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A locked BRALT may be a good opportunity to spin-off one of the major symptoms of malaise, and look at the facts without the usual partisan mud-slinging. Or perhaps not.

Here's a take on the finances at Rangers, seeking to make some estimates on viability. I have disregarded everything that Dave King has had to say on the matter, and am using rough figures elsewhere. I am taking the end of July as the point at which the great majority of ST income has been received.

In season 2014-15, the money looked like running out sometime around the end of October. A net surplus from the 2014 share offer of around £3m seemed to tide the club over for a couple more months. This is consistent with the initial Ashley loan, the Lewis Macleod money, the subsequent "first tranche £5m" Ashley loan and the 2 or 3 loans at £1.5m: by which I mean that each £1m appeared to tide Rangers over for a little under one calendar month. This is also reasonably well correlated with what appears to be the burn rate from recent years' published accounts.

Last season's ST money, apparently starting from just about zero as evidenced by the bridging loans to get to ST time, seemed to be enough to cover about 3 or 4 months of operating. That seems just about right as the initial share offering money had covered the ST deficit for 2 seasons, and last season's ST income (and hence "ST months") could plausibly have been lower. So maybe each of the 2 previous seasons was financed at something like 5 months by STs, 7 months by the IPO. I don't claim the accuracy of some experts on here, but I do claim not to be pushing the figures in either direction, according to any agenda; and I further claim to have sanity-checked the rough figures using more than one metric.

In rough numbers, STs appear capable of bringing in around £10m p.a; and again in rough figures, that covers around half a year of operating. But this season is special, because of the starting position of significant debt. Please note that I offer no opinion on what may happen to that debt, in particular not taking it as read that a liability will be converted into equity because that is what has been informally claimed in some quarters. I'm remaining sceptical without being cynical.

2012-2013 - STs plus (first) 50% of IPO - balance at end of season of about 50% of IPO

2013-2014 - STs plus (remaining) 50% of IPO (plus smallish loans) - balance at end of season of about zero

2014-2015 - STs plus rights offer, plus loans, plus player sales - balance at end of season of about £8m [DR]

2015-2016 - pre-season balance after STs, estimate somewhere between £1m [DR] and £4m, taking loan liabilities into account.

I know I'm playing fast-and-loose with terminology and figures here; but as a rough take on it Rangers appear to have no money from the very start this season. It seems to take a leap of faith to believe that this money will appear when needed, and it further seems to me that this is the fundamental difference between the views taken by AIM (& ISDX), and the SFA: it seems that the former requires some evidence of ongoing funding, but perhaps the latter just really wants it to happen.

I've tried to put some order-of-magnitude numbers in one place, to see what people think about the apparent inability of the club to generate the basic funds needed to continue in the coming months. Am I missing something on the financial side? (I know all about the claims of special treatment, and counter-claims of how loans will not be called in but instead money will somehow be donated; but that's not the scope of my question. I also think that sort of sniping is what tended to make the BRALT wearisome for any near-neutral.)

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If, as I read your post, the rangers have, since the new club's inception, consistently overspent while seeing assets diminish, then either they're going down the stank or Dave King* is going to have to actually put some money in. Not as an "investment", or soft loan, but just to get the bank balance to a stage where they aren't endlessly chasing their tails. In other words, hand over multiple millions with no expectation, or indeed hope, of ever seeing a penny. Nothing he has done so far suggests this is a likely development.

FWIW, I think your figures could be more accurate - STs, for instance, you've gone a bit lowball imho - but they have had sources of cash, like share offers, which simply won't happen again: meanwhile the organisation, if they want to maintain their perceived status, is simply unsustainable on the money available in the Domestic game. European money might save them, but they would have to qualify first.

Worrying times indeed - if you're one of the morons who bought into this con game. Decent people should be fine.

*ETA: Or somebody - but if you're mental enough to throw money into this pit, you're not likely to have much to throw...

Edited by WhiteRoseKillie

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FWIW, I think your figures could be more accurate - STs, for instance, you've gone a bit lowball imho - but they have had sources of cash, like share offers, which simply won't happen again: meanwhile the organisation, if they want to maintain their perceived status, is simply unsustainable on the money available in the Domestic game. European money might save them, but they would have to qualify first.

They could definitely be more accurate, I have intentionally used a broad brush, and cross-checked where possible, in order to get the best sanity check I could. My intention was to put some focus on the gist of the finances and its implications, to avoid getting involved in the odd few millions here or there, as I don't think that affects the implications of the club's position, materially.

(Just for reference, the last 2 years have shown total income averaging around £23m and expenditure at about £33m, so the annual deficit excluding extraordinary income has been about £10m. STs plus gate receipts and hospitality have totalled around £13m. STs alone in the year to June 2014 were a little under £8m, which made me think that the current ST period can only just about clear existing loan liabilities. So on actual STs per se, I've probably gone "highball". ;) )

No one has shown any interest in making "donations", which seemed to be sort-of-implied at some points prior to the board-change EGM; loans for equity has the problem that it takes money away from a possibly significant future source - a share/rights issue - in a way that is reminiscent of the astonishing Ticketus manoeuvre.

The European income question is an interesting one. I looked at this about 6 months ago for my own interest, as the received wisdom then was that promotion was essential and Europe ASAP was critical for the increased income. I looked at a model with some very modest increased transfer and wages expenditure in order to get into Europe (a complete guess!), and added some assumptions. I came to the conclusion that the Premiership and aspiring to compete in Europe looked like expanding the income-expenditure gap, not closing it. That initially surprised me, but then I thought about the fact that even with "cheaper squad costs" through EBTs, and regular European competition there hadn't previously been nearly enough money to survive.

The circle I currently find it impossible to square is the apparent zero bank-balance post-STs (assuming that funds have been set aside for loan repayment - I know...) with no clear means of raising operational capital, yet being treated officially as a "going concern". The auditors have been protecting themselves from endorsing that view off their own bat for years, as highlighted by noting an emphasis of matter in the 2014 accounts: they stressed that the "Group" had made key assumptions that allowed the going concern basis to be used (not all of which subsequently proved to be correct), and also noted a material uncertainty in this same area. Things now seem to me to be less robust than they were then. Will the next auditors agree with NOMADs, AIM & ISDX, and simply say that there's no credible basis for continuing to trade?

I doubt, at this point, whether there's any role for the SFA to ask for clarification ahead of next season; but the FPP clearance seems to have been, at best, a little naive.

Don't want to pre-judge the next instalment, however it can't really be the case that the board are unaware that the current balance and operating costs are sustainable. Given that they have (effectively) taken action to remove the club from a suitable platform, it doesn't seem likely that a "proper" share issue is in their plans, and largesse seems not to be on the table. So can they really be intending to continue "as is", or is there a crash and some inevitable spin coming?

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sugna - interesting read,

How much do your calculations take into account;

- wage reductions due to the player exodus;

- apparent increase in season ticket sales;

- loss of retail revenue since the MASH loan and renegotiated terms?

It would appear that the income and expenditures will have a different balance this year (not necessarily for the better/worse).

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The biggest problem for them is how the football landscape has changed over the past 10 yrs. Their main income is ticket sales. Every year that the TV deals increase down south, Rangers (and celtic) will be getting relatively poorer. This has already been seen by Celtic competing with a League 1 side for a player and Ranger's reliance on squad players from the championship/League 1.

WIth this increasing pressure on maximising the wage bill level, the additional costs that they have such as Murray Park, Ibrox and the other trappings of a big club have a disproportionate impact on their finances. It's ok for a Premiership club in England to have an elite training ground, large staff levels, extensive scouting network etc, as this still only represents a manageable proportion of their expendeture. For Rangers, these things in all likelihood, represent the majority of expendetures (I'm sure i saw a report showing the player wage bill was not the problem).

Basically, they need to down size all their other operations. They are operating at a level where they need champions league group stage money every season, when the very best they can ever hope for is it every second season.

If they had sense they would come out and say they are down sizing where possible (have to keep Ibrox), with the aim to upgrade in the future if there is the opportunity.

The penny needs to drop they are on the equavilant income of a top League 1 side in England.

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The biggest problem for them is how the football landscape has changed over the past 10 yrs. Their main income is ticket sales. Every year that the TV deals increase down south, Rangers (and celtic) will be getting relatively poorer. This has already been seen by Celtic competing with a League 1 side for a player and Ranger's reliance on squad players from the championship/League 1.

WIth this increasing pressure on maximising the wage bill level, the additional costs that they have such as Murray Park, Ibrox and the other trappings of a big club have a disproportionate impact on their finances. It's ok for a Premiership club in England to have an elite training ground, large staff levels, extensive scouting network etc, as this still only represents a manageable proportion of their expendeture. For Rangers, these things in all likelihood, represent the majority of expendetures (I'm sure i saw a report showing the player wage bill was not the problem).

Basically, they need to down size all their other operations. They are operating at a level where they need champions league group stage money every season, when the very best they can ever hope for is it every second season.

If they had sense they would come out and say they are down sizing where possible (have to keep Ibrox), with the aim to upgrade in the future if there is the opportunity.

The penny needs to drop they are on the equavilant income of a top League 1 side in England.

Good post.

Celtic as you say have downsized...if we take the training ground, the site is much larger than Murray park...

but Celtic have only developed half of the site, there was plans for an academy building and sleeping quarters and class rooms,more training pitches and such...never heard anything about them starting to build this, I would think in

the currant environment these plans have been shelved for the moment.

At this moment I would probably say Murray park costs them more or less the same as our training ground to run...

for the level they are at .....that is crazy.

The playing side at Celtic has been downsizing for years....if we look back wee Strachan was blew out the water when Smith came back to rangers.That season rangers spent a right few bob, most of that investment carried them to 3 in a row. At that particular time Celtic fans were screaming for funds to be made available to the manager....

it is still going on just now, some will always want a big signing.

Celtic will probably continue as they are at the moment....

buy young cheap players and try and punt them for profit...rangers will probably need to go this road as well...which is probably why warbs got the job....heard he gives youth a chance,and we are seeing them being linked with youths at the moment in the press.

As you say the penny needs to drop....think most Celtic fans know exactly where we are..

most know we cannot compete with the championship in England...champions league is a big carrot....butits getting harder and harder to get there,most are happy if we just get into the group...I constantly read in the press about gers being there in three seasons....good luck coz if we get there once every three seasons we are doing well..

sad to say,but that is the reality...we struggle to get there....if rangers want to get there they will need significant investment....and being honest it is a massive ask.

Someone has to be honest with rangers fans...come out and tell them there plans...

the good guys won but not a lot has changed...rangers fans have still to hear about a plan of action being put in place and what's happening in a structured timetable for there future.

You can't ask people to part with there cash on blind faith...be honest with them, tell them your plans...the championship is a hard league to get out of...if they do what investment is needed for the top league just to stay in it???what investment is needed to win it or qualify for Europe???

Trimming the wage bill is a good start...and will save cash..problem is rangers fans and everyone else are guessing at costs and savings...where are these so called good guys to reassure the fans about the club as a going concern??

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The basic economics just don't stack up. The new club has burned through what £90million and has no cash reserves. What is different this season? With no public listing raising £10-15m is going to be much harder. And that’s just to keep going. They have lost £1m in shirt sales. It's impossible to see how they get out of this. Even if they get back to the top flight, they will need to have a genuine premier league squad which they currently they don't. Most SPL sides have managed to accumulate and develop players; Newco will have to bring in almost a full squad that's a lot of upfront investment, with only limited pay back. The scale of that becomes stratospheric if they want to compete for the title and to compete in a meaningful way in Europe.

What happens if they don't invest and continue to underperform on the pitch? It's clear that will have an impact on the income from the fans and that leads to more financial difficulty.

The opportunity to "play the youngsters" is past. Firstly Rangers youngsters are not really that good. Hearts had been investing in the youth for a good few years, and it remains to be seen how effective they will be in the top tier. I don't think for one moment that newcos youth team would win the championship and might not even qualify for the play offs.

It's a dammed if you do, Dammed if you don't situation.

The sevvies need to realise that success is no longer a divine right, and that having a large "passionate" fan base does not guarantee success, in either football or financial terms.

Things could get better if you have good sensible financial management. Unfortunately they have Dave King

ETA :lol:

Edited by Insaintee

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I posted a link the other night somewhere else, if you like this thread, you should read what this bloke has got to say, he has spent a fair bit of time putting together the blog and it's a good read:

http://mattleslie74.weebly.com/blog/no-more-cards-from-the-deck-for-the-bluff-king

I don't personally agree 100% with his conclusions, but it tracks Dave King's rangers-related activities over the last few years quite well.

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To gauge the possible state of this seasons finances it would be best to look at last seasons financial disaster.

They had three non recurring financial boosts from The Commonwealth games, wee share issue and the selling of a player totalling £5 million thereabout.

We know the clubs running costs that stand around £15 million for the stadium and all other facilities.

The interim accounts released for up until December 31st do paint a pretty picture but it all goes badly as soon as January comes around where they posted an operating loss of £2.88 million.

But a closer look at the accounts show an unpaid loan of £1.5 million and we'll add that to the interim operating loss and totals £4.38 million for the time being.

Then comes the SD £5 million loan which the club took which then pushes the accruing loses for the season up to £9.38 million.

Since they didn't take the second tranche of the SD loan they then borrowed 3 similar amounts of cash from the T3B's and the Mad King of £1.5 million, two from T3B's and one from the Mad King apparently totalling £4.5 million. We'll add this to our total and now stands at £13.88 million.

June's wages and bills still have to be met but which source will have paid them this time ?, ST's or the Mad King or the gullible bears ? I'll wager it won't be as much as £1.5 million so I'll speculate just less than a cool £1 million and the total of debt now stands at £14.5 million possibly or thereabout.

£14.5 million

So far we have £14.5 million but some of that loss can be absorbed by the club and converted into shares, the Mad Kings investment and T3B's reducing the losses to £10 million. That might cover some of the debt but still leaves £10 million in operating losses.

On the other foot it looks far far worse than the above. Firstly there is the non recurring items they might not or will not get next season depending on how the club is run. That £5 million from the Commonwealth, wee share issue and McLeod being sold, if they did not receive that last season then they would be staring at operating losses of £19.5 million ? yes that's correct they have overspent last season by that amount removing the non recurring items.

£19.5 million

This season the club appears to be reducing it's players wage bill, the management and the boards wages plus all their bonuses, we'll see. They will save even more when gardeners and suspended members of staff have eventually got their contracts honoured. But is this enough to dramatically reduce a running deficit of nearly £20 million from last season if they do not secure non recurring funding for services rendered ?

There is a claim that nearly £5 million came of the wage bill when there was an exodus of players at the end of the season. How much of that £5 million will disappear as the club signs new players ? that's anyone's guess I think but it will not be enough if said players are getting paid much less than the previous players that have left.

King has publicly stated they will overspend from last season if need be, seriously ? Is he going make the club overspend more than £19.5 million this season if he has to ? Common sense says he is talking complete pish by the new managers approach to procuring players, no marquee signings and scraping the barrel for possible missed talent they can sell on for good money if they prosper. Also we know the glib is famous for manipulating facts and figures and await with baited breath for such laughter.

For The Rangers to generate as much as cash as possible so the shameless glib & liar puts in next to nowt the club will need to be successful under W&W so the stadium is filled near maximum occupancy every other game, failure to do so will definitely see the horde going mental at seeing failure again and with a shoestring budget. Success under W&W then it's pats on the back and job well done spending the pennies to save for a title challenge to Celtic next season.

Even with the ST hike I just don't see them posting anything less than £10 million in operating losses for the new season unless some dopey idiot throws money at them with no chance or hope to get it back. What's the new boards max limit on funding ? there has been a myriad of amounts with no real intent with a figure laid out in stone. If they do post less than £10 million in operating losses then I'd say the new board have done something right but they will post losses into the millions for sure covered by soft loans converted into equity.

One other thing ? Is King and his cronies going to keep converting soft loans into shares until there are no shares left for any future share issue ? this could give them a huge stranglehold on the club in future with voting rights keeping them in place even if the fans want them to fcuk if they fail miserably.

King wants to sell 45K ST's and that money will go into the playing squad budget, by the way W&W are procuring players it looks like they are already close to that limit. The Rangers fans may argue their wages on record or rumour but are they factoring in bonuses here ? appearance money, winning bonuses, clean sheet bonuses etc etc etc.

As things are for the moment the club is pulling in it's belt and that's a good thing but is it already too late and they are one disaster away from going into admin because the running cost of The Rangers FC is based on success and not on budget ? If it were based on budget they'd have been posting profits for the last 3 years and this year looks like the last 3 years, accumulate debt to gain success and deal with it when they get to the top tier. Even in the top tier it be save to suggest they'd still run up operating losses chasing the dream and not living in the reality.

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Some awfy long posts on this thread.

Even Born_Hoopy's link is a TL:DR moment.

Good reads and decent debate material here, just a wee bit long guys.

Makes a change from some of the [email protected] on the BRALT, though...... :thumsup2 .

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Some awfy long posts on this thread.

Even Born_Hoopy's link is a TL:DR moment.

Good reads and decent debate material here, just a wee bit long guys.

Makes a change from some of the [email protected] on the BRALT, though...... :thumsup2 .

Good post, Rocky and a decent thought from the OP and well worth considering. A Charles to you both. I'll read through it all tomorrow when I'm sober ;)

The disappointing thing is seeing 'the usuals' posting about Rangers AGAIN. Haven't they a team to support?

Edited by The_Kincardine

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The disappointing thing is seeing 'the usuals' posting about Rangers AGAIN.

I had really hoped to avoid the Gers-bashing and speculative over-analysis by taking a neutralish "gist" approach. Claiming 3 significant digits of accuracy on the finances is fantasy and always seems to be done with something of an agenda, which starts to look pretty BRALTish almost immediately.

The OP was intended to take a very broad approach to season-on-season finances, and the implications of not readily being able to top-up the annual "ordinary" income, as has been done up to this point. I can't see how that can work; nor can I see how the board and the SFA (and the SMSM) can avoid addressing it. Yet that's what they appear to be doing. That seems to me to be the current critical thread in the Rangers story, as everything else depends on its resolution.

The thread was not intended as point-and-laugh: there's been plenty of that and only a small proportion has been genuinely funny.

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The £5M from the Commonwealth Games, was that just a payment for hosting the Rugby 7s etc,

Or does it include the money they would have made from hosting the cup semis and Scotland game when Hampden was out of use.

Is this a sum that is non recurring that has been counted somewhere?

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Good post, Rocky and a decent thought from the OP and well worth considering. A Charles to you both. I'll read through it all tomorrow when I'm sober ;)

The disappointing thing is seeing 'the usuals' posting about Rangers AGAIN. Haven't they a team to support?

And the Shite starts :(

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Good post, Rocky and a decent thought from the OP and well worth considering. A Charles to you both. I'll read through it all tomorrow when I'm sober ;)

The disappointing thing is seeing 'the usuals' posting about Rangers AGAIN. Haven't they a team to support?

More sensible posts on one page than the BRALT has seen in months. Supporters of various teams wanting to have a grownup discussion. Why does this disappoint you? Have you anything to contribute, or are you just going to moan about how people won't leave you and yours in peace, wrapped in your wee "company isn't the club" comfort blanket?

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£5m?

Sorry £5m was for the 3 non recuring incomes,

But question is still, was the cup semis and Scotland games included>

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Good post, Rocky and a decent thought from the OP and well worth considering. A Charles to you both. I'll read through it all tomorrow when I'm sober ;)

And the Shite starts :(

More sensible posts on one page than the BRALT has seen in months. Supporters of various teams wanting to have a grownup discussion. Why does this disappoint you? Have you anything to contribute, or are you just going to moan about how people won't leave you and yours in peace, wrapped in your wee "company isn't the club" comfort blanket?

f**k off the pair of you. I said it was a good thread and a good reply. I said I'd read it and make a post in response.

Why on earth either of you take objection to this is beyond belief.

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f**k off the pair of you. I said it was a good thread and a good reply. I said I'd read it and make a post in response.

Why on earth either of you take objection to this is beyond belief.

Nobody's taking objection, or even in simple English objecting, to this. The part of your own post you decide not to quote, I do. What makes you think non-the rangers fans shouldn't discuss the subject?

The continuing situation at ibrox holds a fascination for many, and this particular discussion has, until your interjection, focussed solely on the question of the thread title. Either join in or, with all due respect, fúck off to somewhere you feel more comfortable.

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f**k off the pair of you. I said it was a good thread and a good reply. I said I'd read it and make a post in response.

Why on earth either of you take objection to this is beyond belief.

I have as much right to post on this thread as you get over it.

8)

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