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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A big boy did it
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.”
THE BARCA MOLE
Dinnae say that-they’ll block yer flight back!
You looking forward to it,bud? I hope it goes really well for you and V.
HEBCELT’s Stornaway specials await your detour to Swindon.
Talking about attendances I believe tomorrow’s attendance at Celtic Park will be hugely significant. Its a 3pm Sat match after a wee break and its against one of our closest opponents. There was a plethora of reasons given as to why crowds have been down in recent games. However tomorrow everything is in favour of getting a big crowd. Lets hope for a packed Stadium and a rip roaring win.
TBM
By the way,well seen it was the start of the night if I could pronounce Ecumenical.
Ffs,I struggled to spell it there!
And I used the spellcheck….
Is anyone in any doubt that the demise of oldco, and now sevco, have been contrived…..part of a bigger money-making plan by the spivs……… I am in no doubt this is the case….!!!!!!!!!
67 Heaven
If (and I do hope and pray that it’s a BIG if) they get back in the top flight, the top priority for the powers that be will to see that they win the league as quickly as possible. What these clowns at the SFA really mean when they say they want a strong Rankers back at the top, is that they want to see us knocked off our perch. Referees, as always, will be key to this but we will see it on an unprecedented scale.
I wonder what wee Fergus makes of all this.
Rob. Eh. Think you had better check out
The new bhoy is a midfielder !!!!!!
And hasn’t been added to our cash drain up front
BOSCOBHOY02
Fergus’ lawyers are even more hacked off.
They would be coining it in as Fergus went to town.
The demographic on here is, in general, a body of Celtic Supporters closer to the grave than the cradle… there is a lot of hate going to a lot of graves relatively soon and a lot of hate is going to hate from the grave because you forgot the meaning of humility.
Can somebody explain to be what the huns have done worse than what the authorities allowed them to do? And if they are not in fact the huns per se, and a totally new entity, why the fixation? Surely it is those who allow and silently endorse who are most responsible for the chaos.
Are we nothing without something to hate… rhetorical question.
I’m a great believer in hate begets hate and suffer the consequences too.
glendalystonsils
Sort the Refs and they will never be a force again in any shape or form.
Matron Matron get out the meds groundhog day is back!!! Hail Hail Hebcelt
boscobhoy02
15:50 on 17 January, 2014
He’ll be dancing…..!!!!!!!!!!!!!!!!!!!!
kitalba
15:53 on 17 January, 2014
If you don’t understand by now, you never will….
SYDNEYTIM
Yer preaching to the converted wi me,as you know,but gauny lighten up?
We nearly won a trophy-might have needed some superglue,right enough!-in Europe. Just last week!
It’s all fine and dandy,and the GB are gonna serenade Peter at the next AGM,they’re just keeping their powder dry till then.
glendalystonsils
15:49 on 17 January, 2014
We’ll be ready for the barstewards this time…….the refs will have to be VERY careful…..hahahahahaha
Someone just dumped 200,000 shares at 26p. But WHO is buying this stuff? And why?
Sydneytim….. I was being sarcastic….thought you might have picked up on that. We brought in Balde and Pukki in the summer and in my opinion they will be fine in the long term. They all need a little time to settle and some settle quicker than others. I still believe Pukki wasn’t bought to be a 20-30 goals a season player and Lennon bought him for his football intelligence as we definitely need much much more clever footballers than we have to play at the highest level in the CL…. I have said before, Barcelona have very few guys who are “strikers” but have several players who can attack from off the front line
BMCUW
I agree, I would love to see wee Fergus and Paul McBride heading up the stairs at Hampden to take on the SFA (and have a wee look at the 5 way agreement)
Did he return to Canada ? or was it Bermuda or somewhere like that ?
Tell you what…….these spivs are smart…….
Leftclick
To sort the refs we have to sort their masters. By ‘we’ I mean the whole of Scottish football (apart from the one team who stand to gain from the status quo)
BOSCOBHOY02
Boston,from what I hear.
Heading up a charitable foundation. His wife must be very persuasive!
Bobby. Just in from the wolfe tones concert here great night
Wheel chairs for band soon
Happy as Larry
But in times of hard cash there are people responsible for our strikers shambles that are costing us 4m a year Accountability must come into the equation. Not as if any of these guys were goal scorers and unlucky they have stopped. They all are not Goal scorers and never have been
Accountability
Sydneyt….
Your posts are too negatively repetitive for my taste..no harm in that just a different way of looking and judging things.
However…I do share your concerns about a genuine striker.
Now, it is clear you don’t think one will arrive and again, as an opinion, it is perfectly valid.
But…how will you know we have the real McCoy IF Celtic do bring in a striker before the window closes?
Obviously you’re not just going to accept PLs or NLs word that the player is a great striker. What are the criteria Celtic would need to meet in order for you to say “fair play that’s exactly what I’ve been pleading for”.
Clearly the player will need to have a goal scoring record but what else?
Will he need to be:
Signed from a top competitive league?
Have a goal scoring ratio of at least 3:1?
Be an international with a scoring record for his national side?
Be somebody we’ve heard of?
Be proven scorer over 3 or more seasons?
Played and been successful in more than one country?
Something else?
Like you I don’t have the knowledge and reach of Celtics network so couldn’t possibly put an actual name to a player but maybe you could let us know what profile of player we should seek?
HH
Another 200,000 Sevco shares, dumped, for 26p each.
Sevco now worth a Wanyama and a Hooper!
HH
From baby bhoy twitter “@CollectCelticFC: The corruption that goes on at SFA to help Sevco5088 http://t.co/1aNRbpZY02”
@ScottishFA
Rob. Pukki was all that Neil was offered
He was p@@s poor in Germany
My mate watches shalke ( I lived in Germany for 4 years ). He says he was awefull
His stats are awefull. Why are we throwing money away on strikers who have never been goal scorers
May as well still Mathews up front
BMCUW
Boston. At least he can still see a Celtic(s)
Seeing as we ain’t shipping many silly goals these days I have a feeling that if we sign a cracking wee goal poacher who bangs them in for fun some will come on here and moan about our midfield not being midfieldery enough.
Justafan. I would swap pukki for griffifths Pure swap gets rid of dross and we may get a player who will score more goals than the rest
Paul67 – Definitely a new perspective on clean sheets.
Of our recent forward player signings, Pukki seems to be the one who is starting to show the something that made Lenny see him as a Celtic player. His movement, workrate, strength, and link up play have improved with every game. I was expecting more pace from him, based on what the manager said at the time he arrived, but overall, I think the Bhoy could come through for us. It’s may be no coincidence that he is the only one who has been given a decent run in the team. Amido looks promising but the manager doesn’t think he is ready. Boerrigter is the one that concerns me the most. He has been given opportunities in the team but has yet to show anything special. Looking forward to seeing our 2 new Bhoys soon.
Justafan,
This is SydneyTim on a go slow.
He’s a little tentative that we might actually sign a striker.
Wait till the window shuts and it’s impossible to sign one. He goes into meltdown. ;)
The new club will go t*** up again but I think the main focus should be on the SFA they have done more harm than good to our game and rules are there for every club to adhere to.
Have Regan or Doncaster ever been asked about the existence of the five-way agreement by a member of the MSM
If not, why not?
googybhoy ♥ Celtic
15:45 on 17 January, 2014
“I have my own ideas about who is responsible, but I would rather keep them to myself.”
####
There’s a chain of people responsible.
One of the things they have in common is that they have all, in their time,had Sally’s full backing, for which he has been amply rewarded.
In Sally we trust.
Did the five way agreement have any provisions about a future insolvency event?
“In Bosnia I cried every night. In Bosnia every time I saw a dead woman, I thought to myself that could’ve been my mum, over here in Rwanda, they are just dead Africans.”
“Please before you leave, a request from this family, since we are all one, please shot us, it is better that we die from the bullet rather than the machete… less pain”
UN: “I cannot help you”
“Please shoot the children, please, please”
(Paraphrasing)
67Heaven:
Please define what I don’t understand.