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.
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Doesn’t sound good bada bing….
DELIASMITH
Secondly, don’t even think of messing the Rangers fans about. Again, Rangers is not Newcastle.
Is that the polite way of saying ” We know where you live…”
It’s going to be nice to see Scotland’s youngest team start to be run as a business and not as a money wasting exercise. I just wonder how long it will take their fans to revolt.
Deliasmith – brilliant. I am sure MA will be off to Slaters as we speak. And as far as messing the Huns support about? LoL. They have been messed about for two years and can’t muster a united protest front despite various threats to do so.
P.S: What happened to the money that King asked to be put into a bank account rather than season ticket sales?
This is Sevco Smarten yourself up
BT-Not the sort of thing you can shake off in 24 hours,not sure if he had a gig last night,think he played Newcastle on Friday.
bournesouprecipe
Mini Starry just laughed out loud at that!
JOBO BALDE
If you are looking in, Paulo Nutini concert cancelled tonight, pish
Where’s the deeds
This is Sevco – smarten yourself up
Apologies if already posted but Paolo Nutini gig in Glasgow tonight is cancelled.
Sports Direct –
On Special
Brown Brogues, Blazers and ice-cream sundae ties…….
Whaurs ra Bommur??
Exactly, when was this mystery solved ?
“Youse that buy the Sports Direct pies….”
For anyone looking for an alternative to tonights cancelled Nutini concert, could I suggest “Stones in His Pockets” at the King’s tonight. Well worth a visit if you were going out anyway. A few seats still available.
If thomthethim is lurking, I tried to reply to your text but it is not sending for some reason.
Bada Bing, just seen your post about tonight’s concert, gutted so I am, apparently tomorrow’s show will go ahead, did nae sound like severe tonsillitis to me, more like a bad hangover
sftb, im heading in to see that play heard good things about it.
http://www.theguardian.com/football/2014/oct/27/crystal-place-josh-harris-takeover-american?CMP=twt_gu
Yesterday’s game was first I’ve enjoyed for a while. Really like the look of Scepovic has a wee bit pace aswell. 2 up front probing Killie defence all day.
Any troops on here going to Romania for Astra game. Tickets looking scarce anyone know of any good pubs in Bucharest.
GB64- hope he’s 100% fit
Ross Hall update –
At Mr Ashley’s express wishes,
Mr Derek Llambias expected imminently for his
“ranjursitis” innoculations………
More news at the top of the hour.
paolosboots
Enjoy. I saw it last time it toured and it is the most laughs I have had in a long time although the ending is sad.
Today in 1980, seven IRA prisoners begin a hunger strike in the H-Blocks. They are joined by three comrades in Armagh Women’s Jail.
Something I can’t get my head around.
Ashley supposedly paid someone a pound for the naming rights to the stadium, who did he pay the pound to and does that person own the stadium, in other words holder of the “deeds”. I don’t see how one person can pay a second person for the right to give a name to a third persons property. In my mind the only person who can choose the name that goes on the dome is the owner (deed holder)…??
Plese help, am I way off on this……could one neighbor pay another neighbor to put a name on a third neighbor’s house……???
TIA & HH……
Bada Bing,
Rumour is he was in Ashton lane last night pushed, so tomorrow could be ok
sftb thanks for the reply looking forward to it.
I remain sceptical that Skepovic is Celtic class; but then that may simply be me adjustin’ to the fact that hoopslegend Mo Bangura is currently bouncin’ around the Iranian second division.
Pushed should be pished
They are bein’ led like Llambias to the slaughter
DBBIA/ClariceStarlingCSC
wonder who that is?
excuse link to the Sun,phils insider :-),charlotte?
oh the webs they weave
http://www.thescottishsun.co.uk/scotsol/homepage/6036015/Man-faces-extortion-allegations-over-leaked-Rangers-secrets.html
Ole Gordybhoy showin’ why he’s maybes not the ideal birthin’ partner.
gordybhoy64
16:37 on 27 October, 2014
Pushed should be pished
Or a DU player doesn’t like his tunes or affinities?
The boul’ Deek’s nickname……..
…..Succulent Llambias?
dontbrattbakkinanger
16:37 on 27 October, 2014
They are bein’ led like Llambias to the slaughter
DBBIA/ClariceStarlingCSC
Do think Ashley will serve up the succulent Llambias?
Wash down with nuke broon
dontbrattbakkinanger
16:38 on 27 October, 2014
Ole Gordybhoy showin’ why he’s maybes not the ideal birthin’ partner.
—–
That good Sir is just too funny!
EpiduralCSC
HH jamesgang
Just about to leave for the Airport, to drop off Dhaughter No.2
Enjoy Australia Laura
Hail Hail