A simple question regarding our finances

[Bluepeter9 5,167]

your right and as such why are the bank taking the piss

I actually doubt the bank are taking the piss. What the most likely scenario is:

1. The Bank has refused to allow the overdraft to get any bigger.

2. The Bank is insisting on a repayment schedule (and always with an OD will have the right to call in at any time - and using that threat to ensure they get repaid - which is basically fair enough)

3. To satisy point 1 we need to make a profit, not a loss - last year (IIRC) we only generated a profit of just under 4M even with CL football.

4. Of this £4M some went to repay the overdraft (again I cant remember exactly but it was just over £1M so we have £2M to play with (Beatie, Jelavic et al.

5. OD are used for cash flow purposes, so if, say, the cL monies dont arrive into our account until Feb then we are probably at the edge of our limit (allowing for some room for wages etc. and cashflow (as opposed to profit) is harder to manage, in many ways than profitability.

6. We will have presented a business plan to the Bank that would say how much we are going to pay back and when and the bank will have agreed that and expect us to stick to that. If that plan included no spending in January (even increased wages) then unless we generate cash we are unlikely to be able to buy. (The actual OD position will go up and down based on when monies arrive into our account)

In this whole thing CL monies etc is not all available to 'spend' or even reduce debt , it helps us generate a profit - (which is living within our means) and it is the profit that helps us get rid of the bank.

PS With the new UEFA finance rules we would have to live within our means anyway - a lot of teams, especially in the EPL will suffer if they dont start planning now..

[gunslinger 270]

I actually doubt the bank are taking the piss. What the most likely scenario is:

1. The Bank has refused to allow the overdraft to get any bigger.

i doubt we need a bugger one just getting to use our current one would be fine

2. The Bank is insisting on a repayment schedule (and always with an OD will have the right to call in at any time - and using that threat to ensure they get repaid - which is basically fair enough)

why though

3. To satisy point 1 we need to make a profit, not a loss - last year (IIRC) we only generated a profit of just under 4M even with CL football.

5.2 million in a season we spent 8 million on players and sols 1.5 million worth

4. Of this £4M some went to repay the overdraft (again I cant remember exactly but it was just over £1M so we have £2M to play with (Beatie, Jelavic et al.

we sold wilson and thomson quite possibly for more we also reduced the wage bill

5. OD are used for cash flow purposes, so if, say, the cL monies dont arrive into our account until Feb then we are probably at the edge of our limit (allowing for some room for wages etc. and cashflow (as opposed to profit) is harder to manage, in many ways than profitability.

it should be very very easy even now to borrow against guaranteed income

6. We will have presented a business plan to the Bank that would say how much we are going to pay back and when and the bank will have agreed that and expect us to stick to that. If that plan included no spending in January (even increased wages) then unless we generate cash we are unlikely to be able to buy. (The actual OD position will go up and down based on when monies arrive into our account)

all information points to the bank giving us the business plan. why is this why are they interfering with us at this level. if we have an amount agreed to be repaid and we are getting all sorts of extra money in why cant we spend it.

In this whole thing CL monies etc is not all available to 'spend' or even reduce debt , it helps us generate a profit - (which is living within our means) and it is the profit that helps us get rid of the bank.

PS With the new UEFA finance rules we would have to live within our means anyway - a lot of teams, especially in the EPL will suffer if they dont start planning now..

we very very comfortably meet the uefa fair play targets.

[boss 1,941]

I've no idea why folk still won't believe that Rangers are not responsible for MIH debt and have given the bank no guarantee for it. Doesn't matter how many times some of us say this, the pretendy wee accountants out there seem to think they know better.

I include gunslinger in this - rarely has so much guff been posted so many times by the same person in the one thread.

Oh, and Happy New Year.

[RFC55 110,241]

I've no idea why folk still won't believe that Rangers are not responsible for MIH debt and have given the bank no guarantee for it. Doesn't matter how many times some of us say this, the pretendy wee accountants out there seem to think they know better.

I include gunslinger in this - rarely has so much guff been posted so many times by the same person in the one thread.

Oh, and Happy New Year.

Cheers Boss

[Bluepeter9 5,167]

all information points to the bank giving us the business plan. why is this why are they interfering with us at this level. if we have an amount agreed to be repaid and we are getting all sorts of extra money in why cant we spend it.

This just shows the basic misunderstanding you, and others have, of basic business.

The bank do NOT give a business plan to any company, the company give the business plan to the bank and the bank decide to support it or not. Whether we like it or not the we borrowed from the bank and they are entitled to get their money back. The bank, despite all the shouting, even by Walter, are not controlloing the company, only telling the company what they are willing to lend. (And I must admit its very easy for a Board of Directors to say - oh its the banks fault cause thats all they will lend us - its an easy way out)

It also should be noted it is NOT and never is in our interest to carry high levels of overdraft. Dont get confused between an overdraft, which is basically there to smooth out cash flow, and investment (say Stadium improvements, which require investment and are usually funded with long term debt - like your house mortgage)

We do not and should not want to keep debt levels so high, as it costs us significant monies to service that debt.

wrt to your point above it does not matter how much extra cash we generate (to a certain extent) what matter's is how much profit we make. It is only really profit that can be used to fund increased spending.

I also am NOT trying to debate these issues - they are in the main basic facts but so many people on here start talking about us generating an extra £20M in income and wondering why we dont have £20M to spend, and that is because it is NOT an extra £20M of profit. (and its all generalisations)

I am just using basic rules of thumb to try and stop some of the nonsense being talked about wrt to our spending ability, or lack of it.

Some people on here start from a point of ignorance about basic business profit generation and business cashflow.

Rangers can not keep on making a loss, that increases debt.

Rangers should not be carrying debt except for short term cash needs, but we have generated losses, we have built up debt and now its time for us to pay it back.

Rangers should be and must work within the income we generate for long term survival that is NOT dependant upon a sugar daddy under writting our losses.

My last 3 sentences mean that times are tough financially while we sort ourselves out, but in the longer term we either get another sugar daddy (and the risks associated with that) or we adopt a work within our means approach and survive long term and once clear of the debt that cash is used on the field not to pay interest.

[Bluepeter9 5,167]

Will be interesting to see what happens with Celtic over that. Their season book sales are down, attendances are down, yet they are investing very heavily.

Correct but if the investment is backed by the shareholders putting funds in (as capital), it doesn't matter. BUt yes it did strike me that they are bound to be suffering a big drop in revenues again and I wonder how Desmond is funding the spending?

[ronniemca 479]

Will be interesting to see what happens with Celtic over that. Their season book sales are down, attendances are down, yet they are investing very heavily.

celtic dont have the same problems, they have an owner who is prepared to supply loans at little or no interestand, is prepared to pay the wages of expensive loan signings. our owner has put us in the shit, and has basically deserted us. and until slippery dave is gone rangers will not move forward one inch.walter and his team have worked miracles, but that cant go on much longer

[gunslinger 270]

I've no idea why folk still won't believe that Rangers are not responsible for MIH debt and have given the bank no guarantee for it. Doesn't matter how many times some of us say this, the pretendy wee accountants out there seem to think they know better.

I include gunslinger in this - rarely has so much guff been posted so many times by the same person in the one thread.

Oh, and Happy New Year.

then where is the money going.

i am sure you are right but why are lloyds reclaiming so much cash so quickly.

12 months ago you told me 1 million per year and i told you i bet its alot more. well it was. so now i want to know why.

oh and i never once said we were responsible for mih debt. the opposite really.

[boss 1,941]

then where is the money going.

Read the Accounts - it's all there:

http://www.rangerspedia.org/index.php/Accounts_-_2010

You never did understand the concept of net debt as disclosed in the Accounts.

[gunslinger 270]

Read the Accounts - it's all there:

http://www.rangerspedia.org/index.php/Accounts_-_2010

You never did understand the concept of net debt as disclosed in the Accounts.

ok so its going to lloyds. and last year on players. so now i ask why so much to lloyds.

[boss 1,941]

ok so its going to lloyds. and last year on players. so now i ask why so much to lloyds.

- loan getting repaid at £1m a year

- overdraft fluctuates through the year and the balance at 30 June will depend on the timing of receipts and payments

It's not hard to understand.

[gunslinger 270]

- loan getting repaid at £1m a year

- overdraft fluctuates through the year and the balance at 30 June will depend on the timing of receipts and payments

It's not hard to understand.

so last year 13 million repaid.

7 million on players.

1 million on loan.

5 million?

[gunslinger 270]

Yeah,will be interested to see what the balance sheet is for this financial year. Surely they will be running at a big loss.

i will bet you any amount of money they wont.

oh and the previous stuff about desmond loaning them money he isnt. directors loans also have to be legaly declared.

[Bluepeter9 5,167]

i will bet you any amount of money they wont.

oh and the previous stuff about desmond loaning them money he isnt. directors loans also have to be legaly declared.

If Celtic are not operating at a loss with the size or their squad and no CL money then we should be hiring Peter Lawwell to run our club. BUT my guess is they will be running at an operating loss even if it is funded by the shareholders.

[gunslinger 270]

If Celtic are not operating at a loss with the size or their squad and no CL money then we should be hiring Peter Lawwell to run our club. BUT my guess is they will be running at an operating loss even if it is funded by the shareholders.

every year we hear this and we hear about there lack of ticket sales and big squad. and every year the losses are minimim and the ticket sales huge.

47k ordinary season book holders last year.

i will bet this year is no different. tiny losses at worst.

[Bluepeter9 5,167]

every year we hear this and we hear about there lack of ticket sales and big squad. and every year the losses are minimim and the ticket sales huge.

47k ordinary season book holders last year.

i will bet this year is no different. tiny losses at worst.

.. and if true then they are running a bigger squad than us on a smaller budget and still competing for the league - so we are either still paying to much, they are fiscally better at management than us or better at marketing but I doubt it - but all is speculation until their accounts come out.

[gunslinger 270]

.. and if true then they are running a bigger squad than us on a smaller budget and still competing for the league - so we are either still paying to much, they are fiscally better at management than us or better at marketing but I doubt it - but all is speculation until their accounts come out.

they pish all over us financially even a layman can see that from last years accounts comparison.

they spent money last year on players even without the cl pretty significant money.

[Bluedell 14]

Until about a year ago Rangers were a "branch" of MIH and as such it was difficult to differentiate between Rangers debt and MIH (in legal terms - not as per the balance sheet). SDM undertook a major refinancing of MIH last year and as part of that there were 3 key items

i) Lloyds took an additioanl share in the ownership of MIH (I think it was up from 12.5% to 25%) in return for writing off some debt (MIH debt, not Rangers)

ii) MIH was legally restructured to clearly separate Rangers from the rest of MIH, as this was the major stumbling block to finding a buyer, and why due diligence was almost impossible.

iii) The 50m£ loan which was owed by Rangers to MIH (all internal to MIH legal company but due by the branch (Rangers)was written off. This loan was created by MIH taking up the bulk of the rights issue about 6 or 7 years ago.

ii) and iii) are wrong. Nothing done by MIH has changed the status of Rangers and there was never any £50m loan owed by Rangers to MIH.

As Boss suggested earlier, I really don't get where some people get their information from.