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CVA or Vanish

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#1

Gaffney

The Gaffer

Reputation: 640
It all started when he mentioned "In Scotland we have never had a newco at any time but in England, whenever a club goes into administration, a newco is the natural consequence."

In England when a club enter's Admin the usual route isn't a newco. A newco in recent years has been the route for a club that agree's a CVA after Administration. There has never been a club that has went into admin, failed to agree a CVA and formed a newco.

Chester City, Farsley Celtic, Rushden and Diamonds, Airdrieonians and Gretna (information from celtic quick news) failed to agree a CVA and vanished.

Meanwhile Leeds United, Crystal Palace and Plymouth Argyle did agree a CVA and formed a newco. You can see that smaller clubs are less likely to get a CVA and bigger clubs have been able to agree a CVA. This is typically because the clubs have a bigger fan-base and a bigger appeal to be saved.

This should be good news for Rangers but here is some of the ratio's of debt to turnover.

- Leeds United had an overall debt of £35m, £7.7m of it was for HMRC. In 2010 they had a turnover of £28m.

- Crystal Palace were £25m in debt their biggest was a £9.25m overdraft, their turnover is changes often but on average it is £15m. They made big cuts to reduce their costs.

- Plymouth Argyle were between £1-2m in debt £750,000 was in tax and they have a turnover of £2m.

Rangers turnover without European football is roughly £40m. In recent years they have made a few big sales to reduce their losses. Currently Rangers don't have a very valuable squad and without big sales or European football turnover could be £30-40m if they have SPL football.

As the debt stands, Rangers could agree a CVA because the debt to turnover ratio is roughly 1.4, Leeds United was 1.25 but Crystal Palace topped it at 1.67.

However if Rangers doesn't win the tax case their ratio could be anywhere from 2.5-3.35 which is way above any of the other clubs they went out via CVA.

If Rangers loses the tax case and face debts of £134m it's likely that they aren't a company worth saving unless someone is willing to pump in enough funds for a CVA to be agreed. But so far in football there has never been a CVA agreed with such a high ratio of debt. As it stands a CVA is likely but still tough because HMRC have the tax case and Ticketus so far don't want anything less than £15m from their £28m.

So if Rangers can somehow managed to agree a CVA under Whyte or a new owner then a newco going straight into the SPL probably won't be a massive problem because they have came to terms with their debt.

However if Rangers cannot agree a CVA, a lot of fans will demand for a newco not be allowed back into the SPL straight away. The system has worked so far, if there is a big enough reason for a club to be financially saved, it will happen.

In the end I hope the SPL lay the rules out nice and simple, agree a CVA or vanish. Rangers cannot blame HMRC, Ticketus or any of their other creditors, they can appeal to agree a CVA but boycotting or intimation is wrong.

The blame lies with Murray who spent while Rangers were in a lot debt for over a decade, the fans also have to blame for this. Celtic did gather up debt for a while but we cut back and got it down to almost nothing. Rangers didn't spend a lot for a little while but one or two season's isn't enough to clear £50-60m of debt. Sometimes you do have to spent to earn but you have to spend wisely. The only people who got you in this situation is you.

Agree a CVA, suffer the consequences of your overspending or vanish.

Click here to view the article

#2

marmarisbhoy

Celtic Legend

Reputation: 1,300
It's ALL smoke & mirrors..............................they have NO Audited Accounts LOL = NO LICENCE !

#3

Gaffney

The Gaffer

Reputation: 640

It's ALL smoke & mirrors..............................they have NO Audited Accounts LOL = NO LICENCE !

The intended direction is clearly a newco which is OK if they agree a CVA first, if they don't then the SPL is ruined.

#4

pepperami

Celtic Legend

Reputation: 282
if they lose there history and titles and get no tv cash for years then thats a success

#5

fishsticks

Celtic Regular

Reputation: 236
A good point made on the radio last night, would we have all this fuss if Rangers or Celtic got relegated, would there be an immediate vote for a 14 team league?

#6

Gaffney

The Gaffer

Reputation: 640

if they lose there history and titles and get no tv cash for years then thats a success

They won't lose their history, the SPL or SFA wouldn't do that but there is a chance that could happen with the dual contracts issue.

#7

Kennys Dugleash

Celtic Legend

Reputation: 819
All Rangers shame & shenanigans to one side for a moment...........

Ask yourself this simple question:

CAN THE SPL SURVIVE 3 YEARS WITHOUT RANGERS GATES OR THE CURRENT TV DEAL WITHOUT SEVERE FINANCIAL LOSS OR FURTHER CASUALTIES?

If the answer to that is YES then who cares?

If the answer to that is what I suspect NO then Rangers with sanctions and punishment must retain SPL status FOR THE GOOD OF THE LEAGUE AND THOSE THAT ARE IN IT.

All the rest is HERESAY till it actually happens?

BTC
LIQUIDATION
CVA
NEWco
RESTRICTIONS

The only thing that stands right here and now is NO EUROPE NEXT SEASON.

#8

marmarisbhoy

Celtic Legend

Reputation: 1,300
Does anyone really believe that the sky contract warrants 4 glasgow derby's ?

I say it's pure single-fish and another smoke and mirror deflection from the SFA to try and find them a way in the back door.

HMRC are watching LOL

#9

marmarisbhoy

Celtic Legend

Reputation: 1,300
When was scottish football best represented in Europe? Wasn’t it when Rankers were nowhere? and Aberdeen and Dundee were regularly strutting their stuff on the continent.

Scottish football doesn’t need Rangers ! but Doncaster certainly needs his "Bonus".


#10

pepperami

Celtic Legend

Reputation: 282
we dont need the filthy hun cheatinng scum strip em bare and let em die