Finances

[Insaintee]

BIG LOLZ

Let me guess Ally88

[Insaintee]

Who?

Aye who

[THE KING]

The tactic from Rangers (including King) is fairly sound though.

Despite my obvious loathing of fat Mike, I would be a fool to dismiss his business acumen and like any successful businessmen he is not ruled by the types of emotion so often displayed on here, he is not motivated by a life long hatred of a football club, he simply wants to make money and the current setup is not making him any money nor will this change while his customers remain alienated.

All this pish about King begging Rangers fans to buy merchandise is utter bolix, yes he said that for Rangers to be successful then they need to maximise every revenue stream including fans buying merchandise but he did this in the context that the current deal is not doing this, neither fat mike nor Rangers are making any money.

Rangers and King will continue to do the bare minimum when it comes to marketing retail while continuing to publicly state that the deal is definitely not in the best interest of Rangers, as long as the friction remains public and this includes not paying a loan which is not due to be paid back then Fat Mike`s customer base will remain alienated, anyone who thinks Fat Mike made his money from an alienated customer bases is beyond deluded.

......aaaaannnd how many times have I told you to stop listening to your racist ex directors tit bits supplied by the shameless liar? ...here you go...

.http://m.eveningtimes.co.uk/news/13616961.Fresh_concerns_over_Mike_Ashley_s_Rangers_retail_deal_as_Sports_Direct_goods_figures_emerge/

Concerns about the retail deal Rangers has with Mike Ashley have heightened after it emerged that his Sports Direct group sold nearly £4 million of goods to club outlets in the last year.

It means that the sports firm headed by Mr Ashley, who owns 8.9% of the club plc, has taken nearly £8 million in two years of sales to the Rangers Retail joint venture, which runs the club's entire retail and merchandise operation, including the club's Rangers Megastore.

It is understood most of that money has gone as Rangers Retail which is controlled by Mr Ashley is buying Rangers merchandise, including replica kits, gifts, polo shirts and track suits from the Ashley-controlled firm for use in club outlets.

.......

Edited August 21, 2015 by THE KING

[dave.j]

......aaaaannnd how many times have I told you to stop listening to your racist ex directors tit bits supplied by the shameless liar? ...here you go...

.http://m.eveningtimes.co.uk/news/13616961.Fresh_concerns_over_Mike_Ashley_s_Rangers_retail_deal_as_Sports_Direct_goods_figures_emerge/

Concerns about the retail deal Rangers has with Mike Ashley have heightened after it emerged that his Sports Direct group sold nearly £4 million of goods to club outlets in the last year.

It means that the sports firm headed by Mr Ashley, who owns 8.9% of the club plc, has taken nearly £8 million in two years of sales to the Rangers Retail joint venture, which runs the club's entire retail and merchandise operation, including the club's Rangers Megastore.

It is understood most of that money has gone as Rangers Retail which is controlled by Mr Ashley is buying Rangers merchandise, including replica kits, gifts, polo shirts and track suits from the Ashley-controlled firm for use in club outlets.

.......

Most sorted club in Scotland, apparently.

[THE KING]

Good to see big mike raking it in from the tramps.

[bennett]

Pay "big mike" back his money and you'll get control of your retail deal ...... © some blogger....

[THE KING]

What a cash cow for big Mike kerchinnnng!!

[THE KING]

Just cant help laughing at rangers fans thinking they can force MA into "a better deal"...boycotts LOL....zero effect on big MA money.....oh wait hes down £10k...BREEKS!!

..Sport Direct financial papers now show that in the year to April, 2015, £3.834 million went to Sports Direct through sales to Rangers Retail. The previous year it was £3.843 million.

[Ken Fitlike]

Most sorted club in Scotland, apparently.

The most 'distorted' club in Scotland, maybe

[THE KING]

£8 million in 2 years for big MA..oh ma sides!

[sugna]

Revisiting this as I still think that finances are going to be the defining factor in whether the club make it through the current season; and because I'm still quite surprised to see so little SMSM coverage of widely-known problems in this area. Perhaps the SPFL have contingency plans already in place (not just for Rangers, but for any insolvency event).

Looking again at the data that is available, and taking the same broad-brush approach as before, I think that these are all likely to be the case with respect to the club's finances:

1. Ashley's loan was spent before ST money came in.
2. Loan money was about spent (at least half spent) before STs.
3. So at around the end of July, the cash available to cover all running costs in the short-to-medium term was about equivalent to the ST takings, which can be approximated at £10m.
4. There is a loan liability of around £9m.
5. From the end of July, costs have been burning cash-at-bank at a rate of around £1.7m pcm.
6. Leaving aside loan repayment, that allows for about 6 months of running, i.e. August to January 2016, inclusive.
7. With loans being called-in, the club would immediately be a few million in the red, i.e. the loans cannot be repaid as things stand.
8. If Ashley's loan, alone, were called-in or ring-fenced (as it really should be, I think, for the directors to be acting properly), the club might expect to have operating funds through to around the end of October, i.e. the month that we're already in.

I don't want to pretend I know more than I actually do on this stuff: I sometimes see people quoting 3 significant figures and a calendar date for cash running out; but I think that the list above is roughly how things stand and I hope it's not "spun" in either direction. I don't think that the cash burn-rate is crucial beyond order-of-magnitude - say £0.5m pcm tolerance; and I don't think that the amount of loans is worth discussing as the club's directors have so far been unable to agree on that exactly. "Around £9m" will do for current purposes.

So, from that approximation of status it's clear that the club can't be solvent to the end of the season without further cash being injected. This can happen in the short term through loans, and in the medium term (assuming that certain hurdles can be cleared) through a share issue. I'm not sure if directors can currently promise equity-for-debt conversion of further loans if that would take their proportional share of the remaining equity from a share issue to above their current proportion of the issued shares. But it seems unlikely, from a layman's perspective, as that would then be a way of circumventing rights-issue rules.

In that case, the amount of convertible loans, and hence the time over which money from directors can be taken as "not really loans", is limited by their current proportion of the issued shares and the proportion of the equity that has not yet been issued (sorry if I'm using the wrong term, here), and the share price to be set for a future share issue.

From memory, I think that a third of the equity is still to be issued. Not a great deal, if 20p per share is a guide price. And the first £5m will surely go in the directors' loans conversion and in the cost of the share issue.

So I can't see how even a "good" share issue will help for very long. It almost looks as though there are two options:

1. Benevolent cash injection, unsecured, for the love of the club; or
2. Some sort of extraordinary event such as an insolvency event or sale of the club.

With things looking this uncertain, it will be interesting to see how the new auditors square things within the accounts.

I would stress that I am not looking to take an extreme view either way here, or make a particular case; I'm just trying to make sense of something that seems a bit intractable, to me.

[Ken Fitlike]

option 3. Final death

[accietilleyedye]

Revisiting this as I still think that finances are going to be the defining factor in whether the club make it through the current season; and because I'm still quite surprised to see so little SMSM coverage of widely-known problems in this area. Perhaps the SPFL have contingency plans already in place (not just for Rangers, but for any insolvency event).

Looking again at the data that is available, and taking the same broad-brush approach as before, I think that these are all likely to be the case with respect to the club's finances:

1. Ashley's loan was spent before ST money came in.
2. Loan money was about spent (at least half spent) before STs.
3. So at around the end of July, the cash available to cover all running costs in the short-to-medium term was about equivalent to the ST takings, which can be approximated at £10m.
4. There is a loan liability of around £9m.
5. From the end of July, costs have been burning cash-at-bank at a rate of around £1.7m pcm.
6. Leaving aside loan repayment, that allows for about 6 months of running, i.e. August to January 2016, inclusive.
7. With loans being called-in, the club would immediately be a few million in the red, i.e. the loans cannot be repaid as things stand.
8. If Ashley's loan, alone, were called-in or ring-fenced (as it really should be, I think, for the directors to be acting properly), the club might expect to have operating funds through to around the end of October, i.e. the month that we're already in.

I don't want to pretend I know more than I actually do on this stuff: I sometimes see people quoting 3 significant figures and a calendar date for cash running out; but I think that the list above is roughly how things stand and I hope it's not "spun" in either direction. I don't think that the cash burn-rate is crucial beyond order-of-magnitude - say £0.5m pcm tolerance; and I don't think that the amount of loans is worth discussing as the club's directors have so far been unable to agree on that exactly. "Around £9m" will do for current purposes.

So, from that approximation of status it's clear that the club can't be solvent to the end of the season without further cash being injected. This can happen in the short term through loans, and in the medium term (assuming that certain hurdles can be cleared) through a share issue. I'm not sure if directors can currently promise equity-for-debt conversion of further loans if that would take their proportional share of the remaining equity from a share issue to above their current proportion of the issued shares. But it seems unlikely, from a layman's perspective, as that would then be a way of circumventing rights-issue rules.

In that case, the amount of convertible loans, and hence the time over which money from directors can be taken as "not really loans", is limited by their current proportion of the issued shares and the proportion of the equity that has not yet been issued (sorry if I'm using the wrong term, here), and the share price to be set for a future share issue.

From memory, I think that a third of the equity is still to be issued. Not a great deal, if 20p per share is a guide price. And the first £5m will surely go in the directors' loans conversion and in the cost of the share issue.

So I can't see how even a "good" share issue will help for very long. It almost looks as though there are two options:

1. Benevolent cash injection, unsecured, for the love of the club; or
2. Some sort of extraordinary event such as an insolvency event or sale of the club.

With things looking this uncertain, it will be interesting to see how the new auditors square things within the accounts.

I would stress that I am not looking to take an extreme view either way here, or make a particular case; I'm just trying to make sense of something that seems a bit intractable, to me.

Option one if was gonna happen it would have already,surely

Option two The last time it happened it didn't help much due to the lack of an option 1

So in summary is option 3 the only real option

[54_and_counting]

1. From the end of July, costs have been burning cash-at-bank at a rate of around £1.7m pcm.

whats your evidence of this?

[mythstoliveby]

I think they'll take one or two short-term loans from the "three bears" (sorry, that term always makes me LOL!) and that these loans will let them limp on in the hope that the extra dosh of being in the SPFL will steady the ship.

AND TO THINK THAT ALL WE'VE HEARD FROM THAT LOT OVER THE LAST FEW YEARS IS HOW WE NEED THEM - OH THE IRONY!!!!!

[sugna]

whats your evidence of this?

(I think that you're quoting #5 on my list as #1. I'll go with that assumption, but if you actually meant #1 then disregard the following.)

That figure is slightly below the burn-rate calculated from the loan burn rate (quite easy to calculate) from earlier this year, and aligns fairly well with the last couple of sets of accounts - again, using the broad-brush approach. It's possible that costs may have reduced: several players out and in, 2 new coaching staff. At some point soon, McCoist's salary can be discounted and they will be down to just paying for 3 coaches. With a tolerance (see above) of £0.5m pcm, I'm making every effort to be equitable, erring on the side of financially optimistic.

Perhaps counter-intuitively, it doesn't make a game-changing difference to the gist even if all footballing staff (players and coaches) are completely free: money still comfortably runs out this season.

[54_and_counting]

(I think that you're quoting #5 on my list as #1. I'll go with that assumption, but if you actually meant #1 then disregard the following.) That figure is slightly below the burn-rate calculated from the loan burn rate (quite easy to calculate) from earlier this year, and aligns fairly well with the last couple of sets of accounts - again, using the broad-brush approach. It's possible that costs may have reduced: several players out and in, 2 new coaching staff. At some point soon, McCoist's salary can be discounted and they will be down to just paying for 3 coaches. With a tolerance (see above) of £0.5m pcm, I'm making every effort to be equitable, erring on the side of financially optimistic. Perhaps counter-intuitively, it doesn't make a game-changing difference to the gist even if all footballing staff (players and coaches) are completely free: money still comfortably runs out this season.

so from figures earlier this year you assume we are still at the same incomings/outgoings now than we were pre march?

anyway, king has already stated on TV and John Gilligan stated at a fans group meeting (as a rep of the board) that there will be more short term loans until another stock exchange issue can happen

Our accounts are what? a month away, i expect King to release a big statement in thenm about his changes off the field and what he plans for the rest of the season (a 1.5mill loan is due to be repaid on new years eve)

Until then everything is guesswork, a reasonable assumption that i agree with is that money will run out and we will need more short term financing, however King has already stated as much so the ball is in his court

P.S, as an Alloa fan, why do you care so much anyway

[mythstoliveby]

Until then everything is guesswork, a reasonable assumption that i agree with is that money will run out and we will need more short term financing,

As I said, they need us more than we need them

[sugna]

so from figures earlier this year you assume we are still at the same incomings/outgoings now than we were pre march?

No. If you read either of my two previous posts I hope that should be very clear. If not, I suggest reading them again. You're imputing things that aren't there, and ignoring caveats and tolerances that are there. I don't know why objective reality should be controversial for you, but if you don't want to accept that reality there's probably little additional benefit to either of us in my trying to explain it to you.

anyway, king has already stated ...

Ah, OK, I wasn't making any assumptions about the veracity of statements from a man with more criminal convictions than anyone in the history of Scottish football. You may not be aware of this, but an objective judicial process culminated in him being tagged a glib and shameless liar, and the judges went further, saying that nothing he says should be trusted without independent corroboration. So I don't feel he's quite as reliable as audited accounts. It seems like a mark of insanity to then take his word on anything, since he's a warranted liar. But YMMV, of course. Fill your Boots of Gullibility.

... there will be more short term loans until another stock exchange issue can happen

But my earlier post aimed to put bounds on that, and gave a rationale for those bounds. I think there are 40m unissued shares, and the last trades were below 25p, so a total equity release of £10m may optimistically be realisable. That just about covers current loan liabilities and the cost of a rights issue; and loans beyond rights-issue proportion appear, to me, unfeasible. Is the reality of all of this less relevant than what a multiply-convicted criminal claims in a sound bite? I don't understand why anyone would want to take a (literally) fantastic view on his club's outlook, compared to, say, the gritty, realistic approach that saw Hearts return triumphantly to the Premiership this season. Seems like the epitome of head-in-the-sand.

Our accounts are what? a month away, i expect King to release a big statement in thenm about his changes off the field and what he plans for the rest of the season (a 1.5mill loan is due to be repaid on new years eve)

There you go again. King is a warranted liar: anyone trusting what he says has no grounds for later complaints; much like Green and Whyte, except that King is much more convicted for his criminality and mendacity. You'd have to be mad to take anything he says at face value. That's not opinion, it's documented independent findings of an in-depth investigation into his statements versus reality. No one need guess at this stage whether or not he lies: he lies.

Until then everything is guesswork, a reasonable assumption that i agree with is that money will run out and we will need more short term financing, however King has already stated as much so the ball is in his court

I've given a broad-brush estimate of current cash-at-bank, burn rate, loan liabilities and equity conversion. All are the correct order of magnitude. All show imminent or medium-term zero cash. So we agree that money is a problem, and that cash generation is going to be crucial to survival. Where we differ is that I have tried to quantify that and extrapolate it to zero cash balance based upon the best available objective financial information; while you appear to be basing your extrapolation on unquantifiable statements from a convicted criminal.

That's entirely up to you, of course: you pays your money, you takes your choice.

[54_and_counting]

You care for way too much to be an alloa fan

Nice try though