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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http://t.co/VTwwsPEcep
Bada bing
Badge is a bit like one on our shirts in 1995
onlyonepaulmcstay
I like kusadasi the best plenty of Irish bars !!!
Which stadium is this?
http://t.co/Wjsb8xrUW9
http://twitter.com/CelticNetwork11/status/424285783516655616/photo/1
Badges.. we don’t need your stinking badges :)
djbee
21:25 on 17 January, 2014
Gies a clue, cos sally disnae hiv one…hehe
Just took a break to watch our Big ’67 Cup win on an old vhs. What a team we had; absolutely crucified cattenaccio; the first real attacking fitba in Europe that the Dutch studied, adopted and implemented afterwards. When you see how good we were, it makes your day, as it did mine tonight. My uncle John was there in Lisbon. He was a real Celtic mhan and it was great that I could invite his son to Seville; another great effort at Europe’s top table.
MorethanaclubCSC
!!bada bing!!
21:17 on 17 January, 2014
We don’t, and there would have to be extensive consultation with the support before it was even contemplated….!!!!
Goblins orcs all ugly tax return in a fortnight salary mcmoist will announce a turnover more than bridies Forfar JCGE
67Heaven-not so sure my friend.HH
!!bada bing!!
21:36 on 17 January, 2014
I’m VERY confident….
Ok, serious quesion. A lot has been said about sale and lease back, how much is it worth and who is going to buy it. Ipox I am talking about, surely ticketus will put a bid in and get some cash back.
It must be worth at least 56p if you bought the whole shebanf for a nicker.
Are we quizzing tonight then?
The newest club in the SPFL are on the verge of administration
after only 18 months in existence.
That has got to be a new world record.
DJBEE
Celtic should buy their training ground.
http://t.co/5i89XlayJq
fieldofdrams
No one interested mate.
Boa noite.
End o a hard shift in the windy, sand dunes.
BCW
Outrageous! I will just have to turn to drink instead.
Was back over last Christmas and had a good evening with a fellow CQNr.
What exactly is going on in the Gallowgate?
Went to BAR67 and no game being shown so went to the Emerald Isle next door.
Boxing Day evening and it was dead, Bairds closed and the Pheonix closed (I was there for the opening at the first game of the season against Aberdeen with my kids not too long ago).
I was taken back by the lack of punters around and the closure of the pubs.
What has happened? Serious question.
Once a Celt…..Always a Celt.
fieldofdrams
Yip Outrageous………spent 1/2 a shift at work putting it together too.
http://t.co/nPZw1K3TV1
FU Cameron, well done Liverpool, call these bassas out
BCW-I’ll give it a go mate.
Minceyheidman
Simple answer is everybody gubbed and lyeing in scratcher. more and more people getting a good few days off at that time, pick n choose your nights/days oot, plus weather was £$%^T!! over hol period.
onlyonepaulmcstay
21:06 on
17 January, 2014
Turkey bhoy @20:17
My mrs is just sitting here trying to look for a holiday for 10 days, she had mentioned Turkey, where is the best place to go? We are just looking for a chilled holiday, nothing mental, inside knowledge is the key mate!!
Have a wee look at Olu Deniz.Really beautiful,great beaches,boat taxis,stunning scenery and as laid back as you want.Always ask the price,barter like hell,and as I said,stay out the tourist traps.Turkey is beautiful.At this rate its the place to go.
DJBEE
That is fair enough but Bairds closed?
Tomorrow Neil’s ‘Invincible’s’ play the Mothers
in a top of the table clash at CP.
I would suggest that there will be very few comments
about the attendance from our ‘friends’ in the media
who now have alot more to worry about.
Bada Bing/fieldofdrams
I’ll try and see if more are interested, maybe Sunday night or next Friday evening.
BCW-OK mate
Gordon
World records is what they do best :)
Minceyheidman
Pretty sure I read the council revoked the license some time ago.
Bairds has been shut for about 9 months,maybe longer..
Fat Sall look at Neil Morrisey for paying your debts
Minceyheidman
honestly don’t know but did they not lose their license due to polis being, well, polis?
It was rather sad to see such a Celtic landmark as Bairds has always been closed down, maybe I should have checked first.
Are there any moves to re open?
I thought it may have had something to do with the commonwealth games, as I remember going to Manchester when they had it and the streets were cleaned up around the city centre and certain people taken off them and hidden away for a while.
DJBEE-I think the polis said it was for persistent non co-operation…….
Bairds was shut once they found out that the toilet scene from trainspotting was filmed there
Love
Looks like the polis have other issues today; looking for the wee 3 year old missing in Edinburgh. Thoughts with him and his family. Hope he’s found healthy and well and that this will not be another very sad story.
HH
Gerry