Peace – Not War

ByTrisidium

Peace – Not War

We normally don’t talk about on-field stuff on SFM, but given the over-optimistic coverage of the prospects of TRFC (particularly in the ESJ © The Clumpany  and DR) it is worth noting that since they beat Celtic on penalties in last year’s Scottish Cup semi final, they have played in four huge games which were real barometers of progress ;

  • Hibs in the Scottish Cup Final: 2-3
  • Celtic in the Premiership: 1-5
  • Aberdeen in the Premiership: 1-2
  • Celtic in the League Cup Semi-Final: 0-1

On each occasion, they have failed the test, not only by failing to get a result, but by being second best in most on-field departments.

The point is not one of wider Schadenfreude, or even an in-depth critique of the abilities of the team or manager, but of how the TRFC board and the MSM, in falsely inflating their side’s prospects, do a disservice to TRFC fans. Aided and abetted it seems by the manager who – even allowing for the positive spin managers need to put on things post defeat – is refusing to accept reality.

We often talk about turnover as the yardstick by which performance can be (roughly) measured. If that were the only yardstick, one would expect TRFC to be right up there with Celtic. But it is more complicated than that. For Celtic and TRFC, there are massive overheads (e.g. stadium costs) that have to be dealt with and taken out of the equation before Glasgow apples can be compared with Aberdeen and Edinburgh varieties.

Even allowing for that it seems pretty clear to me that TRFC have more disposable income (for spending on players and contracts) than Hearts or Aberdeen for example, but the gap is now not as great as raw turnover figures would suggest  – and the margins are probably slim enough that they can be easily blurred by managers at other clubs who have a good grasp of tactics, an eye for a player, and a proper understanding of football psychology.

To compound the problem for TRFC, there are two rather large eggs in the TRFC transfer basket which are now cracked or broken.  A dangerous waste of resources in fact. Whether it was Warburton or King who went to the market for Barton and Kranjčar is irrelevant. More relevant is the reason marquee signings like these were made.

Once a manager is recruited, you stay out of his domain

Yes, Barton’s signature in particular has used a huge chunk of the already scant budget, and that is a real blow to the manager’s planning, but the real problem is that the club has deliberately pushed fan expectations skyward, all of which is counter-intuitive given the rough calculations in the preceding paragraphs. More worryingly for Rangers fans, the board’s own expectations for the playing side are unrealistically high – and given the business expertise contained therein, puzzlingly so.

TRFC is a focal point for tens of thousands of people. The people who run the club are also influential opinion formers and how they set the tone for those thousands is important.

Tub-rattling, dog-whistling, and the WATP mentality have been employed almost exclusively thus far in the ‘journey’. All of which may have rallied the troops and provided a welcome injection of funds, but it also antagonised almost every football fan in the country who wasn’t a Rangers follower. And in view of how those funds (including the £21m IPO) seemingly disappeared into the ether, did it really help the club realise any ambitions going forward?

TRFC are looking up at the north face of a financial Eiger today

I can’t help feeling that had they been replaced with humility, some regret, and gratitude to those who smoothed their path into the leagues, then the view from the club deck would a lot more attractive today than it is.

The journey could have been an expansive one bent on winning friends along the way, clearly differentiating itself from the Murray era, and carrying assurances that the new Rangers would never treat the game in Scotland as shabbily as its predecessor.

Seems intuitively obvious to me that a mission statement like the following would win hearts and minds;

“The latter-day custodians of Rangers have destroyed our club and shamed its traditions of sporting integrity, fair play, and honest endeavour.

“However the ethos and identity of our club will not be allowed to slip into obscurity.

“We will build a club worthy of the traditions of sporting integrity and fair play. It will be open and accessible to people of all colours, creeds and nationalities,

“It will be a long journey, but it is one which we relish, and one which will in time restore Rangers to the upper echelons of the game“

Managing expectations realistically with a ‘we are thankful to keep the Rangers name alive’ would have played better with the bears.

I don’t believe there is a football fan in the world who wouldn’t sign up to that had they found their club in the same circumstances as 2011 Rangers. I don’t believe that Rangers fans are any different either, but the problem is that their moral compass is being calibrated by people whose past records make them least qualified for the task.

Instead of a plan to win Scottish football over, we got boycotts, victim-hood, denial, and that wonderful new oxymoronic idiom, post-liquidation. Really though, it should all have been so different.

Water bills notwithstanding, TRFC are looking up at the north face of a financial Eiger today, but they chose to climb an Eiger instead of a Munro, and they sold false hope and snake oil to the fans on the way.

They have no money with which to recruit players of sufficient quality to challenge at the top. They are facing a massive bill for repairs and maintenance of a stadium that has atrophied under six or seven years of neglect. They have similar infrastructure problems at their training ground. They need to build a scouting infrastructure which currently consists of one man and several local volunteers. Their income from merchandising is non-existent due to a testicles-drawn dispute with Sports Direct. They owe several millions of pounds of soft loans which they cannot convert to equity because of that same dispute, and the people they have gone back to again and again for top-up finance have ever shortening arms and lengthening pockets.

.. we understand the value that Rangers can bring to the to the Scottish game and we want it to be realised.

Miracles of course do happen, perhaps in the shape of a magician manager who can get them access to European cash almost immediately. Unless that comes to pass, there is no way forward for Dave King and his board, other than to make peace immediately with Sports Direct and actually stump up the cash he promised two years ago; cash he promised to bridge the resources gap which is widening by the week.

A widely accepted wisdom in many football boardrooms these days is that the main recruitment priority of any board is an excellent manager. A really good manager can make a team out of ordinary players, but a poor manager will have difficulty sculpting a winning side from even very good players.  So in a club with limited resources, it makes sense to spend a major part of your budget on a very good manager.

Another widely accepted wisdom in boardrooms (even if not always followed) is that once a manager is recruited, you stay out of his domain.

The boardroom at Ibrox is not awash with wisdom it seems. First of all they put their faith in a manager with little or no experience in the game. That may well have worked out with a bit of good fortune, but does anyone really believe, after his disappearing act in the wake of the Cup Final defeat and his absence at the Barton signing conference, that Mark Warburton is master of his own domain?

If not, does the ‘come hither’ curled finger of fate attached to Jimmy Traynor’s hand at last week’s press conference convince you?

I would guess that there are at least half a dozen experienced managers with a track record of success who would relish the challenge of putting TRFC on the map at the opportunity cost of a Barton for example. Instead it seems – if the rumours are true – that Warburton’s autonomy was breached so that said Joey could be hired to boost ST sales.

No group of fans is entitled to expect success. Rangers fans, and Celtic fans, have historically come to expect that very thing. It is understandable to some extent, but it should never be confused with an actual entitlement to success – and that is what the board at Ibrox are selling to the fans in return for their cash – which as we have seen is not being converted to the promised on-field successes.

the ‘come hither’ curled finger of fate attached to Jimmy Traynor’s hand should convince us that Warburton is not his own master

To a large extent, I think some of the online comments in fan sites in the wake of the Celtic match have been sensible and mature. Reality amongst Rangers fans is at last beginning to bite, and that can only be a good thing for TRFC. Rangers fans are beginning to understand that too many liberties have been taken with their loyalty to and love of the jersey. The problem for the fans is that whilst they come to terms with what may be a realistic timetable and roadmap towards success and parity with the top clubs, the current board and their chums in the press are invested in having them believe the opposite.

Already the cheerleaders in the red tops are proclaiming their ‘gulf-denial’ credentials in the hope that enough fans will be convinced of it. The problem is that the fans know the gulf exists – and not only that does exist, but it is unrealistic to expect it not to.

The Level5 effect is wearing off. In the past five years, £21m quid in investment, £6m in loans, and five years worth of ST sales have all come and gone. Will Rangers fans really do those sums, observe that in each of the four milestone matches mentioned at the beginning of this article there is nothing to show for it, and agree that there is nothing to concern them?

Rangers fans will no doubt call us obsessed to produce an article like this – about them. But football is uniquely interdependent – we all need each other. It is a game where we benefit from the traditions, the colour and the fanaticism of rivals. The fact is that we understand the value that Rangers can bring to the to the Scottish game and we want it to be realised.

Sadly though, the current people in charge at the club are people who revel in making war on fellow clubs and business partners as well as the national broadcaster and BT Sport. They have also failed to deliver on promises of investment and success to their own fans, and escaped press scrutiny of that failure. Whilst they are there, we see only division in Scottish football with no coming together possible for generations.

I believe that the vast majority of fans who love Rangers, like the rest of us, have had enough of a war on too many fronts to count. It’s time to make peace – with everyone. Football in this country can’t be fixed until that happens.

About the author

Trisidium administrator

Trisidium is a Dunblane businessman with a keen interest in Scottish Football. He is a Celtic fan, although the demands of modern-day parenting have seen him less at games and more as a taxi service for his kids.

1,368 Comments so far

torrejohnbhoy(@johnbhoy1958)Posted on8:48 pm - Oct 28, 2016


StevieBCOctober 28, 2016 at 20:31       Rate This 
“…Notes to the financial statements (continued) 18. TRADE AND OTHER PAYABLES GroupCurrent liabilities
Trade creditors                            1,021 1,002 Social security and other taxes   2,659 1,498 … The average credit taken for trade purchases is 31 days (2015 – 33 days).
Non-current liabilitiesTrade creditors                               137     -…” ====================================== Quick scan of sum numbers;
– interestingly, looks like trade creditors are relatively flat at c.GBP 1M, [although new, non-current category is GBP 137K]
On the face of it, looks like trade creditors are being squeezed more than last year – but maybe not to levels we expected ?
[Although it is still a 15% uplift on trade creditors in total.]
– Taxes are up by c.GBP1.1M, [or up 77% uplift on HMRC payable ]   Delayed / disputed payments to HMRC outstanding ? Other reason(s) ?
======================
Some speculation on Twitter earlier that the £2.9m loan draw down may have been used to pay off a large creditor.There has been some claims,albeit from normally well informed sources that TRFC were at least 2 quarters behind with payments to HMRC.
May not be connected,of course.

View Comment

John ClarkPosted on8:57 pm - Oct 28, 2016


In the ‘Strategic Report ( Going Concerns)(continued) (page 13, I think)there is this :
“The Board of Directors has received undertakings from certain investors that they will provide financial support to the Group and have satisfied themselves as to the validity of these undertakings and that the individuals have the means and authority to provide such funding as and when it is required. The Board acknowledge that had these assurances not been secured then a material uncertainty would exist which may cast doubt over the Group’s ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.”
Nice to know that the Board have ‘satisfied themselves’ as to the validity of these undertakings.
Is the SFA as happy with such ‘self-certification’ as CO was with the reports of players’ remuneration? “Nothing to check here: good old Dave wouldn’t lie to us,now, the way Sir David did?”
Should we ask Mr Regan whether he has seen proof of the validity of these assertions that money will be forthcoming when required?
Perhaps not: we might not believe him, either!

View Comment

John ClarkPosted on9:23 pm - Oct 28, 2016


easyJamboOctober 28, 2016 at 19:46
‘..Edit: I’ve found a link in the Sun.’
____
Thanks, eJ.
And thanks for the heads up on  Ashley’s further litigation: sadly, I shall miss anything that happens in December.
And perhaps there will be nothing at all happening in Glasgow High Court in November!

View Comment

John ClarkPosted on11:28 pm - Oct 28, 2016


I crave the blog’s  indulgence, but since Lord Carloway has been mentioned in an ON topic way, I feel a little bit justified in briefly mentioning him in an OT way
Lord Carloway has said in support of his refusal to accept the idea of a ‘Register of Judges’ Interests’:
” there is  the possibility that an individual judge may be the subject of misconceived criticism, deriving from the disclosure of personal financial information, where those interests are tangential”,
Would it be fair of me to reply
” there is also the possibiity that an individual judge may be the subject of entirely justified criticism deriving from the disclosure of personal financial information where those interests are NOT tangential”?
It is not at all inconceivable ( and this is purely in the abstract) that in any particular jurisdiction ,a judge may be, say, a major shareholder ( perhaps via those kinds of anonymous trustee thingies ) in, say, a struggling company  whose fortunes may be affected by a decision in a court case that has fallen to be heard by that judge ( whose personal fortunes will be affected by a decision given against that club).
Now, of course, our judges would recuse themselves in any such situation. And I personally  have heard two  Judges carefully tell Counsel about very tenuous connections they had with one of the parties appearing before them, and getting their consent that he should nevertheless hear the case.
Nevertheless, I found Lord C’s reason for his opposition to a ‘register of Judges’ interests’ not at all immediately convincing.
There have been ‘unjust’ judges in the past and , human nature being what it is, there is always the possibility that there may be the odd one in the future.
I think Lord C  ought to open his mind more fully to Parliament. He may very well be absolutely right: but the reason he seems thus far to have given for his view is not terribly convincing.
But then, I’m only an actual tax-payer who wots not what his masters are about!

View Comment

John ClarkPosted on12:07 am - Oct 29, 2016


Rejoining the blog after  a skype session with the son and family in Oz [ and if it happened that SDM was the creator and maintainer of ‘Skype’ I swear that all his sins would be washed as white as snow! Or would that make me as unprincipled…?] I  continue my reading of the ‘accounts’.

And my eye falls on what must be the saddest line that could appear in a company’s accounts, betokening the fundamental lack of trust that the finance world has of its essential integrity as a business:

“the    Group               
                          does not have access
                                                                to any further banking facilities”

View Comment

wottpiPosted on12:20 am - Oct 29, 2016


Sorry to keep harping on about it but T’Rangers accounts show nowt has changed re the general problem of the level of cost needed to keep a large football club running.
Opirating costs are posted at circa £24m. Of that about half are wages including £6.4m for the 1st Team squad.
Therefore to keep the ship running they need £10m plus general wages plus the cost of the 1st team. This is at a time when austerity measures have been applied. 
We are told this season 1st team wages have risen by circa £4m to over £10m
We can therefore expect overall expenditure this season/ financial year to in the region of £28m.
An up lift in revenue of around 30% is required to meet the increased expenditure and that is just to maintain the status quo of a team that drew at home with St Johnstone this week.
Tommy Wright has shown himself to be a wiley manager but we know how hard it was for the Saints to make progress in Europe.
Even if the required uplift is achieved this season via ticket salesT’Rangers have little chance of Europe success given current performances. With no cash from there or from the retail side of things where exactly is the money going to come from to invest further  in a squad that is clearly underperformed for the £10m it is costing? It would appear some £14m of investment money (internal debt) has been gobbled up with very little to show for it. How much do T”Rangers think needshe to be spent to get a squad capable of ’55’ and Europe glory?

View Comment

Carfins FinestPosted on4:51 am - Oct 29, 2016


For one who is completely out of his depth when it comes to annual figures etc. I have gleaned the following from the latest publication from Ibrox.
1. They only survive because they have friends willing to stick their hands in their pockets to bail them out as and when required.
2. They firmly believe that European football will ease ALL their financial issues.
3. The Football Authorities are happy with this because the Ibrox Board have told them it will be alright on the night.
The problems are very obvious.
1. The easiest way, they say, to lose a friend is to lend him £1.00. The friendship will soon erode when the friend starts to feel he is only a friend because he has some money.
2.Ask St. J. or Motherwell etc. just how profitable the early rounds in the UEFA cup are. Even winning the UEFA cup has no great wealth attached.
3. The Football Authorities are sitting with their collective fingers in their collective ears singing la la la la la willing to believe whatever sh#t is shovelled their way. Part of the problem not part of the solution.

View Comment

AllyjamboPosted on8:29 am - Oct 29, 2016


Carfins FinestOctober 29, 2016 at 04:51 
For one who is completely out of his depth when it comes to annual figures etc. I have gleaned the following from the latest publication from Ibrox. 1. They only survive because they have friends willing to stick their hands in their pockets to bail them out as and when required. 2. They firmly believe that European football will ease ALL their financial issues. 3. The Football Authorities are happy with this because the Ibrox Board have told them it will be alright on the night. The problems are very obvious. 1. The easiest way, they say, to lose a friend is to lend him £1.00. The friendship will soon erode when the friend starts to feel he is only a friend because he has some money. 2.Ask St. J. or Motherwell etc. just how profitable the early rounds in the UEFA cup are. Even winning the UEFA cup has no great wealth attached. 3. The Football Authorities are sitting with their collective fingers in their collective ears singing la la la la la willing to believe whatever sh#t is shovelled their way. Part of the problem not part of the solution.
_________________________________________-

And, they have already borrowed £2.9m as early as this month! Not an indication that current expenditure is under better control than in previous years. It is, I’d say, though, an indication that this year’s loss will be at least as high as last’s, and worse if there is no (home) Cup run all the way to the final (over to you, Mr Regan).

On that £2.9m, and the further borrowings required in March, is there any indication where the soft loans are coming from, could it include borrowings/donations from Club 1872? If the club have not needed to utilise the monies held by the supporters’ collective then they will still have this in the background, but, if they have already called upon it, and the supporters see no improvement in the playing side, then that well would almost certainly begin to dry up as the members become ever more disillusioned.

What is the plan to turn these annual losses into profit or to at least break even? Is there one other than to get into Europe (uncertain at best and will cost more to achieve than the potential profit) and beat Ashley/SDI in court and get a greater income from merchandising (uncertain at best and the end result could be very expensive)?

View Comment

BarcabhoyPosted on8:32 am - Oct 29, 2016


Rangers increase in taxes due is almost certainly as a result of increased Season book sales . The overall sales have increased by 4,500 over the previous year. Not only that there was a hefty price increase. The VAT element of the increase is relatively easily calculated.

Last year 37,000. These season books are now on average Circa £80 more expensive. The VAT on that is £13.34 per season book . On 37,000 season books that adds £493,000 to the VAT which would be due at the end of June 2016. There is also 4,500 additional season books with the VAT element on each at circa £56. That adds another £252,000 to the VAT due.

That delivers a total of £745,000 of Extra VAT due , but not overdue , at the end of June . The overall increase was  £1.1 M in taxes due compared to the previous year. If VAT on season books accounts for all but £355,000 then it’s not a stretch to accept that this balance is covered by VAT on increased Hospitality and PAYE on increased bonus’ due for promotion to the SPL.

The accounts don’t show any evidence that RIFC has been delinquent on taxes, in fact it indicates that taxes are probably up to date.

The football though does show how poorly Rangers have spent their extra revenue. The current squad have played more than enough games to be judged as no better at all than those other clubs in positions 2-5 in the league. That extra revenue has had to be supplemented by further loans of £3.75M . In real terms the progress in the accounts has been almost entirely due to more fans attending games and paying more to do so.

The board have taken the fans money and spent it poorly. Thats not a sustainable strategy and it’s not clever management

View Comment

SmugasPosted on8:49 am - Oct 29, 2016


Oh, I don’t know about that.  My clubs been doing it for 26 years now!!!

View Comment

Long Time LurkerPosted on8:53 am - Oct 29, 2016


Have Rangers met the UEFA criteria to play in Europe re established sets of audited accounts etc.?

View Comment

AllyjamboPosted on9:28 am - Oct 29, 2016


Long Time LurkerOctober 29, 2016 at 08:53 
Have Rangers met the UEFA criteria to play in Europe re established sets of audited accounts etc.?
__________________________

Could you imagine it? TRFC qualify for Europe, the journey is complete, King is (metaphorically) carried shoulder high and lauded as the great messiah, then…UEFA take a look at their accounts, which they won’t do until after they qualify, and the true cost of what their messiah has done is revealed!

And, as Europe is one of only two ‘plans’ to get their finances in order, if they can’t achieve Europe, the chances of meeting FFP standards diminishes, with each passing season!

View Comment

Charlie_KellyPosted on10:03 am - Oct 29, 2016


Carfins Finest – I agree with the gist of your post apart from the following 

“2.Ask St. J. or Motherwell etc. just how profitable the early rounds in the UEFA cup are. Even winning the UEFA cup has no great wealth attached.”

The reason the early UEFA rounds don’t bring in any profit for the likes of St Johnstone is due to the fact that they will have a home crowd of 5-8,000 or so and a very expensive trip to somewhere like Belarus, Romania etc…. and no TV coverage.
Its a virtual certainty that rangers first game “back” in Europe would be covered by TV and that they’d have a home gate of 40K+ (regardless of the opposition) at £20-25 a ticket. So just one round in the UEFA cup could be worth over £1,000,000 to rangers when you factor in TV money, bonus payments from sponsors for reaching Europe etc..
I agree this would come nowhere close to solving all of their problems but there’s no doubt that it’d be a welcome financial boost if it were to happen.

View Comment

HomunculusPosted on10:39 am - Oct 29, 2016


BARCABHOY
OCTOBER 29, 2016 at 08:32
================================

That would make sense. It would not be unusual for a business to align it’s VAT quarters to it’s annual accounting period. So end of June would be the end of a VAT quarter, but the money would not be due to be paid for another month (and seven days). Simply normal business.

In addition the June period would be their biggest in the year as that would be when a lot of season tickets are sold (even if they are not actually paid for) and the VAT would be due. You would expect the June return to be bigger this year simply because the number sold is simply bigger as is the individual cost. 

Based on your logic there is a simple and perfectly acceptable reason why the outstanding tax is higher at that time. Occum’s Razor. 

However I personally think the underlying message for the club is far from a good one. They are working based on cash in hand and nothing else. They are relying on rich supporters (and possibly “loans” from club 1872) just to keep operating. They are still spending more than they are earning and had to borrow as early as October (the fourth month of the year). They are unlikely to be able to spend on player purchases or higher salaries, so they need to perform better with what they have, or the support will dwindle, as will income. 

They need a successful rights / share issue. However it should also be borne in mind that a lot of that money is already spent and the creditors will get their debt repaid as equity. So it may well be a share issue – £10m already paid. I not that the AGM has a resolution with regards an issue. Last year it was for c40m shares, this year it is for c80m. If those were valued at the last trading price of say 25p and it was successful it would raise £20m. That to me may be the last throw of the proverbial dice. 

View Comment

Jingso.JimsiePosted on11:41 am - Oct 29, 2016


HOMUNCULUS

OCTOBER 29, 2016 at 10:39       

…They need a successful rights / share issue…
——————————————————

How would that be possible?

There’s two markets for RIFC shares: institutional buyers & fans of the subsidiary, TRFC.

RIFC seems to be toxic to institutions, so that leaves fans to take up the majority.

I think that RIFC/TRFC would have to state clearly some very unpalatable truths about the business & the perilous position it is in after 54 months (and about where approx. £75m has gone) to get fans to dig into their pockets. I doubt they’d raise enough.

The board of RIFC would need to state that, unless fans step up, the business is a goner. 

Who’d be foolish enough to underwrite the issue? 

Can they have a share issue without (cue Derek Llambias!) a NOMAD?
 
How many RIFC shares from the original flotation are still unissued?

Questions, questions, questions…

View Comment

HomunculusPosted on11:58 am - Oct 29, 2016


JINGSO.JIMSIE
OCTOBER 29, 2016 at 11:41
==================================

If resolution 11 fails, and it is a special resolution, then shares will have to be offered to existing shareholders anyway. 

The existing lenders could then gets their shares in a debt for equity swap, but that would mean that whilst there would apparently be a sale of shares no new money would actually come in.

The chance of selling shares to anyone outside of existing shareholders is slim to none anyway. Who would want to invest in a four year old business, which has posted losses every year and is predicting further losses. That’s without even mentioning the lack of banking facilities, the outstanding claims on it’s assets, and the lack of retail income for six years.

In short, they want money from Club1872 and directly from the fans. Everything else would just be smoke and mirrors. It could however raise a couple of million to help see the season out. Club1872 must have a reasonable amount of cash and it is there to buy shares, so it would make sense. Some fans would put a bit of money in to help their club out. If the issue was not 100% taken up that would not be the PLC’s fault. 

On the NOMAD thing, a Nominated Adviser is a requirement for trading on the AIM market. They are de-listed from that market so not only do they not need one why would they even want one.

View Comment

justbecauseyoureparanoidPosted on3:49 pm - Oct 29, 2016


Genuine question. Does the SPFL have any concerns about member clubs having going concern warnings from their auditors?
Follow up question. If not why not?

View Comment

TincksPosted on4:07 pm - Oct 29, 2016


On the surface TRFC’s audited accounts show very little change in their position.  Losses have been reduced to a more manageable level and look set to continue for the current and next financial year.  Shareholders seem to have given assurances of further soft loans which have proved acceptable to the auditors.  Taxes seem to be paid up to date and the water still flows out the tap.

Amidst all the criticism of Warburton and TRFC’s results they are clearly in the mix for a European spot.  Their only defeats so far this season are to Celtic and Aberdeen.  As Charlie Kelly states, given the likely turnout each European tie might be worth circa £1m to the kitty.  Based on the current wage structure a third place finish this season a modest run in Europe could get them very close to or beyond break even point in 2017/18.

That’s the glass half full analysis.  On the other hand, let’s look at some of the risks and scenarios, any one of which could widen the gap between costs and income.

*  Rangers finish third, qualify for Europe but are 25 points behind Celtic.  Season tickets drop by 5,000.
*  The squad is thin.  A serious injury crisis could have a significant impact on results.  Rangers finish 5th.  Season tickets drop by 10,000+.
*  The roof situation becomes critical necessitating repairs and stadium rental costs. 
*  Puma or 32 Red want their money back.
*  An ageing squad needs revamping Spring 2017 – where does the money come from for transfer fees and/or increased wage roll?

BB covered this last point eloquently:

The board have taken the fans money and spent it poorly. Thats not a sustainable strategy and it’s not clever management

The best metaphor I can find for Rangers and their finances is that they remind me of a giant game of Jenga.  Each loss, each soft loan, every deferred repair/refurbishment or other can kicked down the road is simply another block removed from the tower.  We’ve all seen skilful players with steady hands and strong nerve who can keep the tower standing long after we think it should have fallen but, at some point it will tumble down.  Will Rangers ever get to the point where bricks are placed back in to shore up the foundations?  I doubt it.  The situation is not sustainable and sometime, somehow a tipping point will be reached. 

View Comment

jean7brodiePosted on6:50 pm - Oct 29, 2016


justbecauseyoureparanoidOctober 29, 2016 at 15:49
____________________________________
My memory isn’t very good but I seem to recall folk on here saying that clubs have to prove they are viable and have to be able to prove they can see out the season03???
BTW thanks to all you erudite people on here. I read everything, every day, and am very glad to be educated by all of you.

View Comment

HomunculusPosted on7:14 pm - Oct 29, 2016


With regards the loans, the accounts tell us where they are from

There was an opening balance of £3.75m.

£1.5m of that being from King,
£1.5m from other related parties,
£0.75m from the other directors.

A further £6.275m was borrowed this year.

£2.2m of that being from King
£2.375m from other related parties,
£1.7m from the other directors.

The other related parties are – George Taylor, George Letham, Andrew Ross, Barry Scott, Scott Murdoch

The other directors are – George Taylor, George Letham, Andrew Ross, Barry Scott, Scott Murdoch

There were transactions in October, after the end of the accounting period. These amounted to £2.9m, there will be further borrowing in March.

The money borrowed by the PLC has been “passed to subsidiary” i.e. the club, to finance it’s ongoing operations. 

The total borrowing (by the PLC) is currently around £13m. 

Can I also add as a lay man that if the opening cash at bank was £2.9m and a further £2.9m has already been borrowed that’s a total of £5.8m, with more to come in March. That would suggest that the PLC expects to overspend by in excess of £6m this year. Goodness knows how much higher than that.

View Comment

HomunculusPosted on7:55 pm - Oct 29, 2016


Apologies, my last should read

The other directors are – Douglas Park, John Bennett, Paul Murray.

View Comment

Cluster OnePosted on8:21 pm - Oct 29, 2016


justbecauseyoureparanoidOctober 29, 2016 at 15:49 i 13 Votes
justbecauseyoureparanoidOctober 29, 2016 at 15:49 i 13 Votes
Genuine question. Does the SPFL have any concerns about member clubs having going concern warnings from their auditors?Follow up question. If not why not?
going concern warnings from their auditors?
Follow up question. If not why not?
—————-
Genuine question. Does the SPFL and the SFA have any concerns about member clubs having to receive loans in Oct and saying they need more later on to keep going to see out their obligations until the end of the season?

View Comment

HomunculusPosted on8:35 pm - Oct 29, 2016


CLUSTER ONE
OCTOBER 29, 2016 at 20:21
====================================

Maybe they don’t mind because the member club is actually getting the money from it’s Holding Company, so it’s not actually “external debt” per se. Even though the Holding Company is having to borrow the money in order to provide those loans to the member club.

The SFA / SPFL can take a rather interesting view on these things, when it suits them.

If you are Spartans or Livingstone then fielding ineligible players is a big deal. For other clubs thing like proper registration and notifying the authorities of side contracts seem to be much less of an issue. No sporting advantage for them apparently. 

View Comment

Cluster OnePosted on9:24 pm - Oct 29, 2016


HOMUNCULUSOCTOBER 29, 2016 at 20:35
Maybe they don’t mind because in their eyes, We as fans don’t matter……A Misplaced  assertion. 

View Comment

John ClarkPosted on10:27 pm - Oct 29, 2016


Cluster OneOctober 29, 2016 at 20:21
‘…Does the SPFL and the SFA have any concerns about member clubs having to receive loans in Oct and saying they need more later on to keep going to see out their obligations until the end of the season?..’
_________
The Articles of Association of the SFA give the Board the power to get in among the finances of member clubs:
“Art 12.2The Board may arrange for an inspection of, and may require the relevant club or recognised football body to provide copies of, all such books, records and details for any purpose, including but not limited to Club Licensing. Such inspection may be conducted by the Board, or by such authorised employees of the Scottish FA, the Scottish FA’s auditors or other professional advisers duly appointed by the Board on giving to any club or recognised football body reasonable notice of its intention to do so”

and the Rules of the SPFL give similar powers:
“Rule E30 Every Club shall keep detailed financial records and the Company shall be entitled to inspect such records and to require Clubs to provide copies of any financial or other records which the Company may reasonably require in order to enable the Company to investigate whether the Club has complied and is complying with these Rules, the Articles, the Scottish FA Articles, the UEFA Statutes and the FIFA Statutes and to ensure compliance by the Club with the same.”

With the powers conferred, it would seem to me that both Boards would be extremely negligent in the discharge of their fiduciary duties to their respective Companies if they were not independently satisfying themselves that assurances made by ANY member club that, “it’ll be fine, we know we can get loans from (unspecified) quarters who’ve got the dosh as and when required” are not just pious aspirations!

At the very least,they ( the Boards) should demand to see written commitments from the potential ‘lenders’ that the assurances are genuine.

And if they don’t get sight of such commitments, start detailed planning for another few dinner dates and another ‘5-way agreement!’

View Comment

wottpiPosted on11:47 pm - Oct 29, 2016


Just a reminder to folks that I believe  Aberdeen carried an “internal debt” of £15 m a few years back.
In relative terms other clubs may be in a worse pro rata position requires internal debt than T’Rangers.
If fans in the stand and fans with access to funds via their businesses or personal wealth want to put cash into a football team then so be it.
Yes I too am of the opinion the authorities should have a say in how far a club goes re such ‘investment” but at the end of the each club has to be responsible for its own actions.
Maybe those in the blue room will work some magic but ad far as I can see, despite a good effort, history is more than likely gowing to repeat itself.

View Comment

SmugasPosted on7:45 am - Oct 30, 2016


Tend to agree WOTTPI and there was nothing ‘internal’ about Aberdeen’s debt btw!  You can’t ask for boards assurances which they, like the auditors, can ask for and then on receipt of said assurances say “no ye wulnae.”  All you can do is act appropriately if those assurances prove to be hollow particularly if the impact is to the detriment of everyone else.  

View Comment

tonyPosted on10:17 am - Oct 30, 2016


phil’s latest 
http://www.philmacgiollabhain.ie/rifc-accounts-2016/#more-8214

View Comment

John ClarkPosted on10:17 am - Oct 30, 2016


The following has just very recently  been put to me by someone whom I know to be as keenly interested as I in watching out for any sign or suspicion of jiggerypokery by the SFA in the matter of their ‘dealings’ with the dead club and the new club.
Perhaps one of our keen-eyed ‘accounts’ scrutineers could have a look at it?
“King claims that after losing an appeal TRFC paid the LNS fine.
LNS fine was £250K + £150K costs but TRFC paid £286K. Why?
Well interestingly if you look at SPFL’s payment to TRFC for winning the championship, £475K, and deduct 40% for tax you are left with pretty well £286K.
So did SPFL withhold the payment and pay the tax or has TRFC done what they say but SPFL let them off with £114K?
No matter which TRFC are £114K short in paying the fine.”
There may be a simple, acceptably innocent explanation of this little bit of synchronicity: and I shouldn’t let my suspicions run away with me, but …….

View Comment

tamjartmarquezPosted on10:19 am - Oct 30, 2016


A week is a long time in fitba, as in politics.
Celtic defeat The Rangers 1-0 in a very one sided League Cup Semi to set up a final meeting against Aberdeen. Warbs and team all on message the gap is small.
In the league following 2 rounds of league fixtures where there was 2 good wins for the champions  the gap is already unbridgeable. All Euro place challengers had a dire week, apart from this seasons new boys, who were earlier in the week booed of the park after holding Saints to a draw at Ibrox. The Rangers actually ended the week as top performers of the also-rans, and are just one league position of their rightful place. 

Big, big opportunities missed by Hearts, Aberdeen and St Johnstone to dampen the noise out of Ibrox, as a result of there collective poor week they have unwittingly bought more time for Warburton and King, and raised expectation to Level 5, who are busy placating the people with upbeat coverage of Joeygate and The Rangers financial results.

View Comment

tamjartmarquezPosted on10:42 am - Oct 30, 2016


On another note- consistency and compliance officers. Immediately following what proved to be the winner in Betfair semi, great cross and finish btw, both Dembele and Griffiths jump hoarding and barrier to get into spectators, but no bookings. 
just saying like.
Killjoy? No player for any other club, bar one, would expect such such leniency.

View Comment

tonyPosted on10:48 am - Oct 30, 2016


TAMJARTMARQUEZ
dembele was booked for it mate

View Comment

AuldheidPosted on11:01 am - Oct 30, 2016


Long Time LurkerOctober 29, 2016 at 08:53 Have Rangers met the UEFA criteria to play in Europe re established sets of audited accounts etc.?__________________________
Could you imagine it? TRFC qualify for Europe, the journey is complete, King is (metaphorically) carried shoulder high and lauded as the great messiah, then…UEFA take a look at their accounts, which they won’t do until after they qualify, and the true cost of what their messiah has done is revealed!
===========
Actually what UEFA have said in that letter of 8th June 2016 (apart from UEFA viewing TRFC as a new club/ company ) is that the granting of the licence  is done by the SFA. That means that it is the SFA who scrutinise the accounts and once UEFA get the list of clubs granted they accept the natonal association has carried out the licensing process in the spirit and letter of fair play under UEFA FFP.
Now this where the financial rubber hits the integrity road because if the national association is driven by the fear of what will happen to the domestic game will be seriously damaging to it financially, are they likely to abide by the spirit  of the rules and refuse a licence or find ways of reading the letter of the rules that let’s them justify  granting a licence when they should not?
Res12 should get answers to that question but for obvious reasons of self protection the persistence is meeting resistance. Only the club’s can seek answers but they are interdependent and so would rather let it all fade away.
My analysis has consistently been that UEFA prize money should be much more equitably shared amongst all top tier clubs who provided the opposition from which a winner would emerge. I’m not saying lower tier shouldn’t but perhaps that is where the solidarity payment should go.
Pursuit of UEFA geld killed RFC yet TRFC see pursuit of same bounty as the answer to their business prayer’s? “As oil is to the oil industry so stupidity is to football” (Soccernomics) and I’m now including the media in that Forrest Gump bracket.
Where is the strategic thinking at play either at Hampden or the media? Why a reluctance to think about why our game is in such a mess off and on the park? Why a reluctance to introduce Domestic FFP which was mentioned a while back or would such a policy prevent a club qualifying for UEFA but failing to get a licence granted because Domestic FFP does not allow for a club to continually depend on loans that they need to field better players than the rest that other clubs cannot access?
It might even be questionable if a club with such a policy would obtain a licence under UEFA FFP but if their survival depended on it as it did in March 2011, would the SFA apply the spirit of UEFA FFP or try and find ways to navigate the rules to let them justify granting it?
The future is a prisoner of the past unless the present changes and only clubs under supporter pressure can do that.

View Comment

tamjartmarquezPosted on11:38 am - Oct 30, 2016


Cheers Tony, apologies, stand down Compliance  Officer

View Comment

John ClarkPosted on12:12 pm - Oct 30, 2016


And on the World cup qualifying front, the SFA will await the outcome of FIFA ‘investigations’ into alleged irregularities in the Lithuanian /Maltese nexus.
There is a certain irony in there somewhere, I think, where a body that itself needs investigation is waiting, probably self-righteously, for the outcome of an investigation into another body!

View Comment

Charlie_KellyPosted on12:25 pm - Oct 30, 2016


Re Dembele Yellow card (or lack of?) if you skip to 55 mins on this clip, the TV folk certainly seem to think he got booked.
https://www.youtube.com/watch?v=2WigaWTKlwY

However on the SPFL site when you click on the match report it only lists only Brown & Griffiths as being booked for Celtic
http://spfl.co.uk/league-cup/fixture/3639100/
So who knows?

View Comment

Big PinkPosted on12:45 pm - Oct 30, 2016


We have contacted SPFL for clarity re: Dembele. Looks like someone’s info is off – either the TV or the SPFL.

Guess who we think it might be 🙂

I’ll get back if we get an answer

View Comment

tonyPosted on12:52 pm - Oct 30, 2016


BIG PINK
the guardian say he was booked too 
https://www.theguardian.com/football/live/2016/oct/23/rangers-v-celtic-scottish-league-cup-semi-final-live

View Comment

tamjartmarquezPosted on12:59 pm - Oct 30, 2016


Dembele card? i too read SPFL match reports where no booking reported. Following Tonys heads up i read further, Guardian report below, which relies on Sutton, BT coverage.
https://www.theguardian.com/football/live/2016/oct/23/rangers-v-celtic-scottish-league-cup-semi-final-live
7d ago16:04

90 min Dembélé was booked, by the way, for charging into the crowd to celebrate. On BT Sport the decision has left Chris Sutton apoplectic.Updated at 4.04pm BST
 7d ago16:01
GOAL! Rangers 0-1 Celtic (Dembélé, 88)Finally Rangers’ resistance crumbles. An innocuous long ball isn’t dealt with and Leigh Griffiths spins into the box before crossing with the outside of his boot for the arriving Moussa Dembélé, who finishes brilliantly with a Cruyff-turn on the run at the near post.
==
booking or no booking i’m sure Broony explained it is a no go, following hot on heels of Cup Final pitch invasion, and player assaults.
Advice for Sutton Fans keep off pitch, Players keep out of crowd. 

View Comment

oompaloompaPosted on1:49 pm - Oct 30, 2016


“This Club has become one of the first to implement the Living Wage.”
Really?  I thought Hearts were the only team in Scotland to implement the Living Wage of £8.25 per hour, due to be increased tomorrow.  They are according to the Living Wage Foundation.  If they’re referring to the National Living Wage it would be illegal not to pay it.
You have to wonder if they are as genuine with any of the other statements?

View Comment

CrownStBhoyPosted on2:42 pm - Oct 30, 2016


oompaloompa:
“This Club has become one of the first to implement the Living Wage.”Really?  I thought Hearts were the only team in Scotland to implement the Living Wage of £8.25 per hour, due to be increased tomorrow.  They are according to the Living Wage Foundation.  If they’re referring to the National Living Wage it would be illegal not to pay it.You have to wonder if they are as genuine with any of the other statements?
———————————————————————————————

Celtic have indeed implemented the living wage as calculated by the Living Wage Foundation; they are not referring to the National Living Wage.
Previously, Celtic had paid £7.85/hour which was the immediately preceding living wage rate.

The commitment was made at the time of Celtic’s annual report in July 2016: 
“This commitment was delivered and a minimum rate of at least £8.25/hour was implemented with effect from July 1, 2016, reflecting the prevailing voluntary Living Wage rate.”
That should be genuine enough for anyone.

Hearts are an Accredited Living Wage employer.
Celtic have not signed up to receive this Accreditation as they believe it would mean “handing over decision-making on salaries to another agency”.
Some have used misinformation on Celtic’s stance for their own ends.
This Accreditation does not commit in law to a continuance to pay this rate.

This link below shows a map of existing Living Wage employers:
http://www.livingwagemovement.org/map

View Comment

StevieBCPosted on3:01 pm - Oct 30, 2016


Any truth in the rumour, (which I have just started), that Hilary Clinton is now contemplating a career change…as the media face of ‘Rangers’?

Angry statements, misdirection, ignoring rules and regulations, threats and blatant fibbing, whilst lining her own pockets…she’d fit in well in the Blue Room.

09

View Comment

tonyPosted on3:18 pm - Oct 30, 2016


another one from phil 
http://www.philmacgiollabhain.ie/valuable-feedback-on-rugger-chaps-analysis/#more-8218

View Comment

oddjobPosted on3:20 pm - Oct 30, 2016


Steviebc,
I think that’s a Trumped up charge !

View Comment

Jingso.JimsiePosted on3:36 pm - Oct 30, 2016


HOMUNCULUSOCTOBER 29, 2016 at 11:58      
JINGSO.JIMSIEOCTOBER 29, 2016 at 11:41==================================

Thanks for your excellent reply.

View Comment

oompaloompaPosted on6:24 pm - Oct 30, 2016


CrownStBhoyOctober 30, 2016 at 14:42
I understand where you are coming from regarding Accreditation, being tied up to a third party pay increase which has averaged at 4% over the last four years would be risky.  The point I was making was that RIFC have stated in their annual accounts that the are the “club” to implement the Living Wage.  Would be interested to know what RFC are paying their low paid staff.  If it’s £8.25 or more then fair play but if it isn’t then the statement about being the first “club” to implement it is a load of absolute tosh.

View Comment

scottcPosted on6:42 pm - Oct 30, 2016


OOMPALOOMPAOCTOBER 30, 2016 at 18:24       Rate This 
CrownStBhoyOctober 30, 2016 at 14:42I understand where you are coming from regarding Accreditation, being tied up to a third party pay increase which has averaged at 4% over the last four years would be risky.  The point I was making was that RIFC have stated in their annual accounts that the are the “club” to implement the Living Wage.  Would be interested to know what RFC are paying their low paid staff.  If it’s £8.25 or more then fair play but if it isn’t then the statement about being the first “club” to implement it is a load of absolute tosh.

In fairness, the statement you quoted says, ‘one of the first’, not ‘the first’

View Comment

HomunculusPosted on6:56 pm - Oct 30, 2016


This is a direct quote from the RIFC PLC accounts.

“The Club has chosen to adopt the voluntary Living Wage rate as a minimum for all its employees.”

This is a direct quote from another clubs accounts.

“Earlier this year the Club made a commitment to again review the minimum hourly rate of permanent staff. This commitment was delivered and a minimum rate of at least £8.25/hour was implemented with effect from 1 July 2016, reflecting the prevailing voluntary Living Wage rate.”

View Comment

oompaloompaPosted on8:05 pm - Oct 30, 2016


So, what minimum rate of pay is the cash strapped “club” paying to its employees?

View Comment

CrownStBhoyPosted on10:09 pm - Oct 30, 2016


OOMPALOOMPA

The link provided in my previous post can be found on the Living Wage Foundation website and shows all employers paying the Living Wage as presently prevailing according to the Foundation.  Those not paying the rate are NOT on the Map.

View Comment

easyJamboPosted on10:12 pm - Oct 30, 2016


tony October 30, 2016 at 10:17 
phil’s latest  http://www.philmacgiollabhain.ie/rifc-accounts-2016/#more-8214
tony October 30, 2016 at 15:18 
another one from phil  http://www.philmacgiollabhain.ie/valuable-feedback-on-rugger-chaps-analysis/#more-8218
====================================
I’ve now read through Phil’s “Rugger chap’s” review of the accounts and while I generally accept his findings, I have some comments on them.

He states that RIFC had cumulative losses of £18M since it was created in 2012.  That figure significantly understates the cash losses, as the first year’s “profit” was only achieved because of the inclusion of a £20.5M paper profit in respect of negative goodwill.  The actual operating losses reported over the period was £35.9M

He also suggests that Dave King through New Oasis Ltd provided the £2.9M funding earlier this month and will provide additional funds in March.  The only indication I can find about the source of these funds was that it came from “investors” (p13, p15, p30, p58).

He queries the need for funding in October, despite the large increase in deferred income (mainly ST sales). I think that can be explained by Note 15 (p45) in the accounts relating to Trade Debtors which indicates that £11,423,00 was due in respect of “season tickets that are paid by supporters using deferred payment plans or merchant services.” From the best of my knowledge of how Hearts ST revenues are delivered, these sums will be released to the club by the service suppliers on a game by game basis throughout the season. Therefore I would take the view that the club is not actually cash rich at the moment as the bulk of the ST income has still to be received. There may still be some other reason for needing the £2.9M, but I don’t think we can come to any conclusions as yet.
————————————-
Re the follow up blog and another observer’s view that the £522K impairment charge in the recent accounts “almost certainly” relates to unsold stock. 

I disagree with that assertion.  The treatment of the investment in the associate companies (RRL) is explained in Note 1 (p31) and Note 14 (p44).

Rangers “investment” in associates (RRL) was valued at £587K  in June 2015.  Between Rangers share of the profits of RRL last year (adds value) and share of dividends issued (reduces value), that left a book value of £522K, which was written off as “impaired”, leaving a zero value for their investment in RRL as at June 2016. 

My reading of the accounts is that Rangers have decided to completely write off the value of their investment in RRL, on the basis that it had no value to the club going forwards.  Any future dividends received or payments for selling their stake will simply be added to their income in any future years.  In the Business Review (p9) it states: “As a result of the ongoing litigation and termination of the IP agreement, the Group has concerns about the future viability of Rangers Retail Limited. As such, the Group considers that its investment in Rangers Retail Limited is impaired at the year end and has recognised an impairment provision amounting to £0.5m.”
——————————-
Phil’s sources may have got it spot on meaning I have got it completely wrong, but based on what I have read I am comfortable with my interpretation and explanations as above.

View Comment

John ClarkPosted on10:29 pm - Oct 30, 2016


Trying to read up on ‘Insolvency’, I  incidentally came across this:
“The new rules which will guide insolvency practice from April 2017 have been published. Modernised and consolidated insolvency rules have been laid in Parliament and will come into force on 6 April 2017.From:The Insolvency ServiceFirst published:25 October 2016The new rules which will guide insolvency practice from April 2017 have been published…….The rules will apply in England and Wales. A parallel project to modernise the Scottish insolvency rules is currently underway with the Scottish Government. ..”
I have truly become such a cynic when it comes to anything to do with the control and regulation of bad b.s.ar.s in the business world that  I say ” Oh, big such-and-such wowees!”
I’ll bet that Court-appointed ‘Administrators’ will not be any more liable to suffer penalty for assisting asset strippers to create fictions than they presently are.
Indeed, as far as I can make out, the ‘Insolvency Service’ [an executive agency of the Department for Business, Innovation and Skills] is not so much about catching bad guys, as helping them to cash in on their ‘good luck’ in buying assets cheaply!
But then, what do I know? Nothing very much, except that expecting Parliament to have a real go at proper regulation of the business world is like asking Nigel whassisname to campaign for the EU!

View Comment

tonyPosted on10:33 pm - Oct 30, 2016


EASYJAMBO
i only post his site to add convo to this site,i can’t really understand the accounts bit of his or jj’s sites 

View Comment

John ClarkPosted on10:57 pm - Oct 30, 2016


easyJambo says ( October 30, 2016 at 22:12):
‘….Phil’s sources may have got it spot on meaning I have got it completely wrong, but based on what I have read I am comfortable with my interpretation and explanations as above.’
_______
And again, this blog demonstrates the understanding we have of the need for evidence-based conclusions when people who know what they’re talking about have some differing points of view here and there.
Those of us( like me myself personally!) who struggle to read our own bank statements or make sense of the bumf that comes through the door about transferring credit card accounts for x months of ‘interest free’ really appreciate the serious work done by eJ and , say, Phil’s ‘rugger man’, and other folk who post, who are drawing on their knowledge and experience. We then get a sense of perspective, of objectivity.
What we know for sure is that there are questions to be asked about any statement coming from Ibrox( as indeed there would be in respect of  any apparently struggling business!).
And I think we can reasonably expect that the SFA and SPL ought to be asking those serious questions, for their own sakes. (it certainly wouldn’t be for elevated notions such as ‘the good of Scottish Football!)

View Comment

upthehoopsPosted on7:10 am - Oct 31, 2016


Like some others on here I am not qualified to forensically examine the Rangers accounts. However, I don’t need to be qualified to know that needing yet another loan just to keep the lights on with six and a half months of the season to go is far from a good position to be in. Furthermore, there is an admission that another loan will be needed before the end of the season – just to keep the lights on!

How much longer can this go on? For ends to meet will require them to compete in the Europa League group stage at the minimum. It will also require fans to continue to buy season tickets in the same numbers. Will they do so without league title success? In my view the only way out of this endless circle would be for another Souness type appointment, which is just not possible without a bank willing to throw money at them. They can’t even get a bank to extend them a modest overdraft facility. Am I being naive to think if it was possible for them to use Ibrox or Auchenhowie as security they would get an overdraft? Oh how much worse it would be if the media were not scared to tell the truth about them!

View Comment

vascodaparsPosted on8:47 am - Oct 31, 2016


Given their dependence on loans from “investors” to continue trading as a going concern, is the financially distressed club in contravention of the EUFA FFP rules? 
And therefore would they be permitted to compete in a EUFA tournament should the qualify on sporting merit?
On the subject of investors, does anyone know how much Club 1872 has made available to the board, and how many shares that has allowed to be allocated?  

View Comment

AllyjamboPosted on10:51 am - Oct 31, 2016


Just a wee thought on the fresh directors’ loan of £2.9m.

Much has been said suggesting it indicates they have already run out of money much earlier than in previous years, but, could it be that they might not have run out of cash yet, but the auditors have insisted that the first tranche of the promised loans is in place before they would sign off the accounts? It might also explain why they ‘need’ £2.9m now, but only £0.85m in March (one month’s wage bill?) to see them through the rest of the season, as there will be a residual amount left of the £2.9m. Of course, if I am anywhere near the mark, it might indicate that the auditors were not prepared to take the board’s word that the loans would be made! There is also the possibility that the much discussed roof repairs, that the accounts suggest require around £500,000 of repairs this financial year, desperately need doing but the roofers are not prepared to start until they have the funds attached to ensure payment.

On the spin in the SMSM providing the ‘good news’ that the club’s losses have been halved to £3.3m, as though it’s some sort of an achievement. The reality is, the club’s ever growing losses have been increased by £3.3m, but that’s not what the bears want to hear!

View Comment

wottpiPosted on11:22 am - Oct 31, 2016


UPTHEHOOPSOCTOBER 31, 2016 at 07:10
How much longer can this go on?
————————————————————————-

It can go on as long as people are willing to put money into the club.

That is the same with all the other clubs in the country.

IIRC Ann Budge announced the other week that £3m from unidentified sources was donated to the club to help cover the new main stand project. Not a peep was heard in opposition or questioning if this was all above board. I can’t imagine that having gone through and administration event via  CVA that Hearts’ credit rating is that good. Therefore the club is relying on the input from fans, some of whom may have large amounts of disposable income, and trying to run as tight a ship as possible.

While it would be nice to win the League I think most Jambos are realistic enough to know the best that can be hoped for is, fighting for second spot, a domestic cup run with the chance of taking a trophy and trying to get a squad together that could be seen as making progress in Europe.

The problem down Govan Way is that the Holding Company is chaired by a man that very few trust. There are elements of the fan base who would be happy if he and some of his cohorts were seen heading down the road. Therefore if ‘success’ is not obvious then there could be some disquiet amongst fans.

However it has to be said that this has not reared its head as of yet and there are no signs at present of anyone breaking rank despite the misgivings.

At present due to the onerous retail contract and the poor relationship T’Rangers have with sponsors and strip suppliers they are now maximising their fan based income, i.e They are in the top division with maximum ticket prices and fairly solid numbers coming through the gates each home fixture.

However we know that already, from last year, the 1st Team wage bill has risen by £4m. Some of that will be the new deals for the likes of Wallace, Tavernier, Waghorn etc but money will have been spent to bring 5 ageing ex EPL players to the squad.

One is the back up goalie, one is suspended, one is injured (possibly long term) one appears to have been posted missing and the oldest is putting in a decent shift by all reports.

Add Peter Pan Miller to the list and you perhaps have anywhere between 3 to 6 that will need replacing in the near future.

If the squad remains the same some players wages will probably increase come next season. IMHO there is still no-one shinning through from the younger players  that will command a bumper transfer fee. 

As we all know any signing can see those additional millions go down the plug hole as opposed to uncovering a gem or getting the best out of ageing players. The problem is who do T’Rangers recruit in the future and what will it cost.

In terms of Scottish Football at the end of November the season will be all but over in the top half of the premiership. Celtic will an unassailable lead in the league. They or Aberdeen will have won the League Cup. Celtic will most likely finish bottom of their CL group and be out of Europe. All that is left is the Scottish Cup.

That could be the scenario for the Scottish Premiership for a good number of years to come. All clubs, including Celtic are going to struggle to attract a decent quality of player here unless decent money is on offer. The sniff of some European action is perhaps the only thing that could be attractive over the big money available in England and its lower divisions.

Therefore T’Rangers are left in a dilemma. They know the ceiling of their income for now and the next few years and they know deep down it is not enough to be all conquering. The additional cash from the odd game in the Europa League qualifiers isn’t going to cut it.

I still see a scenario where T’Rangers will use what money they have to try and uncover rough diamonds from elsewhere and weaken domestic opposition by snaffling a few of the better players.

With the prospect of playing in Glasgow in front of a large crowd then they simply cannot match Celtic’s spending power or the bigger attraction of CL football if there was to be a battle for a players signature. 

No one can take away that they are currently second in the league. However we know that come December last year their form dipped and that they has a run of sticky games towards the end of the season. I believe they will lose points along the way. The current teams in spots 2-6 will all be chopping and changing spots as the season progresses.

It really is going to come down to whether or not the Bears can live with the reality of being also-rans and support the club, physically and financially, come hell or high water or whether having completed ‘the journey’ the destination is not quite what they were hoping for and they can’t stomach it.

If the majority of those flooding through the turnstiles at present are truly football fans it will be the former.

However if there is a significant number of glory hunting  arrogant supremacists who believe in entitlement, then rough waters lie ahead.

View Comment

easyJamboPosted on11:43 am - Oct 31, 2016


vascodapars October 31, 2016 at 08:47 
Given their dependence on loans from “investors” to continue trading as a going concern, is the financially distressed club in contravention of the EUFA FFP rules?  And therefore would they be permitted to compete in a EUFA tournament should the qualify on sporting merit? On the subject of investors, does anyone know how much Club 1872 has made available to the board, and how many shares that has allowed to be allocated?  
====================
They should be struggling to get a licence with a “Emphasis of Matter – Going Concern” statement from the auditors, but I’m sure that the SFA will seek and receive assurances from Rangers that they are financially sound and that it is ok to issue a licence.

It is difficult to assess how much cash Club1872 has available to buy shares. They haven’t been forthcoming with such information. I would estimate something in the region of £1M.

The AGM resolutions (Res. 10 & 11) are seeking permission to issue up to 108M shares.  The price of the shares will determine how many shares you would get for your cash.  The JP Jenkins share exchange has seen shares change hands for around 27p in recent months. However a share issue would probably be set at a lower price, e.g. 20p.  That would raise a maximum of £21.6M. 

Should the club get permission to disapply pre-emption rights (Res 11), 65M shares at 20p, with a value of £13M, could well go in a debt for equity exchange.  I can’t see anyone other than Club 1872 making any substantial new investment.  Their £1M could net them 5M shares at 20p.

In the scenario above, 70M new shares would take the total shares in issue up to 151.5M.  Club 1872 currently holds 4.9M shares or 6% of the club.  A further 5M would take them up to 9.9M shares, but still only 6.53% of the club.  It doesn’t look like a good investment to get just over 0.5% for £1M

As a contrast, if Dave King’s (New Oasis) stated debt of £3.7M was converted to shares, again at 20p, he would get 18.5M new shares taking his share of the club from 14.57% up to something around 20%. Meanwhile Mike Ashley’s 8.92% would be diluted to 4.8%, which would be below the threshold required to be able to raise resolutions at an AGM.

View Comment

HomunculusPosted on12:12 pm - Oct 31, 2016


EASYJAMBO
OCTOBER 31, 2016 at 11:43

==================================

The big question is, does Ashley still have the backing to block the special resolution going through.

Also worth bearing in mind that your scenario sees the issue of new shares, but nowhere near as much “new” money as one would expect. The bulk of the money has already been paid, and spent.

Like I said a couple of days ago it really only brings in the money from Club1872 and any they can get from supporters. It is unlikely anyone new will want any part of it.

View Comment

AllyjamboPosted on12:21 pm - Oct 31, 2016


easyJamboOctober 31, 2016 at 11:43

The interesting thing is, of course, not how many shares RIFC plc might issue, nor the price they offer them at, but just how many mugs they can find to buy the shares over and above those that are taken up as repayment of the loans. It’s hard to imagine that this time round anyone outside the ‘Rangers’ family will take up any shares, and that any wealthy supporters would be prepared to input substantial sums without gaining some meaningful control of the club. If that is the case, then it only leaves the men who currently finance the club, and surely they must be close to saying ‘enough!’

It might well end up that the only meaningful advantage a share issue gives them is in ensuring they comply with UEFA’s FFP regulations by exchanging the ever growing debt for equity! Then, if they qualify, make enough from a stint in Europe to post their first ever profit/break even report and accounts. That will, of course, depend on whether or not they spend, spend, spend chasing Euro glory!

View Comment

Big PinkPosted on12:46 pm - Oct 31, 2016


New Podcast with Ally Begg and Ally Jambo:

http://podcast.sfm.scot/e/weekly-monitor-episode-1/

 also on iTunes

First of many we hope. Some feedback required if you can be bothered 🙂

Also looking for volunteers – listen to podcast for details.

View Comment

ChristyboyPosted on2:03 pm - Oct 31, 2016


I was reading an article through a link from James Forrest (The Football Life) and in it was a paragraph
that said in 2015 Ibrox and Murray Park were valued together at £75 million. Would that be right? I remember a guy who Murray Park is named after, getting a valuation 21 (well) done and it was about
£125 Million back in the  halcyon EBT, Joe Lewis, JJB days and that was allegedly a bit inflated . Would
Ibrox and Murray Park be really have been worth £75M ? 

View Comment

AllyjamboPosted on2:51 pm - Oct 31, 2016


ChristyboyOctober 31, 2016 at 14:03

The only indication we have as to the true value of these two properties is that they were bought, along with some other bits and pieces, for £5.5m some four years ago. The valuation given on the balance sheet is what the property value is, notionally, to the business, or, as is often the case, whatever is required to ensure assets exceed liabilities. You can rest assured the true value of Ibrox and Murray park is closer to that paid four years ago than the figures given on the last two balance sheets.

View Comment

neepheidPosted on2:51 pm - Oct 31, 2016


Christyboy, the properties are valued effectively at what it would cost to replace them, not what they could be sold for. Building a 55,000 capacity stadium would cost at least £60m, and I believe that Murray Park, or whatever it’s called this week, cost well over £10m when it was built. However, there aren’t too many buyers around for large football ground these days, so the open market sale value of Ibrox to anyone who doesn’t have a top team to play in it is probably less than the value of the land it occupies.
In my view it is ridiculous that these rebuild figures can be used in accounts, when what creditors/potential investors really need to know is what they are worth on the open market, if it all goes belly up. However that is what the law allows, so no sharp practice involved.
One of my first bosses told me to ignore everything in company accounts except the cash flow- everything else can be manipulated, but if you follow the cash, you’ll get a true picture. RIFC Group need a cash injection of £3-5million every single year just to keep the lights on.
Somebody (so far) is putting the money in. Just don’t ask me who or why, or how they imagine they’re ever getting it back- that’s the real mystery
 
 

View Comment

HomunculusPosted on2:57 pm - Oct 31, 2016


CHRISTYBOY
OCTOBER 31, 2016 at 14:03

The “value” for the accounts is not what the valuer thinks the assets could be sold for.

I believe it is what is called a depreciated replacement cost*, though that is only from memory of previous discussions here.

It’s certainly not the same as a valuation for mortgage purposes where the lender is basically ensuring that they can get their money back if you are unable to repay the loan. 

*Depreciated Replacement Cost is defined (RICS, 2005: Glossary) as “The current cost of reproduction or replacement of an asset less deductions for physical deterioration and all relevant forms of obsolescence and optimization.”8 Oct 2006

View Comment

StevieBCPosted on3:06 pm - Oct 31, 2016


If not already mentioned;

In anyone’s eyes, the RIFC accounts don’t look great…to put it mildly.

You would think [!] that the SFA would now be comparing these accounts with the information provided by RIFC/TRFC to obtain their SFA licence for the current season, to try and identify any material discrepancies.

With the recent history at Ibrox, again, you would think that the governing bodies at Hampden would choose to be a bit more proactive – for the benefit of all Scottish football.

Or are the blazers just going to sit on their hands in the bunker, and react when the smelly stuff hits the fan – again ?! 

View Comment

easyJamboPosted on3:06 pm - Oct 31, 2016


Christyboy  October 31, 2016 at 14:03 
I was reading an article through a link from James Forrest (The Football Life) and in it was a paragraph that said in 2015 Ibrox and Murray Park were valued together at £75 million. Would that be right? I remember a guy who Murray Park is named after, getting a valuation  (well) done and it was about £125 Million back in the  halcyon EBT, Joe Lewis, JJB days and that was allegedly a bit inflated . Would Ibrox and Murray Park be really have been worth £75M ? 
=============================
The Oldco’s last published accounts for 2010, reported that their freehold properties had been valued in 2008 at £121M, with a further £20M in fixtures and fittings, which was probably their peak values, before depreciation started to affect the book values.

The accounting policy for the Newco appears to have changed. While the Depreciacted Replacement Cost (DRC) valuation was assessed at £75.5M for the properties in 2015, the Fixed Asset value is only recorded as £40.4M for the properties and £43.6M, including fixtures and fittings.  The DRC figure is determined as the cost of building a brand new stadium of a similar configuration from scratch. It is inevitably much higher than the value to a prospective purchaser, e.g Charles Green bought the distressed assets of the stadium and training centre for a combined  £1.5M in 2012.

View Comment

ChristyboyPosted on3:19 pm - Oct 31, 2016


Guys, as ever, thanks for that. That price flung me a bit there. 

View Comment

StevieBCPosted on3:41 pm - Oct 31, 2016


Latest copy/paste effort from Chris Jack / Level42 ;

“…But he will never play on Warburton’s watch and a January exit back to England now appears to be the best outcome for all concerned as the Barton saga continues into another week.
Rangers were never going to pay out the best part of £2million just to get Barton off the premises. That scenario made no sense, especially with the transfer window around the corner…”
http://www.eveningtimes.co.uk/sport/14832432.Chris_Jack__Joey_Barton_has_been_good_value_for_Press_and_punters_but_a_disaster_deal_for_Rangers/?ref=mr&lp=7
=============================================

erm…no, the ‘best outcome’ for Barton is probably to remain suspended for 2 years on full pay – and win bonuses !

Don’t think Barton will be in any rush at all to leave TRFC – unless he is given an acceptable, hefty payoff.  

View Comment

bfbpuzzledPosted on4:15 pm - Oct 31, 2016


Any valuation depends on the assumptions used to arrive at it. The more complex a situation the more imaginative the assumptions tend to be. In one case Lord Denning talked about a valuer having to take his mind into the clouds – all a bit metaphysical. 
As long as the assumptions are stated then that is fine.
DRC needs to be supplemented by the value of the land. My guess would be that a site near the Clyde with all its history would be very contaminated by all kinds of unpleasant materials asbestos heavy metals and so on- the cost of removing that might very well exceed land value in its most profitable use.
As a well known Chartered Surveyor said to me “valuation is valuation” which made sense at the time…

View Comment

Big PinkPosted on5:22 pm - Oct 31, 2016


Ally Begg’s celebrity video tweets are hilarious. This is the latest, but have a trawl through them.

View Comment

Cluster OnePosted on5:42 pm - Oct 31, 2016


Christyboy October 31, 2016 at 14:03 I was reading an article through a link from James Forrest (The Football Life) and in it was a paragraph that said in 2015 Ibrox and Murray Park were valued together at £75 million. Would that be right? I remember a guy who Murray Park is named after, getting a valuation (well) done and it was about £125 Million back in the halcyon EBT, Joe Lewis, JJB days and that was allegedly a bit inflated . Would Ibrox and Murray Park be really have been worth £75M ?
———————————–
I also read it…Investment has been in “football capital” (players) to ensure promotion and to repay Sports Direct their £5m. And to pull a direct quote: “There was also a desperate need for investment in infrastructure at Ibrox and Auchenhowie and for a complete rebuilding of the Academy that had been sadly neglected for a number of years.” – this comes with no note as to what the actual investment was.?
    new artificial pitch’s were installed at Murray Park In  October 2013 Gers received funding from the Scottish Football Partnership and they are supporting the costs along with Rangers Lotto and the club itself.So the sadly neglected murray park had installed new pitches with the help of funding from  the Scottish Football Partnership So what  investment in the infrastructure at Auchenhowie was done if the value has droped?                                                                                                                                        The next worrying matter is the valuation of asset. In October 2015, Ibrox and Auchenhowie were valued at a total of £75.5m. In the accounts, after provisions for depreciation and impairment, the pair are valued at a total of £40.4m. That’s a £35m drop in a year suggesting that there has been a significant issue with either Ibrox or Auchenhowie. Insert witty comment about the roof falling in.

View Comment

upthehoopsPosted on7:01 pm - Oct 31, 2016


STEVIEBCOCTOBER 31, 2016 at 15:41 
erm…no, the ‘best outcome’ for Barton is probably to remain suspended for 2 years on full pay – and win bonuses !
Don’t think Barton will be in any rush at all to leave TRFC – unless he is given an acceptable, hefty payoff.

===================================

If Barton leaves in January there will be a cost for him keeping his mouth shut. It won’t be cheap in my view. 

View Comment

tonyPosted on7:30 pm - Oct 31, 2016


another one from phil 
http://www.philmacgiollabhain.ie/another-communique-from-the-scrum/

View Comment

Comments are closed.