Deciding the future of Sevco

Leadership is often about making decisions.

I understand from well-placed sources that this morning there was a conference call between most of the main stakeholders at Rangers International Football Club.

The item for discussion was quite simply the April payroll because the money isn’t there.

The Institutional Investors are clear that not a penny more will they put into this financial basket case.

The Season Ticket money is flowing in, but there are legal issues in using it to keeping the lights on.

This is because directors of the PLC a taking Season Ticket monies from people, essentially selling futures in football matches, while knowing that the Administration button is about to be pressed is very naughty.

I understand that despite the noise level online by anti-board types many Ibrox customers are renewing so that they can keep their seat in the stadium beside people they know.

However, even if the Season Ticket money was used to meet the Payroll and keep the lights on it simply isn’t enough.

Let us say that the club sold 35,000 Season Tickets at £400.

That brings in £14,000,000 and, I’m sure you will agree dear reader that is quite a sum.

However, it will not cover the annual wage bill for all staff at Ibrox and Murray Park.

On the published accounts of both RIFC and The Rangers Football club (TRFC) formerly called Sevco Scotland Limited the salary costs are 99% of turnover.

Moreover I have not even factored in the impact of the upward only contracts enjoyed by many on the playing staff.

In order for Season Tickets to fund the operation the club/company/celestial entity would need to sell 70,000 Season Tickets at £400.

That would, of course, bring in £28,000,000.

However, given that the stadium has a capacity of 50,987 then I see a problem right there…

Even if the Season Ticket money is used to pay wages this week then I am advised that the  cash will probably run out probably by August.

The chaps on the conference call know that this business can’t survive with the current cost base intact.

The only way it continues is for further external finance.

For the Nth time it is worth pointing out dear reader that this is a business without a credit line from a bank.

Moreover,there is currently no working capital to keep the operation running while bringing in the type of planned austerity that Celtic implemented during the Gordon Strachan years.

Further external financing, probably from major shareholders, will be required to keep the show on the road.

The important chaps who were in that conference call this morning have important decisions to make.

They do not appear to have any easy options.

Tough call.

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