinness sesh if and when i get home:)
Mike – I’ll be at the club tomorrow mate. Swing by and we can catch up over an irn bru. Glad to hear Kath is becoming aware of all things Celtic.
slainte
tony
Evening all
Just had my tea after a stressful week. So let me get this straight. ( I now for personal reasons refuse to consult any mainstream Scottish media outlet unless Judith is on the weather) Fat Salary is still on his £800k a year salary. BDO have agreed to give the current Huns some of the fee generated by Everton’s sale of Jelavic. Sydney Tim – a genuine good mate of mine- is still moaning even after getting into the Wolfe Tones for nothing. I know the last to be true- but I cannot seriously believe the other 2
Jimbo67 supporting Oscar Knox
Funny that SSB/ Shortbread made no mention of the first cuts at Ipox tonight?
Andy Mitchell N.I. has had his contract cancelled – mutual consent.
Southside,
Walter is the man with no surname.
So when the girls used to say to me they were staying in to do their hair, they weren’t actually knocking me back?
https://pbs.twimg.com/media/BeNU6n1CAAAGMHc.jpg
DJBEE
That’s a peach of a photie :O)
Operator
When your a legned you only need one name ;
Hitler .. Frankenstein .. Walter … Dracula .. Mussolini
djbee
20:28 on 17 January, 2014
So when the girls used to say to me they were staying in to do their hair, they weren’t actually knocking me back?
https://pbs.twimg.com/media/BeNU6n1CAAAGMHc.jpg
Aye, but who’s the Bhoy on right?
Djbee
Is the one furthest to the left Phil Lynott?
Is the bhoy on the right Ray or Willie McStay??????
TBJ
You missed oot Thatcher n Blair.