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. The hun hordes won’t be pleased that their overpaid Galactodiddies are refusing to help bale out the sinking ship,a perfect storm.

  2. Gene's a Bhoy's name on

    On the subject of who owns the deeds -when the prospectus for the ipo was issued it included valuations of ipox and muttay park – i can only deduce that they are therefore owned by the shareholders in trifc.


    However in gaga land they were valued at over £80m -which if you believe it makes a 27p share a great value -pile in lads -you heard it here first.

  3. TBJ Praying for Oscar Knox on

    Souper ally backs his players stand not to take a 15% pay cut.. cos its not their fault.



    He says he has his own ideas who is to blame but will keep that to himself.



    Is this the same ally who demands others to name names



    Does he have a hundred names written on these sheets of paper .. that hes not showing us.



    Or.. is it so obvious he does not need to comment .. its that wee ginger irishman and his big pal lawell

  4. From previous thread.




    Another wee comment from the RIFC Shares Discussion Board – this will be unpalatable to many an orc, a business guy talking sense.



    “Footballers have a relatively short period of time to earn quite substantial sums of money. It could end in a moment with an ill-judged tackle. They would be crazy to take a pay cut. Besides, the original Rangers got players to take a pay cut in the hope of saving the club but it was too little, too late. The club folded anyway and the players lost out on wages that they were entitled to expect. If new Rangers really want to survive, they need to rebuild from the bottom up. That means playing in a stadium that they can afford to run, operating with support staff that are more akin to a junior club and building slowly. If they have to lose supporters whilst they do this, so be it. But building sustainably is the way forward, not trying to blitz their way back to the top in as fast a time as possible funded on an ad hoc basis by what amounts to charity donations by fans at the time of the share issue. As was said at the AGM, the current spend profile would not be sustainable even for a top flight club with income being maximised. That means that current practices would never be right and must be stopped forthwith. With the benefit of hindsight, trying to resurrect the original Rangers was not the smartest idea since it also meant resurrecting assets and business practices that haemorrhage cash. Starting completely afresh would have been the way to do it – but I guess people worried that doing so would alienate the customer base. I’m not a big football fan but this is a very interesting case study in company dynamics.”




    Then Monaghan pasted over from a FFr –


    “I am happy…perfectly happy…to start again in Div 3 with a 25 point deduction and U19 squad if these c[hap]s have all gone, and gone for good, and we the fans own the stadium, name and the famous badge on the jersey. I know most will drift off, I know all the risks, but I am calm…[You just told us you were a basket case, Sammy]


    Sorry, the arguments are now legal, financial and technical and we’ve had 2 years of it and got nowhere: every leak regarding bad news has been true; every glimpse of hope has been shot down.


    Under these people we cannot dream, we cannot hope, and we will get nowhere…and I think that is the ‘bottom line’.”



    Is this another sign that the dam is creaking/cracking?


    I would love to believe that this is the next step towards the end of Scotland’s Shame, but after watching two years of lies, rule bending and cover up, I think the best we can hope for is they are left in a realistic state of financial poverty. At least to see the end to the Media’s external question of do we miss the Old Firm, as they would present no more of a challenge than other clubs. I would love to see them go into the Championship with a weak side and fail to reach the Premiership at the first time of asking, that would be worthy of a big bowl of jelly and ice cream.





    Not only are your opinions not worth tuppence,ye canny even spell it.



    Dear,oh dear.



    Keep battering away at my door,you’re leaving some other poor sod alone.

  7. Auldheid thanks for the info,I’ve been scouring Trip Advisor but just could’nt remember the mame .I’ll check them both out and report back afterv my visit. Caberfeigh should’nt your moniker be spelt Cabarfeidh?? Are you a Hun??? Hail Hail Hebcelt

  8. tbj praying for oscar knox



    14:51 on 17 January, 2014,



    There’s no very many in there that look my way now…can’t think why!

  9. The Battered Bunnet on

    Gerry, Sipsini, from the 2013 Annual Report



    Interest Rate Risk


    The working capital of the Group and Company is funded largely by bank borrowings. The Group and Company has a £33.19m facility with the Co-operative Bank of which £12m is in the form of overdraft and £21.19m in long-term loans.



    While the nature of the overdraft results in the application of a floating rate, the loans offer the possibility to lock into a longer-term interest rate. £10.59m (2012: £10.97m) of the loan facility is required to be drawn down for the term of the facility agreement. In 2012/13, fixed rate periods were each for three months and the average balance on the loans was £10.76m (2012: £11.14m).



    During the course of the year, the Group had an average credit balance on the overdraft facility of £6.98m (2012: £1.92m). The average overdraft rate applicable during the year was 1.50% (2012: 1.50%) and the average loan rate 1.65% (2012: 2.15%). In terms of the overall risk management process, executive management liaise closely with advisers in managing the risk profile of the Group and Company.



    In times of interest rate volatility, executive management take advice as to the various instruments that may protect the Group and Company against increased costs, whether this be an interest rate cap, collar or other mechanism. No such mechanisms were utilised during the year nor in 2012.



    Based on the average levels of debt in the year to 30 June 2013 it is estimated that a 1% increase in interest rates would result in a net increase in finance costs, and thus reduction in profit and equity of £0.11m (2012: £0.11m). The calculation in both years incorporates the terms and conditions of the agreement with the Co-operative Bank as noted above, the terms of which have not altered from 2012.



    The bank loans and overdraft bear interest at LIBOR plus 1.125% and base rate plus 1.0% respectively, as was the case in the year ended 30 June 2012. The other loans of the Group and Company are interest free. It is the Group and Company policy to secure funding at the most cost-effective rates of interest available to the Group.



    The maturity profile of the Group and Company’s financial liabilities at 30 June 2013 and 30 June 2012 and details of applicable interest rates on these liabilities are disclosed in Notes 24 and 25.



    The Group achieves short-term liquidity flexibility through use of a bank overdraft.


    Of the available bank facilities of £33.19m (2012: £33.94m), of which £21.19m is represented by long-term loans and £12m by overdraft, £22.59m (2012: £22.97m) remains undrawn at the balance sheet date

  10. leftclick Together we will get justice for the Dam 5 on



    Congratulations on writing the article without mentioning “TELT YEEZ” :))



    Please let it be sale and leaseback at best for them and I just love the word “perpetuity”.

  11. Tbj from earlier.



    ‘jabba ewokked away’



    Superb mate. Even bsr would be proud of that one :)

  12. glendalystonsils on




    I would love to see them go into the Championship with a weak side and fail to reach the Premiership at the first time of asking, that would be worthy of a big bowl of jelly and ice cream.



    If that was the worst that happened to them, I would feel gutted and cheated, but after what’s happened so far, I’m kind of getting used to it.

  13. Taking a pay cut makes sense if it will save jobs and stave off an event like administration, I have taken pay cuts in the past for this reason.



    However, if inevitably jobs will not be saved (particularily your own job) then why take the cut. I have also refused to take a pay-cut in the past.



    A mere 5% pay-cut can be hard to deal with (I’ve hadd a 10% cut too). Your expendature expands to your earnings, mortgage, rent etc..

  14. Bmcw



    Lol, I think if you scroll back ma man, you came to my door first, and not for the first time, and then the auld chestnut spelling mistakes, children do that, silly Bhoy , eggs granny suck tell how don’t your to, join them up.

  15. If you ever get bored with the hun accounts (yawn) and you don’t have any grass to cut… then watching ‘Shooting Dogs [Beyond The Gates]’ might give you a reason to pause and think, it’s a story about hate for the sake of hate.

  16. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on




    15:02 on 17 January, 2014



    Wae oor refs ??……behave yourself !!…..hahahahahahaha

  17. TBJ Praying for Oscar Knox on




    I can think of one currant who might not be looking in your direction but still manages to keep an eye on you.






    Im here all week.. ;))))




    After waiting for true justice and punishment for all of their underhand dealings, EBTs, tax evasion, I now think that if they were to fail to win promotion even with the expected help from the establishment, this is as much as I now expect. Though do hope and pray for more.

  19. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on

    the battered bunnet



    15:00 on 17 January, 2014



    There you go……lazy journalism could have found that out very easily, if they had wanted to….!!!!!!!……..thank you

  20. DeniaBhoy in awe of wee Oscar's Courage on

    Por Cierto – I said, in my opinion, the current team would fail more often than not to get to the CL stages in the coming years. We got in this year by the skin of our teeth. I wouldn’t be confident of repeating that success too often with a similar level of players.



    My guess is that we will downsize significantly over the next 5 years due to lack of CL’s football, a big drop in season ticket sales and low SPFL attendances. We will continue to dominate Scottish football but the present setup, based on 50,000 plus crowds and the 20 million CL jackpot, will not be sustainable.



    Reality is more likely to see 30-35k attendances and a meagre bonus from second-tier European games for consolation. And if there is no CL group-stage football likely, the biggest incentive we have for signing rising stars disappears into the clouds. As I said, only one failure to get to the CL stages will start this slide downwards.


    Home attendances are already a lot closer to 30k than 50k. I assume the drop of 25-30k fans on match days from just a few years ago is a good indicator of what we can look forward to unless something massive happens and we get to leave the SPFHell.

  21. 67Heaven ... I am Neil Lennon, supporting WEE OSCAR..!!.. Ibrox belongs to the creditors on




    15:22 on 17 January, 2014



    Yep, and it’s great….hahahahahahaha

  22. lazee bashed tart-agree,if Hearts keep the majority of their team next season ,they could beat Sevco to the title,can you imagine the cheating with the MIBs under pressure to stop “civil unrest”? .That’s why the play offs were introduced.HH

  23. Kitalba



    Why? Does it matter? This is the prelude to another celebration of “thems” downfall again. I cant wait to get my orange, and lime flavoured jelly, with a big dollop of vanilla ice cream right in the middle!



    I’ll post the picture after the inevitable event!




  24. BMCUW ………FC not PLC 14:38 on 17 January, 2014………………



    Awe mhan, naw, no you anawe………..


    Ah shood hiv known when ye said ‘Richturd Coff wiz wan ae the bestest Sudefrikan/Seawedes tae captun Scoddland ever, ever, ever’ that day in yon wee pub in Hope Street wen ye hid seventeen pints of McEwan’s snakebites…….. In ah thoat ye wur joshin………


    Ah shood hiv known then ye wurnae or ye wur, wit iz it???????? Ye cannae be, c’moan, ah know yer Da……… Ur ye oan the list??????



    TBM p.p. Declan

  25. leftclick Together we will get justice for the Dam 5 on



    Just watched a youtube 2 min trailer of “Shooting Dogs [Beyond The Gates]‘



    I will make a point of getting the full movie


    Thank you.


    Till later all





    So did you really just spout yer bollix this morning about a list just to have a cheap pop at me?



    Sure looks that way….



    I keep looking over my shoulder looking for a dead sheep. I don’t know whether to phone the RSPCA or the cops cause I’m absolutely petrified here.



    Listen,yer 67yo,seen a lot and done a lot. No point in me offering advice.



    So I won’t.





    You knew the minute I dragged ye into that bloooooo taxi,so don’t cry wolf now!

  28. Shieldmuir Celtic on

    In the midst of all this chaos on the southside, maybe we should take a few minutes to thinkabout ourselves. We shouldn’t get too depressed at the thought that Celltic is a selling club. If you know the history, Celtic has been a selling club for as long as I have supported them – and that goes back to the 1940′,s.. By that I mean, that, for various reasons, they have sold many of their best players,mainly because they could not compete financially with clubs south of the border. This financial gap has widened in recent years, and if the player wants away ,there is little our club can do. Here is a little list I have compiled, and I am sure that some of you can add to it –


    1940’s – George Paterson to Brentford;


    – Jimmy Delaney to Man. Utd;


    1950’s – Bobby Collins to Everton;


    – Bobby Evans to Chelsea;


    1960’s – Paddy Crerand to Man Utd;


    1970’s – Kenny Dalglish to Liverpool;


    – Charlie Nicholas to Arsenal;


    1980’s – Brian McLair to Man Utd;


    – and so on; We should be thankful for the days they spent with us and the joys they gave us. We sould be even more thankful for those great players who stayed with us and whose talents we enjoyed. Hail hail!

  29. You are quite correct Paul 67


    The rangers financial plight is not the MAIN STORY. In the east end of Glasgow ( but well done taking the eye of the real ball)


    The main story is we have a strike force that costs our club about 4million pounds in wages


    A strike force that was not 1st 2nd or 3rd choice for our manager. But fitted into the budget of our CEO


    Time for a person who takes 1 million pound a year out our club to be accountable for the strike force shambles


    But keep it up Paul. Only another 12 days of the window to go and PL can be happy


    Time for accountability of this waste of cash



    Eyeing the ball bhoys for the real enemy. PL

  30. SSN showing entertaining and rare footage of Neymar writhing about in agony, ACTUALLY injured.



    Karma, she is a bitch.

  31. Sheildmuir. We sold out only goal scorer for 5.5m and we have been told by out assistant manager we can’t afford 5.5 million to


    Sign a replacement


    We are left with




    Pukki. Jesus wept









    Wow taking the p@@h out the fans now

  32. BOBBY MURDOCH’S CURLED-UP WINKLEPICKERS ………FC not PLC15:32 on 17 January, 2014





    You knew the minute I dragged ye into that bloooooo taxi,so don’t cry wolf now!……………..



    Aye, ok, but you said it was an ecumenical taxi……………. Remember??????


    And hey BTW, I’ve never cried Wolf; no time for the Tartan Tories!




  33. Sydneytim… The new lad Stefan has been with us for most of this week and hasn’t scored yet… he’s a big waste of money too… I think he’s had long enough time to settle and we aren’t seeing a return on investment yet. Wgat the F were they thinking ??



    Don’tgivethemaminutetosettleandadjusttoanewcountyyandculture CSC

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