Rangers FC in 2012-2013 – Could It Survive Financially?

How much will it cost to fund The Rangers FC through season 2012-2013, subject of course to obtaining a membership by tonight.

I have based all of the calculations on the Duff & Phelps reports which can be read here Duff and Phelps Proposal 5 April 2012 and here Duff Phelps Report July 2012.

Some of the income and costs are per game and some are per annum. I have tried to extrapolate to a full year. The Duff and Phelps figures cover a period of approximately 20 weeks, split between playing season and close season. This period runs from 14th February to 29th June (from St Valentine’s Day to the Feast of Saints Peter and Paul).

I will be delighted if anyone wants to correct my sums. I have also rounded figures for ease of arithmetic. All figures therefore are approximate. 

I hope Sevco don’t use this calculator…

What Will The Rangers FC Spend in a Year in SFL3?

Wages and Salaries

When I looked at the initial Duff and Phelps report regarding wages, and this covered the period from 14th February to 30th March, I wrote the following regarding wages and salaries:-

“The account produced shows a pre-administration figure of £479,513 and post-administration total of £1,208,986.

I have broken them down as follows. Let us say the pre-admin wages cover two weeks. That amounts to roughly £240,000 per week.  That rate of pay continues until 9th March, when the players agreed the wage reduction strategy.

Therefore wages are running at £240,000 per week for the four weeks till 9th March.

This leaves a balance for the remaining three weeks of £210,000, or £70,000 per week.

That calculation, rough as it is, shows a weekly saving in wages, even before we calculate reductions in PAYE and NIC, of £170,000.

Therefore, in April, D&P would be spending £280,000 on wages.”

Lots of players have left Ibrox, but still many remain. In addition, there are a couple of hundred non-playing employees. Taking a broad-brush approach, would it be fair to suggest the wage bill, as a result of high earners leaving, might not have reduced as far as it did during the Duff and Phelps negotiated pay cuts, but let’s say to £100k per week.

Messrs Alexander, Broadfoot, Wallace and McCulloch, on the playing side, along with Mr McCoist and his back room staff, would make up most of that figure, and I may in fact be underestimating the costs. However, I will go with that, giving us salaries of £5,200k per annum.

Pensions are also included with a sum of £108k for the period. On the same slashed budget above, I have taken this as being £150k for the full season.

PAYE/NIC

On a wage run of £100k per week, the PAYE and NIC figure would amount roughly to £40k on top, giving an annual sum of £2,008k. During the spell covered by D+P’s figures, wages and salaries were paid totalling £2,799k. PAYE and NIC totalled £1,752k.

Catering

This has already been addressed in principle by mick in his series of Piegate posts.

The accounts show payments out of £991k for catering and food and beverages. Bearing in mind that the income from these was £389k that does seem remarkable.

Did D&P pay out £141k for food for each of the seven matches at Ibrox during their tenure? How much does a pie cost wholesale?

Looking at sensible figures, let’s say that in SFL3 they spend £50k on food per game. That is an annual figure of £900k.

This instruction might help to fill the money gap at Ibrox.

Direct Match Day Costs – Home and Away

For the six home SPL games, this totalled £103k, giving an average of £17k per game. Over an 18 game season this comes to £306k.

For the six away SPL games, this totalled £55k, giving an average of £9k per game. Over an 18 game season this comes to £162k.

Payments For Away Tickets

I have left out of account the sums paid to teams for away tickets, as I have accounted for this in the income section below.

Security and Policing

Security and Policing costs are shown as £515k for the period. I have taken this as £89k per home game, leading to a season bill of £1,602k.

Facility Costs,

These are stated at £221k.  Pro rata for the year this comes to £575k.

Lease And Hire Purchase Charges

These are stated at £343k and over a year would be £892k.

Utilities

These are stated at £256k. Pro rata for the year this comes to £665k.

Software Licences

These are stated at £111k. Pro rata for the year this comes to £289k.

Extraordinary Items

Player Agent Fees – this will depend on who Rangers can sell, so would be factored into income from that source.

Legal Costs – the sum in the Duff + Phelps report for this came to just under £25k. This related to the legal costs chargeable by D+P to Rangers, and therefore excluded the figure of well over £1 million accrued so far as costs in the administrators’ case against Collyer Bristow. Bearing in mind the possibility of lengthy legal battles regarding players, disciplinary matters etc, I have estimated a “low ball” sum of £200k for a season to cover all legal advice and actions.

SFA Fines – Rangers FC still has to pay the £160k fine for bringing the game into disrepute and will have to pay Mr Whyte’s fines too if he fails to pay. As a compromise I have put this in at £250k. Of course, there could still be other fines to be levied.

 Miscellaneous Payments

Programme Costs – £19k for 6 games = £57k for season.

Audio-Visual Costs – £59k for 12 games = £177k for season.

Media Costs – £54k for 12 games = £162k for season.

Medical Costs – £9k for 20 weeks = £23k for season.

Football In the Community costs – £44k for 20 weeks = £ 114k for season.

Sub Contractors’ Costs – £24k over 20 weeks = £62k per season.

Staff Expenses – £34k over 20 weeks = £88k per season.

Player Accommodation – £53k for 6 games = £159k for season.

Other Employee Costs – £32k per 20 weeks = £73k per season.

Merchant Services – £23k per 20 weeks = £60k per season.

Cash Collection Costs – £3k per 20 weeks = £7k per season.

Stationery and Postage – £32k per 20 weeks = £73k per season.

Petty Cash – £8k per 20 weeks = £21k per season.

Waste Disposal – £51k for 20 weeks = £153k for season.

Estimated Annual Costs

Wages and Salaries                                         £5,200k

Pensions                                                              £150k

PAYE/NIC                                                         £2,008k

Catering                                                               £900k

Direct Match Day Costs – Home              £306k

Direct Match Day Costs – Away               £162k

Security and Policing                                   £1,602k

Facility Costs                                                     £575k

Lease And Hire Purchase Charges             £892k

Utilities                                                                £665k

Software Licences                                           £289k

Legal Costs                                                          £200k

Programme Costs                                            £57k

Audio-Visual Costs                                          £177k

Media Costs                                                       £162k

Medical Costs                                                    £23k

Football In the Community costs               £114k

Sub Contractors’ Costs                                  £62k

Staff Expenses                                                  £88k

Player Accommodation                                 £159k

Other Employee Costs                                   £73k

Merchant Services                                          £60k

Cash Collection Costs                                     £7k

Stationery and Postage                                 £73k

Petty Cash                                                          £21k

Waste Disposal                                                 £153k

SFA Fines                                                             £250k

TOTAL                                                                   £13.428 million

I have not included VAT in my sums on the basis that the figures produced will be ex VAT, I assume.

What About Rates and Insurances?

No rates were paid by the administrators in the period referred to. This might be because the club pays in two instalments per year, in December and June, or because the administrators are entitled to treat it as an expense of the administration, to be aid at the end. In any event, Sevco Scotland Ltd will have rates to pay

Rangers’ rateable value for Ibrox Stadium is £1,916,000. Interestingly, Glasgow City Council still lists the proprietor as “Rangers Football Club Ltd”. There is no such company in existence.

The rateable value for Murray Park is £598,500. East Dunbartonshire Council lists the proprietor as “Rangers Football Club PLC”.

I will ignore other smaller properties Rangers own at Edmiston Drive. As a matter of interest, both rates revaluations are under appeal, and have been since 2010.

The national business rate is £0.45. There is a supplement of £0.08 for properties with Rateable Values over £35,000. I will ignore the additional rates supplement for retail premises selling alcohol and tobacco. I suspect these are both sold at Ibrox, but I will leave it out of account just now.

Therefore, subject to reliefs, the annual rates bill for Rangers = (£0.45 + £0.08) x (£1,916,000 + £598,500) = £1,332,685.

As far as insurances are concerned, I will assume that they are included in the various categories of facility costs, staff expenses etc.

Total Running Costs of The Rangers Football Club

Adding the rates bill to the total above gives a final estimated figure of £14.761 million.

Bearing in mind that the running costs under Sir David Murray and Craig Whyte were between £3.5 million and £4 million per month, a reduction in costs to around £1.2 million per month would be a remarkable effort, although made easier by the massive proportion of a football club’s costs which is in the form of wages.

This might help…

Income

Looking at an 18 home game SFL season, what crowds and sales are likely to be generated, and more importantly, what income needs to be generated?

Prize Money

This will be negligible by comparison with SPL income, so I will disregard it for these purposes.

Sponsorship

The D+P report showed sponsorship income of £773k for the period. I will estimate £1,000k for the coming season.

Player Sales

This is a “wild card” so I will come back to it below.

Other Income

The additional trading income of programme sales, hospitality and food and beverage sales in the figures is applicable to the seven home games played. They total £729,000. This works out at £104,000 per home match. It is likely that that income would not be replicated in an SFL3 season. Rather therefore than that amount, let’s reduce it to £60k per match. Over 18 games that amounts to £1,080k.

Stadium tours generated £23k. Over a year that comes to £60k.

Finally there are “other sales” totalling £394k. This comes to £1,024k annually. That would take a hit too, I am sure. Applying a similar reduction as above takes us down to roughly £600k.

Estimated Income

Prize Money                                                      Nominal

Sponsorship                                                       £1,000k

Player Sales                                                        Wild Card

Programmes, Hospitality and Food          £1,080k

Stadium Tours                                                   £60k

Other Sales                                                         £600k

Where Does This Leave Sevco Scotland Ltd?

The total Estimated Income excluding ticket sales and player sales comes to £2,740k.

Therefore, to break even, on a receipts and payments basis, requires additional income of £12,021,000.

Or to put it another way, £1 million per month for twelve months, with a spell of around 2 ½ months when no football is played.

This can come from ticket sales, player sales, proceeds of Cup matches and further investment.

On the other hand, the investors want a return, and the outgoings figures do not include nay dividend or return to them. In addition there is nothing included regarding capital expenditure, such as the much touted remedial work required at Ibrox in connection with stripping of asbestos, for example.

Season Tickets

This method normally gives football teams most of their cash, allowing them to use it up as the season progresses. The Ibrox season ticket has been announced starting at a price of £258. Can Mr Green sell 25,000 at that price? For our purposes we need to take the net cost, before VAT is added.

A £258 ticket = £215 plus VAT.

To fund the full shortfall (and I know this is the cheapest season ticket) would require £12,021,000 / £215 = 55,911 season tickets at that price.

Rangers, I confidently predict, will not sell in excess of 50,000 season tickets for this season.

Ticket Sales

During the period D+P have accounted for Rangers had six home SPL matches together with the Rangers v Milan “charity” match. They also played six away games in the SPL.

Ticket sales are stated to be £2,014k. However, that figure includes the sale of tickets for away games, which are remitted to the away team with Rangers deducting a 5% fee for “managing” the sales. The figure paid to clubs for away tickets in the period is £508k.

Therefore the net income from sales of tickets is £1,506k. This includes the sum representing Rangers admin fee for selling away tickets. Therefore the net ticket sales for the seven home games are about £1,480k. If the average cost of a ticket for Ibrox was around £20 or so, then this represents approximately 75,000 tickets over the seven games, including away fans. Of the six SPL matches, the attendance was made up of season ticket holders, and for the charity match, each customer was a “pay at the gate” at a net charge, I recall, of £10. That suggests therefore that, over and above the season tickets, Rangers sold around 7-8,000 tickets for each home SPL game.

Away teams, and in particular Celtic, brought lots of fans making up those numbers. SFL3 teams will not bring thousands  of fans. Will Rangers be able to make up the shortfall?

If we take it no season tickets are sold, but Rangers fans will pay £20 per head at the gate to see SFL3 games, how many fans will they need at each match?

£12,021,000 / £20 = 601,050 tickets at that price. Divided by 18 matches, that gives us 33,391 per game.

If season tickets are sold, as they are at a cheaper per game rate, then more tickets need to be sold on the gate.

Remember the Rangers Fighting Fund!

This had a balance of £524,000 or so at the start of July. You can see the details here. rangers fighting fund 4-7-12 – Sheet1£630,000 has been paid in to the Fund since it started.

The Rangers fans who have supported the Fund deserve praise for doing so. However, standing the amount needed to run Rangers each month (£1.2 million on the above figures) even these admirable efforts are just a drop in the ocean. The full sum donated since February would cover two weeks’ expenses only.

If it was all handed over to Rangers FC, it would help, but not hugely.

Can Sevco Scotland Ltd fund Its Team for the Next Season?

The figures above are very rough estimates, although based on valid source material.

I think that my cost figures might be under-estimated. For any business to reduce its monthly costs overnight from £3.5 – £4 million to £1.2 million would not be easy.

I have not factored in the costs of redundancy payments which in some cases might well be substantial, and necessary to reduce the wage bill as foreseen by me.

Even on the optimistic basis I have mentioned, it looks as if Rangers would need in excess of 33,000 fans paying to see each and every home game to keep their head above water. I suspect (a) that that number is actually too low and (b) it would not be achievable anyway.

In addition, talk of signing new players on £7,000 per week wages suggests that the wage bill, whilst down, will fall nowhere near as much as it needs to.

Posted by Paul McConville

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82 Comments

Filed under Charles Green, Football, Rangers

82 responses to “Rangers FC in 2012-2013 – Could It Survive Financially?

  1. Excellent work Paul, today will be very interesting I doubt Sevco will gain entry to div3 can’t see SFA license being granted. Your calculations clearly show Sevco will have serious financial problems unless massive investment saves them and I do not see that happening either. One thing is for sure, Scottish football will take time to recover but recover it shall. Glasgow? Well Glasgow is Green and White. Hail! Hail! Paul keep up the good work.

    • JimBhoy

      I agree i do not think things will be resolved today but they will be allowed to fulfill their weekend fixture… More rule bending..

  2. ecojon

    What can I say? AWESOME!

    I have to admit I did tinker with the idea of doing a much smaller, less detailed exercise but finally accepted it was beyond me. So more power to your elbow, Paul :)

  3. beanos

    Confirming that…………it just doesn’t all add up. Literally.

    Been wondering about this for a while. Without significant cuts of high earners from the wage bill, its very hard to see a break even scenario. Yet we hear tales of additional SPL players being taken on.

    Be interesting to hear how Charlie is selling this to the SFA as a vaible plan to complete the season.

  4. ecojon

    @Paul

    One small point of the issue of Rates. I note in the D&P creditor’s list that there are two bills for approx 7K for unpaid rates. This is a tiny amount against rates payable and this puzzles me.

    Because it means that Murray and Whyte must have paid all their rates and especially with Whyte I don’t find that believeable. If he did pay the all the rates it must have been just about the only thing he paid.

    There is one advantage to SevGers being in the SFL3 in that there is a rate discount on the stadium as opposed to the SPL figure quoted – I will try and check the discount but I doubt if it will be enormous.

    I also wonder how the Albion Car Park rental is paid – I believe it may be on HP or some kind of finance but is apparently tied up for 20 years. I am still unclear whether it is actually an ‘asset’ purchased by Sevco.

  5. ecojon

    And the pie pic is a cracker :)

  6. Cuillin Dreams

    Excellent summary Paul.

    Only comment would be the aggravation factor e.g. postponements, bad weather, forced to play games midweek, injuries, stroppy players/mangement walking out, extended cup runs (for most teams a blessing, for Sevco more cost) etc. Could easily add a further 10% to overall costs.
    For Sevco to exist, far less thrive, they need a substantial cash input (55,000 season tickets?). Unless the ‘investors’ come up with some cash soon it’s going to be a long, hard winter.
    April can be the cruellest month but I think they will be fortunate to see it!

    ‘What are the roots that clutch, what branches grow out of this stony rubbish’ The Wasteland – TS Elliot – 1922

  7. a

    Policing costs included old firm games, you need to reduce these for the coming season. Software licences are probably annual fees so should probably not be annualised. Player sales???

    • ecojon

      @ a

      Not so sure about reducing policing bill. Police numbers are based to a large extent on fan numers attending.

      And then there is the terrible prospect, and I hesitate to say this out loud, that an SFL3 ‘diddy’ team might actually win at Ibrox. I wonder what reaction that might spark?

      Apologies for the use of the word ‘diddy’ and I would explain that this is not my perception of the lower division heroes who turn out week-in week-out to help keep community spirits alive in a helluva lot of Scotland. I suspect however that it might be the initial impression of some SevGers supporters.

      However, experience is a great teacher and leveller and I wait with interest to view the Rangers calvacade through the SFL and wonder when the the cartoon will become a nightmare as it surely will on occasion.

      • Marching on Together

        As regards policing costs, Leeds United this week won a significant battle in the High Court over West Yorkshire Police charging the club for policing costs incurred away form the stadium and on public land and roadways outwith the control of the club. This was a test case which many clubs in England & Wales were waiting on. Leeds will get around £1million back for three years of overpayments.

        I do not know exactly how the police in Scotland charge for their costs, or if this decision would have any impact on their current practice, but I do recall that Hearts were unhappy last year about the amount being charged by the police.

  8. joe mccormack

    Good stuff Paul but your wages costs are way to low, £7m including NI?

    Wallace, Goian, Alexander, Broadfoot, McCulloch, McCoist, McDowall on their own add up to £5m. Add in another 25 players or so and 200 back room staff and the wage bill currently must be at least £10m.

    There’s no way they will get to Xmas carrying this level of wages. I would love to see Hughie’s financial plan for the next 3 years.

    • ecojon

      @joe mccormack

      The blueprint of Charlie’s financial bound is contained in a well-known book written by his namesake Charles Lutwidge Dodgson aka Lewis Caroll.

      Viewing is recommended through the wrong end of a telescope fitted with a blue filter and this usually provides satisfactory results, albeit transitory :)

  9. Mick

    Doesn’t really matter how much its going to cost next season.
    The plan is to fold and sell the land, or else accept a 1 season suspension from the SFA and come back into SPL 2 the following season.

  10. mick p.g.

    its a great break down of all the figures paul very intresting,and also you have to so financial stability to meet critreia of a licence this means there devo bust or in admin by xmas ,bill miller ran a mile when he seen the 30mil black hole and that was with spl figures, over 3 year period he stated 30mil ,
    its a worse situation now due to sfl div3 revenues so its either games a boogie tonight or at some point in the future ,that would throw more kaos on the div3 fitures list its time the sfa told them to bolt as they cant afford to operate ,time to call spartans which they should have done at start also there is massive story on king surfacing the 2000 20mil he got is back in the lime light so if it was a year out it might reveal that much tax dodging that the sfa wash there hands with them by then its time to sell if not its admin by xmas

  11. Joseph

    If I was a proprietor of an SPL football club I would be seriously looking to hire the owner of this blog. He has got the figures down to an art. What an amazing piece of work!

    • martin c

      The article mentions a conditional licence, surely as previously posted Brechin would be incandescent if then a permanent licence was refused at a later stage (D C Mack).

      Would fans get a refund if no licence issued?

  12. ecojon

    I think the best way to get an indication on SFL3 rates for Ibrox is to look at Hampden – stadium and not offices – and the RV there is £1.1 million.

    A rough rule of thumb using a Rate Poundage of 50p in the £ gives an idea of the actual dosh payable and I would think that RV at Ibrox would be higher than Hampden.

    Also just thought about Albion Car Park and its rates – not sure if that is rolled into the stadium valuation or not. If not – not sure what address it would be rated under with all the changes going back to Albion and White City days.

  13. JimBhoy

    Paul I may have missed a section but the guys running the club would be making a few bob also i would think, could probably add AT LEAST £500k to that. Some costs would come down as they only need to open the two stands and less programs and food sold..

  14. ecojon

    @JimBhoy

    Less food might be sold but for sure the accounts will show more pies being sold although not necessarily consumed if you get my drift :)

    • JimBhoy

      Mr Ecojon, what i am really interested in are the condiments, these are much easier to conceal and can be resold on the black market, used pies not so easy.. Oh and those little wooden fork things…

  15. ADM

    Well laid out, clear that there’s nothing material missing – indeed, agree with several above that your cost assumptions are probably too conservative. Allowing for that, you’re not miles away from David King’s throwaway estimate of £10m a year for every year out of the SPL.

    While the Evening TImes story on Shiels set a new standard in fantasy, there seem to be a lot of people living in alternative universes at the moment. The SFA must have worked out (although not necessarily to your level of detail) that Rangers in SFL3 doesn’t work financially – it didn’t work in the SPL and their income will be massively lower in SFL3.

    So, if we ignore further fines, and assume heroic cost reductions, and ignore the redundancy payments that go with them, it’s still not possible to put together a viable financial plan for Rangers for 2012-13. Green must know this (unless he’s getting financial advice from the same people as advised him on the TUPE rules). Every potential investor can work this out for themselves – “we’re taking a business model that didn’t work financially in the SPL and putting it in SFL3″ – Green would need an incredibly convincing case of why things were going to be different to be able to get a bent farthing out of anyone who was remotely interested in not throwing their money away.

    I don’t believe a year out helps – sure you could in theory reduce the outgoings, but the redundancy payments would be enormous and a decent chunk of the running costs continue, while the income would go to zero.

    And despite all that, Sevco still appear to think they can put conditions on their acceptance of the SFA licence.

    So what are the SFA up to? Think the reality is a severe case of emperor’s clothes – everyone knows Green’s Rangers are financially naked but no-one wants to point it out. No-one wants to be the one that finally closes off the hope of Rangers continuing to play senior football again.

    So what’s going to happen? On the basis of no inside information at all, purely my outside-in analysis of different players’ motivations:

    (i) Rangers will not play Brechin on Sunday. It’s too late. Brechin will get a bye. (This is actually the one I’m least sure of, which is a shame, since it means I could be proved wrong before I’ve even posted… :-) )
    (ii) Rangers will eventually realise they’re in no position to make conditions, they will accept the SFA licence and start the SFL3 season
    (iii) The dual contracts investigation will find Rangers guilty and the record books will be corrected
    (iv) At some point in the season, Sevco (or whatever it’s called by then) will go bust and into liquidation (presumably via adminstration)
    (v) No investor will come forward to save the club
    (vi) Thereafter, the only possible continuation for Rangers will be deep in the junior leagues

    • JimBhoy

      I think they will play on Sunday on a temp license rule bending type thingy. I agree with all your other points except I think when they go bust there will be a buyer and they will be under Rangers-minded hands in SFL3 next season. I wanna see Bomber Brown run the club, that would be awesome…fekin great laugh…

    • ecojon

      @ADM

      Couple of points I would make. Like you I find Brechin a hard one to decide and it might be that the conditional licence for that game allows the SFA to kick an actual decision a further few days down the road. But I would assume that Green would need to ‘cave’ before then but it might suit the SFA to delay and let someone else pull the switch like the investors. Then they can claim ‘clean hands’.

      But the one thing that really worries me is that the SFA say YES and SevGers staggers on and then goes into admin/liquidation – at that point where will the assets actually be? That is the BIG question!

      • Richboy

        Can’t see the temporary licence coming to fruition. Should Sevco win and subsequently be denied a license then Brechin would raise holy hell. Not quite sure that this would normally send tremors through the SFL/SFA but they are already looking like complete mugs and this would be a bridge too far.

  16. ADM

    And no amount of pie sales is going to change that….

  17. JimBhoy

    What a fiasco, the dual contracts thing are irrelevant in these negotiations. The SFA could not have served the fans worse this season if they had tried. Selling tickets for a game a couple of days off when one of the teams don’t even exist… FFS what a disgrace. The SFA should have given a deadline last Friday and if there was no agreement they should have taken the Ibrox team out of the cup. Simples…! Many times I have said the Ibrox club, IF they play this season will be in administration before the year is out..! Your figures probably back that up Paul….

    I would expect to see the big earners encouraged to leave (by the green goblin) and leave Ally to pick up some players on SFL3 wages. McCoist and his backroom boys may be asked to take a cut also…

    • ecojon

      If Green accepts title-stripping then Ally really is of no further use to him and he will hire an SFL manager on the appropriate scale. Ally’s reported salary runs from £1-3 million a year and I’m sure there’s bonuses on top not to mention the free pie supply.

      I just don’t see how Green would keep him when every penny is a prisoner.

  18. Ian Gers

    Can never understand why celtic people are so fixated by the intricacies at Rangers. It’s nothing short of a fixation on a greater instituation. Rangers will be rebuilt bigger and stronger. We have character, we have strength beyond what you can ever know. Enjoy this while it lasts, it won’t last long.

    • JimBhoy

      well you are the Peepul..!!! Best of luck mate I honestly mean that. Been a terrible time for the fans, I think all celtic fans who went through the near miss we had know how you feel albeit your situation much worsened by the various factions who purport to have Rangers best interests at heart.
      I think there is a way to go before this sorts itself out but i admire your optimism but you cannot really blame the Celtic fans and neutrals on this site for chatting about this circus, I am sure Rangers fans and neutrals would be doing the same.

    • ecojon

      @Ian Gers

      Supporters of a variety of clubs post here and the reason they are a bit fixated is the damage potential for Scottish Football through what is happening.

      If Rangers fans back Green that is their decision and look-out.

      I personally find it difficult to envisage a future Rangers going beyond it’s ‘normal’ World Domination pitch but fair enough mate – The Universe awaits but you’ll need to build a rocket ship and if you rely on Green you might find it’s a one-way trip season ticket.

      It is also, to ordinary football fans, a Royal pain in the ass to once again have to listen to the bile and hatred from a section of the Rangers support that proposes a scorched-earth policy for any Scottish team judged ‘guilty’ in attacking Rangers in its hour of weakness. As this is in the future when Rangers return to its ‘rightful place’ one can only hope that wiser heads at Ibrox will, by then, prevail and perhaps just about every Scottish Football supporter from all over Scotland will stop hating you.

      To have reached that nadir is a truly awesome achievement.

    • ADM

      Reiterate JimBhoy’s point – best of luck. A strong, clean Rangers would be good for Scottish football. However, one of the most interesting things about this whole fiasco has been the degree to which it hasn’t been just Celtic fans (not convinced it’s even mostly Celtic fans). Think Celtic fans have learned a lot about the true attitudes of fans of other clubs and, hopefully, perhaps now give those clubs and their fans a greater measure of respect. (Although, as Mr Bunny points out in his 1.07pm post below, there are still occasional slip-ups…) (Was going to correct him to add in Clyde, but I realise that’s just showing my age…)

    • mick p.g.

      ian a dont mean to sound like jim traynor but have “you took your medication today ” bigger and stronger you will end up with the tag internet bampot that statement is a perfect example of a Delusional disorder brought on by reading msm articles in the record ,the celtic people as you call us tryed to warn yous of the diaster waiting to happen but yous just said it was not true and sent death threats now look at yous ,you should have listened to us and you would not have been in this state look up the word “ozymandias”just keep taken the snake oil and you and your team will be fine there there

    • mick p.g.

      ian your team has turned in to a deluded cult with a evil side

    • Grabthegrass

      You may well have all of this and come back stronger, but at the moment you, or more correctly Sevco, don’t appear to have enough money. That’s the plain simple truth and if you can amend any of Pauls figures above to show that you could break even in SFL3, then please post them / argue against them. No one can see the current investors propping up Rangers to the tune of several million a year for three years. There’s a reason Miller and the Blue Knights walked away and that’s because they did the homework based on the real figures they were allowed access to and came to same conclusion.

      Regan predicted a long slow death for scottish football, but that may be code for rangers. You would be much better off cutting now and taking over another club with the RFFF money and start that way. Maybe a bit harsh, but a lot more realistic than the Sevco fantasy signings and money trail.

    • Niall Walker

      Good Evening Ian,

      I think you underestimate how fascinating the decline and fall of any great institution is to neutrals such as myself, it is a boiling epic of intrigue,conspiracies, loyalties, heroes, villains and innocents. This is box-office stuff to an anorak like me, it is no coincidence that all great empires implode and the cause is always corruption from within. SDM is Nero fiddling while Rome burned: CW is Caligula, crazy as a bag of snakes: CG, the Trojan Horse and Ally as Julius Caesar in March.

      The bad news is few if any recover their former glory, just take a look at Greece.

      I wish your club well but I fear the battle for Rangers is only just beginning.

      Pax.

    • Martybhoy

      Weigh…..anchor

  19. mick p.g.

    all the pies have been stolen and eaten greens left with the crumbs and no profit to bake some more ,even if the sfa give them a licence theres no way they can fill the financial black hole charles green was reading the same glossy mag as miller the diffrence is greens not out of pocket so took up the deal while miller was using his own cash ,millers laywers told him its a mess dont buy green saw a quick buck and must have thought spl not think sfl hes gas cookered d&p should have cut costs but never sat for months ran up a massive bill then done a dodgey deal with green we still dont know who the backers are the black hole is deeping with every day that passes ,hes got to sell bits soon or they will be bust ,also the bdo is here soon that will be intresting to or are they as bent as d&p ?

  20. Mr Bunny

    mickmccahill
    July 27, 2012 at 11:03 am
    —————————————
    Hoy! Glasgow is also red and yellow and black/white stripey thingy coloured from the team at Hampden. It’s not all about the old and infirm you know.

  21. Brilliant work Paul.

    However, I don’t think anyone with even a tiny bit of knowledge of the story would be at all surprised at your conclusions. Funny how the cold, hard facts – esp. about money – can blow away all the bluster and the ‘we’ll-decide-what-happens-to-us-thank-you” nonsense. They seem pretty dead and buried to me, no matter what happens with the SFA.

    I’m sure there must be more to it though – after all, Paul, if you’re able to do all this, surely so have the countless accountants and lawyers working for the actual investors (and Mr G himself)? And still Sevco is arguing the toss at Hampden – weird.

    And I’m sure I’m not the only who first looked at Piegate and thought ‘well there’s a loss leader if ever I saw one’, even a way of ‘hiding’ dodgy or cash-in-hand payments.

    Indeed, it would be interesting if someone checked the figures for when RFC (RIP) were seemingly doing OK and see if they broke even on paper even then!

    Paul, maybe all this work means you’ve found a logical argument that there MUST be another set of accounts somewhere, or another avenue for money coming in/going out. Otherwise there’s no way anyone can help SevGers – or whatever they may be called after Green eventually ‘does one’, as they say in these parts – be anything like the old club (which, remember, NO LONGER EXISTS).

    ****By the way, my mate texted me last night to say that SevGers/old club name had been removed from from the SFL website at around 8pm.

  22. Dhougal

    Paul , Mick,Ecojohn ,i’m just an average Joe Blogs,like i’m sure many others reading this site .I would like to thank you all for all the work you do uncovering this mess and puting it into laymans terms .Brilliant work ,to hell with MSM……….its dead and the club it served

    • mick p.g.

      @Dhougal am laymen myself m8 thats whats good about the celtic network it doesnt matter who you are every 1 has a place in it ,its the only place were joe bloggs counts your more than welcome on any of the sites to do a short story of your experiance on it all ,a would like to thank you for mentioning my name it makes it all worth while when that happens ,after a while reading the articles it opens your eyes up to the msm ,the information age has outted them for good .

  23. Ernesider

    A reminder of Mr Wilkins Micawber

    “Welcome poverty!..Welcome misery, welcome houselessness, welcome hunger, rags, tempest, and beggary! Mutual confidence will sustain us to the end!”

  24. ecojon

    @Dhougal
    :)

  25. ecojon

    From Beeb:

    Rangers fans have been able to buy more tickets for Sunday’s game against Brechin City despite a continued delay in the new club receiving Scottish Football Association membership.

    Tickets for the Ramsdens Cup game at the Second Division outfit’s Glebe Park encounter had sold out on Monday.

    But the Ibrox club said some more became available.

    —————————————————————————

    Gawd, those canny Brechinites – they’ve sold the home tickets to Rangers as they know the game isn’t going ahead. Got to hand it to them maybe Green should be taking lessons from them :)

  26. ecojon

    I suddenly had a worrying thought about Forfar FC as I was eating one of Mick’s pies.

    Now that all the Ibrox pies have disappeared could the next blackhole be centred on the Forfar Bridie. I immediately reached for phone to warn the club so they could search SevGer supporters leaving Station Park in case they had their bridie haul hidden up their jukes.

    Then I realised it will be at least a year before the bridie becomes an endangered species as Forfar, of course, is in SFL2 so the Loon can relax for now :)

  27. Pingback: News Report from Athens – Rangers FC Sign Greek International Kafes on £400k per year Contract | Random Thoughts Re Scots Law by Paul McConville

  28. ecojon

    TV news say Hampden say announcement expected this afternoon which could mean anything. Usual line about progress being made.

    • mick p.g.

      @ ecojon wtach you dont develope a “Delusional disorder” while listening to tv a was flicking throw looking for a word to discribe our other half over at ibrokes ” believes that he/she is the greatest, strongest, fastest, richest, and/or most intelligent person ever” a blame msm jabba and co

  29. Niall Walker

    Afternoon Paul,

    The key figure missing is what is the most realistic return from a fans share issue, this is the golden handshake for any investor. I do not believe any institutions will buy shares not after taking a hammering on Celtic shares( 280 t0 34 ).
    From memory 10,000 Celtic fans paid 14 million for under half the shares, using this data it may be feasible that Rangers could raise 25 million for all shares. Gers fans may not be as willing knowing the 85% loss they may face, one has to ask whether the Celtic issue would have been as successful if they had known the shares were grossly overvalued.
    Green and his investors have already stumped up 5.5 million which leaves a profit of approx 20 million, and any further investment come out of this figure.
    If the losses are only 5 million per year for 3 years then investors have
    gambled 20 million to make 5 million in 4 years, no investor is going to risk
    this kind of money to make 6% per annum profit.

    • Grabthegrass

      Actually that is the real figure to look at. You could argue that the losses over the hopefully three years taken to get back to the SPL, assuming there isn’t an invite to an SPL2, could be absorbed so long as the end flotation figure exceeds amount “invested” by a substantial factor.

      However football history tells you many have tried and virtually no one has succeeded yet in making those sorts of economics work because far too many factors are both outside of your hands and variable. I’m sure marching on together could provide some numbers on what happened to Leeds crowd figures from when they went down from Prem to League 1, but an optimistic version says it could be 50% on average.

      The only thing that makes any of these numbers even half make sense is to sell the properties and either lease them back or move to somewhere else (Hampden anyone?). That really is the sorry truth behind nearly all other football club basket cases.

      Follow the money.

      • Marching on Together

        As Grabthegrass has asked, I am happy to supply them. Leeds fans are notoriously loyal, despite being based in what is primarily a rugby league city, and despite many of them being tight-fisted Yorkshiremen.

        Leeds Utd league attendances were 36,666 for 2003-2004 (last season in the Premier League), 29,207 for 2004-2005 (we don’t do walking away season), 22,354 for 2005-2006 (made it to the Championship play-offs final), 21,613 for 2006-2007 (Chelsea boys takeover – worst season ever), 26,546 for 2007-2008 (made it to the League 1 play-offs final, after 15 points deduction), 23,812 for 2008-2009 (made it to the League 1 play-offs), 24,817 for 2009-1010 (promotion to the Championship), 27,299 for 2010-2011 and 23,379 for 2011-2012.

        In most away games the home team’s largest gate of the season has been with Leeds United (except where there is a local derby) as they have a very large travelling support.

        Throughout this time, Leeds have had the highest regular season ticket prices outside the Premier League, and last season higher than all clubs but Arsenal, Chelsea, Liverpool & Spurs. £612 cheapest last season.

        For the past two seasons there has been a growing fan boycott so long as Ken Bates is in charge, charging such high ticket pricers, and not reinvesting the money back in the team, which has probably led to a drop of around 5000 in average attendance last season.

        How will this apply to Rangers? My feeling is that the first season there will be a small drop, as the real glory-hunters depart, and that the average attendance will be down by no more than 25% – there will be an element of f*** you, we are ra peepul. There will also be the novelty element of playing new teams and going to new places. With Leeds, the first season in the Championship was one of the most enjoyable for the fans for those reasons.

        After that wears off, especially if the football they are watching is dross, crowds will drop (as happened with Leeds). If the faithful do not feel that they are getting value for money, then likewise. I would not be surprised to see attendances at around the 25,000 mark by year 3. If however, Rangers go on an unbeaten run, stretching over more than one season, then the crowds will go back up. If an Old Firm cup is resurrected, with tickets available only to those loyal bears who have bought season tickets or something similar, then likewise.

        Hope this info helps.

      • ecojon

        @Marching on Together
        @Grabthegrass

        It’s very difficult to estimate what SevGer attendances might be and mick p.g. has a point when pointing to the general effects of the recession on fan spending power.

        But there is the peculiarly Auld Firm aspect whereby a ‘core’ of both supports is driven by hatred and not football. It will be interesting to see how long the Rangers element will hold-on without their main focus in opposition. I think the percentage of the Rangers support in this category is higher than that at Cletic but that may well be wishful thinking.

        Marching on Together and I don’t agree about sale and leaseback for Murray Park but it could work for Ibrox and be a way of selling the idea that shareholders don’t get dividends through the capital raised going to founder investors and possibly the over-priced lease payments through various mechanisms.

        But the real question is: Does Sevco have the finance to complete the actual sale from D&P and, if so, how long will the spare change left over keep SevGers afloat and the key to all this must lie in the ST sales.

        Leggo raises an interesting point about chairman Malcolm Murray in his blog this morning and although some of his rants are way OTT he also is well-tuned into certain of the Ibrox camps which might better be described currently as ‘armed’ camps where different Rnager fan sections are tearing themselves apart.

        However, looking on to 3 years down the line and assuming there is no major reconstruction of the league, can SevGers actually build enough cash to finance a successful entry to the SPL. Even with an SPL2 that could still be a problem.

        Marching on Together gives interesting attendance figures but I wonder what the yearly financial figures are like.

        Another small thing that I have pondered is whether SevGers – with their slightly reduced SFL3 ST price will continue to take the money in 4 x instalments or whether it is lump sum paid up front as that could affect take-up. Of course till they sort out banking facilities they have problems and as of Friday morning could still only take cash or cheques for Brechin tickets.

        • Marching on Together

          ecojon

          “it could work for Ibrox and be a way of selling the idea that shareholders don’t get dividends through the capital raised going to founder investors” IMHO the proceeds of any sale of Ibrox (or indeed Murray Park) whether leaseback or otherwise would go to fill the cash-flow gaps, including any necessary to actually pay for Sevco actually buying the assets. When Leeds United sold and leased back their ground and training complex, it was all used to pay wages and other ongoing running costs including rental payments for the sold assets, to keep the club out of administration for another few months, while time was bought to negotiate with creditors further.

          “Marching on Together gives interesting attendance figures but I wonder what the yearly financial figures are like.” If you are talking about for Leeds rather than for Rangers, what would you like to know? Only club outside the Premier League in England making a profit year on year for the past 4 years. So there is hope for Rangers recovering financially.

    • ecojon

      @Niall Walker

      I suppose this is the problem with shares in a football club when you go beyond a single share for display on the bedroom wall or what do you buy as a birthday/Xmas/retiral present for a fan who already has every branded item the club shop stocks :)

      I agree that institutions are out as potential investors and that is without even taking into account the mystery ‘founder investors’ where the first £10 Million invested can be ‘doubled’ as a bonus for coming in at the start.

      Obviously an AIM flotation is why Green has been brought into the equation as it would appear to pop-up as part of his business career landscape.

      The original figure quoted was a £30 million AIM flotation with Green receiving £3 million commission for his troubles.

      The likelihood of that being raised I believe should be judged against the the £600k raised by the RFFF earlier this year. A fantastic amount but way short of a £30 million flotation target and the RFFF money was raised by a largely united fanbase facing an almost immediate collapse of their club.

      Since then the fanbase is at war with each other and the Green faction – even going as trying to starve Green out by not buying STs and eating all the pies without paying it would seem :)

      So a share flotation would cause the civil war to erupt again IMHO. It would be fuelled by stuff like Green had failed in his promise that the fans would own the club – they never will. I wait with interest to see if their shares have voting rights and I suspect not and similarly with dividens.

      The ‘founder’ shareholders will hold a separate class of share – it’s no-brainer.

  30. mick p.g.

    @niall but were in a bad ressecion and the west coast is hit bad with it the rff couldent even raise a mil

    • Niall Walker

      Afternoon Mick,

      I share your scepticism but I did say it was only feasible , I personally believe Green will sell soon for 10 million to a consortium who will persuade the fans to invest for non-commercial reasons.

      • mick p.g.

        @niall 10mils abreak even figure for the green backers ,if its all tits up and private developers over more green will bite there hand of in a minute a bet all it takes is the tesco land dealer to be like me and a bet he,ll step right in lol joking aside it is sad for there fans that are good and not in to bigotry
        but every 1 tryed to warn them and they dident listen so there all to blame

  31. DCR

    There are three things that spring to mind from these excellent analysis of the situation;

    1. Since most SFL3 grounds only hold a few thousand, would tens of thousands of supporters buy season tickets to never have the possibility of seeing an away game?

    2. I believe the £7k/month player purchase to be a ruse, the aim of which is make the season ticket buyers believe that serious investment is being made in the team….so it is going to be rewarding to buy a season ticket and see SPL players function while the team are in the wilderness (no disrespect intended).

    3. The SFA are likely playing the waiting game in making a decision…waiting for someone else to pull the final plug. They have seen the submitted accounts (assuming they are accurate) and will know there’s no money, so let nature take its course and they will run out of money of their own accord. In fact they probably have it on good authority that there isn’t even the money to actually complete the purchase from D&P on the 31st July. We may well see a dead Sevgers by Wednesday morning. Green will have setup a pre-pack, will put the company into “company Voluntary Administration”, will purchase the ‘pack’ and sell to Tesco, or a pie-making factory!!

    • Grabthegrass

      1) Only 10% of season ticket holders go away in the SPL, so if there are only 10,000, that’s 1,000 a game. I guess most SFL3 clubs will do like Brechin and simply accept an away following twice their own for a twice a season bumper pay days – they probably reckon on getting beaten so make hay while the sun shines (and sell more pies)
      2) I think you mean £7K/week….Transfer stories like this abound during the summer, with 99% of them complete rubbish. I think most knowledgeable football fans will know to wait until they see the inevitable picture holding up the new shirt etc.
      3) Ummmmm. If the SFA / SPL had any gumption they’d include a bond to give them some recompense in that event, but I wouldn’t think that they have the bottle.

  32. Niall Walker

    Addendum:

    Fergus invested 9 million and in 5 years made a profit of 40 million, now that is the return an investor wants.

    Rangers cannot break even in the SFL and no investor will cover their losses.

  33. mick p.g.

    @niall its “ozymandias” time it happens to every group or leader that rule

  34. Pensionerbhoy

    A financial Colossus there, Paul. No way a simple task for one man and his dog. I think your estimations might just expose the gaping abyss in Sevco Rangers’ books in the coming year. While your figures are based on selected safe material, I fear Charlie’s are a bit ‘pie in the sky’ – BLUE perhaps?

    H H

  35. Richboy

    We love our pies out here in Oz but it seems that Scots virtually live on them. When I was a kid in the East End of Glasgow we could not afford pies, we lived on Spam (no Monty Python references intended). Looks like the tables have been turned and those of us in the colonies must look on in envy as the Scots feast on succulent Lamb pies by the barrowload whilst we savour them occasionaly.

  36. Niall Walker

    I have serious doubts the land less demolition is worth much.

  37. Ernesider

    Hi Paul

    You wrote:

    “Even on the optimistic basis I have mentioned, it looks as if Rangers would need in excess of 33,000 fans paying to see each and every home game to keep their head above water.”

    So if 40,000 turn up for each home game, Rangers can survive?

    Well guys, its up to you now!

    Forget the internecine brawl that is tearing you apart.
    Give over on the whining and whinging about victimisation.
    And for God’s sake accept that that your troubles are of your own making and not a Celtic/Papish conspiracy.

    Just practice what you have preached for so many years and get out and support your club.

    Surprise me?

    • Grabthegrass

      If you take Leeds Utd as an example, they went from average 39,000 (and prob could have got more except for ground capacity) to around 25,000 in championship / league 1. Last three years at Ibrox was 46,000 with some spare seats. Given that SFL3 is a lower standard than League 1, it would be hard to see how on average you would get more than 30,000 max and over a season, more like 20,000.

      However there’s nothing like winning games to bring in a crowd and if they price it right and do a bring a kid for free promotions and try and get some atmosphere (and sell all those bloody pies) then you never know – it might just work.

      Howeve if they miss a promotion, then that’s when you get down to the true hard core, which is prob somewhere around 20,000 average.

  38. Niall Walker

    I can see 20,000 turning up once to watch Annan Athletic but twice ?

    I am an East Fife fan, most don’t appreciate how bad the football is, wait until winter arrives.

    I would prefer if the fans took over their club sooner rather than later, this capetbagger act is a backward step in my opinion.

  39. kevin doran

    i assume that shirt sales are included in “other sales” ?

  40. Pingback: Wings over Scotland | The Very Sorry Song

  41. sparky

    well well well rangers have been granted a liecense,so the above comments are rather null and void,as for the fianacial side of things,the tv rights have only been granted for one season,4 spl clubs will be in administration by february 2013 fact,rangers are just the first club to prove that they were in money difficulties many many more will follow,rangers will never die,its more than a club its an institution.
    lastly……..the spl
    anti british anti rangers ,but theyve kept their dignity b ut theyve created there own demise.

    • John Holland

      I bet you feel like a silly billy now that Sky has renewed its tv rights albeit at a lesser sum, Arrogant TRFC fans thought the world would end without RFC but they are so wrong. Let’s see what happens with the ESPN and BT bids.
      To put your gas at a peep, my comments are not anti- British sentiments, as I am a Scot first and Brit second. My comment is anti-RFC / Sevco, BUT (Big BUT) only because of years of cheating, and the recent threats, bullying and arrogance of AMcC, SJ and CG. Football is bigger than any club and certainly bigger than them!

  42. Niall Walker

    Evening Sparky,

    I share your pessimistic outlook for a lot of SPL teams but I do not see the SPL as anti-Rangers since RFC contributed to the SPL rules. I have a couple of questions: What do you think the average attendance will be at Ibrox for the next 2 years and what has Scottish Premier football got to do with Britain ?

  43. Hugh McVey

    Paul, I’ve studied your estimates for the second time and indeed they are reasonable, based on accounts published. Rangers would need to win ‘Big Money’ from the Collyer Bristow claim – but wait, wouldn’t that belong to the liquidator for distribution to oldco creditors like HMRC or the wee newsagent owed £700 ? Better off trying Family Fortunes,

  44. SPORTSFANNZ

    At what point will Sevco Rangers be deemed to be trading while insolvent ?

  45. tommy jones

    trouble is rangers sold 34000 briefs so go away and do your sums again plus an average of turn up at gate od 10000 and also they cannot sell 50000 as they have to allow so much % for visiting fans so go out and buy a bigger buttoned calculator

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