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The truth behind the banks?


JTP

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To give the impression of stability although they had already explained publicly explained our financial predicament, still makes no sense, as you said yourself it was apparently "insignificant"......

People love a good conspiracy theory and the bank controlling our club is just that.

Sometimes you have to face up to the fact that some people know more than you. :D

I agree that it doesn't make total sense that the bank have input into the club's affairs, but it doesn't make it untrue. I was told about this over 3 months ago by someone fairly senior within the club, and I've got no reason to disbelieve it.

Perhaps it will become a little clearer when both the club's and MIH's accounts are published.

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Because of the embarrassment that we couldn't give our captain a contract, perhaps? Walter will not always be 100% truthful about every aspect of the club, nor would we want him to be.

When did we officially announce that Weir did sign a new contract?

Can't rememeber the exact date but it was in July......

My understanding as that the club never made any announcement. Happy to be disproved though.... :)

Walter mentioned it in an interview, it was posted on here

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To give the impression of stability although they had already explained publicly explained our financial predicament, still makes no sense, as you said yourself it was apparently "insignificant"......

People love a good conspiracy theory and the bank controlling our club is just that.

Sometimes you have to face up to the fact that some people know more than you. :D

I agree that it doesn't make total sense that the bank have input into the club's affairs, but it doesn't make it untrue. I was told about this over 3 months ago by someone fairly senior within the club, and I've got no reason to disbelieve it.

Perhaps it will become a little clearer when both the club's and MIH's accounts are published.

I fully accept their are plenty of people who know more than me..... ;)

The vast majority of what is written there is probably accurate , the only two bits i disagree with i have commented on......

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To give the impression of stability although they had already explained publicly explained our financial predicament, still makes no sense, as you said yourself it was apparently "insignificant"......

People love a good conspiracy theory and the bank controlling our club is just that.

If you were in silly debt what the bank was asking for every month would rule your outgoings and incomings would it not?

As long as i was paying them back as promnised what i did with the cash in my pocket would be none of there business......Pretty simple really.

No, you would deal with the credit department of the bank who would look and all your incoming money and outgoing and they would tell you what you needed to do.

You would then have your ability to withdraw money removed and be made to pay back a set monthly payment.

When you are using the bank's money and they feel that you are not going to repay it, they will step in and remove your banking facilities unless you start to do what they say.

I know this from working in the lending department of a bank and dealing with our credit department.

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Whilst everyone would have loved to have seen two or three signings made, the stark reality is that the money from CLGE has to go to the bank debts, and the full impact of this - and this summer - will be seen in next years accounts. As always, I hope some of this helps.

As has been said, the format or that article has made it hard to read, so I need to ask about this part.

In what context is this written, the bit in bold especially?

Is that saying that next year's accounts are going to look much healthier, or much worse? Initial instinct tells me that the former will be true after the downsizing we've 'achieved', but I'm not 100% sure.

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Is that saying that next year's accounts are going to look much healthier, or much worse? Initial instinct tells me that the former will be true after the downsizing we've 'achieved', but I'm not 100% sure.

Debt will be reported over the next few weeks as somewhere around £30-35million.

As such, with all the downsizing and the CL money, we could be back to around £15-20million next season.

Which makes this season's SPL all the more important for shifting the financial balance back towards us.

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Is that saying that next year's accounts are going to look much healthier, or much worse? Initial instinct tells me that the former will be true after the downsizing we've 'achieved', but I'm not 100% sure.

Debt will be reported over the next few weeks as somewhere around £30-35million.

As such, with all the downsizing and the CL money, we could be back to around £15-20million next season.

Which makes this season's SPL all the more important for shifting the financial balance back towards us.

Cheers Frankie.

It was just worded very doomsday-esque.

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Now my limited understanding when it come to clubs finances is that the banks will only get involved if the club goes into administration.

And clearly we all know RFC are not in that situation so why does it keep coming up that we are controlled by the banks?

To me that does not make sense.

Okay, we may be restricted in what we have to do to live accordingly but in no way are we CONTROLLED by any bank!

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I have no reason to doubt what is stated in the opening post.

As Frankie says, net debt at 30 June 2009 will be much higher than last year - I wouldn't disagree with his estimate (especially as it came from a half decent source :P )

And next year's accounts will certainly see the benefit from this summer's activities, i.e. reduced wages/CL money etc. As a result, net debt at 30 June 2010 will be back down again, perhaps below £20m.

One more year of winning the SPL and getting into the CL (either directly or in the easyish CHQ rounds) and them finishing second and getting papped out in NCQ4 will, IMO and all things being equal, pretty much eliminate the financial differentials, perhaps even putting us in the stronger financial position.

Therefore this summer's clearout and prudent signing strategy has been a good and necessary thing for us. So perhaps looking forward it doesn't matter how much the bank were or weren't pulling the strings, either formally or through implied credit restrictions.

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As someone else touched on...I was always under the impression that banks would only get involved in decisions within any business if that business has gone into administration.

So, we are not in administration but the banks are telling our Club that they cannot offer contracts to players etc?

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

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The thing I don't get is - and it refers to Gaff and Cartman's debate about Smith 'lying' - is that we knew as soon as Caldwell's own goal went in for Arsenal against to make it 2-0 that Celtic weren't going through.

Yet given this, the club STILL said that we didn't have the funds to even bring in a loan player. They said that Celtic going out of Europe would have made no difference.

Is that playing coy? Or is it them just misleading the press?

To be fair, as football fans we all 'knew' that celtic were getting pumped out, but if you are a Bank looking at RFC's situation you need more certainty than that. I think they were just hedging their bets, because other factors were at play.

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

which means the bank wouldn't be dictating how we use our cash just how much we can spend (which i think we all accept is currently happening). So it's us deciding if we could offer players contracts.....

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

Basically what I said - the bank may have set a facility limit - but management make the decisions how to work within that position - ergo - the bank do NOT agree contracts - the management do - simples! ergo the bank are NOT running the club! Simples!

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

which means the bank wouldn't be dictating how we use our cash just how much we can spend (which i think we all accept is currently happening). So it's us deciding if we could offer players contracts.....

Yes but when you offer someone a contract you are making a commitment that will cost money.

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not too sure about the banks saying what we can and cant do, maybe they had a say in regards to the overdraft they are giving rangers

maybe the bank told murray "show us signs that you ARE reducing the overdraft, or we WILL remove the credit facility and you will be forced to pay back the full amount of said overdraft"

had that once with my student overdraft that i didnt bother my arse about for ages,

either way to leave a loan deal to the last day would hint to higher powers being involved, we could easily have lost rothen by waiting that fucking long

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How ever we did it...the MAIN point in all of this is the fact that we have a higher degree of stability around the place now. Our squad is the strongest it's been for years. The wage bill is now firmly under control and we are, I believe....far better placed to be bought, and a much more attractive proposition for potential buyers!

Whether this is all down to a combination of Murray & Bain's prudence, or the banks insistence....I'm not really bothered. Things are at last looking rosy!

If we can still stay in Europe after Xmas, we will be bringing in extra coffers that probably haven't been accounted for. Perhaps that could finally lead to us bringing ion extra defensive cover or tying up Boyd.

We shall see!

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

which means the bank wouldn't be dictating how we use our cash just how much we can spend (which i think we all accept is currently happening). So it's us deciding if we could offer players contracts.....

Yes but when you offer someone a contract you are making a commitment that will cost money.

Thanks for explaining how a contract works, i was fair stumped there.......

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Why I think the OP in whole should be taken with a pinch of salt. Banks do NOT run businesses - they may provide a financial constraint on borrowings, in particular overdrafts and they may be an agreement with the bank to reduce debt (or it may just be financially prudent to do so) - but here is the point - Banks DONT sanction contracts or otherwise - banks do not run businesses, if it gets to the state where they want control they apply for administration (and all creditpors are then treated as equal and not just on the banks behalf) - and as a public company that is a legal process and reporting measure. The club management sanction contracts or otherwise - they may have chosen to look at a loan player as their own constraints over the next 12 months have eased with Celtic out of the CL (and in fact they may have asked for a change to the OD terms to do so) - but they will not, should not and will not be going to the banks to ask them to sanction this or that spending. Simples!

Not really all that simples.

Irrespective of the debt at 30 June each year, we need something like £15m facility to see us through to our worst cashflow position around April, just before the next season's ticket money starts to come in.

Before the auditors can sign off, they need to satisfy themselves that (any) company is a going concern. As part of that, the auditors must ensure that the directors have considered the period ahead for at least the next 12 months from date of signing the accounts. This involves, inter alia, considering cashflow projections for the period and confirming that the necessary bank (or other) facilities are in place or likely to be in place.

The bank says, okay we will agree the necessary facility for the next 12 months but only if the cashflow position doesn't exceed x. In order to get to that projected cashflow position, the club therefore needs to do y, z and a.

So the club are indeed in control of what they do - the directors have the legal responsibility for running the company, not the bank. But the directors are pretty much pushed into playing ball with the bank in order to get the agreed facility, in order to satisfy the going concern consideration, in order to get the auditors to sign off.

There. That really is simples. :)

which means the bank wouldn't be dictating how we use our cash just how much we can spend (which i think we all accept is currently happening). So it's us deciding if we could offer players contracts.....

Yes but when you offer someone a contract you are making a commitment that will cost money.

Thanks for explaining how a contract works, i was fair stumped there.......

just think if you had asked this at the start, all this arguing wouldnt have been needed

communication lads, its simple :gerbad::gerbad:

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