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There’s your dinner! Newco are rubbish and plan to downsize

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Prior to this morning’s AGM, which got underway a few minutes ago, Rangers International chairman David Somers issued a statement to the stock market, which he intended to reading at the meeting.  It contains powerful insight into reality at the club:

“Graham Wallace (former chief exec) wrote a review [in which]he indicated a desire to spend £20-30 millions in reaching the top levels of Scottish and European football. After visits to various City institutions the Board believed that such a level of expenditure would be supported by the City institutions, and the then monthly rate of loss, would also be supported by the shareholders.  In the event, this was discovered not to be the case, because when we came to raise funds through a share issue, we soon found that there was a lack of appetite from shareholders to invest significant extra funds just to pay wages and utility bills.”

No.  Kiddiin’.  Sherlock.

That £20-30m estimate was conservative, more would actually be needed.  The funding requirement remains but it has grown as a result of newly-established commercial deals the club accepted to agree short-term funding in recent months.  Charles Green found fools in the City but that ship has sailed, it is staggering that the board believed going back to the same well would have been effective.

The penny has dropped, the most important aspect of Somers’ statement is:

“Accordingly, we have moved to cut costs significantly. Like any household, Rangers can ultimately only spend what it earns and, as has been reported in the media, we have moved quickly to bring our costs down and much more in line with our income.  Rangers Football Club has been living beyond its means for many years and much of the cost cutting and efficiency improvements should have been addressed years ago by previous boards when we were in the lower divisions.  But they weren’t, so we are doing it.  A material part of our costs relate to player costs, however, and these can only be addressed over a long period of time because of the length of the contracts. These contracts are often measured in years, not months.”

Bang, there’s your dinner!  Newco are rubbish and they plan to downsize.

They can’t do much about property, security or business services costs, as Somers said, the “material part of costs… relate to player costs”, and with a player budget heading closer to Alloa Athletic than Athletic Bilbao, income potential will nosedive.

Fixed costs to operate a football club, which occasionally hosts 50,000 spectators at Ibrox, run to around £17m p.a.  Then they have to employ players, coaches and other football staff.

As I’ve been saying for years now, football at Ibrox is not economically viable.  They can survive as long as there are assets to sell-off, but the sharks will soon finish off the carcase. More power to Mike Ashley’s elbow.

Today is the LAST POSTING DAY BEFORE CHRSTMAS for CQNBookstore!  Orders placed before 14:00 today will be shipped Special Delivery to ensure you get them next day.  Take a look around the store, you know about your Annual, and Caesar & the Assassin, but here are tons of Celtic books and DVDs.

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  1. Inverness youngster Ryan Christie has emerged as a transfer target for Celtic. (Scottish Sun)

     

     

    Celtic are tracking Senegalese defensive midfielder Kara Mbodji, who plays for Alex McLeish’s Racing Genk side in Belgium. (Daily Express)

     

     

    Scotland manager Gordon Strachan believes the lure of European football could help Celtic land winger Ikechi Anya, who has been a star for the national side under Strachan. (Various)

     

     

    Lennon is also hoping to beat former club Celtic to the signing of St Mirren midfielder John McGinn. (Scottish Sun)

     

     

    And Birmingham hope to sign another Celtic target in Inverness defender Graeme Shinnie. (Scottish Sun)

     

     

    http://www.bbc.co.uk/sport/0/football/30588942

     

     

    Looks like Ronny wants to hold onto the top players and bring in more. Interesting how much WGS wants Celtic to sign Anya. I reckon it is for the European fitba which really helps international players.

     

     

    LB

  2. Joe Filippis Haircut

     

    12:38 on

     

    23 December, 2014

     

     

    That’s totally fair enough and it’d be interesting to see whether more goals are lost from left, right or centre. I just don’t think it’s backed by RD selections. We’ve all seen Mulgrew at LB but RD hasn’t even tried it (as far as I can recall).

     

     

    As I said to NegAnon, the fire could just bee that we’ve looked at another LB. Since we have no cover there to speak of, that’s not a sure sign that Izzy is done for.

     

     

    We’ll just need to wait and see.