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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Thanks to everyone for their help.
!!Bada Bing!! The phone may be smart but the owner is not :-)
Xavi off to new york after the world cup
Ole Fat Sallary’s interview was John Smeatonesque.
Clyde shamelessly advising Sevco to buy their challengers’ players.
Fassreifen
With what …the buttons off their shirt
He’s dead right Rangers won’t go into administration again.
http://www.thefootballlife.co.uk/post/73628749994/the-end-again
On Admin, Sale and Leaseback and all that jazz
It would appear that Clyde has a good CQN listening public. They’ll be very happy with that.
EDB
Quite
Cannae understand it myself ….
Trust all is well
HH
Good Grief this is crazy.
The bhun was admitting they were useless and would struggle to beat better teams next year if they have to lose some “big” names and the two twonks in the studio shout him down.
As for buying their nearest rivals two best players and everything would be all right. That is what got them into this mess in the first and second place.
Adverts are even crap on this station :-)
Keith Gillespie on Sky Sports…looks like one does at the end of a works night oot
Marrakech
McCoist is just plain thick …when mixed with an unhealthy dollop of self interest and sleekitness…..nae wonder we have Trumpet Major McCoist
ernie lynch
16:12 on 17 January, 2014
Did the five way agreement have any provisions about a future insolvency event?
Would that not have been a six-way agreement…..????
Snyde truly is dreadful, who are these people?
Bom dia,
Marrakesh Express 18:27.
Sure there’s plenty better qualified than me to give you tips about Berlin. However, canny recommend “the Blarney” Irish Pub enough.
Nice people. v. Celtic friendly. Good Guinness. Live music session on a Saturday and they may (by now) even have a Rio Fergus Mcann CSC T-shirt up on the wall !
http://www.blarney-pub.de/
Uncle shug and Jim Duffy, 2 good tims, trying make sense
of the hun……ffs!!!
Another “Celtic fan” on Clyde. Transparent.
Monaghan1900 17.43
“a demo outside the main door ,with the crowd we took to manchester.”
Aren’t they still in jail???
corkcelt- supporting the dam 5
15:47 on 17 January, 2014,
A lot of folk will be skint waiting for the end of the month. Hopefully, there will be a good crowd with an atmosphere.
Mighty tim, if your lurking, I’ll meet you tomorrow like arranged, be nice to put a face to a name. HH
…..on another subject. Our CSC received this from Celtic today. Good to know the Celtic Spirit is very much alive.
……………..Recently, our kit warehouse realized that, as a result of the change in kit sponsor from Tennent’s to Magners, we were holding a substantial quantity of Celtic training kit. Much of this kit was either previously earmarked for the 1st team squad or indeed, has been worn previously by the team.
I was asked, along with a few other senior club officials, whether there were any well deserving causes that could make good use of the kit on our behalf. Knowing that your club does a lot of good work on the ground to help underprivileged communities, I suggested that you guys should be recipients of a shipment of the kit.
I’m pleased to be able to say that this is now going to be shortly on its way to you at the club. My hope is that you will welcome the opportunity to distribute the kit, most of it Nike sports apparel, on behalf of Celtic Football Club and Celtic FC Foundation. The club have picked up the shipping charges and it is our hope that you can ensure that the kit finds it’s way in to the hands of those who deserve it most.
Maybe I’ll think a bit more, before my next “Sack the Board” outburst in future.
!/2 a Salary is no more than a TV game show Z celeb who is now in charge of the funniest and longest running game farce in town, it suits him well, as he as all the credentials needed, talking mince while looking dumb at the same time is one
LOL at the two Hun rockets the BBC managed to drag up.
“Ah’m buyin’ season tickets for all ma family’
‘It’s aboot that name, ‘Rangers'”
Keep feeding the spivs, numbnuts.
jackie mac
18:18 on
17 January, 2014
sorry came across this when trying to google the latest on the state of ibrox
it’s so funny looking back
http://www.dailymail.co.uk/sport/football/article-506533/Rangers-consider-open-roof-stadium-new-look-Ibrox-host-megastars.html
The ole AyeBrokes open roof project appears to have gone ahead. No way it cost £700M though!
Ten Men Won The League 17.52
McCoist admitted in today’s press conference that his pay cut hasn’t taken place yet.
The reason?
“I’ve not had the contract put in front of me yet”
————————————————————————————–
You get the feeling that once a contract IS put in front of him he might not be able to lay his hands on a pen for a while…….
PFayr
We’re fine but would love to take a Tardis journey back to February 1983 and start the romance over again.
Younger daughter mentioned tonight she’s off over to Strasbourg and Paris next weekend. She hopes to do the 3rd year of her course in Strasbourg starting in September. Can’t think why Paris is involved:o)
Are you going to the 14th March function?
glasstwothirdsfull
18:49 on 17 January, 2014
Ten Men Won The League 17.52
McCoist admitted in today’s press conference that his pay cut hasn’t taken place yet.
The reason?
“I’ve not had the contract put in front of me yet”
————————————————————————————–
You get the feeling that once a contract IS put in front of him he might not be able to lay his hands on a pen for a while…….
———
And then you have illiteracy to take into account.
EDB
Defo
I’m one if OTs bhoys
Aye Clyde, but Sevco don’t have a Fergus McCann, they’re relying on Dodgy Dave King.
kitalba
15:53 on 17 January, 2014,
It’s not hate… It’s one up man-ship, I don’t know what occupation you are in but I’ve had smug huns giving it… Watp for years, I am certainly enjoying every minute off their doom.
PFayr
As we are. That’s me and my lovely minders:o)
Expect to meet the old chap tomorrow.
“Nobody told me wages, or signing players would affect the finances”
Super Sallary
YouReallyCouldn’tMakeThatUp CSC
So Sally hasn’t actually taken a pay cut yet, but happily sent his captain in to ask his players to rip up their own contracts?
How much longer are the Huns going to be taken in by this “leader of men”?
My very good friend and his son at CP:
http://www.celticfc.net/newsstory?item=5273
bsr
You just made that up >}
HH
I’ve listened to snyde for a hour now, the ignorant, the stupid,
and a few house ni##er tims,deary me.
Marrakesch express , Berlin is a great city ; usually good summer as well.
Great restaurants , bars for all tastes and prices. The Bus tour is brill and a must do to see the city as it’s very spread out and has tons off history.
Good wee Celtic bar off mehringdam called The Blarney.
Which part off Berlin are you going to?
EDB
Poor minders..being subjected to us lot
bournesouprecipe
He didn’t say that did he? Ho ho ho…