The early years of a new business are risky. It doesn’t matter if you have the best product or service, or the potential to rule the world, it’s critically important you don’t run out of cash.
The Rangers Football Club ran at a cash deficit from their first month’s trading. Within six months of starting business they undertook an enormously successful share issue (going public as Rangers International PLC), raising in the region of £22m, but they continued to spend more than they earned. On Saturday, the BBC reported a club source confirmed they were 48 hours from running out of money.
For a moment, put aside who owns Rangers International (RIPLC), sits on its board, owns its retail rights or has security over its assets. In any normal run of business these things are important, but right now, for RIPLC, they are secondary. The most important issue in this company is paying its creditors.
They can either pay their bills, or they can’t. If they could pay their bills, they would have no problems with predator-shareholders and the company could accommodate the aspirations of all stakeholders – including fans.
If the company cannot pay its bills it will not meet the aspirations of any stakeholders. It will either go out of business, or it will attract an investor who is prepared to pay creditors, and in return extract assets or some other compensation.
The pain of Dave King and his legions of cohorts in ‘restoring Rangers’ and preventing Celtic from accumulating 10, 20 or 30-in-a-row is tangible, but there was no easy fix. Rangers International should have been urged by all of these voices to cut costs to match income, pay their bills and ensure that Newco, unlike the original Rangers FC, would never be out of pocket and vulnerable to the most aggressive carpetbagger.
Instead, all we heard about was the Restoration of Rangers, no matter the cost. Living as modest also-rans, paying their bills while hoping to win the odd cup and avoiding an absolute hammering at Celtic Park a couple of times a season, was simply unacceptable when pitted against the alternative – burning cash like there’s no tomorrow and hoping something miraculous would turn up. It was madness.
Mike Ashley has fed the junkie-club a couple of million, which might be enough to see it through Christmas but it’ll need another, larger, hit, before long. Attempts by King or any other wealthy fans to intimidate the Easdales, or Ashley, to capitulate, will fail, again.
The club does not have the money to pay its creditors until season ticket renewal money arrives, but it has more assets, specifically the stadium and Murray Park, which can be sold or secured. In return for this latest loan, Ashley got control of the boardroom. This will allow him and his allies to dictate the terms of the next funding arrangement.
Those wondering how he will increase his shareholding in Rangers International, in conflict with his ownership of Newcastle United, are missing the point. He doesn’t need to own Rangers International, all he needs to do is own the stadium – at an onerous rent, and own the merchandising and image rights.
Like Sir Davie Murray before him, he might even fancy owning the IT provision, travel, stadium advertising and catering (yes, I know that’s already gone) at Ibrox. Murray’s companies used to take close to £4m a year out of Rangers – and they thanked him for the honour.
Much of the above could be outsourced to Newcastle, where all ‘customer contact’ could be administered from. He could even subcontract the manager, coaches, scouts and the guys who puts the cones out from Newcastle. All of which would mean that in the event of a commercial trauma, he holds all the contracts necessary to start afresh.
Ashely doesn’t need to own another ounce of Rangers International, in fact, after he has secured the stadium etc. on a long and glorious lease, he will be pretty much finished with the hollowed-out runt of a club.
Similarly, those who suggest Ashley’s loan is a sign that he will not allow the club to fail are missing the point. If he owns or controls the stadium, IP, client databases, coaches or whatever else, he controls what happens AFTER a liquidation.
Right now Ashley, and his collaborators remaining on the board, have to pay those onerous contracts we heard so much about, while they own less than 50% of the shares. I doubt Ashley has paid onerous terms in his life. Liquidation would allow him and his pals to start afresh, stop paying the last bunch of spivs and keep the money for themselves.
In practically every literary portrayal of hubris, the protagonist has a moment of self-awareness. It as though literature doesn’t work, it’s not credible, without a fleeting moment of clarity. No one, it seems, carries the same stupid world view throughout a complete novel.
Literature has failed to prepare us for the most predicted self-harming on the planet.
Remember to order Caesar & The Assassin, signed by Billy McNeill and David Hay, more here. To confirm a note on Billy’s nickname. While it was acquired from Cesar Romero, Billy prefers “Caesar”, which was how the name was always spelled during his playing days.
678 Comments- Pages:
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TootingTim
I’ve walked past Lillywhites many times and never realised that it was a sports shop at all! Shows you how observant I am!
Taken from st stivs post lasf evening..
As one who happens to just have what might be called a passing interest in matters Rangers, could some of you knowledgeable people explain what the term SEVCO translates as?
BT
I imagine PL salary increase is determined more by the good profit years between 2005..2013 which are missing from said post of St Stivs.
Albeit I still do not believe that affors him a £350K pay increase or 80% bonus in a which way whatsoever.
MWD said AYE
hankray
14:40 on
27 October, 2014
It doesn’t SEVCO is used as the basis for lots of puppet companies used in takeovers etc. The two involved in the Rangers saga are/were Sevco5088 and Sevco Scotland. There’s loads of others it’s just a way to give a name to the takeover vehicle, until it can trade as the target company.
hankray
it’s sectarian and it’s a secret!
MWD said AYE
If the huns went into admin,would Ashley’s 7 year merchandise deal be burst?
Inspired by bsr @13.10
By a lonely Copeland Road
I heard a young bear calling
Michael Ashley’s taken charge today
For you stole; the assets shorn
So the bears might see the morn.
Now they’re on payback forever and a day.
Low lie the Fields of Masonry
Where once they watched the small free masons ply.
Their hate was all they’d sing they had swords and shields to swing
It’s so lonely ’round the Fields of Masonry.
By a lonely Copeland Road
I heard a young bear calling
Nothing matters long as it’s tax free,
Against the Facepainter and the Crown
They rebelled and were brought down
Now they must raise the pounds for Mike Ashley.
Low lie the Fields of Masonry
Where once they watched the small free masons ply.
Their hate was all they’d sing they had swords and shields to swing
It’s so lonely ’round the Fields of Masonry.
By a lonely shopping mall
They watched their protests failing
As they railed against the man who likes a pie
So they wait and hope and pray
To their God who walked away
It’s so lonely ’round the Fields of Masonry
Low lie the Fields of Masonry
Where once they watched the small free masons ply.
Their hate was all they’d sing they had swords and shields to swing
It’s so lonely ’round the Fields of Masonry.
Weeminger…………..now I have it, thanks
Moonbeams……….another way of putting it, thanks
SFTB
Hilarious!
Sftb.
Good stuff:)
SFTB- VG :))
I see Mike Ashley is quick off the mark and has employed the designer of the Tesco buttermilk logo to re-design the Ibrox logo
New Ibrox logo
Sports ditect dot com
New owners of the Hun…
Got a ring to it, eh?
!!bada bing!!
14:17 on 27 October, 2014
Somebody should tell that clown Sally,the difference between a loan and an investment.
He’s just using his greggs example. He believes that every time he gives them dosh for a steakbake, that he is investing in them so ensure his next treat, but in fact Greggs are taking the fat fool for a mug by taking his dosh as a loan and making even more profit. Just like all them other fat benefactors
Mike Ashley likes a bargain…
2 for 1 on the old Murray Park/ Albion car Park loan deals –
No wonder he’s the UK’s number one!
bournesouprecipe
13:10 on 27 October, 2014
Michael you have taken them away.
………………………………
Chuckle, chuckle :-))
In case any of you bhoys are interested sfa have put up some tickets for Ireland match £35 a pop on their website which has been down for past few days.
67 Heaven – Enjoyed reading your lengthy post. You may well be right. I hope so. I really was hoping for admin mark II though and the subsequent points deduction. That was a fair bet if King had taken over and treated them to a spending spree.
Whither the cash strapped scrofulous hillbillies the day?
Cultsbhoy 14:07
That’s funny. I’m eagerly waiting for the Mike Ashley endorsement of Ally McCoist!
SFTB – absolutely brilliant.
Sftb.
Awfy gid!.
HANKRAY 1423
Nae offence,but he didnae leap five feet in the air.
He barely got off the ground,the ball went upwards and in off the crossbar.
wee davie………….
We salute you!
some music to read along to
https://www.youtube.com/watch?v=vNuVifA7DSU
:-)
SFTB. nice one :-)
I see Pukki scored his 4th goal in 3 games for Brondby with Fridjohnson scoring too.
Just a note to say, seriously, there hasn’t been a better brief analysis of recent history, current state of affairs and future prospects of Rangers than today’s piece by Paul.
The key is this: Ashley becoming the biggest creditor will give him life and death power over Sevco without having the responsibility of ownership. He can get hold of the remaining useful assets at some stage in the future, then liquidate the husk of the business, and then start, or allow some other person to start, a football club playing in royal blue at Ibrox Park, paying rent for the use of the stadium, commission on any intellectual property they need (either to Ashley or Green or Whyte), and getting nowt from matchday catering, club shop etc.
Probably aim to get into the SPL first, and 15 or 25 points clear of relegation, then do the dirty deed.
Power without responsibility …
por cierto
13:38 on 27 October, 2014
As I said Brick and Mortar and of course the “little” extras por cierto
http://www.themag.co.uk/the-mag-articles/sir-john-hall-makes-clear-mike-ashley-bought-newcastle-united/
………………………………………
Should that not read “………..brick and Mordor……”?
Sftb
Maybe we should get Pukki and Daryl Murphy as our front 2
PAOLO GIG AT HYDRO CANCELLED TONIGHT-Tonsolitis ,no word yet about tomorrow night yet
Bada
jobo will be devastated as will gordybhoy64
SFTB……………..
awfy braw ….Huntertainment of the First Order…..you will be a dead cert for …first tap at the goat…..
Braw
The most moderate and literate of the Rangers commentators (I know, tallest dwarf …) McMurdo has just posted.
As ever, and like his rival, stupider, fellow bluenoses, he couches his analysis entirely in terms of personalities. Even there, he rambles off after a red (white and blue) herring –
“I have two things to say openly on this blog to Mike Ashley.
Firstly, smarten yourself up if you are going to sit in the Directors Box. Button your top button and get a blazer on. Rangers is not Newcastle.
Secondly, don’t even think of messing the Rangers fans about. Again, Rangers is not Newcastle.
BT- I have tickets for tomorrow…
MASH – Suicide is painless
https://m.youtube.com/watch?v=4gO7uemm6Yo
DELIASMITH
I reckon Ashley may use a lot of effs in his short reply…
I, like most Celtic fans, am loving the comic-fest at the bigot dome. The intellectual gymnastics performed by the MSM are truly wondrous to behold.
The huns are “oot the gemme.” They will not be able to challenge us on the park for many years whilst the spivs can relieve the gullibles of their cash. Some posters are worried that Ashley will get a team together to overtake us. NO CHANCE!
We must concentrate on our own team building and while nobody can be happy with loans/projects, we are where we are. If JG signs a decent length contract, I will be well pleased. IMO, he is better than Hooper. The point is that if he bangs in, say, 25 goals for 2 seasons, he will be bought by an EPL or European club. Celtic can do nothing to stop this. We can rant and rave all we like but if any player wants to move, he will. End of.
It’s a bitter pill to swallow, but that’s the reality until FFP properly kicks in, and/or some kind of Euro reform happens.
No matter, I am Celtic through and through.
COYBIG! HH