Economic Carnage and what it entails for Rangers

[Bill 13,717]

Yes indeed. It should be shut down tighter than a duck's arse and every penny should be held captive for the foreseeable future.

 

The club could do with painting a realistic picture for the fans too, most of whom haven't nearly grasped the seriousness of this situation. There should be no more daft talk about transfers unless it's a sale. We are standing on the brink of re-running the pain of eight years ago unless the board screws down the hatches - tight.

Edited April 21, 2020 by Bill

[Walterbear 557]

Agree cost cutting inevitable. Goal is to survive rather than stop 9 1/2. 
 

Reduce squad. Reduce wages. No new contracts. Sell players (probably at cut price).  Do that and we survive. I think we will struggle to stop the scum. They have cash. I think keeping Gerrard and his team is a challenge. 
 

The challenge is keeping revenues up for a diminished or possibly non existent product and that’s where football has a slight advantage. Fans will put their hands in their pockets but there will be reduced spending in not just tickets but extras such as food, sponsorship, advertising etc. 
 

There will be opportunities for those on the ST waiting list. I think imagination needed for ST sales for example. Distilleries offer casks maturing in 10 years to fund investment. You effectively loan the distillery money and you get a cask when it matures. I think if we regards STs as a loan to the club and each game not played in front of a crowd is paid back to the fan in reduced prices for ST over say 5-10 years fans would respond. I could work this out in detail but can’t be bothered but it would work. 
 

Wr will have fans who lose their jobs and sadly lives. We could up the price levels at Ibrox in exchange for sacrificing capacity. Offer more Bar72 type facilities - again using the loan model. 
 

However I still think we will come up significantly short compared to the scum. If we survive it is possible this whole crises could kickstart cross border cooperation and that might be the salvation in terms of remaining a major club. 
 

We would surely have a strong case during the crises for changing TV income and Rangers TV could be critical to broadcast reduced or closed door games. 
 

I think there are loads of opportunities to reduce costs (not having operational costs in match day ironically will save a fortune) but revenue generation is a bigger challenge. 
 

What all this indicates is we almost certainly need support and flexibility from UEFA to break some of the rules that restrict us to the economic and administrative cesspit of Scottish football but if we can’t escape then significant changes in the level of product and how we watch it and how we pay for it are inevitable. 

 

 

[craig 5,199]

18 hours ago, buster. said:

For us, yes, we can speculate like we do for the football side but ultimately of course, it´s wait and see.

However, the boardroom and club financial planners can´t. I´d be interested to see what the finance experts amongst us have to say on this. @Bluedell @Bill @craig  (the BBC!!).

 

Ann Budge came in for a lot of criticism when she moved quickly to cut costs but IMO whilst her calls on the football side have occasionally been dubious, she was right to take immediate measures on this.

 

We´ve already had a debate of sorts regards Deferrals v Cuts....but that initial decision has already been taken and the revised numbers could be fed into any future analysis.

 

As for Hagi, I don´t think it would be wise to commit the 4 or 5 million sterling at this point in time.

You could say, sell X and Y, raise the money and spend but transfer values have just been diluted and it appears the proposed fee for Hagi is fixed.

 

Good time to get Saudi owners in (I doubt the price of oil will stay where it currently is).

Could we use Auchenhowie to store millions of barrels of crude to sell at a later date ?

 

 

 

Mate, I would try to put something together for discussion but I am a) absolutely swamped at work and b) all of this really would be guesswork because there are so many variables.

 

I have read that matchday profit is negligible at Rangers so right now we shouldn't be overly hurting (wages should be getting funded from ST's - though that also depends on whether CC companies are releasing funds as, I think it was BD that said, they only release them from the CCCS per game - and with games not getting played we may be seeing that income drying up).

 

Some may not want to hear this but our current financial state is one thing.... everything is relative i.e. we will be successful or not, dependent on where we are in relation to Celtic.  I suspect that Dave King & T3B (again, personal business circumstance and finances pending) have come so far that they wouldn't let the club fail.  May need additional funding but I suspect (nothing more than a hunch) that they would be prepared to do so.  But Celtic wages are significantly higher than ours, CL qualification wages.  With the pandemic drying up income it is known that they have asked, and been rejected, Adidas for an up front payment for their new sponsorship.  Adidas have asked for state aid from Germany....  so things clearly aren't all rosy at Celtic Park.  It is also rumoured that much if not all, of the Tierney  money is segregated for, ahem, anticipated legal cases against them.

 

If the transfer market dries up or significantly drops that will hurt us for sure - but given their need to sell, annually, if they don't make the CL then one has to expect that it will hurt them more.  Which is a good thing.

 

Yes, we have been running at losses even with decent sized European income - but that EL income has also helped fund purchasing Kent for 6.5 million (as an example)… we may have to curtail such purchases for a period - but that also depends on the club, King & T3B funding, sponsorships, commercial retail issues with Ashley, potential share issues (will they be postponed as people look to their financial liquidity) ?

 

And all of that is before we even look at the personal financial situation of 43,000 ST holders and their ability to continue to buy ST's.... or, as an extension of that, the alleged 15,000 ST waiting list

 

The situation is far too liquid, far too variable, to quickly make a stab at what to expect.  Sorry

 

 

[craig 5,199]

16 hours ago, Gaffer said:

Funnily enough we have plenty of precedents, albeit the cause (in this case a 'disease) is different.  It is scary and what bothers me is that the government continue to insist that they're listening to their medical advisers.  That's crazy.  They can only give one side of the issue to the government but history tells us that far more deaths occur in depressions and in poorer economies than this disease can ever cause.  I could give you those numbers but they are very frightening so I'll refrain from that on here.

 

One additional thing w are beginning to see also is a sharp decline in the value of certain stocks.  This lockdown has shown how vulnerable certain businesses are and as a result their intrinsic value will be lowered to reflect that.  This means that pension funds and other investments will be widely affected too.  The long term effects of this lockdown are way greater than the threat of the disease.

 

Rangers must tap into its supporters better.  I don't know how much room there is to manoeuvre on Rangers TV so that we can show all away domestic games on that platform.  We need to look at all avenues of income.

The markets are currently down no more than they were in 2008.  Consolidation is inevitable and, when it happens, it will be about being on the right side of it.

 

My fear in the financial markets is a 2nd, or 3rd wave and we will see a double dip in the markets - it is very strange because, unlike 2008, this pandemic has everyone already espousing we are looking at a depression - so the markets SHOULD have already priced that in - yet they are "only" down 20% from their highs in February.  

 

We (my company) have had calls with some of the brightest and sharpest investment manager minds around (obviously due to investment portfolio management) and they cannot believe that the markets have rebounded as much as they have - in their words.... "we have NEVER seen this before.... so how can we possibly know where it is all headed" ??

[craig 5,199]

13 hours ago, Gaffer said:

^^^This 100%.  I've said it a few times.  This is about surviving now.  The sooner businesses realise this, the better chance they have of getting through it.  I doubt that many of the current football clubs will still exist in 5 years.  The most at risk are those larger clubs, especially in England, Italy, Spain and France.

Barcelona already looking to sell the naming rights to Nou Camp for a season to try to help them through it....

[buster. 5,194]

22 hours ago, Gaffer said:

Funnily enough we have plenty of precedents, albeit the cause (in this case a 'disease) is different.  It is scary and what bothers me is that the government continue to insist that they're listening to their medical advisers.  That's crazy.  They can only give one side of the issue to the government but history tells us that far more deaths occur in depressions and in poorer economies than this disease can ever cause.  I could give you those numbers but they are very frightening so I'll refrain from that on here.

 

One additional thing w are beginning to see also is a sharp decline in the value of certain stocks.  This lockdown has shown how vulnerable certain businesses are and as a result their intrinsic value will be lowered to reflect that.  This means that pension funds and other investments will be widely affected too.  The long term effects of this lockdown are way greater than the threat of the disease.

 

Rangers must tap into its supporters better.  I don't know how much room there is to manoeuvre on Rangers TV so that we can show all away domestic games on that platform.  We need to look at all avenues of income.

I can´t think of a comparable precedent in terms of scale and unifomity throughout the world and industrial sectors and that´s not taking into account of uncertainty wrt to timescale/evolution of the virus  ,..but that is drifting to Lounge territory.

 

- Will the upcoming economic situation reduce ST/ other revenue numbers ?................Yes  (will be the same for all clubs)

- General downsizing will mean lower quality of squad as a whole 

- It will come down to good/bad management of what resources you have.

- Going into next season, we already have player contracts to honour that must be at a level that any up to date projected budgets might struggle to cover.

- Big cost cutting hopefully starting weeks ago

- Should be wage cuts, not defferrals (needs to change)

- We are accustomed to running at a structured loss but approaching the time when projections/plans pointed towards breaking even and not requiring shareholders to fill holes.

- Are the major prospective investors (looking at proposed share issue) doing it for emotive or investment reasons ?

 

We were in the process of making the club more professional at various levels (eg. commercial, youth development, etc) as well as edging towards on the pitch success and employ Steven Gerrard who adds glamour.

 

What happens now is that the player trading market will bomb for at least the short term and in Scotland, may never get back to the numbers we were starting to see Celtic receive. That would severely restrict potential to make any money and discourage investors.

 

Brings us to individual assets, eg. Morelos.

Do we accept what would be a cut price deal to get some money in and his wage off the books ?

I think the risk that he loses interest in a sea of red mist is too great and we sell, even if the fee is low. Needs be.

In hindsight, re-signing Davis and Defoe was a mistake.

McCrorie and Docherty should be kept IMO. They are the type who might excell at a Rangers forced to downsize. Gerrard might not be madly keen on them but SG is going to have to consider a practical Plan B or he´ll be for the off.

 

etc, etc.

 

Brightside is we have some decent youths coming through.

I´d like to think players such as Kelly are ready for the step-up to a squad with what will have to be a significantly lower wage bill.

 

 

ps. I apologise for the disjointed and rambling nature of the post.

Edited April 22, 2020 by buster.

[buster. 5,194]

18 hours ago, MacK1950 said:

Have said many times a domino effect could come in with collapse of a major club,but didn't think a virus would be the chance of the cause.

Newcastle Utd fans have had to relatively suffer the reign of Mr.MASH for a number of years.

 

Suddenly it seems as if a takeover will lead to another rich bastard (Saudi oil money) in the door but one that is more likely to splash the cash. The Geordies have a way of attracting bad luck as well as cnut investors or now murdering bastards and at the same time, the oil price hits zero. That will obviously change but there is something poetic in the symmetrical about that.

 

Regards big clubs, it´ll be about to what levels they will need to downsize, how long will it take to recover and managing the process. My off the cuff guess is that Bayern Munich may come out of this on top of the pile.

[buster. 5,194]

5 hours ago, craig said:

Barcelona already looking to sell the naming rights to Nou Camp for a season to try to help them through it....

They are doing it to raise funds for outside agencies fighting the virus.

[Gaffer 1,665]

5 hours ago, craig said:

The markets are currently down no more than they were in 2008.  Consolidation is inevitable and, when it happens, it will be about being on the right side of it.

 

My fear in the financial markets is a 2nd, or 3rd wave and we will see a double dip in the markets - it is very strange because, unlike 2008, this pandemic has everyone already espousing we are looking at a depression - so the markets SHOULD have already priced that in - yet they are "only" down 20% from their highs in February.  

 

We (my company) have had calls with some of the brightest and sharpest investment manager minds around (obviously due to investment portfolio management) and they cannot believe that the markets have rebounded as much as they have - in their words.... "we have NEVER seen this before.... so how can we possibly know where it is all headed" ??

I'm not sure what these investment managers are using to track previous trends but we have seen this before and it's quite common.  Unfortunately, too many use modern portfolio theory as the basis for their models but it's deeply flawed and omits all of the major dips throughout history.  Funnily enough the dip in 2008 is nowhere near the worst we've had in the last 60 years.

 

As for a 2nd or 3rd wave ... of what?  It's the lockdown that's causing this, not the threat of the virus.  The government can halt it by removing this mass lockdown.

 

We will all have our opinions based on what our experts are telling us.  I think what we can agree on is that tough times are ahead and Rangers must protect every penny it has.  We are going to need it to ride this out.

[buster. 5,194]

44 minutes ago, Gaffer said:

I'm not sure what these investment managers are using to track previous trends but we have seen this before and it's quite common.  Unfortunately, too many use modern portfolio theory as the basis for their models but it's deeply flawed and omits all of the major dips throughout history.  Funnily enough the dip in 2008 is nowhere near the worst we've had in the last 60 years.

 

As for a 2nd or 3rd wave ... of what?  It's the lockdown that's causing this, not the threat of the virus.  The government can halt it by removing this mass lockdown.

 

We will all have our opinions based on what our experts are telling us.  I think what we can agree on is that tough times are ahead and Rangers must protect every penny it has.  We are going to need it to ride this out.

An unpredictable pandemic, economic chaos and the very questionable quality of political leadership around many parts of the world is a toxic mix. 

 

Who knows,...geo-politics might end up kyboshing any thoughts of a 2020/21 season.

 

 

Edited April 22, 2020 by buster.