Got this article sent to my email about finances

[brockstoker 0]

I stand by the assertion that unless someone values RFC at £100m MIH will have to write off the difference.

So Broken Stocker is indeed a stalker. Surprised at your appearance given the financial maulings you have taken in years gone by. But welcome all the same.

Your comment above is simply wrong for the reasons in my first post. Wrong to the tune of about £47m. And this board deserves better than your half baked financial misunderstandings.

1. The £21m debt IS already included in the £79m net assets consolidated. Have a look at the accounts (page 14):

http://www.plusmarketsgroup.com/cgi-bin/re...rangers2008.pdf

If you still refuse to accept you are wrong I will type out the balance sheet for you. For goodness sake, if this is the basic error you made, heaven knows how you are going to understand the next point.

2. Your reply did not even mention the minority interests. Is that because you don't understand them? The minority interests at January 2008 represented about one third of Rangers. See MIH's balance sheet - I think the total minority interests were about £47m from memory, some of that re other MIH subsids. So only about two thirds of the value of Rangers is included in MIH's shareholder funds. So only two thirds of any shortfall in value will hit MIH's shareholders' funds. This point at least I won't blame you for not understanding - it is exceptionally complicated - but I am right.

So your assertion that "unless someone values RFC at £100m MIH will have to write off the difference" is wrong for the above two fundamental mistakes. (I won't complicate you further with your smaller mistake about goodwill.) Rangers isn't in the MIH shareholders' funds for anything like £100m and I defy you to prove otherwise.

Hope to have the opportunity to tear apart your financial analyses in the future.

Until we meet again.

1. In some Scandinavian countries, you can buy a house with the mortgage attached to it. If you pay the owner £79,000 for his house which has a £21,000 mortgage on it, then you are effectively valuing it at £100,000. You pay £79m to all the shareholders of RFC, and you end up with club plus the £21m owing to the banks. Unless you think the club is worth £100m you wouldn't buy it.

Unless someone values the club at £100m then no shareholder will get their share of the £79m.

2. As you say, only two thirds of the shortfall will hit MIH shareholders funds; I didn't disagree with that. I didn't even attempt to quantify it. I do seem to remember minority interests from my O Level accounting, but all I assert is that there will be a shortfall - a point you seem to agree with.

Financial maulings? Your recollection on that seems as coloured as your recollection of my MIH is doomed articles. And as for the stalker accusation, I only joined this board to comment on your constructive criticisms. Someone emailed them to me, otherwise I wouldn't have known you were still around.

Pip pip!

[Bluedell 14]

1. In some Scandinavian countries, you can buy a house with the mortgage attached to it. If you pay the owner £79,000 for his house which has a £21,000 mortgage on it, then you are effectively valuing it at £100,000. You pay £79m to all the shareholders of RFC, and you end up with club plus the £21m owing to the banks. Unless you think the club is worth £100m you wouldn't buy it.

Unless someone values the club at £100m then no shareholder will get their share of the £79m.

In your example you value the house at £100K. Correct. However when we are talking about buying Rangers you are buying the club. Assets AND liabilities...which are valued at £79m.

You are talking of valuing everything bar the debt at £100m. In what way is that relevant? You are buying the shares of the club. What's the point in looking at certain sections of what you are buying? You have to look at the whole thing. The club is worth £79m (in your example). The club contains the debt.

[boss 1,941]

1. In some Scandinavian countries, you can buy a house with the mortgage attached to it. If you pay the owner £79,000 for his house which has a £21,000 mortgage on it, then you are effectively valuing it at £100,000. You pay £79m to all the shareholders of RFC, and you end up with club plus the £21m owing to the banks. Unless you think the club is worth £100m you wouldn't buy it.

Unless someone values the club at £100m then no shareholder will get their share of the £79m.

2. As you say, only two thirds of the shortfall will hit MIH shareholders funds; I didn't disagree with that. I didn't even attempt to quantify it. I do seem to remember minority interests from my O Level accounting, but all I assert is that there will be a shortfall - a point you seem to agree with.

Financial maulings? Your recollection on that seems as coloured as your recollection of my MIH is doomed articles. And as for the stalker accusation, I only joined this board to comment on your constructive criticisms. Someone emailed them to me, otherwise I wouldn't have known you were still around.

Pip pip!

1. Muddying the waters with irrelevant stuff about "some Scandinavian countries" is a new one. Posters will understand that if you buy a house for £79k you are valuing the house at £79k. And whether or not you need to take out a mortgage for £21k is irrelevant to the fact that you valued the house at £79k. You have doubled counted the debt and your only response is to refer to some weird Scandinavian house purchase system.

2. It seems you have now accepted that (about) one third of any shortfall will not hit the MIH shareholders' funds. This is the first time that you have conceded that you don't understand enough about minority interests to be making the financial assertion that you did:

"unless someone values RFC at £100m MIH will have to write off the difference".

Please re-read that assertion and admit you were wrong.

Your lack of understanding might be good enough for elsewhere - but RM deserves better.

[brockstoker 0]

1. In some Scandinavian countries, you can buy a house with the mortgage attached to it. If you pay the owner £79,000 for his house which has a £21,000 mortgage on it, then you are effectively valuing it at £100,000. You pay £79m to all the shareholders of RFC, and you end up with club plus the £21m owing to the banks. Unless you think the club is worth £100m you wouldn't buy it.

Unless someone values the club at £100m then no shareholder will get their share of the £79m.

2. As you say, only two thirds of the shortfall will hit MIH shareholders funds; I didn't disagree with that. I didn't even attempt to quantify it. I do seem to remember minority interests from my O Level accounting, but all I assert is that there will be a shortfall - a point you seem to agree with.

Financial maulings? Your recollection on that seems as coloured as your recollection of my MIH is doomed articles. And as for the stalker accusation, I only joined this board to comment on your constructive criticisms. Someone emailed them to me, otherwise I wouldn't have known you were still around.

Pip pip!

1. Muddying the waters with irrelevant stuff about "some Scandinavian countries" is a new one. Posters will understand that if you buy a house for £79k you are valuing the house at £79k. And whether or not you need to take out a mortgage for £21k is irrelevant to the fact that you valued the house at £79k. You have doubled counted the debt and your only response is to refer to some weird Scandinavian house purchase system.

2. It seems you have now accepted that (about) one third of any shortfall will not hit the MIH shareholders' funds. This is the first time that you have conceded that you don't understand enough about minority interests to be making the financial assertion that you did:

"unless someone values RFC at £100m MIH will have to write off the difference".

Please re-read that assertion and admit you were wrong.

Your lack of understanding might be good enough for elsewhere - but RM deserves better.

1. I'm not muddying the waters. I'm making a clear analogy - Blue dell accepts it for the house. You buy the house and acquire the debt with it - you don't take out a mortgage. I still contend that RFC is the same. When businesses change hands for £1, it doesn't mean that either buyer or seller value them at £1 - it's because they think that the value of the assets is equal to the debts. Have you never heard of the concept of Enterprise Value?

2. the (unquantified) difference. I've never stated what I thought it was, because then I would have to guess what someone would pay.

If someone pays less than £79m for the shares of RFC (which I still contend would mean that they would have to put a value on the club of £100m) then MIH will have something to write off. You seem to disagree with the bit in brackets but presumably not the rest. Or maybe you will.

Not good enough for RM? I didn't see the No Riff Raff sign on the way in, old boy!

[Bluedell 14]

It can't be assumed that any buyer will repay the debt so the company (not the "house") is worth £79m

I believe Boss is correct on the MI.

However this is getting into semantics and is even boring me now.

[boss 1,941]

1. I'm not muddying the waters. I'm making a clear analogy - Blue dell accepts it for the house. You buy the house and acquire the debt with it - you don't take out a mortgage. I still contend that RFC is the same. When businesses change hands for £1, it doesn't mean that either buyer or seller value them at £1 - it's because they think that the value of the assets is equal to the debts. Have you never heard of the concept of Enterprise Value?

2. the (unquantified) difference. I've never stated what I thought it was, because then I would have to guess what someone would pay.

If someone pays less than £79m for the shares of RFC (which I still contend would mean that they would have to put a value on the club of £100m) then MIH will have something to write off. You seem to disagree with the bit in brackets but presumably not the rest. Or maybe you will.

Not good enough for RM? I didn't see the No Riff Raff sign on the way in, old boy!

1. Think you'll find Bluedell is agreeing with me. You don't acquire the debt when you buy a house, and the posters out there know that. You arrange your own debt (mortgage) if you need one. Here goes:

Fixed assets £144m

Add: Current assets £18m

Less: Creditors £83m

= Net assets £79m

The 'net debt' of £21m is included in "Creditors £83m' and so has already been included in the calculation of the £79m. I really can't make it much clearer for you.

2. Finally you now agree that MIH will only have some of the shortfall to write off: "MIH will have something to write off". Compare that with your: "unless someone values RFC at £100m MIH will have to write off the difference". That is wrong and you have just proved it by contradicting yourself. So thank you for accepting that your assertion (which you asserted that you continued to assert) was wrong! MIH will not have to write off the difference. Agreed? It will only have to write off some (perhaps two thirds?) of the difference.

Everyone is good enough for RM (they even let me in). It is your financial muddlings on which RM deserves better.

[boss 1,941]

It can't be assumed that any buyer will repay the debt so the company (not the "house") is worth £79m

Boss and Bluedell on one side versus new poster Broken Stocker on the other. Who will be eliminated from the RM house? You decide.

I believe Boss is correct on the minority interests.

Thanks. I am.

However this is getting into semantics and is even boring me now.

And me. Ma heid's burlin'.

[brockstoker 0]

It can't be assumed that any buyer will repay the debt so the company (not the "house") is worth £79m

Boss and Bluedell on one side versus new poster Broken Stocker on the other. Who will be eliminated from the RM house? You decide.

I believe Boss is correct on the minority interests.

Thanks. I am.

However this is getting into semantics and is even boring me now.

And me. Ma heid's burlin'.

Last word from me. In the UK you don't acquire the mortgage with the house which is why I used the Scandinavian analogy where you do. Ask someone about the Enterprise Value of a company.

Anyway enough of this from me. It's been an exciting first day in the RM House. Perhaps I'll come back and play another day!

[boss 1,941]

Anyway enough of this from me. It's been an exciting first day in the RM House. Perhaps I'll come back and play another day!

Bye

[TheFlyingPig 0]

So if someone offered circa 40 M plus taking on the debt MIH would be happy?

[Frankie 505]

Now this is where I wish BP9 would come in a request another forum for these kind of accountant debates... These guys make Steve Davis look like Hugh Hefner...

Good to see Brock coming on and defending his point of view though.

[Bluepeter9 5,167]

Now this is where I wish BP9 would come in a request another forum for these kind of accountant debates... These guys make Steve Davis look like Hugh Hefner...

Good to see Brock coming on and defending his point of view though.

... na - cant do these posts are relevant to Rangers - the pish I ask to be moved isn't - cant help you this time!

BTW what is funny when analysing accounts - especially a football clubs is that the accounts only give that snap shot in time and the accounts are published months after that time period - hence to commentate on the accounts with relevance you then have to take what has happened scince then into account (sic) - The next set of Rangers accounts will look like shite but will not reflect the reality of the current position nor projected position with the CL money and cut costs! So when all the naysayers come on about how BAD they are they will be commentng on a position that will have been greatly reduced (I hope) scince then.

[Bluedell 14]

BTW what is funny when analysing accounts - especially a football clubs is that the accounts only give that snap shot in time and the accounts are published months after that time period - hence to commentate on the accounts with relevance you then have to take what has happened scince then into account (sic) - The next set of Rangers accounts will look like shite but will not reflect the reality of the current position nor projected position with the CL money and cut costs! So when all the naysayers come on about how BAD they are they will be commentng on a position that will have been greatly reduced (I hope) scince then.

What happens in the future doesn't take away from the financial mismanagement of the club in the past.

[Bluepeter9 5,167]

BTW what is funny when analysing accounts - especially a football clubs is that the accounts only give that snap shot in time and the accounts are published months after that time period - hence to commentate on the accounts with relevance you then have to take what has happened scince then into account (sic) - The next set of Rangers accounts will look like shite but will not reflect the reality of the current position nor projected position with the CL money and cut costs! So when all the naysayers come on about how BAD they are they will be commentng on a position that will have been greatly reduced (I hope) scince then.

What happens in the future doesn't take away from the financial mismanagement of the club in the past.

I know that but I also dont hear many people complaining about some of the purchases that 'helped' the debt grow - Mendes, Davis, Lafferty, Miller, Bougherra and also some credit has to be given for also takling the problem - the management have a difficult job balancing expectation against spend - and like the previous large debt the current level of debt has been built trying to enhance the squad for the future and (IMHO) the figure need to be taken in that context (if we hadn't have invested last year would we have CL football this year that allows some of that 'investment' to be paid back / reduced and that wont be reflected in the accounts till next years published accounts.