Reflections on Goalposts

By

I am no believer in the long term viability of …

Comment on Reflections on Goalposts by seminal.

I am no believer in the long term viability of brand Rangers but I have come to conclusion that all this talk of iminent Sevco administration is bunk.

Given Stockbridge’s closeness to the management accounts and taking him at his word (I know) that there will be £1m left in the bank at April then surely the name of the game is to get them to ST renewal in May/June. Surely this would be achievable with cuts of only about £3m?

They can then put up STs by 50% which should close the monthly deficit to about £0.5m from £1m assuming other costs do not rise. It means that they would still run out of money sometime during 2014/15 – unless they can find a credit facility that can cover the £6m or so. Perhaps not impossible for a better run Rangers on a cusp of a return to the top flight?

However if Ally blows it in the Championship then it would be curtains….

seminal Also Commented

Reflections on Goalposts
Ratdog said:

but it’s not beyond the bounds of possibility that someone could take the Ibrox situation by the scruff of the neck and make it work. Wallace has a very hard job on his hands of course but if costs can be slashed, season ticket income for 2014/15 secured and The Rangers put on an even keel
————————————————————–

We hear this argument a lot, essentially it was the same used by the guy in the Scotsman, that Rangers are too big to fail by virtue of their fans.

Basically, Rangers fans are in it for one main reason: Supremacy. Suppremacy over Celtic, Supremacy of Scottish Football. Winning.

Without this supremacy, Rangers would have few fans.

Unfortunately it would cost about £40m to £50m in annual expenditure to achieve this supremacy. The turnover for Sevco is barely half this amount. In the absense of a friendly bank or wealthy benefactor then Sevco will never again achieve the same supremacy over Scottish football.

Then what?

Well, slowly, the post ’86 generation of bears will begin to drift away from Sevco as the product is no longer fulfilling their emotional needs. In 5 years time we may see a Sevco that has an expenditure of £20m based on £10m of revenues.

Whatever happens there will always be a structural deficit of about £1m a month in the finances. THis has existed since 1986. It is because the fans are unable or unwilling to put in enough to meet their expectations. It is Rangersomics.

The current version of Rangers may make it through to the end of season on the necessities of short term cost cutting being sold to the bears. It may even make it to the top division. But ultimately it is doomed as is any form of Rangers.


Reflections on Goalposts
m.c.f.c

“Seminal – it appears to me that you are looking for reasons to hope that things will be different in future – I assume because you have emotional attachments to Rangers”
———————————————————

I don’t see how you can draw that conclusion at all. But it is typical on here to be called a troll or closet sevconian if you dissagree with the current group think.

Basically my argument is that most of the original penny share spivs have now exited the stage. Yes they had no interest in the football business and running a sustainable business in the long run which is why they put idiots like Green, Mather, Ahmed in charge.

Somehow, and don’t ask me how, they found bigger fools to sell their shares to. Namely Laxeys and Easdales who bought from 70p all the way down to 40p. Now these guys are sitting on losses on those shares. The only viable way they have to make a return is to separate the property company (RIFC) from the football club (Sevco) and get the club operating on an even keel so it can pay its rent.

To do that they need to make it to the next ST sale, which will require about £3m in cuts. Apparently this is being attempted. Ask Phil McG, he agrees with this. He has no “emotional attachment to Ragers”.

Thereafter they will require either a credit facility or rights issue of between £6m to £10m so they can survive the championship. To achieve this they require a viable CEO and chairman which looks like it has been achieved. Wallace and Somers may be many things but they are not spivs in the ilk of CG and IA etc.

Thereafter they hope that increased money from the top flight (and dare I say Europe) will keep them running.

Ultimately they are doomed but it will take longer than the 6 months or less predicted by many on here.

The era of “spivs” is largely over.

Easdales are not spivs. Laxeys are not spivs. Wallace and Grommit are not spivs. They are certainly not Rangers men and are certainly looking for return. But their MO is completely different.

Many on here are still “fighting the last war” against Green, Whyte etc. Those days are gone.


Reflections on Goalposts
m.c.f.c.
“but if the intention of the RIFC owners (known and unknown) was to run a tight-ship, sustainable football club, they would have controlled costs from the outset”

“I think you need to look at the evidence of the owners’ basic motivation as witnessed by their actions –”
—————————————

This is true and who knows why costs weren’t controlled from the outset. My guess is that Green et al expected to be back in the top flight sooner and that they needed a free spending rangers of old in order to keep up the illusion of it being the same club.

However, recent actions imply to me that things have changed. The three directors recently brought in do look like professionals and will attempt to cut costs while attempting to maintain the bears’ belief in their brand.

It may go against the group think here that Sevco are on the verge of admin followed by asset stripping, but this does not really make too much sense to me when considering from the perspective on the two largest shareholders: Laxeys and Easdales. I doubt that their share of the assets alone (Ibrox and MP) would cover their expense in investing in the shares of RIFC.

Bsasically the days of the penny shareholders in control has passed to those with a bit more “muscle”, namely Easdales and Laxeys. They’re the daddies now, and that is why we are seeing the late dash for austerity.


Recent Comments by seminal

Podcast Episode 1
Barcaburster,

A brilliant piece of dedective work. I think you might have nailed it. I have listened to that tape at least twice and never spotted the relevance of that part of the conversation. I think it is vital.

Who ever came up with the existence of a “deed of novation”? I have never seen or heard any evidence of one existing other than on these pages? Was it part of some other Charlotte docs, or was it something someone speculated on once and became part of the canon of groupthink?

I think using a deed of release (signed by CW under false pretences) would make for a “cleaner” scam for CG and avaoids the need of requiring D&P agreement as in the case of a DoN.

Again, Barcabuster, well done for the best piece of original work here for a number of weeks.


The Blind Men and the Elephant, a cautionary tale
neepheid says:
February 5, 2014 at 9:53 am
———————————

Good post neepheid. But the only way as far as I can see that the assets have any value if there is a football club paying rent to use them. I am sceptical about the value of brown field sites in Govan for use as housing or a Tescos. £3 million at most. And it probably wouldn’t be worth all the hassle from disgruntled bears. Murray Park to me looks too “protected” in order to gain the planning for development.

However the rental value of these properties from a viable football club could be £2m a year. On a 6% yield basis you are talking a valuation of £33m.

Therefore the property play itself is dependent on a viable football club being able to rent them. Yes it makes sense to ring fence the property assets. But not to send the club to the wolves. Laxeys will know this.


The Blind Men and the Elephant, a cautionary tale
Campbellsmoney says:
February 4, 2014 at 2:50 pm
2 1 i Rate This

So here, the CVA route was effective in preserving the secured creditor’s position at the expense of its unsecured position (and the unsecured position of all other creditors). Presumably, the secured creditor considered that it would have received less in a liquidation.

—————————————

Campbell, that is an interesting point you make, and it reminds of when, other than HMRC, nearly all creditors accepted Charles Greenes paltry CVA offer of about 8 pence in the pound.

Personally, I would have been a bit more Shylock with them and demanded my pound of flesh, even simply pour encourager les autres.


The Blind Men and the Elephant, a cautionary tale
😆 😆 resin_dog, you just made all that up 😀


Past the Event Horizon
With all this talk of new club, old club, escaping debts, assets put beyond creditors, and all sanctioned by the authorities and now precedent, I wonder if the SFA has ever considered the unintended consequences of their actions? (rhetorical question).

If a Scottish club can now escape debts without much in the way of any sanction, sporting or otherwise, then surely it would be foolish for anyone to offer credit to such an institution.

If Hibs/Aberdeen/Dundee Utd/Whoever wants to purchase a player for £1m or £2m (in itself not a bad thing as the debt would largely be met by, say, an increase in £100k turnover and their would be a sell on value of at least if not more). But who would lend such a club this money now? Would Rapid Vienna? Perhaps because football creditors seem to be offered greater protection but Lloyds Bank certainly wouldn’t. RV would rather sell to a club in Norway, Denmark or Holland and would probably take less to do so.

And for all other day to day expenditure would have to be paid in cash if credit becomes unavailable bringing with it all the associated business issues with cashflow. A real headache.

In my view the flow of credit into Scottish football will dry up and long term this will be the greatest harm caused by the SFAs wanton disregard for the rules.


About the author