Sometimes in sport, the tipping point simply comes down to who wants it more.
I was thinking about that basic truth after speaking with a very well placed Ibrox source late last night.
We had not been in touch for a while, and it is always his call-literally-when we get in touch.
When it comes to the domestic scene, everything is rosy in the Sevco garden.
Ok, they won’t do a treble, but they have stopped the TEN, and after that, nothing really matters.
He then told me things that underlined just how much the Sevco High Command, as fans in the boardroom, wanted to stop Celtic from achieving that historic tenth title.
To say that the chaps in the Blue Room have dug deep would be an understatement.
Whenever emergency finances were needed throughout this season, they printed off more share certificates and bought them.
He said that best scenario, the accounts for this year (ending 30th June) would have a £25m hole in them.
Yes, dear reader, that’s TWENTY-FIVE MILLION.
I asked him if this included any contingent liabilities for the Sports Direct case, and he said that no, the £25m was simply an operating loss.
Then I inquired if any of the original Charlie and the boys “Onerous Contracts” were still in play, and he said a few of them were.
As well as the projected losses of £25m, he said that the esteemed ex-chairman had formally called in his loan and that the 90 day repayment period was now in play.
He reminded me that the principal was £8.5m and that the interest rate was 9% compound.
Mr King wants two things that creates a real problem for his ex-colleagues in the Sevco High Command.
Firstly he wants the loan paid, and the clock is ticking on that one.
When I have mentioned here before that this financial generosity might just have some security attached, it has caused some distress in the Blue Room.
The second thing that Dave wants is for those fine chaps at Club 1872 to purchase his shares.
My guy said that the current board of that Quintessentially British ensemble tended to be pro-King, seeing him as their saviour.
Of course, both those things see the financial situation of Sevco worsening.
The King loan being repaid with interest is self-explanatory.
Moreover, Club 1872 do not have an inexhaustible supply of funds, and if they buy Dave’s shares, then that money is not going into Sevco.
If they do acquire Mr King’s shareholding in RIFC, then they will be due one, possible two directors on the board.
If that were to happen, then they would be able to look under the hood and know the whole story.
Another thing that is concentrating minds in the Blue Room is the possibility of General Ashley carrying out an encircling manoeuvre.
Sevco expects a court date to be set within the next two weeks.
It is a three-week trial, and, as already been reported here, the costs of that trial have already been agreed upon at a previous procedural hearing of the High Court in London.
The Sports Direct folk are hoping for the trial to commence before the end of April.
That is what I was told last night.
So this morning, I contacted my Shirebrook guy, and he conceded that I was well informed on the matter.
Decent of him…
Encircling manoeuvre?
Well, if Ashley were to prevail in this trial, he would almost certainly look for the appropriate amount of funds to be ring-fenced.
This would explain Mr King’s push to have any assets or monies in the UK shipped offshore ASAP.
The thing is, no matter what comes down the pipe financially, I’m now convinced that the guys in the Sevco High Command will do anything they can to keep the show on the road,
Across the city, they’ve been up against the smartest guy on the heated driveway who is rather good at that managed decline lark.
He must be the toast of the Blue Room.
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What did CW buy?
Was it a club or company?
Or buy 1 get 1 free?
The Rangers* Board have got this absolutely right. They delivered the most important thing. The Celtic Board got it catastrophically wrong by not delivering the most important thing. Champions League money and transfers from players now of higher value as they are winners and playing at CL level will mitigate the financial distress for them. Celtic blew it massively but we must give credit they won it and won it easily.
Are we to assume from you piece that we should now be calling him The Lying Loan KING or LLK for short.
On the face of it – and strictly from a ‘Rangers continuation’ club/thingy nonsense perspective – it would seem that a managed insolvency event could be becoming more appealing to try to shed the debt and liabilities ?
There is undoubtedly a peak of goodwill around Ibrox right now – so why not try and exploit the bears to the max, ASAP?
However, this would mean everybody losing their current shareholdings and unsecured loans.
It’s guaranteed that RIFC is going to post an even bigger loss than last year – but if it’s c.£25M…?
Or, are things so complex at Ibrox that RIFC is like an out of control megaship drifting in the Suez Canal: everybody onboard can see that the crash is definitely coming – but nobody can do anything to stop it?! 🙂
But then again, the Ibrox club has fooled us all over the last 9 years, with its continuous, ‘imminent demise’…
Turnover was £59m and Operating Expenses were £68.5m in November’s Annual Report
Chuck in win Bonuses for winning the League ,loss of Match Day revenues, Covid costs,Sports Direct and the fact King has chosen to cash out then it really doesn’t take that much of a stretch to reach a £25m loss.
Put it this way they wrote off around £10m in losses with the last Share issue and still mange to post a £16m hole in the finances WITH a good Europa run.
Kings Loan is also around 8% Interest.
They have until October to clear it.
Phil,
Do we know who “bought” these extra shares??
Thanks,
Allan
those new shares havent been allocated yet on the rangers website – 20 million in donations for worthless shares now since 20 October
It’s easy to take a gamble when you don’t have much to lose. They had no choice, stop 10iar or the fans would have turned .
This sort of gambling works till it doesn’t.
Time will tell which club has had a managed decline and which club has shown financial prudence in a pandemic , this time last year a vaccine was a distant hope.
This was an all or nothing gamble for sevco and it worked this time , but they are in a financial pressure cooker , they can’t afford anything to go wrong. It will.
So, assuming Sevco lose in court, that should account for the profits from the Europa League run. Then add the 10m they owe King. Or not, if 1872 buy them. A great deal hangs on European football given these operating losses
Every time they have yet another Shares for Debt Issue I think of it in terms of Liquidity
Diluted Orange.
The key point is that Sevco directors have stepped up when needed-yes it dilutes the value of RIFC shares.
However, they seem not to care about that.
Hurt will do that to a person.
They’ve been hurting now for well over a decade.
This recent success will be short lived however if they fail to back it up in Europe.
A failure to reach the Group Stages of the Champions League for example would be a financially devastating blow for all concerned and we know only too well just how difficult that can be?
If they do manage it however and sell one or two assets then a full financial reset could be on the cards.
Celtic meanwhile has mismanaged our own issues.
Complacency has been our biggest issue,a complacency born out of a decade or so of dominance of the Domestic game.
Plenty money has been made in that time but very little progress in Europe meanwhile.
If anything there’s been a gradual decline in that regard perhaps slowed in one or two Seasons with one or two notable success.
Our stock has began to tumble thanks in no part to the small minded approach to talking a good fight whilst turning up without a good fight plan.
There’s been smoke and mirrors at both Clubs.
All of that aside however I think most football fans would have taken the 9 consecutive years of domination and one years pain over a decades pain and one measly League Trophy?
Our pain will soon be forgotten the scars of theirs will run long and deep no matter how much money is chucked at it.
Lessons will have been learned at Celtic this Season and I don’t think the Absentee Landlord will want it repeating.
No he’s much too arrogant to let that happen twice.
Mistakes will continue to be made over the River however as the false sense of Superiority blinds them yet again.
I do believe £25m in losses to be a fairly conservative estimate this Season at Ayebrokes Phil but the reality is it’s cost them well over £70m just to secure this Title.
Failure in Europe next Season is not a luxury they can afford.
We on the other hand can offload Édouard,Christie and Ajer and go again.
Debt free.
I’ve been expecting them to go bust for about 2 years now, but the directors keep piling money in like this. Is it blind love, hope, or a knowledge that their debts can be easily recouped with 2 years of CL group stages and a couple of lucky results? It’s a funny old game in Scotland, but it only takes a foray into Europe to get debts under control. They’ve been very lucky with covid, especially the tax payment relief/extensions.
Unfortunately teetering on the brink is something they seem very happy to put up with for a prolonged period. And uefa now talking about removing financial fair play..
Just like the government/bankers….they’re diluting the value of our money….extend and pretend, all those home owners sat in houses their salary can’t afford to buy half of are very very happy now, so happy they vote for the government that has made them rich ( tho they can’t spend any of the “wealth” )….When driven at 100 mph towards a cliff with the accelerator stuck on rarely ends well.
But is it allowed under uefa FFP rules ?
It never fails to amaze me…
But…irrespective of their financial situation…Sevco have this seriously annoying habit of still being here.
Year after year we are told of their debts…and their liabilities…
But guess what…
They’re still here…
They stopped 10 in a row…had a European run we couldn’t match…and stuck it right up us.
I’m fed up listening to this tale of woe…
Wake me up when they’ve actually folded.
Oh dear,
I really think that you should read the piece before you comment on it.
Please expand on your comment…as I have no idea what you are inferring.
Thank you.
Hi Phil,
You may well remember that I’ve been predicting a massive financially calamity for some time, not just for Sevco but for Britain, neigh, the western world.
The low interest rates/Magic Money QE scam has delayed the depression that started in 2007, but in truth, it’s made it much worse and the day of reckoning was unavoidable.
It was a matter of time before something triggered another collapse, be it the amount of debt or, say, a pandemic.
The collapse has never been in doubt, just the timing of when it would start and what would cause it.
We now see some dignified chaps in No 10 spraying money around like there is no tomorrow, borrow, borrow, borrow like there is no tomorrow. Throw money at the economy ( housing bubble ) in the hope they can keep the plates spinning long enough that something comes along to make everything better, give people something for nothing and they tend not to worry so much, ignore the wrinkles, let people get away with stuff they shouldn’t, but the reality is harsh, Britain is bankrupt, it’s currency become worth less ( worthless ) with each passing month. In incumbents in the office are just hell bent now on taking what they can, lining their own pockets while they can before they head off into the sunset, leaving a mess behind for someone to clear up and from which millions will suffer.
There is a striking parallel between the actions of the bankers/politicians in London and those in the blue room.
You can have clever accountants, you can talk up this that and they other, hell you can down right lie to people but unfortunately arithmetic is fundamental, 0 + 1 = 1, it cannot be avoided, you cannot change the fundamentals, like gravity can destroy planets, arithmetic can destroy fraudsters, no matter how hard they try 0 + 1 will never equal 55.
Hail Hail Phil, keep up the good work, look forward to the next 10 in a row, it’s coming.
Managed decline Phil?? Swirling down the drain soon enough if the Roy Keane rumours are true. There will only be one good thing to come out of an appointment like that, Keane will tell it like it is to the succulent lamb brigade and will have no fear of calling out bigotry and sectarianism when he sees fit. However, that IS the only thing he’ll bring to the table. ‘Football the Celtic way’ will be an afterthought
What about the tax liabilities? Did they not owe HMRC approx. £9.5m up to the last financial year.
They are the peepol
So phil, is that sevco now got a third of a billion shares?
Most shares = Most successful club in history
.2 per share, of a company not on a GLOBAL MARKET.
now if you would like to buy a single share then if perchance the COMPANY actually lists then ….
Wow
REMEMBER all accounts have to be declared…
Quick Quick buy before life begins.