UEFA Club Licensing. – To Comply or not to Comply ?
On 16 April 2018 The UEFA Club Financial Control Body (CFCB) adjudicatory chamber took decisions in the cases of four clubs that had been referred to it by the CFCB chief investigator, concerning the non-fulfilment of the club licensing criteria defined in the UEFA Club Licensing and Financial Fair Play Regulations.
Such criteria must be complied with by the clubs in order to be granted the licence required to enter the UEFA club competitions.
The cases of two clubs::
Olympique des Alpes SA (Sion Switzerland )
and
FC Irtysh (Kazakhstan)
are of particular interest to those following the events under which the SFA awarded a UEFA License to Rangers FC in 2011 currently under investigation by the SFA Compliance Officer because
- The case documentation tell us how UEFA wish national associations to apply UEFA FFP rules
- The cases tell us what might have happened to Rangers FC in 2012 had they not gone into liquidation and as a consequence avoided the same type of sanctions that UEFA applied to Sion and Irtysh.
FC Sion (Olympique des Alpes SA)
Here we are told how the Swiss FL and then the UEFA CFCB acted in respect of FC Sion in 2017 where a misleading statement was made in the Sion UEFA licensing application.
Full details can be read at
but this is a summary.
In April 2017 the Swiss FL (SFL) granted a licence to Sion FC but indicated that a Disciplinary case was pending.
In July 2017 the CFCB, as part of their licence auditing programme, carried out a compliance audit on 3 clubs to determine if licences had been properly awarded. Sion was one of those clubs.
The subsequent audit by Deloitte LLP discovered Sion had an overdue payable on a player, amounting to €950,000, owed to another football club (FC Sochaux ) at 31st March 2017 as a result of a transfer undertaken by Sion before 31st December 2016, although the €950,000 was paid in early June 2017.
Deloitte produced a draft report of their findings that was passed to SFL and Sion for comment on factual accuracy and comment on the findings. Sion responded quickly enabling Deloitte to present a final report to the CFCB Investigation Unit. In response to the Deloitte final report Sion stated:
“il apparaît aujourd’hui qu’il existait bel et bien un engagement impayé découlant d’une activité de transfert. Ce point est admis” translated as
“it now appears that there was indeed an outstanding commitment arising from transfer activity. This is admitted”
What emerged as the investigation proceeded was that the Swiss FL Licensing Committee, after granting the license in April and as a result of a Sochaux complaint of non-payment to FIFA, had reason to refer Sion’s application to their Disciplinary Commission in May 2017 with regard to the submission of potentially misleading information by FC Sion to the SFL on 7th April 2017 as part of its licensing documentation.
Sion had declared
“Written confirmation: no overdue payables arising from transfer activities”, signed by the Club’s president, stating that as at 31 March 2017 there were no overdue payables towards other football clubs. In particular, the Club indicated that the case between FC Sion and FC Sochaux regarding the transfer of the player Ishmael Yartey was still under dispute.
The SFL Disciplinary Commission came to the conclusion that FC Sion had no intention to mislead the SFL, but indeed submitted some incorrect licensing documentation; the SFL Disciplinary Commission further confirmed that the total amount of €950,000 had been paid by the Club to FC Sochaux on 7 June 2017. Because of the inaccurate information submitted, the SFL Disciplinary Commission decided to impose a fine of CHF 8,000 on the Club.
Whilst this satisfied the SFL Disciplinary process the CFCB deemed it not enough to justify the granting of the licence as UEFA intended their FFP rules to be applied.
Sion provided the CFCB with a number of reasons on the basis of which no sanction should be imposed. In particular, the Club admitted that there was an overdue payable as at 31 March 2017, but stated that the mistake in the document dated 7 April 2017 was the result of a misinterpretation by the club’s responsible person for dealing with the licence (the “Club’s licence manager”), who is not a lawyer. The Club affirmed that it never had the intention to conceal the information and had provisioned the amount due for payment and that, in any case, it has already been sanctioned by the SFL for providing the wrong information.
The CFCB Investigation Unit accepted that the Sion application, although inaccurate, was a one off misrepresentation and not a forgery, (as in intended to deceive ) but that nevertheless an overdue payable did exist at 31st March and a licence should not have been granted.
Based on their findings, the CFCB Chief Investigator decided to refer the case to the CFCB Adjudicatory Chamber and suggested a disciplinary measure to be imposed on FC Sion by the CFCB Adjudicatory Chamber, such measure consisting of a fine of €235,000, corresponding to the UEFA Revenues the Club gained by participating in the 2017/2018 UEFA Europa League.
The CFCB Investigatory Chamber submitted that it was appropriate to impose a fine corresponding to all the UEFA revenues the Club gained by participating in the competition considering the fact that FC Sion should not have been admitted to the competition for failing to meet one of its admission criteria.
The Adjudicatory Chambers took all the circumstances (see paras 91 to 120 at http://tiny.cc/i8sxsy ) into consideration and reached the following key decisions.
- FC Sion failed to satisfy the requirements of Article 49(1) of the CL&FFP Regulations and it obtained the licence issued by the SFL not in accordance with the CL&FFP Regulations.
- FC Sion breached Articles 13(1) and 43(1)(i) of the CL&FFP Regulations. (Documents complete and correct)
- To exclude FC Sion from participating in the next UEFA club competition for which it would otherwise qualify in the next two (2) seasons (i.e. the 2018/19 and 2019/20).
- To impose a fine of two hundred and thirty five thousand Euros (€235,000) on FC Sion.
- FC Sion is to pay three thousand Euros (€3,000) towards the costs of these proceedings.
Comment in respect of the award of a UEFA Licence in 2011 to Rangers FC.
It is now public knowledge that an actual liability of tax due before 31stDecember 2010 towards HMRC, was admitted by Rangers FC before 31st March 2011.
This liability was described as “potential” in Rangers Interim accounts audited by Grant Thornton.
“Note 1: The exceptional item reflects a provision for a potential tax liability in relation to a Discounted Option Scheme associated with player contributions between 1999 and 2003. A provision for interest of £0.9m has also been included within the interest charge.”
The English Oxford Dictionary definition of potential is:
Having or showing the capacity to develop into something in the future.
Which was not true as the liability had already been “developed” so could not be potential.
This was repeated by Chairman Alistair Johnson in his covering Interim Accounts statement
“The exceptional item reflects a provision for a potential tax liability in relation to a Discounted Option Scheme associated with player contributions between 1999 and 2003. “ where he also added
“Discussions are continuing with HMRC to establish a resolution to the assessments raised.”
This could be taken as disputing the liability but In fact the resolution to the assessments raised would have been payment of the actual liability, something that never happened.
In the Sion case it was accepted the misleading statement was a one off misrepresentation, but at the monitoring stages at June 2011 in Ranger’s case the status of the liability continued to be misrepresented and in September the continuing discussions reason was repeated, along with a claim of an instalment paid whose veracity is highly questionable.
The Swiss FL Licensing Committee did at least refer the case to their Disciplinary Committee when they realised a misleading statement might have been made. The SFA however in August 2011, when Sherriff Officers called at Ibrox for payment of the overdue tax , did no such thing and pulled up the drawbridge for six years, one that the Compliance Officer is now finally charged with lowering.
The case of FC Irtysh of Kazakhstan is set out in full at http://tiny.cc/y9sxsy and is a bit more straightforward but is nevertheless useful to compare with events in 2011 in Scotland.
Unlike Rangers FC , FC Irtysh properly disclosed that they had an overdue payable to the Kazakhstan tax authorities at the monitoring point at 30th June 2017. This caused the CFCB Investigatory Unit to seek further information with regard to the position at 31st March
It transpired that Irtysh had declared an overdue payable at 31st March but cited their financial position (awaiting sponsor money) as a reason for non payment to the Kazakhstan FA who accepted it and granted the licence. The outstanding tax was paid in September 2107.
The outcome of the CFCB Investigation was a case put to the CFCB Adjudicatory Chamber who agreed with the CFCB Investigation Unit that a licence should not have been granted and recommended that Irtysh be fined the equivalent of the UEFA prize money, (that had been withheld in any case whilst CFCB investigated.)
The CFCB Adjudicatory Chamber however decided that a fine was not sufficient in sporting deterrent terms and ruled that:
- FC Irtysh failed to satisfy the requirements of Article 50bis(1) of the CL&FFP Regulations and it obtained the licence issued by the FFK not in accordance with the CL&FFP Regulations.
- To withhold four hundred and forty thousand Euros (€440,000) corresponding to the UEFA revenues FC Irtysh gained by participating in the 2017/2018 UEFA Europa League.
- To exclude FC Irtysh from participating in the next UEFA club competition for which it would otherwise qualify in the next three (3) seasons (i.e. the 2018/19, 2019/20 and 2020/21 seasons). This sanction is deferred for a probationary period of (3) three years. This exclusion must be enforced in case the Club participates again in a UEFA club competition having not fulfilled the licence criteria required to obtain the UEFA licence in accordance with the CL&FFP Regulations.
- FC Irtysh is to pay three thousand Euros (€3,000) towards the costs of these proceedings. “
The deferral was because unlike Rangers FC, FC Irtysh had properly disclosed to the licensor the correct & accurate financial information required, so the exclusion was deferred for a probationary period of (3) years.
Comment in respect of the award of a UEFA Licence in 2011 to Rangers FC.
From the foregoing it could be deduced that had Rangers FC qualified for the Champions League (or European League) and not gone bust as a result and so not entered liquidation BUT it became public knowledge by 2012 that a licence had been wrongly and possibly fraudulently granted then
- Rangers would have been fined the equivalent of their earnings from their participation in the UEFA competitions in 2011
- At least a two year ban from UEFA Competitions would have been imposed, but more likely three in view of repeated incorrect statements.
- The consequences of both would have been as damaging for Rangers survival as the real life consequences of losing to Malmo and Maribor in the qualifying rounds of the Champions and European Leagues.
Karma eh!
Interestingly in the UEFA COMPLIANCE AND INVESTIGATION ACTIVITY REPORT 2015 – 2017 , the CFCB investigatory chamber recommended that both the Kazakhstan FA and Swiss FA as licensors
“pay particular attention to the adequate disclosure of the outstanding amounts payable towards other football clubs, in respect of employees and towards social/tax authorities, which must be disclosed separately;
Would the same recommendation apply to the Scottish FA with regard to their performance in 2011 and will the SFA responses thereafter to shareholders in a member club be examined for compliance with best governance practice by the SFA Compliance Officer investigating the processing of the UEFA Licence in 2011?
This would be a welcome step in fully restoring trust in the SFA.
Is today another month on the calendar we can cross off in waiting for the compliance officers report.
8 months now.If it is sitting on the Scottish FA’s new chief executive Ian Maxwell desk.I believe he starts his roll on May 21
“EasyJambo See this business about the long grass at Tynecastle?”
My wife saw that on screen, and a “that reminds me” moment occurred.
I was then dispatched to cut my long grass at the back of the house.
Please don’t mention any thing about external paint work!!!
“I said, ‘let’s accept the Takeover Panel will not be resolved in the next couple of weeks, let’s go ahead with the rights issue as it is with the restrictions I have in participating’.”
—————————————————————————————————-
If I can ad-lib
“I’m not making the offer, are you mental?…I’m out of the “issue”. How much are Club Tropicana good for?….. Put the sh*tters up them about UEFA FFP”, there’s a good boy James
Can there even be a share issue
Any word on when the court case involving David whitehouse suing police scotland chief phil Gormley,Lord advocate james wolffie QC and fiscal Liam murphy will begin? Iknow it is May but not the date.
On the question of can the RIFC share issue go ahead before King fully complies with the TOP requirements. I’ve just read an extract from a document regarding restrictions on dealings, sadly I can’t copy it over, and, though it doesn’t say the share issue can’t be made, it does appear to prevent any members of the concert party from selling and/or buying shares, so I would imagine that would rule them out from purchasing shares in the issue, and also stop any DfE at this time. Whether or not that would stop the share issue going ahead, or not, is anyone’s guess, but it would make the prospectus rather worse than would otherwise be the case, as it would be inviting people to buy shares in a company with massive (for the size of the company) debt, along with the need to include details of the the unfulfilled TOP order.
I cannot speak for the veracity of the document, but if it is genuine, it certainly appears to make a share issue difficult within the next couple of months.
And, of course, King/RIFC just gave a presser and didn’t give even a hint that the share issue was imminent.
Jingso, Tony’s just put up the document! Cheers Tony
easyJamboMay 7, 2018 at 19:46
“I think JC found out from one of his emails to the TOP, that the share issue could proceed, but that King would still be required to make an offer for the existing shares not currently owned by the Concert Party.”
________
Not quite, eJ.
I emailed the TOPS Support Group on 24th February ( about the notice that had appeared purporting to inform fans that ‘you have one option’ [wherever that had come from/]
and I wrote this:
“………….
…..In the abstract, and prescinding from this particular case, are you able to say whether it is within the ‘Rules’ that a company (in the circumstances that RIFC plc presently finds itself ) is permitted to allow such a notice to be emailed to selected shareholders?”
That email was automatically acknowledged but has NOT been responded to, unfortunately.
If the share issue price was to be set higher than the 20p, wouldn’t that discourage existing shareholders from taking King’s 20p, and thus King might feel able to make the offer without actually having to buy too many shares?
Wouldn’t that be a matter of interest to the TOP, some ‘concert party’ guy finding a way to avoid risk?
Could that be King’s idea? Would the TOP accept that that was OK?
Or am I talking rubbish?
I read the doc earlier, and I took it to read the issue could be made, but was closed to the concert party.
Obviously if the issue was at 15p a pop, there would be a mad dash to buy, because DCK would be obligated to buy them back at 20p a pop. A 25% profit trousered when he meets his obligations.
“I said, ‘let’s accept the Takeover Panel will not be resolved in the next couple of weeks, let’s go ahead with the rights issue as it is with the restrictions I have in participating’.”
——–
Does that read as.lets go ahead but the restrictions I have in participating’mean i won’t be putting in a penny it is up to others.
——–
But then you read.
And King says he will increase his personal investment in the club.
“I have to do that, I have already done that, in advance of next season,” he said. “Because we continue to run at a deficit, deliberately, we have to satisfy the licensing authorities, the SFA, Uefa, that you have sufficient funds to fund your deficit.
“So we have had to give cash guarantees in advance of next season. So whether we raised money in a rights issue or not, we are in for the money, I am in for the money, I am underpinning the cash. The club is fully funded for next season.”
——-
Is king saying here his personal investment in the club.will be an advance of next season.
Ie. i can’t put anything in just now because of restrictions but i will for next season.Is that what he is saying or am i getting it all wrong?
ALLYJAMBO
I wonder what position Rangers would be in now if the SFA had allowed Mike Ashley to increase his shareholding?
Nice to see 5610 paying customers at the Dundee Utd v Livvy match.
Seems a couple of regulars are missing
.
Am I reading this properly ? Mr King has to raise £6 million in order that TRFC ca qualify financially for European competition and is saying it’s somebody else’s shout as he has promised to cover next season’s shortfall (honest) ?
Ian Fraser, who wrote extensively about the demise of HBOS and the travails of RBS, has commented on King’s latest plans.
Ian FraserVerified account @Ian_Fraser 2h2 hours ago
Replying to @BBCDouglasF
This is financial engineering of a dangerous kind. Whole thing stretches credulity, and I don’t think even Dave King fully understands what he’s doing. Seems to be treating the Takeover Panel with contempt too, which ain’t necessarily a good idea.
PADDY MALARKEYMAY 7, 2018 at 21:40
Am I reading this properly ? Mr King has to raise £6 million in order that TRFC ca qualify financially for European competition and is saying it’s somebody else’s shout as he has promised to cover next season’s shortfall (honest) ?
__________
I don’t know if you are reading it properly, or not, but I don’t think anyone else is too sure, either, of what King was saying, or meaning. I wouldn’t be at all surprised if that was what he wanted to happen, with those targeted by the ‘message’ left to take from it what they will. No wonder he only wanted selected stenographers present, the last thing he needed was someone asking for clarification.
SHUGMAY 7, 2018 at 21:17
Seems a couple of regulars are missing .
_____
Too busy celebrating at the champagne party to post on here, I suspect.
Tris. I’m not trolling. My opinion is my opinion. I don’t understand how people can opine on an issue and I’m not allowed a rite of reply as long as it’s respectful.
I think King is just saying “I’ll cover next season … etc, etc, just trust me … etc, etc.” I think what he is not saying is, “There will be no next season for us, nor will there be any share issue because those spoil sports on the Take Over Panel won’t let me. I’m calling in the receivers but it’s no my fault. A big TOPE did it and ran away!”
That’s how I’m reading it anyway!
What chance does your average Ibroxian have in keeping up with Mr King and his financial ways when even the Takeover Panel, who are presumably not short on financial nous or knowledge of the ways of the wide boy, are made to look like naive, ineffective patsies? King seems to be the first recipient of the ‘Slightly Cool Shoulder’. If the outcome so far represents the best shots in the TOP’s armoury, he’s going to be with us for many years yet.
SHUGMAY 7, 2018 at 21:17
6
0 Rate This
Seems a couple of regulars are missing .
*****
Was thinking the same myself. Especially the lad who usually provides us with all the answers to our queries.
https://twitter.com/Record_Sport/status/993604501394386944?s=20
Billydug May 7, 2018 at 22:42
https://twitter.com/Record_Sport/status/993604501394386944?s=20
=============================
That links to the full Q&A and provides a fair bit of detail we have been missing.
e.g. re the TOP ruling
The man is seriously delusional.
How can you make up the gap to Celtic?
We appoint a manager who can win games, with more resources, and we take one league away from Celtic. We only need one league. We don’t need two or three. We need one. Once we take one away, it’s a pack of cards.
You really think it would be like a pack of cards at Celtic if you won the league?
Celtic’s costs structure is more like we were 10 years ago. We needed Champions League football and if we went into the Europa League we were in trouble because the cost structure was so high. Take that away for one season and it will change the numbers in the Celtic side very very quickly. They have the comfort levels we once had of knowing we were going to get Champions League money. We have to take that away from them and hopefully we have started that process on Friday.
I’m in a boozer with some TRFC soul men and they say that part of the problem is that NI drugs money can no longer laundered via Ibrox since DCK has been in post . Haven’t a clue as I am a law abiding citizen .
Confirmation of the value of the share issue ……. £16m, £10m of which will used as DFE.
How much can you raise from a new shares issue?
We’re going one-for-one on this specific issue. We’ll be looking at just over £16m. Right now it’s £6m cash and £10m in loans but we might go £8m and £8m. If the player plan goes the other way we might do it the other way around. We’ve not yet made our final decision but it won’t be less than £6m new cash.”
Note that a one for one issue that raises £16m, will be at 20p a share.
Talking of drugs, what on earth has Dave King been snorting? Has anyone checked the white lines at Ibrox recently? I’ve just read the full article and what a complete load of unadulterated bollox he talks.
However, I can paraphrase the whole thing in two sentences.
1. The TOP are entirely to blame, even although I broke their rules.
2. Having learned nothing from the past, we are going to overspend in a futile attempt to buy success again.
King on Close
If you’ve got the money, why did you agree a £3 million overdraft with Close Brothers?
It’s a significant achievement. For this club to normalise relationships it’s important. Clubs don’t operate without this facility. No club in the world does. Rangers were in a situation where we were denied facilities. So what we’re proving to the world now is that we can get facilities. We want facilities – I’d love to get an overdraft facility. It shows a normalisation of Rangers. It’s our single greatest achievement. To me, the best thing we did was getting that Close facility. That was huge for this club, that we could actually go out into the market place and finally get a third party to give us that facility. That was enormous for the normalisation of this club.
So the greatest achievement of this Board is to be able to go out and borrow £3m. What planet is he on?
Financing – The Rangers way
When will Rangers return to profitability?
Not in the foreseeable future, because we are not going to run it to make a profit in the foreseeable future. I would expect us only to start making a profit when we are back playing Champions League. Until that point, I think we are going to have to continue funding the deficit every single year.
EASYJAMBO
I’ve actually stopped laughing at him as I think he needs help
Billydug
May 7 2018 at 22.42
____________
Thanks for that link to the DR Q&A report.
I thought it only right that the TOP should join in the fun.
So, I have sent this email to the TOP Support Group:
“To:Support Group 7 May at 23:25
Dear Support Group,
For your entertainment and to round off a splendid Bank Holiday weekend, you could do worse than have a read at this link
bit.ly/2rq5Xdm
This is the report by the ‘Daily Record’ (Glasgow) of a Q&A session with Mr Dave King, in which he gives his version of his latest dealings with the Takeover Panel, and lets us all know what he condescendingly ‘took on board’ , and what he ‘agreed’ to, in dealing with what he described as the ‘bullies’ of the Takeover Panel.
It is quite amusing nonsense, designed in King’s way to obfuscate and mislead.
You will incidentally be impressed by the Paxman-like insistence on and persistence in extracting by incisive cross-questioning something like proper answers from King from those of the Scottish MSM who were invited to the session!
Yours sincerely, in the hope that the precedent-setting resort to the Courts will not end in the TOP losing to Mr King.
JC “
There is no rhyme or reason behind the rubbish King spurts out of his gub.
There is no hidden agenda or veiled intentions.
He, essentially just talks sh*te.
I was trying to find out the difference between a pathological liar and a compulsive liar.
From wikipedia:
A compulsive liar will tell stories that “tend toward presenting the liar favorably. The liar “decorates their own person”[3] by telling stories that present them as the hero or the victim. For example, the person might be presented as being fantastically brave, as knowing or being related to many famous people, or as having great power, position, or wealth.”
” It is a stand-alone disorder as well as a symptom of other disorders such as psychopathy and antisocial, narcissistic, and histrionic personality disorders, but people who are pathological liars may not possess characteristics of the other disorders.”
A perfect description of King?
For what it’s worth…
As I understand things, the concert party (including Mr King) cannot, without approval from the TOP, buy or sell shares in RIFC during the mandatory offer period.
However, I do not see what would prevent RIFC selling unallocated shares.
The restrictions, as far as I am aware, apply only to the specific people involved in the rule breach. I cannot see what would prevent the company from carrying on a routine share issue.
Luckily/unfortunately for Mr King, he (and the other members of the concert party) won’t be able to take part in a share issue at this time.
Looks like Other People’s Money will have to do for now.
easyJamboMay 7, 2018 at 21:48
‘…Ian FraserVerified account @Ian_Fraser 2h2 hours agoReplying to @BBCDouglasF(raser)
_______________________
[I remember being quite put out by Douglas Fraser’s very, very inadequate coverage of the ‘business’ story of the saga.
He seemed not to be at all interested in explaining to folk that Liquidation meant that an enterprise ceased to be.
He turned up once or twice at Court proceedings at which I was present,but, whether of his own choice or by editorial direction, he never got into the business of explaining that if a club is not bought out of Administration wholly and completely by new owners, who arrange some kind of deal with the creditors, it goes into Liquidation, and ceases to be.
Had he used his professional knowledge properly, and told his BBC editors that he insisted on finding and telling the truth, the myth of ‘continuity Rangers’ might well have been seen for what it was, and acknowledged years ago, and dealt with properly under the glare of informed public scrutiny.
But, in my opinion, there was, is, an element of corruption in BBC Radio Scotland.
So perhaps I’m too harsh on Fraser.
Although, if he were a man of principle he might have …….]
Glad to hear King is going to be a net investor…..They old ones got burst so many times, the Peterhead trawlermen couldn’t repair them.
…..It’s all Celtic’s fault.
So, if we put to one side;
– industrial scale cheating
– the continuation lie
– revolting fans
– a criminal chairman
– etc…
It seems that TRFC’s raison d’etre is wholly negative.
Stop another club achieving success.
With that sort of warped thinking, TRFC deserves to sink without trace.
…for the good of Scottish football, of course.
easyJamboMay 7, 2018 at 23:11 (Edit)
The man is seriously delusional.
How can you make up the gap to Celtic?
We appoint a manager who can win games, with more resources, and we take one league away from Celtic. We only need one league. We don’t need two or three. We need one. Once we take one away, it’s a pack of cards.
———————-
Indeed he is Easy. Celtic have not been CL dependent for survival and with greater resources can take steps to minimise losing access to the CL.
Even then there are four qualifying rounds to hurdle, unlike 10 years ago when title winners entered the group stages. So a rookie manager is going to transform the current team into CL Group participants in how many years?
What if it takes 2 years from next season 2018/19 and Celtic qualify in all seasons until then. How big will the financial gap become in that time and how much extra would Celtic have in the kitty 3 years from now to ensure they continue to qualify? Dependence on CL money is what killed Rangers and we all remember season 2010/11 as the one of honest mistakes because CL access meant survival. Are we going back there again? In light of TRFC’s policy as outlined domestic FFP, which caps the level of debt a club can enter, is a must to prevent Rangers using non football generated income to feed their footballing ambition.
You really think it would be like a pack of cards at Celtic if you won the league?
Celtic’s costs structure is more like we were 10 years ago. We needed Champions League football and if we went into the Europa League we were in trouble because the cost structure was so high. Take that away for one season and it will change the numbers in the Celtic side very very quickly. They have the comfort levels we once had of knowing we were going to get Champions League money. We have to take that away from them and hopefully we have started that process on Friday.
—————————-
Celtic’s cost structure is not like Rangers 10 years ago. Rangers debt rose from £6m to £36m to provide the team that got CL access for 3 years from 2009 to 2011 and that access reduced the debt to the £18m that Lloyds called in. Celtic did not try and match Rangers debt levels and took a lot of stick for not doing so. They are in a better position to be more wage/debt competitive with TRFC than they were 10 years ago without risking Celtic’s existence. Celtic have a seasoned manager prepared to stay and outlast Gerrad and scouting and development structures in place that Rangers need to build.
As you said Easy, the man is delusional and perhaps its about time questions were asked about his mental health. The definition of insanity is to keep doing the same thing and expect a different result.
easyJamboMay 7, 2018 at 23:36 (Edit)
Financing – The Rangers way
When will Rangers return to profitability? Not in the foreseeable future, because we are not going to run it to make a profit in the foreseeable future. I would expect us only to start making a profit when we are back playing Champions League. Until that point, I think we are going to have to continue funding the deficit every single year.
===============
I wonder who “we” is and is DK immortal?
AULDHEIDMAY 8, 2018 at 02:06
easyJamboMay 7, 2018 at 23:11 (Edit)The man is seriously delusional.
——————————————————
Not delusional Auldheid….. A confidence trickster !
EASYJAMBOMAY 7, 2018 at 19:15
King said. “So we have had to give cash guarantees in advance of next season. So whether we raised money in a rights issue or not, we are in for the money, I am in for the money, I am underpinning the cash. The club is fully funded for next season.”
——————
CORRUPT OFFICIALMAY 7, 2018 at 20:30
“I said, ‘let’s accept the Takeover Panel will not be resolved in the next couple of weeks, let’s go ahead with the rights issue as it is with the restrictions I have in participating’.”
——————
I seem to recall a senior law Lord being told under oath that Mr King was penniless, broke, skint (take your pick) but now he is going to fund The Rangers for the whole of next season….. He did not say Laird or any other consortium, it was “I am”
Hi biggest problem is his Ego, its even bigger than David Murrays and that takes some doing.
You hear people talking about accounts written on the back of a fag packet. Dave King yesterday presented Rangers entire strategy for success on the back of a fag packet!
From Dave King’s statement:
“the football club.. is a different company completely…”
An accidental truth slipping out?
There is far too much baloney in King’s outpourings that it would take hours to wade through.
A quick look at the Bears Den and it appears to majority commenting so far don’t seem overly convinced with their glorious leader.
Perhaps one poster hit the nail on the head by reminding us that King got his QC, in a court of law, to basically say he was skint and a few weeks later he is still mouthing off about how he has the means and money to support the club despite continually running at a loss.
Whether his plans succeed or not, surely the question is do you really want a man of his character to be associated with ‘the club’ you love.
Appears to be a Jack Irvine comment.
It is a known fact that the South African court judge, Brian Southwood, after seeing King testify for four days stated, “the Court are unanimous in finding that he is a mendacious witness…..King showed no signs of embarrassment or any emotion when he conceded he had lied….. he is a glib and shameless liar.”
King bought his way out of a lengthy prison sentence. This is only possible for certain offences under South African law.
i have often wondered why King was not further charged following the unanimous Court statement, with the more serious offence of perjury, a crime I believe in his case would carry a mandatory prison sentence.
Not being conversant in South African law, maybe someone with legal knowledge could tell me if it is possible that he could still be charged with the perjury offence should he come to notice again in his home country.
King clearly considers himself above the law at all times. He most definitely continues to be a liar, be it compulsive, pathological or both. He may have a mental disorder but he is not stupid.
What I cannot understand is why our Scottish game is being dragged down to the lowest by a club run by such a controlling criminal. The club, year after year, is operating at huge financial losses with what appears to be the full approval of our football authorities.
Never mind those connected with the club who blindly follow follow their criminal leader; I can only think, for partisan leanings ‘they know not what they do’ but why do the media allow themselves to toe the party line when it comes to this club’s ongoing disgraceful financial situation?
Is there not a Scottish journalist out there prepared to carry out his/her so called principles i.e. to seek the truth and report it?
The DCK Q&A, as reported in the DR, is a belter.
Once I got past the fact that my inner monologue kept verbalising the questions in Jim White’s voice, I really enjoyed reading it. They should have kept in the bit about all the pandas employed on the turnstiles at Ibrox being paid the living wage next season & Auchenhowie being turned into a unicorn sanctuary from the first of June.
Two takeaways from it:
1. DCK insists he doesn’t conduct business in the UK. Somebody should remind him he’s the Group Chairman of a company with a £20m plus turnover. Then they should remind him that he’s actually sitting talking about a £16m share issue for the benefit of that company.
2. DCK also insists that the TOP/TAB are in the wrong. Again, someone could remind him that their findings have been ratified by several courts of law.
The Q&A seems an attempt to spread blame across several fronts – UEFA, SFA, SPFL, CFC, TOP, TAB, Warburton, Caixinha, Murty, Miller, & Wallace, for example (and that’s probably not an exhaustive list).
Megalomania — an obsession with the exercise of power.
I get that it’s all delusional nonsense, but I understand this delusional nonsense was embargoed until 11.00pm last night when the ‘press conference’ finished at 12.30pm. Why would King ask his chosen few lapdogs not to report this sh*t until then? It certainly kept all the Bears up late refreshing their sites!!
….and for this?!?!
The best suggestion I saw was that the last flight to SA left at 10.45pm.
By the way, good man JC on quickly bringing it to the attention of TOP.
One for our financial students: Is it possible to forgive debts without falling foul of either statute or FFP?
Trying to build a scenario whereby RIFC folds but TRFC sail on through the wake unperturbed.
The precise structure of the debt is important I suppose. Most of the indebtedness is from the soft loans is held by RIFC, but I am sure there will be a paper debt between the club and the holding company.
Can they write that off without fear of a challenge from some of the institutional investors in RIFC?
Do the RIFC accounts quantify any internal indebtedness of TRFC?
I have seen a lot of meaningless bunkum in my time but those King strings of words which look from a distance to represent sentences are beyond parody. “Full of sound and fury signifying nothing”.
Paul Murray it would appear, just as a super-duper share issue, and an “Instant success” manager takes up post, has let the pressure get to him.
To be fair, he does invite the journalists to go and ask him. …..Maybe he just got a bad onion bhaji from Mr Singh?
TRISIDIUM
May 8 at 11.51
____________
This is the first link I’ve come across: it might give a step for a hint. Scroll down to Britboy
https://forums.overclockers.co.uk/threads/what-is-a-holding-company.18240054/”
“However the holding company ONLY owns other companies and apart from that has little else it owns.
The purpose of this is that if something really bad happens, the holding company can go bust, all debts will be written off (as the holding company is a .ltd standing for ‘limited liability’) and just sell the company it holds to another holding company for £1. So its a instrument to avoid awful bad (company destroying) financial things happening to the ‘held company’.
So of course you want the holding company to have as few assets as possible (like computers/staff) as these will all be seized by the administrators when it goes bust.
The theory is that when this nightmare happens, the company that was ‘100% owned’ hardly notices a bump in the road – the holding company is the fall guy and ‘how terrible holding company ltd couldn’t pay the £28m debts it owns from buying ‘held company ltd’. Oh well, written off, company dies – the company it held? Nothing to do with them’. Without the holding company – when a financial nightmare happens, the entire operation could die.
Nowadays the courts are starting to over rule holding companies ‘cheating the system’ like this — and seize the assets from the ‘held’ company ANYWAY. This happened to Southampton FC after they thought they were being oh-so-clever with their holding company going bust …”
I haven’t begun to check the accuracy.
There appears to be neither strategy or intention to run other than at a loss. The nonsense about not taking “the money for Morelos” because there was no intention to pay off loans and they did not need the cash anyway is truly transparent bunk.
Yet the claim that the BBC are “attacking wur Chairman because the have an Agenda against us” is still made.
Hell’s fire rap it into them, as my Granny nearly said.
My immediately preceding post refers.
I meant to add that that is the flanker that CG tried to pull, in collaboration with the Administrators and the wicked men who cobbled up the 5-way agreement.
He failed, of course, as the 5-way agreement failed, to make us believe that black is white: Because there was no holding company to fold, and RFC was not sold to CG as a going concern.
Notice that not even the Administrators used that explicit form of words, because they knew they would have been telling an absolute untruth, rather than merely using a form of misleading words to help CG and the SFA
If they had been able to say ‘Club sold to a new owner” ,by the Lord harry, wouldn’t they have trumpeted it abroad? and Traynor and the rest would have been spared their ‘Liquidation”, “Death” , “End of 142 years history” headlines; and SevcoScotland would not have had to apply for membership of a League and there would have been no need to transfer an SFA certificate of membership!
Any administrators would chase assets that had been disposed of seriously under value, John. I certainly did when I was at the Official Receiver in the 80’s. It’s all part of the gratuitous alienation stick. There has to have been several years between the ‘sale’ and the administration before they wouldn’t claw it back, or at the very least some sort of ‘legal’ cover for it.
John Clark 12.10
I cannot comment on the main body of that post but Southampton did try the holding company approach and it was booted into touch by the FA.
It has to be, otherwise clubs become like the Phoenix. Go up in flames but emerge to live as before.
The intent of Art12 of UEFA FFP is to prevent clubs separating themselves from themselves by forming a football company unless a written contract to do so is in place. But even then whether it is a football club as in Art12 1a or football company under 1b UEFA treat both as a club which is a single legal entity for the purposes of their rules.
The body of your post explains why.
Hi,
I stand to be corrected but my recollection is that TRFC is a wholly owned subsidiary of RIFC.
If that is the case then if RIFC go under then it will mean that TRFC is up for sale as the liquidator of RIFC will be obliged to sell the assets of the holding company to the highest bidder.
This may also be an insolvency event under SPFL/SFA rules so we could be back to square one.
Even if TRFC was not a subsidiary of RIFC and RIFC went under then the admin or liquidator would look to get the debt back
In my opinion King has pressed the nuclear button by going head to head with TOP.
What he is proposing to do is not legally possible and he knows this. If he doesn’t then his lawyers will.
Is he going to force RIFC into liquidation in order to pick up TRFC for himself?
In addition this nonsense of not having a UK Bank account is exactly that, nonsense.
He could put it in his solicitor’s client account which would mean compliance.
The truth is more likely to be that he cannot get money out of South Africa, or doesn’t want to.
He will also attract the attention of SARS if he produces money offshore which should have been repatriated.
This is one battle King cannot win and in my opinion things will go nuclear fairly soon.
Barcabhoy doing a sterling job on twitter analysing TRIFC finances and how the share issue, even if it goes ahead successfully does absolutely nothing to alter the fundamentals of the predicament the company is in nor provide a war chest for SG to turn TRFC into the team of the bears dreams.
So assuming that £6m is raised as working capital, that helps pay back Close Brothers and leaves a little left over to put towards the next years losses. Next years losses being a deliberate strategy of choice!
There is a scenario in my mind whereby TRFC do mount a sustained challenge for the title It’s all and buts and maybes but it is not impossible. Essentially Celtic only need to drop six more points than this season – perhaps a good run in Europe combined with a few injuries causes a prioritisation of Europe over the domestic. SG, given the same quality of squad only needs to be a bit better than Pedro and Murts to gain an extra six points and hey presto, a title race.
A caveat is that the reverse is just as likely – Celtic gaining an extra six points and TRFC losing six = a blowout and despair for the bears/smsm.
And, for what it’s worth, should Celtic slip up domestically my fiver on the team most likely to take advantage as things stand. Hibs.
John ClarkMay 8, 2018 at 12:10
TRISIDIUM May 8 at 11.51 ____________ This is the first link I’ve come across: it might give a step for a hint. Scroll down to Britboy
https://forums.overclockers.co.uk/threads/what-is-a-holding-company.18240054/” “However the holding company ONLY owns other companies and apart from that has little else it owns. The purpose of this is that if something really bad happens, the holding company can go bust, all debts will be written off (as the holding company is a .ltd standing for ‘limited liability’) and just sell the company it holds to another holding company for £1. So its a instrument to avoid awful bad (company destroying) financial things happening to the ‘held company’.So of course you want the holding company to have as few assets as possible (like computers/staff) as these will all be seized by the administrators when it goes bust. The theory is that when this nightmare happens, the company that was ‘100% owned’ hardly notices a bump in the road – the holding company is the fall guy and ‘how terrible holding company ltd couldn’t pay the £28m debts it owns from buying ‘held company ltd’. Oh well, written off, company dies – the company it held? Nothing to do with them’. Without the holding company – when a financial nightmare happens, the entire operation could die. Nowadays the courts are starting to over rule holding companies ‘cheating the system’ like this — and seize the assets from the ‘held’ company ANYWAY. This happened to Southampton FC after they thought they were being oh-so-clever with their holding company going bust …”
I haven’t begun to check the accuracy.
______________________
However this may have worked in the past, and whatever has been done to right this so obvious wrong, and without any personal expertise involved, I’d imagine this scam only worked when the ‘holding company’ was not a public company, with a wide range of shareholders who wouldn’t benefit from the scam. This, of course, won’t necessarily stop Dodgy Dave from trying something along those lines.
There is also the fact that, in this case, TRFC Ltd is an asset of RIFC plc, and all creditors of RIFC would have a legitimate claim against all assets of the holding company in administration/liquidation.
And it goes without saying that, if the scam worked, at all, it would have been used by every business in the country – and capitalism in the UK would have died overnight!
It comes to something when even the Sevco fansites aren’t swallowing the moonbeams…
Let’s face it, they had to have a press conference introducing Steven Gerrard – AKA Stevie Ger? AKA SteveCo? – to the press and King was pretty much the last guy standing to do it, as such he was duty-bound to address something to do with finance so he did his best shoot-from-the-lip and what we got was was: £6-8m new money as a rights issue. Some of the “interest free” debt will be turned to equity (which is no good to man nor beast but I guess it does”reduce debt” in UEFA’s FFP view. Of that £6m rights issue, £3m could be allocated for Close Bros (the debt was secured against future ticket revenue, but needs paid sooner or later), and some will go to Caixinha/his staff, oh and a few grand to Murty…
The Rangers are of course running at a c. £6m/year loss (coincidence? I doubt it, esp as this was the figure given as a prerequisite for European licensing) – even with this injection of “new” money I don’t think Gerrard will see much when he opens his “warchest” other than some spiders and moths…Celtic’s got a £35m biscuit tin, The Rangers have a £6m warchest. Thank God we don’t suffer from some sort of inferiority complex…
Oh and he then went full Corporal Jones with that “Celtic house-of-cards will fold when we win one title because they don’t like it up them Captain Mainwaring!” little rant.
Thanks for posting that link to The Battered Bunnet’s site Auldheid – everyone should read the analysis there – saves me studying for years, doing a ton of research and writing it up here with typos ;o) but suffice to say, Dave seems to think Celtic’s business model is that of the original Rangers (still in liquidation) and Leeds Utd under Peter Ridsdale (Leeds have been out of the top flight for 14 years post their administration) in that one missed Champs League campaign will hole Celtic below the waterline (one! has he seen us in Europe?!?). Yet that’s the model he’s pinning his own hopes to? What is the matter with the guy?
And anyway it couldn’t be farther from the truth – either Dave King is dangerously uninformed for a chairman of a rival club or he is selling the biggest pile of horse5h1t since Heracles set up a garden centre outside the Augean Stables…
As for the much vaunted “cold shoulder” WTF does this guy have to do to for it to be enforced? As I understood it, the cold shoulder would preclude any and all reputable UK financial institutions from working with King and his associated entities until he complied with the TOP’s rulings but instead the guy is running around making financial statements, running up debts and issuing shares willy-nilly on behalf of a club he is not even chairman of.
Now I know he’s only talking about this share issue but is there any greater contempt of a ruling than to pay a little lip service, say the dog ate the paperwork and carry on doing what you were doing regardless, all the while making press conferences saying how unfair you’re being treated!?
I find it remarkable that it’s being unremarked that there has been an admission that Steve Gerrard is a bigger brand than The Rangers’s, but even with with all this hoopla, it seems the arrival StevieGer can’t improve finances at Ibrox, so it’ll likely be Steveco all over again…
If Steven Gerrard didn’t cringe, and start checking over his TRFC contract for a way out, after hearing/reading what King had to say at that press briefing, then the man is stupid – or he must already be aware that his career as a football coach/manager is actually quite limited, and that this gig is all he’s going to get. But worse than that, if the rest of the consortium didn’t phone each other and say, ‘my god, it’s time to get out of Dodge’, then they must be the stupidest businessmen football has ever known.
With his every word, King made himself, and those associated with him at RIFC/TRFC, look ever more inept, and the situation at Ibrox ever worse. If they are happy to let King be the spokesperson for their club, they must all have been struck dumb by recent events at their club. I’d even go so far as to suggest that by allowing King to do the talking, they are ready to step away, and I’ll be convinced of that if none of them start talking to the press in a fire fighting exercise!
If no one at Ibrox can come out with something to reduce the negative impact of King’s words, then they can’t possibly have anything positive to impart.
nawliteMay 8, 2018 at 11:17
I get that it’s all delusional nonsense, but I understand this delusional nonsense was embargoed until 11.00pm last night when the ‘press conference’ finished at 12.30pm. Why would King ask his chosen few lapdogs not to report this sh*t until then? It certainly kept all the Bears up late refreshing their sites!!….and for this?!?! The best suggestion I saw was that the last flight to SA left at 10.45pm. By the way, good man JC on quickly bringing it to the attention of TOP.
___________________
Could the request for an embargo be linked to his TOP non-compliance? Just a thought, but he may well have given them the impression he was in the UK to set up the share offer to stave off any legal action, and, of course, he’s actually done no more than to insult the panel and deride their authority over him. I’m not suggesting there’s an arrest warrant out for him, just that he perhaps feared there might be.
Paul Murray and Barry Scott have brains, and have used them.
What with these high profile pressers hosted by King at Ibrox, one would be forgiven for thinking that he is actually the Executive Chairman of TRFC!
But of course he can’t be, because of his dodgy past…which is why he is kept at arms’ length as Chairman of the holding company, RIFC.
So, the inevitable and stoopid question here is: does the SFA have anything to say about King’s personal – and very public – control of the football club?
You know, the guy that even the SMSM
has been printing is due a Cold Shoulder anytime soon ?
…guessing the blazered diddies must be back in their Hampden bunker…
I frequent another website regularly related to other interests of mine. The lad who wrote the following was a professor at Georgetown University for many years and still writes good stuff at age 90 plus, the quote is a small example.
The final sentence of the quotation below struck me as being highly apposite of SMSM TRFC followers the SFA and others it raised a wry smile. It is doubly apposite since its source would be regarded by some so in the sevcosphere as tainted and thus unacceptable by definition, even though it is perfectly true.
“We read Plato and Aristotle, Augustine and Aquinas, because they deal with truths necessary to become human beings who understand what our existence is for, whatever be our color or era. We can choose not to know what is, but it is not a virtue. It is indeed an illiberal education that closes us off from what we are. When we choose not to know, we end up, not surprisingly, not knowing.”
Re : The TOP
Surely they have crossed all the t’s & dotted the i’s on King by now – are they really prepared to take all that sh*t & not do anything ?
So Sevco operate a “deliberate” deficit, and have actually refused additional “investment”, from the Hong Kong guys, (one of whom has resigned)….Apparently he doesn’t want any additional monies in the club at this time.
How ironic would it be, if Celtic qualify for CL group stages, earning a solidarity payment for every Premier club, and F**k his cunning plans right up.
Maybe they could donate it to a good cause?…..Wadya say Dave?
Most likely explanation of the sudden need to divest 16million in debt is the UEFA fair play debt requirement of 5 -6 million max in accumulated debt being enforced, amazingly, by SFA who were mentioned in King’s ramblings as monitoring them. The share issue is, of course, doomed by King and the concert party’s failure to finance their grubby, vicious take over. Moment of truth when share issue is blocked, is whether or not King and the rest are prepared to write off the debt for no shares in order to allow a UEFA licence to progress, or whether they fold King’s very own deck of cards.
The most stand out comment from King on TOP for me is this one:
“It is going to have to be 50 per cent of the non concert party shareholders, so you need the Easdales, all the Beaufort Nominees, the Blue Pitches, the Margaritas, to sell at 20p and they are not going to do that.”
Surprised not to see that challenged on here as my understanding was that it was 50% of the total shares so 16% acceptance of the rest would take him over the 50%.
If he is correct and it needs to be 33% of shares accepting the offer then i agree with him that it will fail.
I think he is wrong though.
TheLawMan2 May 8, 2018 at 17:10
I think he is wrong though.
=======================
I agree with you on that.
From the Takeover Code
Except with the consent of the Panel (see Note 3):
a) offers made under Rule 9 must be conditional only upon the offeror having received acceptances in respect of shares which, together with shares acquired or agreed to be acquired before or during the offer, will result in the offeror and any person acting in concert with it holding shares carrying more than 50% of the voting rights;
The “frozen” shares and the Easdales on their own would take him over the threshold.
TheLawMan2May 8, 2018 at 17:10
I think it is the fact that it is so obviously wrong that has made it a pointless point to raise with so much else spouted forth from his unfettered mouth. The 50% requirement has been discussed here quite a bit, and for anyone to suggest, as King did, that a rule or law would be as undefined as 50% of non concert party shareholders, is at it!
Nice new emoticon
Thanks Tris. I take it that it is me in my wedding dress 45 years ago!!!!
TLM2 MAY 8 17.10
The shareholding of the groups you mention will be diluted in any case, so why would they not accept an offer of 20p?.
From Twitter.
‘If the current financial mess descending on The Rangers*International Football Club holding company vehicle has nothing to do with the football club at Ibrox as King claims, why do the accounts of that company have to be submitted to UEFA & the SFA before licenses are granted?