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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Minceyheidman
They are using the CG as an excuse to “Clean up the city” as they also stopped an early license opening for a place I go to not to far from a recently deceased team, just so happens that great establishment is frequented by supporters of a Glasgow team that plays in the top league.
They are really really really hurting.
Fnarg.
!!Bada Bing!!
21:08 on
17 January, 2014
Turkeybhoy-might be over in the summer,but will be a resort with 7 year old on tow..
Antalya might be a good shout.Biggest Aquapark in Europe,lots of great boat trips.The majority of hotels are All I nclusive and have kids clubs.With the rate the way it is probably better to go it BB.Get out and about .Get your Celtic strips for a tenner.
Watched the actor Neil Morrisey being interviewed by Peirs Morgan tonight,he ran up mega dues to his creditors when his businesses went to the wall, he paid every single creditor off rather than apply for bankruptcy , a kind of man behaving badly but with honour.As for the Huns they don’t know the meaning of honour HH
Turkeybhoy-was in Marmaris a few years ago,the 2 hour bus transfer from the airport was a nightmare.
BIG-CUP-WINNERS
I rushed home trying to get back in time for quiz and it’s not on????????????????
Oh well one of those things
Mincey
Bairds had it’s lisense revoked and can’t see it ever opening its doors again.
Apologies again for leaving you with Mick and Ziggy!!!
As the inevitable administration draws nearer
will the truth out as to who owns what at Sevco.
Will our hero Craigy Whyte have one final hand to play
in this glorious debacle and will the thread eventually
lead back to SDM.
Confused you won’t be.
For a Friday evening and from Duluth, Minnesota Low – When I Go Deaf
Well; let’s hope that they find the wee fella alive and well. Puts Fitba in perspective……..
adi_dasler
21:03 on
17 January, 2014
Lennybhoy
If he was involved in the Gallowgate Kettling – I reckon most could have run away :)
His auld man was a bun
*his ould man made John Hughes.
Hamiltontim
Mick was ok once we talked, Ziggy was a laugh and my brother really enjoyed it.
One day we can have a pint my friend.
HH
Aye gerrybhoy.
May god keep him safe.
big sean.
Just had a text from a Motherwell supporting mate – he has heard a rumour tonight that neds of the blue persuasion are going to Parkhead tomorrow in Motherwell end to cause bother in stand.
Paying £26 to have a kick at a plastic seat – no wonder they went bust.
Mincey
Good man that sounds like a plan and I promise nothing will get in the way next time!!
Bada bing
Antalya was about 10 mins from airport or at least Delphin Palace where
I stayed was.
Really liked it and one of my kids who would have been 9 back then
assures me we got 2.40 lira and I thought it was still good value outside but
I was all inclusive.
Turkeybhoy
What does the thumb to the teeth mean got that in the suk??
Whilst bartering for Football strips for the kids’
Don’t think it was a compliment : @)
Eventually got what I wanted : > )
onlymallony
Is your mate going?
Onlymallony
HT has been paying thousands every year to masquerade as a tim … go figure ;)
onlymallony
22:33 on 17 January, 2014
Just had a text from a Motherwell supporting mate – he has heard a rumour tonight that neds of the blue persuasion are going to Parkhead tomorrow in Motherwell end to cause bother in stand.
Paying £26 to have a kick at a plastic seat – no wonder they went bust.
——–
During the recent Fir Park riot it’s alleged that some of the Huns Blue Order tried to enter the stadium and join the Motherwell Ultras; they were chased.
I’d imagine the same thing would happen tomorrow mate.
No – he is playing football in the West of Scotland Cup. Some of his mates are going though. They are a bit worried. He believes the cops are aware of the plan.
Here’s an interesting one for you! Bada’s comment about the club crest got me thinking, a painful experience these days. I thought I would look up Celtic FC registered trademarks but could not find the one Bada was talking about, but I found these:
Registered TrademarksShowing all
Mark Status Number
Hail Hail Registered 2199291
The Bhoys. Registered 2206290
Keano Registered 2222400
The Old Firm Registered 2181523
Old Firm Registered 2264673
Nowhere on the hun company pages dead or zombified could I find registration of the last two, the first three go without saying ;-)
Very interesting, or maybe not?
TBJ
Aye but it had worked until S&M outed moi!! :-)
onlymallony
Sounds like a cunning plan
Blackaddercsc
jc2-Thanks.
G’d night all; nearly the witching hour where I am and I hope they find the wee boy alive and well. Prayers for him.
HH Gerry
Onlymallony
Didn’t know that Stuart MacCall had a touchline ban????
Pogmathonyahun-It’s on various pages of the CFC website,and it is all over the fencing round the old school/ticket office.It’s black and gold,quite smart looking,was wondering why we need a new look? HH
Hamiltontim is praying for Oscar
Yep some guy turned up with a Vanguard Bears banner and got it took off and chased..
There’s no way Motherwell will stand for them in their end not the Well boys I know anyway!!
Hail Hail
Had nipped out there for an hour
JC2/Bada Bing
Was also in Antalya ( Lara Beach area ) a couple of years ago, 2 down from you staying at the Royal Wings, very very good, and excellent facilities, great water park for kids as well, it had a wee cinema, where I watched a Celtic game
Most of the hotels are themed, wings based on a plane wings, Concorde was next based on Concorde, and titanic based on that etc, not much outside hotels though.
Is worth a visit
Hail Hail
Starry
I actually saw several of that Motherwell mob charging up the stairs during the game but only found out later the reason for it.
TBJ
I have a spare ticket for tomorrow if you have any friends :-)
Hail Hail
Cowiebhoy supporting the Celtic to 3 in a row
Most of the hotels are themed, wings based on a plane wings, Concorde was next based on Concorde, and titanic based on that etc, not much
LOL
Concorde and Titanic
Enjoy
Hamiltontim is praying for Oscar
I can’t see many Orcs having the front to do that, they’re onto plums with that typical Orc plan..
Like their diddy club doomed to failure..
Looking forward to the Return of The Hoops the morra..
Pog
The club tried to tell me a couple of years ago the the word Celtic was owned by them, and I was ” forbidden ” to use it.
Aye right.
HH
SOAL
The kremlin is another :-)
Hail Hail
More than a fitba blog………………………. ???
WhoknowsCSC
Cowiebhoy supporting the Celtic to 3 in a row
Stayed in the Mary Celeste village when i was there
The sevconians don’t need to sneak in tomorrow, their biggest fan is in the Mothers dug-out…
hurtinghunCSC
An hour to go and my daughter will be allowed to open her eighteenth birthday presents.
She has invited some friends over tomorrow as have I, the bombshell is, the young ones are going into the town at twelve tomorrow night..the worry starts at midnight :-((