Generic Sevco / Rangers meltdown thread

[CropleyWasGod]

This quote is hidden because you are ignoring this member. Show Quote

Could have swore i read at the time that the players renegotiated contracts meant if a newco was set up they could leave with no or a nominal fee

There were a lot of speculative assumptions at the time, such as the one you mention, the right to walk away if they didn't like the new owner, and the right to walk away at the end of the season. I don't think anything was ever actually disclosed, and rightly so. My assumption is that each renegotiated contract was different.

[Jim44]

This quote is hidden because you are ignoring this member. Show Quote

Does this all not boil down to whether RFC get to play in the SPL next year (aside from the trivial matter of fleecing people of 10s of millions of pounds)?
Millers NewCo need the OldCo licence - is this a given that they get it?
If they get it, can they just play again next year in the SPL?
Does someone need to grant the NewCo permission to play in SPL. Despite Doncasters view and recommendation will it actually be voted on?
UEFAs 3 year rule - I imagine any new owners have accepted no Euro football for 3 years. I would like to think that if UEFA impose this 3 year rule as it deems a newco is dodging liabilities, then they would also not be happy with a newco sitting at the top end of a domestic league and act on it.

UEFA's moral and direct policy of refusing licences to play in European competiions to clubs which have 'dodged the bullet' of paying debts and taxes, theft, in any other language, is commendable and logical. However I suspect that that is where their active involvement in this case will stop. While the SPL and SFA have, fudgingly, not played their final cards, I think that even the wildest exponent of fair play, decency and honesty expects them to eventually roll over and have their bellies tickled by the lure of financial security and continuity of the status quo (corrupt and servile as it seems,when it comes to the final crunch, most clubs will unfortunately and cowardly admit to a dependence on the presence of a 'successful Old Firm' in the SPL). If and when these cowards open the door to welcome back the 'cleansed' Govan newco,) nothing would please me more if UEFA came down on our football authorities like a ton of bricks and took drastic measures to make an example of them and warn other countries that this sort of chicanery will not be tolerated. But, somehow, we all know they probably wont.

[cad]

This quote is hidden because you are ignoring this member. Show Quote

Yup, this is a poker game now.. Wonder if Duff and Duffer and the Sherman Tank know about our Rod's poker face?

Rods pair off 2`s will way to much for the Huns .

[green glory]

With the admin's willingness to tell a load of porkies to the compliant weegie media yesterday. You have to wonder what fantasy assurances Bill Miller has been given. Player contracts to a newco, rules on newco in Europe, SPL and Hector lying down etc etc etc.

The balloon is going to go pop soon I hope. I think today at the court of session and Monday's SPL meeting are pivotal.

[greenginger]

http://www.journallive.co.uk/newcast...1634-30897946/

So much for Doncaster's blatant lies about there being no difference in exiting admin. with a CVA in place or not and how in England clubs just stay in the same league.

Darlington are heading for the Evo-Stick premiership but not through a SOLVENT reconstruction.

Has any Learned Hacks suggested how, if the switch to Newco Hun is to be done before the end of the season, the Newco can't have any players cleared to play their last game with the transfer window shut ?

[ScottB]

This quote is hidden because you are ignoring this member. Show Quote

Yup, this is a poker game now.. Wonder if Duff and Duffer and the Sherman Tank know about our Rod's poker face?

The tache will be twitching in anticipation at the opportunity to fleece them good. I'd hope.

This quote is hidden because you are ignoring this member. Show Quote

Could have swore i read at the time that the players renegotiated contracts meant if a newco was set up they could leave with no or a nominal fee

This quote is hidden because you are ignoring this member. Show Quote

There were a lot of speculative assumptions at the time, such as the one you mention, the right to walk away if they didn't like the new owner, and the right to walk away at the end of the season. I don't think anything was ever actually disclosed, and rightly so. My assumption is that each renegotiated contract was different.

It was reported at the time that some / all the players had clauses allowing them to leave if Whyte was still involved with the club. He still owns his shares...

This quote is hidden because you are ignoring this member. Show Quote

With the admin's willingness to tell a load of porkies to the compliant weegie media yesterday. You have to wonder what fantasy assurances Bill Miller has been given. Player contracts to a newco, rules on newco in Europe, SPL and Hector lying down etc etc etc.

The balloon is going to go pop soon I hope. I think today at the court of session and Monday's SPL meeting are pivotal.

Surely the Court will call them out on the apparent bare faced lies they spouted yesterday...

[BarneyK]

This quote is hidden because you are ignoring this member. Show Quote

http://www.journallive.co.uk/newcast...1634-30897946/

So much for Doncaster's blatant lies about there being no difference in exiting admin. with a CVA in place or not and how in England clubs just stay in the same league.

Darlington are heading for the Evo-Stick premiership but not through a SOLVENT reconstruction.

Has any Learned Hacks suggested how, if the switch to Newco Hun is to be done before the end of the season, the Newco can't have any players cleared to play their last game with the transfer window shut ?

The clubs he mentioned exited through a CVA. He really needs to work a bit harder on his research. The one he really should have quoted was Leeds United. They had no CVA, were (I think) liquidated, and yet they retained their league share, the league quoting an "exceptional circumstances rule".

[JeMeSouviens]

This quote is hidden because you are ignoring this member. Show Quote

http://www.journallive.co.uk/newcast...1634-30897946/

So much for Doncaster's blatant lies about there being no difference in exiting admin. with a CVA in place or not and how in England clubs just stay in the same league.

Darlington are heading for the Evo-Stick premiership but not through a SOLVENT reconstruction.

Has any Learned Hacks suggested how, if the switch to Newco Hun is to be done before the end of the season, the Newco can't have any players cleared to play their last game with the transfer window shut ?

So while liquidation has been avoided, the absence of a company voluntary agreement to pay off creditors means further FA sanctions are likely, in the shape of demotion to Evo-Stik Premier or North, and a possible points penalty.

Nails Doncaster's blatant lying. Quelle surprise.

[Killiehibbie]

This quote is hidden because you are ignoring this member. Show Quote

As one of cyberspace's nonentities, I take great offence at some of what he says.

All these nonentities add up to more than he thinks.

[Velma Dinkley]

So everyone employed by Rangers is lying, everyone previously employed by Rangers is lying, the administrators are lying, this Doncaster chap is lying, 99.9 per cent of the Scottish media are lying.

[JeMeSouviens]

This quote is hidden because you are ignoring this member. Show Quote

The clubs he mentioned exited through a CVA. He really needs to work a bit harder on his research. The one he really should have quoted was Leeds United. They had no CVA, were (I think) liquidated, and yet they retained their league share, the league quoting an "exceptional circumstances rule".

Leeds actually had a CVA agreed but it was later challenged at the last minute (by the mighty Hector) as there were some dubious shenanigans going on which may have inflated the %age of debts owed to opaque offshore companies with alleged links to Ken Bates. All very murky.

I agree it is the only available precedent which comes close to applying but I'm not sure it's one they really want to be comparing themselves to!

[joe breezy]

"Leaving Glasgow, am stunned that tax-dodging Rangers' latest Big Idea is....a tax dodge. Glasgow papers report this as some kind of triumph!"

Alex Thomson - Channel 4 News (twitter account)

[JeMeSouviens]

Nicked this from a Sheffield Wednesday forum. It was written by one of the guys behind Club 9 sports and may inform on Miller's motivation (note reference to Der Hun so they were obviously keeping tabs on Scotland as well). Accountancy comments welcome ...

A Case In Favor of English Football Investment

The recent smattering of insolvencies and financially distressed situations in English football has once again placed the spotlight on the current football league model as well as the financial management of clubs in the top four leagues of the FA. The resulting financial disarray has not only caused many clubs as well as their financial partners to seek the restructuring of existing bank loans but those same clubs to seek additional equity capital or outright sale of the club.

The Perfect Storm
English clubs from a period beginning in 2003 through 2009 relied increasingly on leverage to fund club acquisitions as well as to fund football operations and ongoing earnings deficits. English football was awash in bank liquidity from their major financial institutions including but not limited to RBS, Lloyds Bank, Barclays and other middle market players such as Co-Operative Bank plc. In many circumstances, these loans were structured and secured by first mortgage facilities on club grounds and extended on an overdraft or demand basis. Even foreign competition entered the markets with Wachovia Bank’s syndicated financing in concert with RBS on the refinancing of Liverpool FC’s debt in 2008.

While the loans were secured by first mortgages and so called hard collateral, in effect, most of the secured by the enterprise value of the clubs typically modeled after some multiple of EBITDA or turnover. As a result, many of the banks were extending credit with the assumption that the club would be a going concern and turnover from television revenues and higher attendance figure would drive increases in value for the foreseeable future.

Starting with the 2008 credit crisis, the party ended for many football clubs and the punch bowl taken away by the banks. The years of calling the club’s banker to increase as well as extend the club’s credit facility were over. All of a sudden, senior credit officers and credit committees were taking an increasingly critical eye of their loan portfolios including those extended to football concerns. Most, if not all banks were tightening their credit policies and balked at any additional facility increases and in many cases requiring that clubs raise substantial equity to reduce the bank’s exposure. Between the years 2001 and 2009, the FA typically has experienced between 1 and 3 clubs filing for administration/CVA per year. Entering the 2010 season, Crystal Palace has already filed administration in January and it appears that several more clubs may soon follow by April. Notts County and Cardiff City are also face a winding-up petition from HM Revenue & Customs over unpaid tax bills, while Watford has warned that it could go into administration. On the same day that Cardiff City has a winding up hearing (February 10, 2010); Portsmouth FC will also have a hearing conducted with HMRC. Portsmouth, currently in the relegation zone in the Premiership, is feared to have debts in excess of £40-50 million. Currently on many fans’ watch list are: West Ham United as well as Hull City. It is well within the realm of possibilities that the Premiership may see the first side ever to file for administration. Two of the largest clubs facing major refinancing of their debt in 2010 are Manchester United and Liverpool FC which have a total amount of funded debt in excess of £900 million.

Valuations

If you can keep your head when all about you are losing theirs…… Rudyard Kipling

The dearth in new bank financings as well as the overall economic malaise has caused a withering of football club values in the last 1-2 years. New investment funds have sought a respite from the current market volatility and moved to more traditional bond and equity investments as well as cash. Additional concerns over football spending by supporters in the form of season tickets, merchandise and concessions has spooked many an experienced investor. Finally, the latest extension of Sky Sports television contract through the 2012/13 season provided little to be encouraged by in terms of a significant uptick in revenues.

Southampton FC who competed in the EPL as late as the 2004-05 season filed for administration in April of 2009. As a result of this administration, the club was relegated to League One status for the 2009-10 season. The sale of the club out of administration provides an interesting data point in terms of valuation. Southampton Soccer News Topics, who had spent 25 years in England’s top division, was reportedly sold at a valuation metric (assuming turnover of £13 million) of approximately 1x. This is a significant departure from previous sales multiples for Championship level clubs in recent years (Coventry 2007 for 6.0x, Ipswich 2007 – 4.2x, Birmingham City 2007 – 2.0x, Wolverhampton 2007 – 2.52x). The only club acquisition approaching that of Southampton’s was Derby County in 2008 following its relegation to the Championship where previous turnover was inflated from the Premiership.

Recent equity raises and outright sales of Championship clubs have met with continued tepid response, at best, over the past two years with no new sales of clubs occurring in the 2009 calendar year. Clubs such as Crystal Palace Soccer News Topics, Watford, Charlton Athletic, Sheffield Wednesday and Reading had reportedly tested the markets for new investors and were met with little success.

The Specter of Administration
Administration has a significant cost associated with it in English Football. League rules specify that any club filing for administration will be assessed a 10-point penalty in the league tables. As a result of Crystal Palace’s recent filing, the club went from a potential playoff contender for promotion to 21st place just above the drop zone. While administration may appear at first blush as a viable financial alternative, the penalties associated with it can force a club into relegation into the next lower football division and diminish the overall value of the club. Due to this hefty penalty, clubs as well as banks are reluctant to force a club into administration. Many banks have chosen instead to work cooperatively with the banks in terms of finding new equity investors to repay debt (causing dilution in the existing equity holdings), increased supervision by the bank (as has been reported in the case of Scottish FA giant Glasgow Rangers) or an overall restructuring and forgiveness of debt (‘cram-down’ in American parlance).

Due to the above intervening factors, the FA has turned into a relative treasure trove for the experienced sports entrepreneur or investor. Banks and equity stakeholders as of late have shown a greater propensity to be more flexible in their negotiations with potential investors and purchasers. This new-found flexibility will result in clubs emerging from restructurings without having to go through the process of administration while providing reasonable purchase multiples which were non-existent as recent as two years ago.

Evaluating Opportunities
Financial analysis of football clubs is not terribly onerous and focuses on a number potential value drivers:

1. The grounds must be owned by the club;
2. Size of grounds must be in upper quartile of its respective league;
3. Fan support (as defined by average attendance) in top quartile of its respective league;
4. The club must maintain a well-respected academy;
5. Positive EBITDA (exc. Player transfers);
6. Pro-Forma debt less than £10 million post acquisition;
7. Must be in Championship or Premiership; and
8. Wages/Turnover must be maintained at 60% or less and be competitive in its respective league.

Adhering to the above screening criteria provides a strong foundation in order to build a financially viable club long-term. Many of us will look back upon this time in this space and realize that this was a once in a lifetime change in an industry where some will capitalize and reap huge rewards.

Joseph M. Kosich is the founder of Dornoch Capital Advisors LLC, a merchant banking and advisory firm specializing in professional sports finance and located in Pinehurst, NC. Previously, Joe founded and served as a managing director and head of originations and syndications for Wachovia’s Structured Finance Group which specialized in sports and entertainment finance. Joe was responsible for structuring and syndicating complex corporate finance transactions in the United States, Canada and U.K for ultra high net worth families and individual sponsor groups. Joe’s primary focus was on enterprise value lending, preferred, mezzanine and other subordinated debt structures. Prior to joining Wachovia in 2005, Joe spent 16 years, in various structured finance and corporate/private banking positions, with Citigroup, UBS, AG and Bank of America Soccer News Topics.

[CropleyWasGod]

Just had a thought, and it's probably one for the lawyers out there.

BM wants to buy the property of RFC, and presumably his solicitors will do their due diligence and checking of title etc. CW's company still have a charge lodged with Companies House, over the whole of RFC's assets. I think, as do the administrators, that that charge is worthless.

Here's the questions.:-

1. does that charge, even though it may be worthless, have to be lifted before a sale happens? How easy is that?

2. what are CW's rights in blocking the sale?

Flies... ointment.. now.

[hibs0666]

Apparently there is a UEFA statement doing the rounds stating that any transfer to a newco would constitute an interruption of membership and an automatic three-year ban would from Europe would ensure.

[joe breezy]

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

[D7 Bohs]

This quote is hidden because you are ignoring this member. Show Quote

Apparently there is a UEFA statement doing the rounds stating that any transfer to a newco would constitute an interruption of membership and an automatic three-year ban would from Europe would ensure.

That rule was invoked to stop Derry City playing in Europe this year, their third year as a reborn entity - and this despite the FAI petitioning to have it waived. We got their place

[EuanH78]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

not sure if it's better or worse than the one with the bairns keyboard but hysterical all the same

The Huns... Dont do er.. Dignity.

[PatHead]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

What a sad inbreed with his wife/daughter/lover. Hope they don't have more children

[calmac12000]

Despite the collective sigh's of relief from those of a Rangers persuasion, I feel honour bound to point out that except from Bill Millar achieving preferred bidder status in the fight(?) to take ownership of the clubd in administration, the material facts are exactly the same as they were when the process started. I won't dignify organs like the Daily Ranger who are lauding the arrrival of Mr. Millar, in a similar manner to which they would mark the second coming by pointing this out or the fact that considering the background to this drama, no money has actually changed hands yet. Being, totally honest the chances of the Millar deal coming to fruition are not high.

[green glory]

Is there any word on the outcome of today's visit to the Court of Session by Duff and Duffer?

[Just Alf]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

comedy gold ..... some of the comments are brill as well! ....... I'm scooshed tho..... do I score it up or down?!

[Saorsa]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

[Just Alf]

Oh God... NOOOOOOOOOOOO

http://t.co/MPECfApd

[CropleyWasGod]

This quote is hidden because you are ignoring this member. Show Quote

Is there any word on the outcome of today's visit to the Court of Session by Duff and Duffer?

They got six months

[greenlex]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

Deary ****ing me!!!! What a sad hun ******. All thats missing is the spaghetti hoops sauce stain on the shirt.

[Brando7]

This quote is hidden because you are ignoring this member. Show Quote

Oh God... NOOOOOOOOOOOO

http://t.co/MPECfApd

Pretty much how i see all this ending up also...shocking!!!!

[CropleyWasGod]

This quote is hidden because you are ignoring this member. Show Quote

Pretty much how i see all this ending up also...shocking!!!!

It ignores the question of the players' contracts, and the security issue that I raised earlier.

[Prof. Shaggy]

This quote is hidden because you are ignoring this member. Show Quote

Michel Platini was going to get UEFA involved but has changed his mind now that he's seen this heartfelt masterpiece

http://youtu.be/ek7SfViBvJs

Very very sad indeed.
His karaoke isn't even playing the right chords.

[hibs0666]

This quote is hidden because you are ignoring this member. Show Quote

Could have swore i read at the time that the players renegotiated contracts meant if a newco was set up they could leave with no or a nominal fee

TUPE governs the transfer of employees from one entity to another and will:

• protect players existing terms and conditions when they transfer into Newco
• allow the players to walk for hee haw at the time of staff transfer.