Paltry 15% cut cannot be main story


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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  1. Kitalba



    You sound disappointed to see the balance of posts, that appear to you, to be more about “thems” than us, and I understand where you’re coming from. However, what do you expect to see on a Celtic blog, when “thems” are imploding, and adding to the joy of being a Celtic supporter?



    I’m afraid to say, but, I’m one of those guys who viewed a “Rangers” defeat, with almost as much joy as a Celtic victory.



    I have to concede that you’re probably a better man than me in that respect, ( no sarcasm there, honest!).




  2. .



    I Kinda Get.. What Kitalba is Saying..



    And..I ‘sort’ of get what Johnny the Tim is saying..



    (No l Don’t )..



    What I don’t Get is…..?






    When is the Next Olde Firm Game..



    And Who is the Referee.. ?And the 5th Assistant.. ? And the 5th’s brother..



    When is the First *Insert Plc name* Penalty..






    How Many Celtic Players will be Booked..






    You know what’s comming Next..



    When Will Sammi Score..????



    Summa of..?????

  3. Sammi not in the team? Wonder if he’s really injured or on his way out. If so he would leave with my thanks and best wishes, but there’s surely got to be someone out there with a better goals to games ratio who we can afford.

  4. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    Sitting in Paradise……Malorbhoy got up at 1.50, put his coat on and disapeared., only to return 5 minutes later. He thought it 2.50 and went away up to his seat ……hahahahahaha

  5. Jonny the Tim:



    All I am saying is hate begets hate and all that hate spawns. That’s all. It can be ended but for it to be ended each one of us has to make the conscious decision not to entertain hate.



    Gloating is not hate, gloating is just gloating.



    Also I personally feel that as a support we tend to focus on the huns more than we focus on the guilt makers. That’s just my feeling. I ‘believe’ we commercialise hate to a degree and for me, that is not what Celtic is about, and hopefully too neither Rangers.



    I know my feelings are not commonly shared, but I can’t change that.

  6. fassreifen



    but there’s surely got to be someone out there with a better goals to games ratio who we can afford..



    Yes.. Willo Flood scores more Regularly than Sammi..



    Do the Logarithmos..



    Summa of

  7. Looks like its CQN updates for me today….stuck in a chapel car park with my phone and my electric cig….I’m the transport for a wedding photographer…



  8. Kitalba,


    I think there may be quite a few in.your camp,


    (i hope so anyway)


    Sometimes its all down to the simple matter of choice.

  9. corkcelt- SUPPORTING THE DAM 5 on

    Delighted to see my fellow Cork man making the squad again today. Very pleased that media are reporting progress re getting safe standing areas in Celtic Park. Hope there is a good crowd at Celtic Park and that we win in style. This is a great great time to be a Tim, cherish every moment of it.

  10. Cowiebhoy supporting the Celtic to 3 in a row on

    Guys need to get something off my chest, been meaning to come out…now don’t judge me…I’m a Tim, through and through…but I’m gay…and proud…comments?

  11. They lumber in our shadows on

    cowiebhoy ,does it matter? We are all Celtic supporters together.Must take courage to post.



  12. Good to see Celtic Park return to normality yesterday, with a


    Celtic performance to match the excellent atmosphere. It was


    a game of football and despite the scoreline Motherwell are a good


    pro side.



    A competitive league where Celtic always prevail is where we are headed


    into infinity. Tactically, it’s an odd Celtic formation where we accomadate


    the lack of a target man, and at times it’s difficult to know how or who the swinging crosses from Forrest Fisher Izzy are supposed to reach.



    At times in the first half Mulgrew was popping up where Sutton used to play


    and even missed a knock in, on his swinger. But it was superb pass and move stuff, and Motherwell couldn’t cope especially in Celtic’s trademark whirlwind opening.



    The referee began to feature when he looked hesitant to point to the spot, on the Stokes trip, and I’d bet there were lots of Celtic fans waiting on the yellow for Stokes for simulation. Bobby Madden then punctuated the game with bizarre guesses, and completed his miserable afternoon with Anthony’s red.



    James Forrest was in sparkling form and plays his best football when his boots aren’t covered in chalk from the touchline, played inside in the crazy Celtic formation, is where he should be at, to allow Fisher to run past him on the wide.



    Joe Ledley played so deep he wasn’t noticeable, until Motherwell began to rally, and his future along with Sammi’s will remain a doubt maybe till 31st and


    may be the key for another striking signing. Special mention to Virgil Van Djyk a colossus, who even manages a pirouette dummy and shot on goal, not bad for a giant of a man.



    MOM James Forrest