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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SoAL
That’s the one, many thanks.
HH
I’ve had a wee refreshment so forgive me for repeating myself – when the final fire sale takes place I’m gonna buy that Loving Cup, I will bring it down to Heraghty’s Bar, I will fill it with Dalvey 10 year old ( though it’s 12 year old now as I’m scared to open it) and I’ll get Charlie Devlin to sing “Two Little Boys in Blue”. Hopefully you’ll all turn up and it will be like the night of the 4-2 gemme.
The Spirit of Arthur Lee
23:25 on
17 January, 2014
!!Bada Bing!!
I saw the drifters and they were all white
Tribute
——————————————————————————————
Cliff Richard and the Drifters?
Roy
“We” play rangers ( berwick) at home next Saturday at 3pm.
Hibs v my other team sunday 12:15
CRC
I was going to ask if your katy could help me swig some of the ba bru pre match .
And I still can’t find it !!!
Another request, due to my non existent filing system……..
A couple of years ago there was a vid out, one of the dubbed things, where Lenny was hailed as some sort of saviour, his pic was all over the bill boards and the like, it was set in Sweden I think, very business like….again any ideas ???
HH
http://billynowell.com/2014/01/17/one-cake-at-a-time-by-billy-nowell/
BTW
All Joe King aside… has the value of a gingy bottle EVER reduced. Apart from if you lose the cap.. the label .. or obviously smash it
A sound investment with minimal risks
Its great that all the huns appear tonight like their idol Mr Ben
TET
cant find that one and it was a classic…
hh
Good evening all (just) and good night. A game to attend tomorrow. Sobriety is the name of the game. Hope you are all well, and a wee thought for the family in Edinburgh who have lost a baby. Shocking stuff!!!
roy
Aye, it seems to have been deleted, sadly, it was his best IMO
HH
McCoist is a hero in the eyes of the Clive Dunns. Very few see him for what he is, or refuse to see it. An 850k per annum bloodsucker. He fine well knows that his gig could have been covered for one tenth of that by a McCall or Sheils, and with better results. It really does speak volumes of the average Sevcodger that they still worship this dude. Its no wonder they ended up in the state they’re in.
I remember nearly losing it at the ole U2 concert,in the SECCCCC. I was close to the Edge.
“Cliff Richard and the Drifters?”
TooFunny CSC
Marrakesh Express
He is a hero I will have you know, and the longer the msm fail to do their jobs by questioning him, I am grateful.
Jeezo, they could end up with a manager that is actually half decent, as you say the mullet could do it for a fraction, and he would get results.
All hail the msm, seriously, they have been the biggest contributers to their downfall, and long may they continue till they have gone for good, without them, who knows where we would be.
HH
Why don’t you get Indian curry patches?
Burp CSC
Paul 67 /All
I suspect Paul ain’t around , but here goes.
It may have been discussed earlier, but I wanted to comment on the way Southampton go about their business, particularly asking the players what it takes to win the EPL.
I would love to think our own board did the same with the Champions League, but being pessimistic……
Over the the years I have been fortunate, and unfortunate, enough to attend various speeches by top class sports personalities, who have achieved their dream. ( I also listened to Karren Brady, who is full of ****)
Anyway, the two that stand out are Chris Hoy and Sean Fitzpatrick who both focused on the little steps that give a competitive edge, and all added up to one big step.
The approach of Southampton, sounds very similar, to the themes of Chris Hoy et al.
I would love to see us do the same, and throw everything we could at a CL final.
Thoughts ?
http://www.youtube.com/watch?feature=player_detailpage&v=LyQYs5_63Hk
The Specials-Gangsters
dontknowwhoimthinkingabouthereCSC
Clashcitybhoy 00.03
I would see some relevance in Paul’s point if Southampton had actually won the EPL.
They have won sweet fanny Adams .
TT
TinyTim,
Fair point, but they have gone from 3rd tier to 1st tier of English football, admittedly not under same stewardship.
My admiration is based upon their ambition, rather than the operational detail.
Would you not like to see Celtic have ambition to win CL?
Bourne 23.58
I kid you not.
Perish the thought.
http://www.youtube.com/watch?v=uHQXL8wPsCE
Exiled tim
Very true. I despise the Smsm with a passion but I really shouldn’t.
They paraded our heroes Green and Whyte up Edmiston drive. They refused to warn the huns of impending admin. They bum up the manager, hanging on his every word. They hide the truth. They have been a major player in the death of a ‘Scottish Institution’.
Celtic may well have been the dominant Scottish club before 2012 anyway, but they are cemented now, and for the forseeable future.
I am therefore eternally grateful to Jackson, Young and co for their efforts.
So, nobody remembers the vid about Lenny then, and I thought CQN was the font of knowledge >}
HH
People are Strange.
Bilbo, MON, both great characters but enchanted by other things.
Neil Lennon is learning from his Masters mistakes, We are Truly Blessed to have had both these guys at our Club.
Marrakesh Express
23:52 on
17 January, 2014
McCoist is a hero in the eyes of the Clive Dunns.
Aye today he is. Wasn’t that long ago I was one of the few gallant pioneers on FF who still wanted to keep the fat chump.
And McCoist says he has sympathy for his players, stating they were not to blame for any financial problems at the club.
He said: “I don’t know who is responsible but I do know who is not responsible and that’s the players and supporters, who have given us two years of 36,000 season tickets.
“I have my own ideas about who is responsible, but I would rather keep them to myself.”
______________________________________________________________________________________________________________
Aw come on Sally.
What happened to “this decision could kill our club… We demand to know who these people are….” ?
On the matter of your wage cut, did it ever occur to you to correct the erroneous reports in the press which broadcast,
nay ‘hailed’ the magnificence of ‘Coisty’ demonstrating his committment to the club by halving his wages?
Just how many lies does it take before the Sevconians finally realise they are being played at every turn?
They just don’t get it.
Are they truly so utterly stupid that they can’t see this?
I know that Tims love to slag off the huns as being truly thick.
The evidence does tend to support this hypothesis…
BCW
Are you still on FF ?
I have been banned sin die for a while now, they really don’t like anything that is anything like truthful, I have another login there, through the young fella, but would get banned again pdq, just can’t help myself >}
I like to go there on occasion just to see them squirm, it does wonders for the feel good factor so it does.
I have also noticed that a poster who used to post here reguarly, now spends a lot of time there, gone feral me thinks, it can happen >}
HH
phyllis dietrichson
23:39 on 17 January, 2014,
I’ll be there, watch out for acgr, when whisky is involved, he can smell it for miles.
SOS…save our Sally.
TET
That’s weird I got banned for repeating their same club lies, ok I repeated it a lot, but that seemed to irk them too.
Goodnight and god bless all Tims.
Apparently there’s a story about the Easdales putting £20m into Ra gers IF someone offers them £100m for the bus company (minus the burnt out sooper dooper one of course)
Oor Jack must have been a busy man today.
Maybe Dave King might buy it.
When there is so Much GOOD at Celtic and I’m talking about the Supporters especially, The Lord would never abandon such a Faithful Band, the All inclusive crew.
Kitalba is half right, let us not gloat so much in their demise but try to build a lot better future, especially for oor fitba team.
I’ve never been one to be a bigmouth in public about Celtic when they were doing well, well because I know the others would be hurting bad, God’s story is remarkable and he WILL test everyone to the limit, IMO.
Speculation is that Easedales will invest 20Mill in Sevco……
Now when you consider the lengthy history of spin emanating from the MSM where reported facts turned out to be nothing more that bull, what value can be placed on ‘speculation’?
How about putting it this way…
“A realiable source, overheard a conversation in the pub, where two very smartly dressed business types stated for certain that they had heard a rumour that the guy down the road had told his neighbour that his best friend had heard a story somewhere that the Easedales might be possibly considering selling their business and investing 200 pounds in some Sevco chairs.”
Note: Both the purchase items and the amount tend become modified by the chain of chinese whispers….
Speculation is nothing more than pub talk.
What Sevco need is action.
If the Easedales were thinking of galloping over the horizon to save Sevco, why not just do it? Why ask the players to take a wage cut?
We had the stories of Super Dave King absolutely guaranteed to be OK’d to be new Saviour of Sevco. Where is he now?
Spin, spin, spin, spin, spin.
We boy from Edinburgh’s body been found. Man been detained.
Fucking awful. Why in the world would someone do that. Just tragic
Mea Culpa
I totally agree. Even the Orcs aren’t buying it. Someone hit the nail on the head when at the start of the week that piece from Jackson about Hearts was a sneaky way to limit the damage on Rangers should they ever go back into admin. Jack might be calling in a few favours.
sipsini
00:55 on 18 January, 2014
SOS…save our Sally.
………..
Well said the longer he is there lining his pockets with the rest of them the better.
Look at our dugout and couldn’t imagine any of them buying penny shares and taking high salaries to shaft our club in the same situation but thats the difference.
HH GMB
clunks
God rest the poor wee boys soul.