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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Bada Bing
The Cowboys missed out on the play-offs again this year. The opportunity of a tie-up with a club that has 500 million supporters could only be beneficial to them.
Bada
They only deal with cowboys
Paul67,
Re the sale and leaseback,
Are you saying newco/rangers MII own the ground and Murray park?
TBB
many thanks for detailed response.
gerry
ernie lynch
13:39 on 17 January, 2014
So, really, they’re fecked no matter which way they turn….!!
10 Questions Re. Ownership and Voting Control Of Celtic :
1) Do you think Celtic is Democratic ?
2) Do you think all Celtic Supporters should have equal rights?
3) Do you think all Celtic Supporters should have a vote?
4) Do you think all Celtic Supporters should have an equal vote?
5) Do you think only 29,000 Celtic Shareholders should have a vote?
6) Do you think approx. 25,000 Celtic Season Ticket Holders who are not Shareholders should have a vote ?
7)Before the PLC 20 years ago the vote of less than 10 people controlled Celtic.
Did you believe that a PLC would give Supporters more control.
8) Today 20 years later the vote of a different 10 people control Celtic.
Do you think this is healthy for Celtic ?
9)Today less than 10 people have more voting control of Celtic than 50,000 Shareholders and Season Ticket Holders combined.
Do you that 10 people should have more voting control than 50,000 ?
10) Do you think that the 10 largest Shareholders having more voting control than 50,000 Celtic Supporters is the way forward for the next 20 years?
Please note these questions are meant to be thought provoking with a view to a wider discussion on the ownership and voting control of Celtic.
For the avoidance of doubt, I ask these questions on this basis only and not as a judgement of the 10 largest current shareholders.
I do appreciate that the these individuals have done a tremendous amount of good for
Celtic over the last 20 years.
My aim in asking the above questions is to see if there is a way of making Celtic even stronger, more inclusive, more united and with greater vision for the future.
ernie lynch:
“The cost of putting the stadium right in the first place would of course be reflected in the rent.”
And also in the realisation on disposal…
If the team playing out of Ibrox do go into administration it will be interesting to see what the SFA do with them.
As the SFA claim they are the same club – they would receive a 25 point deduction for entering administration twice and promotion almost certainly impossible to the top tier.
If they get a 15 point penalty then they will be admitting they are a NEW club with the history starting from 2012.
Keech Jackson’s piece today reminded me of Jabba rushing to defend Dougie McDonald after it came out in the wash he lied to our manager (it was only a white lie of course) and “ultimately he got the decision right”. Jabba also maintained it was Celtic reneging on not paying Craigy boy up front for tickets for an old firm game that caused them to go into admin.
Keech will do whatever it takes to get his beloved team back on top. If it means lying, misinformation, attacks on Celtic then so be it.
BTW If BFDJ is on SSB tonight I guarantee major muddying of the waters. Incidentally if the players did take a 15% pay cut and their wage bill is £6m they would save about 75 grand a month. A drop in the ocean if they need to save a million a month.
Is my memory defective or did they not sell Murray Park several seasons back to a group of businessmen for lease back? Surely they can’t do it twice. Time to check the records
JHJ
”
If the team playing out of Ibrox do go into administration it will be interesting to see what the SFA do with them.
As the SFA claim they are the same club – they would receive a 25 point deduction for entering administration twice and promotion almost certainly impossible to the top tier.
If they get a 15 point penalty then they will be admitting they are a NEW club with the history starting from 2012.”
I can smell the skullduggery emanating from Hampden already por cierto.
Hebcelt?
The restaurant in Malaga harbour ( not actualy IN the harbour) is JCG Jose Carlos Garcia.
Expensive and highly recommended by my friend. Nose pressed against the window job for me.
La Surena at the harbours end is an enjoyable cheap alternative, 5 bottles of beer in a tin bucket filled with ice and a good range of tapas with Thursday a bogof.
Tonydonnelly….
About lists…..is there a tick list for credit in the Brazen Heed?
Apparently when Jinky used to own the Double J in Hamilton, his punters were all his drinking buddies as well and he used to ‘put it in the book’ after hours and trust them all to settle up honestly at the end of the week,as the wee man couldn’t be bothered with money and all that stupid stuff while trying to run a business.
Anyway,legend has it that the one and only time the pub got burgled, the only thing stolen was the tick book from behind the bar.
Sassenach,
now that you have posted that comment, I remember talk about Oldclub Rangers having to pay for any players that came from Murray Park if they wanted them to play for Oldclub Rangers.
Don’t know whether this would be the same for Newclub Rangers.
Secco my favourite comedy outfit, running the club without CL money would prove difficult for ourselves this is why it is so imprtant to give our young players a chance not just a langue cup game but told you have got a 10 game run to 2 of them see how they get on. Say league matches as we will win the league. We must be bringing through more young players. This season the boys who played against Liverpool and Galastaray did very well but we have not seen enough of them in competitive matches. I would use them in league matches and play the full first team in cup games and the CL .
Have to break my embargo for this:
Wallace is right – there will be no admin II – no one can dispute that. For the very reason that so many posters on here have indicated this morning – they haven’t been through admin 1 yet.
There is no point in resisting the temptation to tell them once more:
Sevco, we told you so!!!!!!!
Back to my self imposed exile. First time I’ve surfed the comments in ages. Could not resist today.
Lang may their lum be liable to structural damage!
Au revoir
Right…..Dark at 4.45…..aff oot for a quick 9 holes.
Sevco,Please be deed when I come back.
Is the game on the telly tomorrow please?
They’re probably not losing £1M/month anymore. They lost and average of that until the accounts of June last year. Some of the costs in that were exceptional.
What we do know is that they stated money in the bank would run out around April. They’ve had a few payoffs since then that would have been unaccounted for when that statement was made, so the predictions of something bad happening around February are probably quite close. I’d focus no further than that.
TBB
Had an email from BRTH concerning the blog you were pictured in seems you are both aware of who the little %&*5 it is & the matter is being dealt with
ryecatcher
13:11 on 17 January, 2014
BMCUWP….
Seriously,The Lancet Medical journal reported a couple of years back that the domestic appliance blamed for most visits to A&E department in Brighton was the humble old vacuum cleaner.
————————————————_
Ryecatcher
The only tic you get in the Brazen is CELTIC, ;))
Nobody else find this piece in Paul’s article alarming?
“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.”
I would guess, based on current team standards, we will fail to get to the group stages more often than not in the coming years. A slippery slope, as once we fail once budgets will start being revised accordingly.
Philbhoy
3pm Sat. KO, game not on the telly, unless your overseas of course I think.
ryecatcher
13:11 on 17 January, 2014
BMCUWP….
Seriously,The Lancet Medical journal reported a couple of years back that the domestic appliance blamed for most visits to A&E department in Brighton was the humble old vacuum cleaner.
————————————————
Premature posting, happens at my age ;-)
Yes that was the Hoover Dustette, I believe. It had a fan just inside the suction aperture which did more shredding than sucking. Ooh err missus.
MA&H
Ta
Ah memories
TD67
Cheers!
Bo’ness!
TBB,
Thanks for the clarification on the co-op loan.
I’ve tried to explain it to huns in the work but head hitting the wall springs too mind! I’ll just relay how you put it. Ta for that. HH
Fat Salary has absolutely backed his players for refusing to take a wage cut of 15% keep going Sal your managerial skills are partly to blame for the predicament your in
POGMATHON YA HUN
As a single bloke,I know Nowt about such things.
I let my wee pal,who shares the house,deal with such things as tidying up.
And I’m sticking to that story….
DeniaBhoy in awe of wee Oscar’s Courage
“I would guess, based on current team standards, we will fail to get to the group stages more often than not in the coming years. A slippery slope, as once we fail once budgets will start being revised accordingly.”
Current Team qualified for the Champions Leegue por cierto
Sipsini
I cant believe the great business minds you work with. . Just don’t get it
Ryecatcher, anywhere on that coast will get you a good fish supper and Pittenweem is good.
The man who wrote the Kelty Clippie, the late John Watt rated Pittenweem so much he wrote a song about it. PITTENWEEM JO
I’m goin’ wi’ a lassie fae Pittenweem,
She’s every fisher laddie’s dream.
She guts the herrin’ doon by the quay,
And saves her kisses just for me.
Well, last July it come tae pass
I met this bonnie fisher lass,
Wi’ her e’en sae blue, and black was her hair.
I met her doon by the village fair.
Oh, Pittenweem, Pittenweem,
She’s every fisher laddie’s dream.
She guts the herrin’ doon by the quay,
And saves her kisses just for me.
So I says tae her, “Can I see ye hame?”
She says, “Och fine, but I ken yer game.
But ne’er the less, ye’re awfy kind.
In fact, a widnae really mind.”
So I took her hame that Saterday nicht.
The moon was shinin’ oh sae bricht.
And as we sat there on the grass,
I said, “Hey, Jo, will ye be ma lass?”
Well, she’s ma lass noo, and weel I ken
She disnae gang wi’ other men:
‘Cause I was fast but they were slow,
And that’s how I won my Pittenweem Jo.
http://www.youtube.com/watch?v=6DibgnPrT64
TONYDONNELLY
All that you say about me is true. Well done,Droopy.
Hands up,I’m finally outed.
Still,I can console myself with never posting on the DR website.
Only a complete knob would do that,eh?
Did the odious wee creep actually take a 50% pay cut or is it deferred until some time in the future when he will get it all back?
How will he survive on 8 grand a week?
It is not difficult to see why he runs with the hare and the hounds.
Does anyone know the whereabouts of BRTH these days? I have a package I was hoping to give him after the game tomorrow but he seems to have gone to ground, or off planet.
Has he ben got at by the hun bassa’s?
For those of us who came of age as Celtic fans in the early 1990s, and who despaired of our club ever competing with them again, these are startling, magical days.
The sense of karma is immense, and the way the Huns in my work all avoided my gaze again this morning – priceless…
Agree with you Paul- 15pcent pay cut seems more like a PR strategy than a concerted attempt to cut costs… One can only speculate as to the next act in this epic comedy.