Generic clubs in financial crisis Thread

[Mr Angry]

http://www.bbc.co.uk/sport/0/football/18564685

The knock-on effect of the newco. Scaremongering by Motherwell or the simple facts?

Scaremongering.

The report talks about losing £315K in ticket sales and hospitality; in Feb, Rangers failed to pay Dunfermline £80K owed for ticket sales . The gate was just under 7500. Motherwell's 2 home games against Rangers averaged at 9531.

Assuming the revenue on the gates were equivilent, that would equate to approx. an additional £22K of revenue for Motherwell over the 2 games.

Therefore, unless the extra 4000 people drank and ate and bought programs to the value of some £133,000 in 2 games, the lost revenue figure quoted by Motherwell is exagerrated.

[weybridgewanderer]

[Therefore, unless the extra 4000 people drank and ate ... to the value of some £133,000 in 2 games...

They don't call us "bears" for nothing

i would be interested to know how much extra motherwell make in hospital for each of the games against the old firm.

that could account for a significant amout of the 100K

[Friday's Legacy]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

[Flyingkiwi]

[Therefore, unless the extra 4000 people drank and ate ... to the value of some £133,000 in 2 games...

They don't call us "bears" for nothing

i would be interested to know how much extra motherwell make in hospital for each of the games against the old firm.

that could account for a significant amout of the 100K

Jesus!

I knew it was rough up there but I never knew that a proportion of club income came from A&E.

Do they actively encourage punch-ups in these hard finacial times, I wonder?

[Franchise FC]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

We all knew that all the press releases from the new owners that the contracts would simply be transferred to the newco were completely wrong.
TUPE rules are simple - you MUST offer the same terms and conditions to the existing employees but the employees don't have to accept them - they can simply walk away.

The players will simply ditch their contracts knowing they can get a larger siging on fee and more likeliood of getting paid in the future.

[Big Ern]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

We all knew that all the press releases from the new owners that the contracts would simply be transferred to the newco were completely wrong.
TUPE rules are simple - you MUST offer the same terms and conditions to the existing employees but the employees don't have to accept them - they can simply walk away.

The players will simply ditch their contracts knowing they can get a larger siging on fee and more likeliood of getting paid in the future.

Plus the won't have to play in the third division as is looking increasingly likely.

[Friday's Legacy]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

We all knew that all the press releases from the new owners that the contracts would simply be transferred to the newco were completely wrong.
TUPE rules are simple - you MUST offer the same terms and conditions to the existing employees but the employees don't have to accept them - they can simply walk away.

The players will simply ditch their contracts knowing they can get a larger siging on fee and more likeliood of getting paid in the future.

The Rangers are now planning to sue for breach of contract according to Sky Sports News. The mind boggles.

[Franchise FC]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

We all knew that all the press releases from the new owners that the contracts would simply be transferred to the newco were completely wrong.
TUPE rules are simple - you MUST offer the same terms and conditions to the existing employees but the employees don't have to accept them - they can simply walk away.

The players will simply ditch their contracts knowing they can get a larger siging on fee and more likeliood of getting paid in the future.

The Rangers are now planning to sue for breach of contract according to Sky Sports News. The mind boggles.

Someone needs to save them legal fees and explain employment law to them in words of one syllable.

Oh hang on - I've got it. Maybe there's a football employees rule like the football creditors rule

[Big Ern]

Looks like the new Rangers owner is trying to chance his luck here. Legally he is in a very bad position as he did not offer consultation over the switching of contracts to the players or their representatives as the law requires. As employment law insists all processes are adhered to, then if this goes to court, he will not have a leg to stand on as this was not done.

He needs to fight to protect the interests on the club, but maybe his stance will make the players more determined to leave for nothing.

[Franchise FC]

Looks like the new Rangers owner is trying to chance his luck here. Legally he is in a very bad position as he did not offer consultation over the switching of contracts to the players or their representatives as the law requires. As employment law insists all processes are adhered to, then if this goes to court, he will not have a leg to stand on as this was not done.

He needs to fight to protect the interests on the club, but maybe his stance will make the players more determined to leave for nothing.

It seems that, even if they somehow manage to retain their SPL status, they are going to be in no position to challenge for anything.

[Mr Angry]

Looks like the new Rangers owner is trying to chance his luck here. Legally he is in a very bad position as he did not offer consultation over the switching of contracts to the players or their representatives as the law requires. As employment law insists all processes are adhered to, then if this goes to court, he will not have a leg to stand on as this was not done.

He needs to fight to protect the interests on the club, but maybe his stance will make the players more determined to leave for nothing.

He is coming over as a typical Rangers owner; a big, arrogant bully, who thinks whatever he says, thinks, or wants is right and stuff everyone else.

As well as threatening the players who would dare to leave, he is also threatening any clubs that take those players on.

Jog on.......

[watfordroyal]

Hibs now onboard,
sorry for Well if it causes them problems, but they've obviously been living well beyond their means if they have to rely on the huns turning up.

[Uke]

Four of Rangers players have rejected to contract across the the newco. More set to follow by leaving the club.

We all knew that all the press releases from the new owners that the contracts would simply be transferred to the newco were completely wrong.
TUPE rules are simple - you MUST offer the same terms and conditions to the existing employees but the employees don't have to accept them - they can simply walk away.

Does TUPE still count when most players are "private contractors"?

If the company they are contracted to ceases trading then they can just leave

[Deadlock]

I've been enjoying reading a bit from the "Rangers Tax Case" blog recently. The latest entry contains this, in part:

There are many fragments to this tale that just do not add up: stories of no banking facility for Charles Green’s newco; reports that season ticket receipts are to be paid to the oldco bank account (from which only secured and preferred creditors would be able to draw ahead of the cash going to the unsecured creditors- i.e. Duff & Phelps could use this season ticket cash to pay themselves); and then there is the bizarre situation regarding the transfer of player contracts plus the failure to provide the required notice periods per TUPE regulations for players whose contracts, it has been claimed, have been sold to Green’s newco. It does not help that Mr. Green appears to have some difficulty with providing any explanation of events that is not riddled with logical and factual inconsistencies. Either he and Duff & Phelps have made a monumental error in their interpretation of TUPE rules for the transfer of employees or they are ‘playing dumb’ to cover for another problem.

I predict a lot of lawyers will make a lot of money, and the creditors will get sweet FA.

[watfordroyal]

There are many fragments to this tale that just do not add up: stories of no banking facility for Charles Green’s newco; reports that season ticket receipts are to be paid to the oldco bank account (from which only secured and preferred creditors would be able to draw ahead of the cash going to the unsecured creditors- i.e. Duff & Phelps could use this season ticket cash to pay themselves); .

D&P's bill is reported as £5m+ so they will defo take this cash & run.
Only a complete mug would buy a season ticket, but then again they are huns!

[weybridgewanderer]

Motherwells document prior to voting

Guidance Document

Risks and Uncertainties to Motherwell FC Finances

Although there is continued speculation on various NEWCO scenarios, there is, at present, only one issue to be determined, namely whether the application by NEWCO for transfer of the SPL share currently held by Rangers to the NEWCO, should be allowed.

It is this scenario we put to members/shareholders in this ballot.

This document seeks to set out the information and scenarios currently available to the Board to allow members and shareholders to cast their vote with maximum available information. We have written it as objectively as possible but require the obvious disclaimer that there remains very significant uncertainty particularly on the revenue impact of all scenarios.

Current Trading

In the financial year 2010/11 we made a profit of £541k. For financial year 2011/12 we do not yet have audited accounts, however, we expect a loss of circa £500k on the basis of income of £4.3m and costs of £4.8m. This loss was notified with our annual accounts last year. It is a result of our decision to maintain our football department budget at last year levels, increased performance related pay, increased cost due to Well Society launch, alongside lower revenues from Cup income, no European income and, crucially, our failure to secure a player trade in the previous 2 windows.

It should also be noted that each league position, other than 1st and 2nd, is worth approximately £85k in revenue in SPL distribution and that our distribution obviously varies depending on performance.

The flexibility of our cost base to adjust in the face of losses in income is limited. Our main cost is staff and, in particular, football department related. As always, the balance which requires to be struck is cutting costs to meet expected income while maintaining performance to the level where higher income can be achieved.

As things stand our budget for expenditure for 2012/13 is £4.5m including a football department budget of £1.8m for players and a further £0.8m on other football activities subject to upside risks on the basis of performance. Clearly, a substantial portion of those costs relate to contracts which are binding on the Club and cannot be renegotiated at this time.

It has been, and remains, irrespective of the NEWCO vote, essential that the Club identify, develop and trade football talent on terms that suit both player and club alike. The Board will always therefore consider competitive offers for our players if it is in the interests of all.

We currently trade with no debt save a long-standing loan to our majority shareholder Mr John Boyle of £340k which is subject to a generous affordability repayment schedule. We have also benefitted in recent years from the generosity of Mr Boyle in making funding available to assist the Club cash flow from time to time. This is no longer something which we can rely upon, or expect.

Europe

The potential net income from our European qualifications is very difficult to predict but is likely to be a minimum of £250k on the basis of past experience. This estimated minimum amount has already been included in our budget forecast for 2012/13 as guaranteed income. In the event of us progressing successfully through the first round of fixtures there is significant upside to this. This is not an equation any Board can rely on for planning purposes at this stage.

POTENTIAL IMPLICATIONS ON REVENUE – NEWCO DOES NOT RE-ENTER SPL

1. SPL distribution

Last year this sum was approximately £1.56m or 36% of our total income. The main risk to this income comes from the existing or pending sponsor/TV contracts that themselves allow SKY SPORTS and other commercial partners to review in the event of the absence of Rangers or Celtic.

Depending on the assumptions made this could mean a loss of income of around £600k. This is our best estimate however there are risks around this number dependent on negotiations with broadcast partners.

2. Gate Income

Last year our cash income from gate receipts was £1.64m comprising £670k season tickets, £970k fans pay at gate. Of the pay at the gate cash income Rangers represented £300k or 31% while Celtic represented £285k or 29% while the other 9 SPL clubs totalled £300k or 31% of cash income (an average of £26k per game)

The potential predictable loss of income from no NEWCO is around £275K (Rangers income minus average SPL other). In addition to this we would expect our commercial revenues from hospitality and sponsorship to reduce but the potential here is unknown. Our best estimate is that hospitality would be reduced by £40k.

We do not anticipate a loss of other gate receipts under this scenario indeed it is possible that we may see a modest rise in attendance (which we do hope to encourage in any event) if we are successful in our marketing initiatives and the fans of all clubs, but especially our own – improve support in the face of the challenges this scenario provides.

3. Sponsor Income

It is difficult to assess this impact which last year comprised around £275k of cash income (advertising and sponsorship). While the loss of the Rangers fan base will be a negative to any commercial contract we have to balance that with the upside of European competition and, other things being equal, the marginal relative increase in our ability to compete successfully in all competitions.

4. Player Trading

We do not anticipate that this scenario has a net impact comparatively but do note that all clubs look likely to be reducing their headcount and costs in the coming year which could have a negative market impact. That said it places a premium on the best talent.

POTENTIAL IMPLICATIONS ON REVENUE – NEWCO ENTERS SPL

1. SPL distribution

Last year this sum was approximately £1.56m or 36% of our total income. We do not anticipate a risk to this sum in the event of NEWCO re-entering the SPL.

2. Gate Income

Last year our cash income from gate receipts was £1.64m comprising £670k season tickets, £970k fans pay at gate. Of the pay at the gate cash income Rangers represented £300k or 31% while Celtic represented £285k or 29% while the other 9 SPL clubs totalled £300k or 31% of cash income (an average of £26k per game)

While we do not anticipate a loss of gate receipts from NEWCO fans under this scenario it is very possible that we see a significant loss of income from fans of other clubs and our own depending on the general view of the ‘integrity’ of the game. This is impossible to judge at this stage but the numbers above give us the chance to draw our own conclusions.

3. Sponsor Income

It is difficult to assess this impact which last year comprised around £275k of cash income (advertising and sponsorship). Again the risks in this scenario seem balanced.

4. Player Trading

We do not anticipate that this scenario has a net impact comparatively but do note that all clubs look likely to be reducing their headcount and costs in the coming year which could have a negative market impact. That said it places a premium on the best talent.

Conclusions

The information above is written as objectively as possible given the uncertainty we face in making this decision. The Board is of the view that whatever decision is made on the NEWCO vote by the SPL clubs, the financial position of Motherwell Football Club will suffer. On a purely financial basis, a “Yes” vote would likely preserve commercial revenues, however the impact on gate receipts is unclear. The risks presented by a “No” vote are slightly easier to quantify insofar as gate receipts are concerned, but even then are extremely uncertain given we do not yet know what the SPL commercial partners will decide.

There are clear risks to the financial stability and very future of this Club presented by the current situation.

In the event of serious financial difficulty, the Board will have to look to the members, shareholders and supporters to further step up their support for the club and the Well Society. This is likely to be in the form of increased prices, higher attendances and further Society memberships and contributions.

The potential target for this we estimate should be at least a doubling of the existing sum raised by the Society of £320k cash in the bank with a total of £368k pledged. It should be noted that these events also mean that these sums may be required to ensure the Club can continue to trade in the transition and not to meet our strategic goal of generating a £1.5m strategic reserve which we will require to generate over and above the sums required to trade through any transition.

It is clear that if we are unable to replace significant amounts of income lost under either scenario, the club could be facing an insolvency event. Following new rules recently introduced at SPL, this would lead to a 21 point deduction, being one third of last year’s total. Whilst other clubs could also be in the same position, their points deduction would be lower.

The Board will of course keep all of our members, shareholders and supporters fully informed of the state of trading and the requirements on all of us.

[PieEater]

Predictable outcome at Pompey.

http://www.bbc.co.uk/sport/0/football/18578555

Chainrai's offer is accepted and 98% of the debt is to be written off.

[TFF]

It's not over yet.

Neither BC not PST will go through with their offers to buy the club unless the players drop their wage demands.

The likes of Ben Haim, Kanu, Kitson and now Mokoena could yet liquidate the club

[PieEater]

Having read it again I'm not really sure what has been agreed other than there is another month of this to assess the PST offer and try to get rid of the high earners before the CVA is in place.

The PST offer includes the purchase of the ground from Chainrai, so if he doesn't accept the offer Birch can go to court and ask the judge to decide on the fair value. It looks like a forced sale may happen and will remove the problem of his £19m secured on an asset worth a lot less.

[weybridgewanderer]

Perhaps should be in URG, but rumours circulating that Aberdeen are about to enter administration and that recent changes at the club were preparing the way for it.