Podcast Episode 3 – David Low


Apologies if this is answered elsewhere, but as the 120 …

Comment on Podcast Episode 3 – David Low by McCaig`s Tower.

Apologies if this is answered elsewhere, but as the 120 day report includes two close seasons, does the Match Day income figure of £26.3m include 2 lots of season tickets in full? (Or is there a notional pile of income not yet booked?).

A back of the fag calculation suggests “normal” income is running at about £1.8m per month, and “normal” operating expenditure is running at about £2.1m p/m. That suggests a burn rate of £300k p/m which is substantially lower then I was expecting, and, on the face of it, not immediately beyond hope (increase revenues by 10% and cuts costs by the same more or less covers it).

Of course, there is a cash-flow issue. Making some broad brush assumptions, say the season tickets are paid in May to August. Income would be roughly £4m per month for those 4 months, and £1m p/m for the other 8 months, totalling £24m p.a. If we were to assume regular outgoings of £2m per month, then essentially the break-even business model is to pile up the cash in the summer, then spend it all over the rest of the year. However, with only £3.5m in the bank at the end of the year, then the company would run out of money about mid-April. (Which would tie up with the need for the Laxey facility).

Of course, life is never that simple – there are often (un)expected one off costs (such as stadium repairs, “investment” in new playing staff and “restructuring” costs) that may need to be funded, and although there may be compensatory one-off windfalls – selling a star, TV money etc – a business needs to have access to reserves or to be able to borrow, or it is at risk.

Even if my figures are accurate (and I suspect they are not – if so, please advise) as it is currently structured, this appears to be a business with huge risks, and little prospect of immediate rewards. (Mind you, I would have said that 2 years ago, and there appeared no shortage of people willing to invest then…)

McCaig`s Tower Also Commented

Podcast Episode 3 – David Low
easyJambo says:

May 4, 2014 at 7:07 pm
The first reference was by Neil Doncaster in Dec 2010, when saying the relegated sides would face “financial Armageddon without League reconstruction.

So the “Armageddon” quote originates in a reference to the cliff-edge between SPL and SFL finances, but quickly became wilfully or accidentally misquoted in a new context, that of justifying a proposed breach in “sporting integrity” (to misquote another popular phrase)?

I think the original point is fair – I’ve long thought that the huge disparity between the rewards on offer in the SPL and those on offer in the SFL (there must have been a 10 fold increase in prize-money, and perhaps a doubling in turnover?) was one reason middle ranking clubs spent money they couldn’t afford on trying to get promotion or avoid relegation. That and the need (partially justified, no doubt) for costly upgrades to stadia caused huge holes in clubs’ balance sheets that are taking years to rectify.

Speaking of Armageddon, East End Park drew 7500 for a reserve fixture yesterday. (I’m being slightly facetious – Jim Jefferies changed his entire starting eleven from those who had won at Arbroath, playing 9 laddies and 2 old men). Maybe I’ve become old and cynical, or maybe it’s been our near-death experience, but I find it far more pleasurable and rewarding to see some young lad make his debut, or score his first goal, than see some expensive “big name” do the same.

Anyway, there was a “red card” protest from the visiting fans in the 65th minute (and apparently there was one in the first half as well, although I missed it). I assume this was a “sack the board” thing, rather than advice to the referee who appeared to have missed Mohsni throwing a punch at Goodfellow, as it was coupled with a lot of pithy advice direct towards Mr (or Messrs) Easdale. I’m not sure why they are being singled out, but it seemed to me that the majority of the away fans were participating in the card holding at least.

Podcast Episode 3 – David Low
Resin_lab_dog says:

The underlying principle that makes it all work though – in whatever embodiment it were to be adopted – is that it is the geographic location of the (potentially) relegated club that ultimately determines which of the champions has the chance (or certainty) of promotion, irrespective.
Not sure I like this – it sounds like geography is a determinator of whether a team can be promoted or not (and not even the geography of the successful team, but that of the unsuccessful team). To me this has an unfortunate echo of the 1970s when Ferranti were voted into the league ahead of perhaps worthier alternatives. Such a proposal could be self-perpetuating – a duff team from the No-lands being replaced by another team from the No-lands, and so on, with a much better team from the Other-lands never getting a look-in.

Of course, the current proposal of “rebalancing” looks flawed, I think on current form Queen’s Park would slot in comfortably into the Lowland League, but if it were an HFL side that replaced them in the SPFL, then who would move north from the Lowland League? Stirling Uni? Spartans? Would they play in the North of Scotland Cup or the Aberdeenshire Cup? That would be farcical IMO.

Podcast Episode 3 – David Low
Some quick comments on that Telegraph article.

1. It appears to confirm that a penalty for a TRFC insolvency would be 25 points, thus suggesting that not only TRFC is the “same” club in some sense, but that the argument that a new insolvency would be the first under the new rules has been rebutted. This has implications for Dunfermline, Dundee and LIvingston (for another few months).

2. It appears to confirm that the SPFL will adopt a “common-sense” approach to interpreting their rules in the case of defining when the end of the season is). I previously highlighted a possible anomaly in that whereas the end of the season is defined as the date of the last League Match or otherwise as determined by the Board, the play-off matches commence before the season has technically ended (as there are still Premiership matches to be played). However there remains the possibility of a club which qualifies for the play-off suffering an insolvency event, which, had it happened a week earlier, would have denied them that play-off place.

3. There is a suggestion that Hearts have to be out of admin or they will suffer another points penalty. This contrasts with the situation at East End Park. From memory we went into admin in March, approved the CVA in July, (had that horrendous hiccup in October) but did not finally come out of admin in December. Bryan Jackson told us that because we had agreement in principle then no further sanctions would be levied, despite us technically being in administration at the start of the season. Admittedly that situation overlapped the old rules and the new rules.

4 “From whence”. Yeuch. No need for “from” there, Shirley?

Recent Comments by McCaig`s Tower

It Is Better To Offer No Excuse Than A Bad One
Season’s Greetings
I think this may be my 2nd post of 2017.
Given it is the holiday period and traffic may be otherwise quiet, I thought I would crave your indulgence and try to enhance my understanding of an old issue.
It is a simple question, and has probably been answered back in the mists of time, but I can’t remember what the answer is.  It  refers to the Big Tax Case.  I apologise for resurrecting ancient history (although I believe the liquidation of (old) Rangers has still to be concluded).
Was it ever determined that payments into the EBT were net or gross of income tax and national insurance?
If the former is the case, then is there any precedent for HMRC chasing the employees for unpaid tax or NI if it cannot be recovered either in full, or in part from the employer?
Similarly, EBT recipients may have assumed that any loan from the trust should have been taxed as a benefit in kind (I think on the difference between a loan at a commercial interest rate and one at an interest-free rate) and declared (and paid) tax appropriately.  Would they be entitled to a refund given this money should have been treated as (taxed) salary?
Of course, if the latter is the case, then I would assume that all recipients would be due a large tax bill shortly (but I’m not so sure that it is the case). 

On Grounds for Judicial Review
Good evening
I’ll start with a little story, told my an ex-neighbour or ours in Fife, many years ago.  Bill was a Glaswegian, a south-sider, and used to go and see the Spiders at Hampden.  In those days, the home fans were allowed on the terraces, and Bill had his regular spot, beside another, older guy.  They knew nothing of each other, they just watched the football.  Of course, life moves on, and Bill’s career took him away from Glasgow, first to Fife and then to the North of England.  Trips to the football became rarer and certainly there was no likelihood of travelling back to Glasgow.   Decades passed before one Saturday afternoon Bill found himself at a loose end in the vicinity and took himself along to the old stadium for the first time in years.  He found his old spot on the terracing, and there was his old buddy.  No words were exchanged – no “where have you been all these years?”, no “it’s yourself, how are you?” – they simply nodded at each other, and watched the football.
I used to be an avid reader of this site (and its predecessor).  I logged in every day (often more than once), I once attended a Tax Tribunal where I had the pleasure of meeting a couple of posters (Finloch, and John Clark before he lost his “e”, I think).  I even posted on occasion, though sometimes my views seemed unwelcome.  However, I got bored, looked at the site less and less, and eventually drifted away.  I don’t think I had been on for years until yesterday.  If you don’t mind me saying, little seems to have changed. 
This morning I wondered if I would wake up to nuclear war.  Yesterday, I woke up to something more apocalyptic – allegations of match-fixing, and thinly (very) veiled accusations against my own club, the Pars.
I remember the dark days, before administration, during and after.  Sometimes it was like a car-crash in slow motion.  You knew what was coming, but you were powerless to do anything about it.  I remember long, solitary walks wondering if I would still have a club to support, and what I would do then.  After 40 odd years, their absence would leave an enormous gap in my life.   It was like an impending death in the family.  That trip to Kirkcaldy – would that be our last ever game?
But the fans rallied round, raised money, and somehow, some way, managed to save the club.  It wasn’t easy – I attended the EGM where the CVA was agreed and where fans and local businesses willingly wrote off large sums of money.  Others invested even more – money that might have been destined for their retirement or their families went in the pot.  Success wasn’t assured – we were seconds away from death, when Lord Woolman made his judgement.  Oh my, I have tears in my eyes just thinking about it – it was like a match-saving penalty in the 8th minute of stoppage time.  (And to answer the question – did we ever consider going down the liquidation  route?  No, not for a second.  If we were liquidated, that was it.  No way would we be afforded the same latitude as others.  Maybe a new club would be started – maybe in the juniors, maybe the East of Scotland league – maybe not.)
We survived.  But we never forget that we spent money we did not have, and taxes due went unpaid.  Now I know all businesses live on credit at some point, and that cash flow issues have caused many a good business to fold.  Where do you draw the line between bad luck, bad management, bad advice and bad faith?  I’m not going to attempt to answer that now, but I know that there is a strong feeling that our behaviour was disgraceful, and shameful, and embarrassing.  We should never forget that.
The new board adopted a policy of not commenting on the affairs of other clubs, and I respect that.  They wish to keep a relatively low profile and concentrate on their club.  Don’t forget that many will have other lives to lead and families and other businesses that are being neglected as they devote their time to putting the club back on a stable footing.  We are only part way along the road to redemption.  And their policy is not a new policy, by the way; two or three years ago I asked the previous chairman if they believed they should get more involved in the governing bodies and received a consistent answer.
Yesterday I wanted my club to make a statement,  Ross McArthur did that on its behalf.  (By the way, no need for an apostrophe in “its” there).  I do not believe he equated our problems with those of others, but merely drew parallels.  He explained the board’s position, explained the background to his statement and attempted to rebut some of the more lurid allegations that saw light (again) yesterday.  I think that is a satisfactory and welcome response and what I was looking for.   Some other responses to his statement have been out of order however, and cannot be helpful.

Whose assets are they anyway?
Pure speculation on my part, but I imagine that Mr Ashley considers himself to be an infinitely superior businessman to Mr King, but that opinion is not reflected in the MSM.
To compound things, when they last went head to head in public (at the EGM in March, was it?) Mr King won.
This defeat will rankle; to exorcise this hurt, Mr Ashley will want to defeat Mr King in their next battle; not only that, he will want to win big, and publicly (and possibly repeatedly).
The thought of getting his revenge will determine when that battle will be – to mix metaphors Mr Ashley holds all the aces and if he is putting all his chips in the middle now it may be to maximise the humiliation.

Why We Need to Change
Starman says:
Member: (15 comments)

July 31, 2015 at 5:25 pm

McCaig`s Tower, there are three ways that a shareholder with a nominee account can vote. The easiest way is to instruct your nominee on how you wish to vote. If the nominee holds shares for a number of clients then the nominee will split the vote according to instructions received from shareholders, casting so many shares “for” and “against” each resolution. Secondly, your nominee can appoint you as their proxy for the shares that you own. The nominee completes a proxy card with this information and sends it to the company. You get a copy. The nominee is effectively giving you permission to vote on the nominee’s behalf for the shares that you own! This would allow you to attend and vote at the meeting. The third way, similar to a proxy vote, is to obtain a “letter of representation” from your nominee for the shares that you own. Same result: you can attend and vote at the meeting.

Thanks, Starman, that is very helpful.

It seems that there are a few hoops to jump through, of which the uninitiated may not be aware. How likely is it that the broker would take the initiative here, or would the small investor be expected to do the running?

My concern was that the ordinary punter would pitch up at an EGM believing him/herself to be a shareholder, only to be turned away as there would be no record of his/her status on the register of shareholders. This might seem like skulduggery were afoot, although it would be perfectly legitimate.

Of course, maybe they would be waved in anyway, in the knowledge that they could put up their hands to vote for or against things as they pleased as it would make no practical difference.

People on here must know people who believe they are shareholders in RIFC – can they comment?

Why We Need to Change

Big Pink says:
Moderator: (330 comments)

July 30, 2015 at 8:34 pm

I don’t see anything untoward about Rangers wanting to know the identities of shareholders. It seems intuitively obvious that the rules on dual ownership for example can be circumvented easily if the identities of shareholders are not known.

Is it even legal to own shares anonymously? And if it is, why did the SFA let Green away with it?

I think it is perfectly possible to disguise “true” ownership via the use of a Nominee Company, for example.

This brings me to an issue which has troubled me, and I crave the blog’s indulgence in seeking elucidation.

I am not an expert in the practicalities of share-ownership, but I understand there to be 2 common methods.

The traditional method is the certificated version – an individual buys shares, receives a certificate, is the registered owner and the person to whom the company writes and pays dividends. I think this would be the case with most privatisations back in the day.

The other method is via a nominee account. In this case, the broker will typically set up a Nominee company to hold shares on behalf of many purchasers (known as the beneficial owners). This has the main benefit of being cheaper. For most small investors, all they want is the dividends and the ability to buy or sell with ease. They aren’t bothered about not getting invited to AGMs or being asked to vote on directors’ remuneration or whatever (or, in general, about having a certificate). Those that do wish to attend an AGM or vote on motions can make arrangements via their broker to get a pass, or give instructions how their votes are to be cast.

Now to the bit that puzzles me. Any list of Rangers shareholders contains a large number of companies with “Nominee” in their title. I suspect that many fan shareholders will have invested via such companies due to cost and simplicity. However, if I am right, not only would this mean gaining access to an AGM or EGM be a hassle (RIFC wouldn’t have addresses to issue an invite), it would not be easy to cast your vote, and you wouldn’t have a physical share certificate to frame on your bedroom wall. I’m not aware of any complaints of Rangers fans being turned away from AGMs or not being able to vote which might have been the likely consequence of my theory.

Has anyone else anecdotal evidence of difficulties being experienced?

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