Of Assets and Liabilities

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Of Assets and Liabilities
[…] More importantly to me is the Net current assets (I did an article of this figure last year on TSFM – read here) figure which effectively shows how much liquid funds you have on hand.  When this gets negative […]


Of Assets and Liabilities
allyjambo says:
Wednesday, October 31, 2012 at 09:28

the result can only be disasterous for the remaining competitors who have to choose between increasing insignificance or to risk financial ruin.

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This is getting right to the crux of the matter. Some teams decided to try and compete with Rangers and Celtic (Hearts, Aberdeen, Motherwell)… In the case of Motherwell this led to admin, while Hearts and Aberdeen (to a certain extent) are not out of the woods yet.

Other clubs, such as St.Johnstone, opted for ‘insignificance’. This led to two relegations. It led to countless ‘fans’ walking away, or never setting foot in McDiarmid. It led to poor Saints fans watching a 37 year old Rudi Vata make 15 awful appearances for us.

Now that the league is running on a ‘fair’ basis, it is clubs like St.Johnstone who are now in a position to benefit. The board is trying to address the lack of fans by letting kids in for free. How many kids will we pick up in the next 3 years who would have otherwise become Rangers fans and how much long term income will that bring as a result?

For the first time ever supporting Saints, this season I am not looking at the bottom and worrying about relegation. We are seriously looking at the European places as an achievable and realistic goal, rather than the ‘thrice in 100 years’ dream that it once was.

While the existence of clubs like Hearts hangs in the balance, (and part of that can be attributed directly to the cheating that Rangers brought to the Scottish game) and their fans have my sympathy, it shouldn’t be forgotten that while Hearts and others lived in hope of success, the clubs that opted for ‘insignificance’ suffered relegation, horrible football, and little or no hope for a decade.

If there is one thing that is learnt from this mess it should be that living within your means is the ONLY way to go.


Recent Comments by stevensanph

The Blind Men and the Elephant, a cautionary tale
IMO Phil has got most things correct in this ongoing saga – albeit with timings slightly off.  When he told us RFC was headed for administration in November, he was correct.  We just had to wait till February while CW withheld various payments to keep the wolves at bay.  If he hadn’t refused to make the tax payments Phil would have been spot on.

And that brings us to the present day.  Based on their publicly available accounts, RIFC are out of money.  Lots of people are hung up on ‘April’ and ‘1 million in the bank’, but I am yet to see ANY analysis that shows how that was possible based on their accounts.  IMO it is purely wishful thinking and believing what the spivs said.

So I happen to believe Phil when he says the money has now ran out.  I believe it has as well.  The question though is, what happens now.  If they simply stop paying bills they will buy themselves another few months.  They could quite conceivably get through till April/May, or they could quite conceivably collapse tomorrow.  I still don’t see the attraction in administration for RIFC.  I still think the property swap has to come in somewhere (if it hasn’t already), with the carcass of TRFC given away to the fans/rangers men.

On a different note re: the questions about property swaps and why didn’t CW swap the property to Wavetower.  Aside from the reason that wavetower only owned 85% and was thus a seperate business, there would have to have been some consideration from Wavetower to RFC to ‘buy’ the assets.  RFC couldn’t have simply given them away, especially with creditors being owed millions from the day Whyte took control.  You also have to remember that at the time RFC valued these assets at 100million +, so if they had sold them for say 5million the club (RFC) would immediately have been bankrupt.  That wasn’t CW’s plan – he needed to make the summer so the switcheroo could happen behind closed doors, which was foiled thanks to McCoist’s management ‘skills’.

The difference that I see now is that RIFC are 1) a 100% owner of TRFC and more importantly 2) RIFC are owed 20 million +++ by TRFC.   There is also – 3) that the assets are now valued in the accounts at around the 25million mark (if memory serves me correct), so we could well be at the point whereby the amount TRFC owe RIFC matches what the assets are worth.  So RIFC could right off that debt, in return for the assets.


Reflections on Goalposts
neepheid says:January 21, 2014 at 10:00 am
Assuming TRFC own the properties, then they are probably not insolvent under 1) but will still be technically insolvent if they haven’t the cash to pay their bills.
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but if they are just deliberately not paying them, when there is cash in the bank to pay them, that isnt trading while insolvent. Extend the payment terms as long as possible, then ‘forget’ to pay certain non essential suppliers until they kick up a fuss is an entirely legal, but immoral way of doing business.

Of course, you run the risk a supplier might go straight to a winding up order over the unpaid debt, but the costs, hassle and bad publicity is probably enough to stop most business’ doing this. Instead, they’ll keep phoning and sending emails…


Reflections on Goalposts
An interesting article by Tom English. I predicted when the accounts came out that they would be out of money come January. Take out a little bit of the cost (eg, Ally’s pay cut 🙂 ) and you might extend that to February.

But i’ve scratched my head on how they get to April with 1m in the bank… Unless.

1) They take the 2.5m facility detailed in the last accounts.
2) They extend payment terms with suppliers/slow down the payment of suppliers.

There was a post on the last page from a poster insinuating that a friend had supplied services at Ibrox and not been paid. One way of getting to April would be to simply stop paying suppliers, or extending the credit terms with these suppliers. Extending terms out to say 90 – 120 days would allow Wallace to tell the truth to English (they are upto date, as they are not due till April), while allowing the business to stumble on. As long as essential services are paid for, other suppliers can be left past the payment terms until they start threatening legal action – at this point and only this point, you pay them. What was that Singaporean company that did that last year? Ortiz?

I believe the aim of Wallace is to get this trainwreck through to April/season ticket renewal time. At that point, you can switch the assets to satisfy the debt owned to RIFC from TRFC and dump the club (minus stadium, advertising, catering, training ground and shirt deals) to the fans/Rangers men, with the attraction that there is season ticket sales to come to keep them afloat for another season (albeit with massive cost cutting).

That’s when the fun will begin…


Reflections on Goalposts
A football club running out of money in January? Needing funds to get through to season ticket time? Well don’t worry Sevco, there is this company called Ticketus who will pre purchase the season tickets and give you the cash now…

what? wait… No. That isn’t going to work this time…


Past the Event Horizon
Lots of posts about why would people buy shares in a ‘worthless’ company? The question is… are they worthless?

I think the consensus is now pretty much clear that they have/are/looking to switch Ibrox and Murray Park from TRFC to RIFC. This will be done to write off the ‘debt’ that TRFC owes RIFC (as indicated in the accounts and should be somewhere around 25m now).

So, RIFC owns:

Ibrox, MP, shirt rights, security, catering… the list goes on.

They sell the loss making TRFC for a pound and rent back the stadium.
So the question is – what would RIFC be worth? A long term lease on the stadium, plus merchandising rights, security etc.

If we take advertising and merchandising alone from their 2013 accounts, that is 2.5m a year. Add the same again for rental of Ibrox and your looking at a business turning over 5m/year with next to no outgoings. On top of that your merchandising should grow to around the 5m mark/year in line with what Celtic can achieve, so your looking at a 7.5m business on that alone. Add in the other things they have tied up and there is a profitable company with a long term guaranteed income stream…

So what is that worth? Serious question… I’m guessing the share price will be lowest around Dec 19?

RIFC makes business sense to me. TRFC does not, but there is 500 million fans willing to bankroll it and in turn RIFC, so maybe its time to buy some shares?!

Infact the only thing stopping me from purchasing a few as a throw away is the big Whyte question that still hasn’t gone away – once the club and RIFC are separated, is that when it will all revert to Sevco 5088, and Whyte and Ticketus? Wasn’t that the plan from day 1?


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