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Paltry 15% cut cannot be main story

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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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891 Comments

  1. Geordiemunro….

     

     

    On yonder hill ….there was a dookit

     

     

    No there noo…..cos some t##t took it

  2. Ally ‘consistency’ McMoist.

     

     

    11 Jan 2014

     

    “It makes sense to me that we continue to have a higher wage bill than the opposition that we’re playing against. I didn’t give [the contracts] out and it would be unfair of me to comment on previous people within the club who made those decisions. I would certainly not be critical of them.

     

     

    17 Jan 2014

     

    “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.”

  3. Geordie Munro

     

     

    Voice of an angel… maybes aye, maybes no,

     

    but definately the mind of a Tim :)

     

    Hail Hail

  4. sydneyt…

     

     

    Sorry your maybe not on line anymore but…

     

     

    Is that your criteria? Leigh Griffiths? Or at least a player matching the scoring ratio, leagues played in, international performance etc. etc.?

     

     

    I know you’d be much more pleased with someone better, as would I, but is Leigh or Leigh-like the benchmark you’ve set?

     

     

    Very surprised if it is!

  5. eddieinkirkmichael on

    tbj praying for oscar knox

     

     

    16:53 on 17 January, 2014

     

    Eddie

     

     

    Lets say 20 home games….that’s 50k a game to park cars.

     

    If its a fiver to park for 2hrs… that would need 10k cars and obviously that cant be true.

     

     

    I would imagine that woulld be very lucky to hold 2k and even then im being generous.

     

     

    But that would mean £25 each jalopy .

     

    _________________________________________________________________

     

     

    I hadn’t done the maths mate, just excepted that the fig was correct as on both those sites it was taken as fact that £1m was the income from the car park. Didn’t intend to mislead.

  6. LAZEE BASHED TART on

    Unlike a lot of people on here I am happy to give Pukki a chance, I think his problem is lack of confidence causing his poor decision making and hesitating in front of goal. Also he is too similar to Stokes and doesn’t link up well with Forrest. Having said that he is worth a punt until end of season. Look what patience with Sammi gave us in the end. Is there anyone we could buy in this window who would hit the ground running or how about a pre contract, though with early stages of CL in July this would be a big gamble.

  7. Aha Mr ryecatcher soitiz

     

     

    I noticed you posting earlier about the pub across from mcgrains earlier.

     

     

    Aye it’s still open. Called either the gallery or the thistle or somert.

  8. Monaghan,

     

     

    ” I really feel for him as he has had to shoulder the burden of looking out for the Rangers on his own. He said once that “we don’t do running away” and he has kept his word.”

     

     

    ———————–

     

     

    How thick is thick…jeeso, £750,0000 and penny shares, why would he walk?

     

    Then again looks like the shares will go like the last ones.

  9. monaghan1900

     

     

    16:45 on 17 January, 2014

     

    Following Alistair’s bold and selfless revelation that he knows who is to blame, the Huns take to their FFin’ keyboards:

     

     

    “Ally has to issue a clarion call to the fans”

     

    ——

     

    “Once again Super is caught in the line of fire”

     

    ——

     

    ” I really feel for him as he has had to shoulder the burden of looking out for the Rangers on his own. He said once that “we don’t do running away” and he has kept his word.” [“Running” you say, Sammy?]

     

    ——

     

    “Alistair still trying to remain dignified despite what he has to put up with.”

     

    ——

     

    “I honestly don’t know how Ally hasn’t walked yet.

     

     

    His love for Rangers must be unbreakable.”

     

     

    **********************

     

     

    Please tell me you’re making these up. Gullible is my middle name but not even I believe they’re actually saying that?!!!?

     

     

    So go on, tell me you’re making it up.

     

     

    Actually 2nd thoughts, tell me no such thing. Leave me to wetysekf laughing!

     

     

    KTF jamesgang

     

     

    TenaLadiesCSC

  10. Lazee,

     

     

    I too would give the guy a chance.

     

     

    First reason being, I’m not a phud. (debatable)

     

     

    Second reason is I think he’s being mismanaged. Look at his last domestic game. Up front alone against Patrick.

  11. sipsini

     

    17:18 on

     

    17 January, 2014

     

     

    He certainly wouldn’t run!

     

    ——

     

    jamesgang

     

    17:18 on

     

    17 January, 2014

     

     

    You may giggle yourself silly secure in the knowledge that those words are FFin’ originals.

  12. ....PFayr supports WeeOscar on

    I continue to be astounded of forehead at the Huns lack of appreciation of the damage that Salary has caused to their club

     

     

    He has almost singlehandedly brought them to the brink of financial ruination

     

     

    Outrageous wages and such a dreadful manager that he requires an astronomical budget to achieve even moderate success

  13. Monaghan1900

     

     

    ‘Consider it done, laugh at the Hun!’

     

     

    HH (hee hee, hail hail? Both!)

     

    Jamesgang

  14. eddieinkirkmichael on

    What’s people’s thought’s on who our strikers will be in next game?

     

    I have a feeling Neil may go with Baldi as I think he showed up well in the recent friendlies

  15. Joe Filippis Haircut on

    The BarcaMole. I agree and when he has fully settled I think we will see the best of him. H.H.

  16. ‘RFC RIP & NI. Funny how they were do keen to sing about but not pay it.’

     

    1500 words. Discuss.

     

     

    EssaysYouWishYou’dGotAtSchoolCSC (esp my school!!!!)

     

     

    HH jamesgang

  17. Jungle Jim 16:41 on 17 January, 2014

     

    the Bookworm If you hate doing something, don`t do it. JJ…………………

     

     

    Suggest JJ that you read the referred post again……….

     

     

    Regards & Hail Hail

     

    TBM

  18. eddieinkirkmichael

     

     

    Going with my wee Bhoy tomorrow and hoping for Pukki and Balde from the off. And a good 60mins to see what they can do.

     

     

    HH jamesgang

  19. The problem for Neil is…he knows the refs will continuously award fouls against Amido. This will prevent us building any momentum. I think therefore Balde is an unlikely starter.

     

     

    Personally I’d throw him in anyway lol

  20. Another FFin’ world record breaking march is mooted:

     

     

    “We need another mass walk like last time.

     

    That day in the sun to say to the world we ain’t gonna take this up the *** needs redone and quickly. A demo in the park and a March to the front door with media on board will get things moving. There are posters on here who organised the last one so let’s do it again.”

     

    ——

     

    “a demo outside the main door ,with the crowd we took to manchester.”

     

    ——

     

    “IMHO we do need something like this because we need a symbolic, identifiable record of our dissatisfaction for the world to see – instead of it being hidden away on here with only a select few who know about it

     

    We may have to obtain our own photographic evidence of numbers and exact details of events so that any mejha doublespeak corruption can be slapped down with conviction”

     

    ——

     

    “But we did take it up the ***”

  21. eddieinkirkmichael on

    I actually think big Baldi would run riot in the SPFL and from what I saw of him I think he’ll actually win US a few free kicks, he holds his ground well and doesn’t lead with his arms which is encouraging.

  22. valentinesday 2 coming soon on

    Good Evening Timland.

     

     

    I’ve decided to listen to snyde tonight…….I’m just shamelessly

     

    rubber necking, please tell me I’m not going to Hell.