The Latest From Duff & Phelps
After a flurry of statements, if not of activity, the administrators from Duff & Phelps (referred to as “D&P”) seem to have calmed down a bit.
Their words on Thursday were short, as reported in the Scotsman –
“Duff and Phelps, the administrators of Rangers Football Club, advise all media there will be no announcement today in relation to staffing levels in any department of the club.
“Discussions are ongoing regarding potential cost-saving measures and announcements will be made at the earliest opportunity, most likely tomorrow.”
So we have an announcement that there will be no announcement – a bit like official forms which have almost empty sheets saying only “This Is A Blank Page”. That always makes me smile (I am easily amused.)
We are left poised to hear about staff cuts “most likely tomorrow”.
One paper today had the very interesting suggestion that Mr McCoist had “demanded” his wages be cut in half. If so, I can’t imagine that conversation would have taken too long – as one of the highest paid non-players at Ibrox, a 50% cut might still not be enough to save his job.
In most Scottish football administrations, and indeed in most such insolvencies where there are very high earners, they go unless absolutely integral to the company.
Mr McCoist has not been helped by the turmoil surrounding his club, but no one is going to suggest that, so far, he is a Busby, a Stein or a Ferguson. It would clearly be possible for the administrators to have someone cheaper running the team – either from within the club or as a replacement from outside, if none of the present staff was willing to take up the position.
D&P do not have the right to impose pay cuts. If they wished to insist on them, then the player could treat this as a fundamental breach of contract and quit to become a free agent.
Bearing in mind Mr Whyte’s comments about it costing £3.5 million per month to keep the doors open, D&P could have saved a significant sum already by disposing of some of the high earners straight away. It would be tantamount to a dereliction of duty, subject to what I say below, if in delay in pruning the playing staff resulted in the loss of many non-football staff. The proviso is that the contractual and financial position might be so confused as to have made it impossible for D&P till now to work out what was happening.
D&P could still seek to sell players, either top one of the few countries whose transfer window closes later, such as Russia, or to another team although the player could not be registered to play for the new team till the summer transfer window.
Bearing in mind the lack of apparent interest in the players, other than Mr Jelavic, over the winter transfer window, one would not expect to see a rush for the remaining ones.
If D&P want to keep going, they need to (a) increase revenue and (b) reduce costs. They seem to have done neither so far!
A rough calculation suggested that around £10 million is needed to get Rangers to the season’s end. If Rangers had enough to cover that sitting in its bank, then why enter administration at all? Even if D&P had insisted on such a sum being there to meet their costs and ongoing bills to the end of the season, it would seem entirely against Mr Whyte’s business practice for him to dip his hand in his pocket to that extent.
There were reports today that D&P were going to court to access the funds held by Collyer Bristow in its client account. Collyer Bristow acted for Rangers pre administration, act for Rangers FC Group Ltd and also represent Mr Whyte. If Collyer Bristow has money in a client account which it believed belongs to Mr Whyte, Liberty Capital or ”Group” then they will not hand it over to D&P.
If the funds were in an account for Rangers (now in administration) the money would be handed over.
Therefore Collyer Bristow must have worked on the basis that the funds they are alleged to hold are in fact not those of Rangers. The problem here is that, if D&P take the matter to court and are dependent on the funds involved to keep the doors open for a few weeks longer, there is no doubt that Rangers as a company would be in liquidation by the time a decision was made.
Collyer Bristow, through its client, whether Liberty Capital, Group or Mr Whyte holds the cards as they have more time than Rangers. The law firm will be sure about whose money it is and have a paper trail to show. However, if the funds belong to someone other than Rangers, then short of a court order, Collyer Bristow would be breaching confidentiality to reveal this.
If that firm has transferred funds held by them in the name of Rangers to another connected company, I am sure that they will have all the relevant records to document this, as inter-client transfers are always subject to close scrutiny by the regulators.
If this money is not forthcoming soon it will be for the liquidator to argue about, rather than the administrator.
Edit – Just prior to putting this post online, I saw a report by Roddy Forsyth in the Telegraph saying that Rangers still has 79 players on its books! Whilst many of them will be youth team players, that is still a staggering number, especially almost three weeks into an administration!
Ticketus released a statement yesterday, as reported in the Scotsman. It is in bold with my comments in plain text.
“Following a meeting yesterday with Rangers Football Club’s (the “Club” or “Rangers”) administrators Duff & Phelps, Ticketus would like to state its desire for a rapid and successful conclusion to the Club’s administration process and confirm its willingness to enter into discussions with any serious potential bidders for the Club.
In other news, I would like to state my desire for a winning line on the lottery, and free tickets including travel and accommodation at the Champions’ League Final in 5 years, when Albion Rovers will defeat Barcelona 7-0.
I confirm my willingness to enter into discussions with any lamp-bound genies or other magical creatures who might assist in achieving these goals.
We met with the administrators yesterday to make it clear that we intend to be part of a solution for the Club, and to ensure a fast and fair resolution is achieved for all parties. We outlined that this includes working with potential purchasers to help provide various financing solutions to the Club that would be attractive to new owners.
How can Ticketus “be part of a solution”? It looks, mirabile dictu, as if Ticketus, in an effort to get round the problem that, if unsecured, its investment in Rangers’ season tickets is swirling down the plughole, is willing to provide Rangers with more money!
Ticketus is funded by Venture Capital investors – maybe this deal with Rangers is the equivalent of putting everything down on one number in the casino – it might not come up, but if it does, what a win!
I am clearly very naïve in these matters. How is it possible that putting more cash into a hopelessly insolvent company is going to get back the value on the purchased tickets?
Ticketus believes that the best outcome for Rangers, its fans, Ticketus and our investors is for the administration process to be concluded as soon as possible, with a purchaser found who is able to bring stability to the Club.
In other news, I believe that the best outcome for me, and everyone I know, is for me to be presented, gratis, with a Ferrari Dino.
Based upon the various debt estimates, and the soon to be reported “Big Tax Case” an investment of over £100 million into Rangers (in administration) might clear the feet, but it would do nothing to plug the “black hole” in the accounts.
Ticketus has an obligation to its investors to pursue all avenues to ensure that the ticket purchase agreement it entered into with the Club is honoured, and we are committed to going to the lengths necessary to ensure that the future of the Club is preserved and its agreement with Ticketus fulfilled. We believe that our investors’ interests are aligned to those looking to safeguard the Club’s future.
Many have speculated about what security, if any, Ticketus holds for its purchase of the tickets. If it is secured, ahead of Group, then that might leave it owning property, which is not the modus operandi of this particular part of the Ticketus empire.
However, as Ticketus was not mentioned on the variation of the Floating Charge lodged at Companies House last year, involving Close, Rangers, Group and Liberty Capital, I would be surprised if they did have that protection.
Ticketus needs the existing company to survive. A newco would not need to honour tickets sold by a previous entity. Therefore Ticketus’ investors need oldco Rangers to stay in existence.
We have already been in contact with a number of other key stakeholders, including potential bidders and fans’ representatives, and believe working collaboratively with all parties to create a solution for the Club that puts it on a secure financial footing must be everyone’s priority.
I wonder how many “potential bidders” Ticketus has seen? How credible are they and how willing are any of them to go along with Ticketus’ plans?
Ticketus meeting the fans might, if properly questioned, lead to the full story being published finally. It remains a deal which is baffling.
Ticketus looks forward to continuing to work with the administrators and serious potential bidders to secure a positive outcome for the Club.
And finally, I look forward to being asked to pitch for the New York Yankees in the first game of this year’s World Series…
I suspect a trifecta of the Rovers winning in Europe, me getting a Dino and my standing on the mound at Yankee Stadium is more likely than Ticketus getting what it is dreaming of!
And Now For Something Completely Different…
Those of a more mature vintage will recall the above line being said, deadpan, by John Cleese as the on-screen announcer in Monty Python’s Flying Circus.
I am not sure why that programme came to mind as I read the following story from STV.
“Asked why had “misled fans” and kept secret a deal with Ticketus to sell future season tickets in return for £24m, he (Craig Whyte) said: “I’ve bigger financial commitments to Rangers than anyone else and I’m working very hard to get Rangers out of administration.
“Asked where season ticket money and the proceeds from the sale of Nikica Jelavic was, he replied: “Every penny is in the club, every penny has been accounted for. All that will be confirmed in due course.
“Mr Whyte said: “I’ve got enormous sympathy for anyone about to lose their job but it’s part of solving a problem that is not of my making.”
It is good to have Mr Whyte back amongst us in the UK, and a relief to see he is well.
it is of note to see that he said he has bigger financial commitments to Rangers than anyone else. Not “in” or “from”, but “to”.
Is this a Freudian admission that, in fact, he owes Rangers money, or that his capital (all £1 of it) remains tied up in the Club? Might it be that, rather than all the focus being on Rangers owing Group/Liberty, in fact it’s the other way round?
Mr Whyte says he is working hard to get Rangers out of administration. How? What is he doing? Only the application of huge sums of cash can save Rangers as it exists just now. Which billionaires has he met? Never heard of them.
“Every penny is in the club. Not “was” but “is”!
I suspect D&P would be delighted to be shown where it was, as they have had no luck in finding it and believe it never it hit the Rangers account.
I am also sure that there are many who would agree with Mr Whyte that the problems might not be of his making, but few would argue that he has not built upon them and made them worse!
His “sympathy” for those about to lose jobs seems to be stated in a rather cold-hearted way.
Today, Friday, might bring redundancy news for Rangers. The 79 man playing squad will be reduced imminently, I think.