McCoist confirms wage bill will be cut for next season

[Bluepeter9 5,167]

there is no way rangers or the banks would reduce our wage budgets just to turn a profit next year, football is different than other businesses,

That perception, as stated is one of the BIG isues in football - but the reality is they are run as busineses and are not different excpet in the sense that they are Not-For-Profit buisnesses where the profit gets utilised by reinvestement, but make no mistake they are businesses and if badly run on the financial side can stop trading. The trouble is that even great busines men get into football and allow their heart to rule their head and make stupid mistakes. Murdo McLeoud said something stupid on the radio when talking yesterday about Boyle and Motherwell - he said people coming in should not worry just have the cash to lose and put some in every year. Well that's a charity and for too many clubs they are run as charities where they depend on donations. (Chelsea, Man City etc etc etc) and that is OK while people are donating, but disasterous when they stop. There are also a good number of clubs that work within their means (Arsenal and St. Johnstone are two great examples).

The only way football is different from other businesses is that some fans, and chairmen/owners think they are charities, but badly run charities still fail and go out of 'business'

[Jimfanciesthedude 24,779]

That perception, as stated is one of the BIG isues in football - but the reality is they are run as busineses and are not different excpet in the sense that they are Not-For-Profit buisnesses where the profit gets utilised by reinvestement, but make no mistake they are businesses and if badly run on the financial side can stop trading. The trouble is that even great busines men get into football and allow their heart to rule their head and make stupid mistakes. Murdo McLeoud said something stupid on the radio when talking yesterday about Boyle and Motherwell - he said people coming in should not worry just have the cash to lose and put some in every year. Well that's a charity and for too many clubs they are run as charities where they depend on donations. (Chelsea, Man City etc etc etc) and that is OK while people are donating, but disasterous when they stop. There are also a good number of clubs that work within their means (Arsenal and St. Johnstone are two great examples).

The only way football is different from other businesses is that some fans, and chairmen/owners think they are charities, but badly run charities still fail and go out of 'business'

yeah cant argue i suppose

i wish people would see though that our downsizing isnt really downsizing at all (i fucking hate the word now), the fact that we went 30million in debt within the last 4 years would tell you that our squad of class players was built on money we couldnt afford

if murray had said to smith after manchester "right walter we can only spend what we bring in now, no more debt for the club, we have to tighten the purse strings etc etc", then perhaps 2iar wouldnt have happened, perhaps last season would have been our only title win who knows

but we wouldnt be this bloody much in debt and forcing ourselves to reduce the squad size purely through our own fuck ups

once again it all comes down to wages, take 4 of our first team players just now, and i bet their wages come to maybe 50k a week or more, surely to fuck there are SPL level players that would command half the wages of these players we have

and maske no mistake, people need to realise that until we are free from debt, the SPL IS our level and no more, forget this european thing, the champions league is just a money making exercise

put it this way, everyone laughs whenever kevin kyle was mentioned as a signing target, yet overall he would have cost half of what james beattie has for us, and kyle couldnt do any worse could he?

instead of big name signings we should be looking at the top guys in the SPL to tide us over until we can move up a level, ffs the beggars got to the last 16 of the CL twice with a centre half pairing of mcmanus and caldwell, scott mcdonald up front and barry robson, paul hartley in midfield

5 SPL signings

[Adoniram 1,919]

Well here is a mere observation.

Sir Vineyard of Murray appeared at last over the weekend to give a quote to the media.

Unfortunately for us mere 2nd class citizens (That's fans to you and I) he was endorsing a 2nd term in office for Alex Salmond.

Was Rangers mentioned - NO

Was there any talk about a possible takeover - NO

Did he say anything about the teams impending fixture congestion - NO

Like i said just a mere observation on where our esteemed owners priorities lie.

[blueben_d 40]

On the bright side we've been running a profit despite all the debt repayments. Once the debt is repaid then we should have a lot more 'disposable' cash to invest in team affairs.

There must be a sizable chunk out of the debt and that also reduces interest payments, if we make further cuts then come 12 months time we must be looking at being debt free particularly if we qualify for the CL

[minnbear 30]

Rangers publish their accounts, they hold briefings for the press, they have Chairmans question time at the AGM and have told us what is happening, there is no lack of communication from the club. There is a failure to believe what the club tells them by some fans which does not help and these same fans react to rumour and mis- guidence by journalists, or demonstrate a sheer lack of understanding of basic financial understanding on the part of many fans.

We are in a financial pickle, the club have told us this, the club have told us we have to deal with it, the club have told us we have to live within our means. What more do you want the club to tell you before you get behind them? In many ways it doesn't even matter how we got here - we must get it sorted and never allow it again.

Bluepeter, I'm not trying to be snide when I say that I must be thick as shite, when it comes to this "understanding" you speak of, and going by this, and other Gers forums, I seem to be in the majority. I refuse to believe that if we had not won the last 2 titles, getting us into the CL (earning the money that comes with that), that we would be belly up by now, but the way we seem to be told that even that money (and the cutbacks we've made on top of that), is still not enough to feed the beast, then what other outcome could there have been ?

If you can tell me (in terms, that a dummy could understand), how that money has been dispersed (I know that we paid off outstanding fees for players last year, and the CL money for this year is not in yet, but they know it's coming), then I would appreciate it very much, because I cannot get my head around it.

I have seen a few posts saying "it's all in the accounts for anyone to see", but when someone asks the posters to put it in layman's terms, they never seem to manage. Why is it such a big ask, we are a football club, not the CIA (I think)

[Bluepeter9 5,167]

Bluepeter, I'm not trying to be snide when I say that I must be thick as shite, when it comes to this "understanding" you speak of, and going by this, and other Gers forums, I seem to be in the majority. I refuse to believe that if we had not won the last 2 titles, getting us into the CL (earning the money that comes with that), that we would be belly up by now, but the way we seem to be told that even that money (and the cutbacks we've made on top of that), is still not enough to feed the beast, then what other outcome could there have been ?

If you can tell me (in terms, that a dummy could understand), how that money has been dispersed (I know that we paid off outstanding fees for players last year, and the CL money for this year is not in yet, but they know it's coming), then I would appreciate it very much, because I cannot get my head around it.

I have seen a few posts saying "it's all in the accounts for anyone to see", but when someone asks the posters to put it in layman's terms, they never seem to manage. Why is it such a big ask, we are a football club, not the CIA (I think)

I will try to answer your post in 'laymans' terms and I will TRY not to make it technical or condecending (try - no promises). (I can also say to the accountants amongst you that this will not be for the pureist!)

Firstly you are right without the CL money things would have been worse - BUT the only people who can force you to go belly up are people you are due money to - thats anyone we are due money to but as the biggest wedge is due to the bank they have 'The Power'.

Lets first deal with the banks 'Power' to put us into admininstration: We are due them money and we will have a contract to pay them that money back, and when we dont pay that money back they can go to the court to force payment. If it went to court the court (In essense) can force us to sell assets to recover these monies and the mechanism for doing this is usually to appoint an administrator (and out side manager - and there JOB (which they take personal liability for) is to do their best by the people that are owed money, and they make a determination of how best to do this (carry on trading, sell the business as a going concern or dispose of parts of the biusiness (assets) (sorry if this is a bit dull but it is improtant). One way to trade on is to settle debts for less that due - but that means the folks you are due money to have to agree. This 'Power' is being weidled by Lloyds who are 'entitled' to their money back and what they will be doing is threatening this in order to get a deal. (Now the actuality of this is slightly more involved - in that it would be a PR disaster - all round) but also Rangers have MORE than enough assets to pay the money owed, its just not in cash.

Leave that now.

Onto the basic question - why dont we have lots to spend given our turnover.

The main reason is PROFIT. It does not matter how much we turnover what matters is how much we spend in relation to our turnover. If we spend more than we earn we make losses and losses have to be funded. The losses can be funded by shareholders putting more money into the 'pot', selling something to make up for the losses (say a player) or getting a bank to extend a lending facility (with some promise that you will pay that back) - this is in esence what we have been doing - spending more money than we earn so have buillt up losses, which the bank have funded and they have said enough! With CL cash and reducing costs we have managed a small profit over the last couple of years, but the profit is small. £2M - £3M here and there and some of that profit has went to reduce the debt and some has went on players (we have spent). (In a normal business some profit also goes to the shareholders in return for their share cash input - a dividend)

Then we have the (vexing) subject of cash flow. Cash flow is nothing to do with profit (as such) but can be confusing as we could have a portion of debt that is actual cash flow. For instance if we start the year (August - ay) with £0 in the bank, bring in £25M in season ticket sales, Spend £10M on players (LOL) and have a wage bill of £2M per month and the TV Money comes in at the end of May. Our accounts go like this. £0 +£0M = £25M - £10M = £15M. (10 months later) £15M - (10 x £2M) = -£5M (which someone has to fund - normally the bank.

Then add in TV cash of £5M and we are back to £0 (then in this example 2 more months of wages takes us back to -£4M (then say league money comes in of £4M then at end of year we are back to even. Although we have spent all we have generated and not made a loss or profit we have needed £5M from the bank to make sure our staff get paid. A portion of our debt to the bank will be 'normal' cash flow needs - without digging I dont know when everything comes in but the example shows the mechanim. Now if we do our accounts (which are a SNAPSHOT in time only) this would show as debt all be it shortterm debt.

When looking at next year the Board will have to look at income and expenditure AND cash flow needs and they will have to make ome assumptions of where the revenue comes from - take out CL football and you can see that to plan for next year on a sustainable buisness model we will have to reduce outgoings.

Now lets go back to profit - the great thing about generating profit is you can use those profits next year to 'invest' but lenders dont like a great deal of investment while they are still out on a limb and usually some form of negotiating will take place about what to invest and what to pay back or more likely what lending facility we need next year and in the current environmement the bank wll look to reduce there exposure. We and the banks have a circular dilema - the more sucessful we are the more we can pay back, which takes investment, but in football the investment is no guarantee of sucess.

(Sorry about the lecture but if you dont get these basics its difficult to undersstand where we have been)

We had been making losses mainly due to high player wages and fees. We have now GOT TO work within our means to stop losses and generate profit (as we can only invest that profit).

Our accounts show where we have spent money (Transfers in, wages etc are NOT detailed) but are there in big terms. We can see what the directors get paid (and whether Bain is worth what he gets paid is a different debate). What I will guarantee you is that NO cash is going to MIH from Rangers (or it would be in the accounts). SDM is not getting cash our (unless he was drawing a directors salary - there are no dividends being declared either). What is clear is that with current wages we can only make a profit with CL football - if we cant guarantee that prudent palnning says cut the wages (and other cost) to fit with what you know you can bring in).

I hope this helps - if it doesn't then feel free to PM me or ask again.

[gogzy 31,195]

Think is what said last week that the first thing he has to do is lose a million from the wage bill for this season.

Weiss wont be with us next season so the wages, whatever we are contributing wont be there

Beattie - He will be either sold for a pittance after his stint at blackpool or le go completly so his wages wont be there

Diouff - Wont be here next season again similar scenario to Weiss

Foster - ont be bought by us and no wages to him

Weir wont be here and whatever he gets each week will be away

Healy - same as Weiss & Diouff

All this will be over a million but its 6 players away from our squad!!

And the worrying thing is will we accept a big bid for shagger, boogie or davis too!!

most of these guys will be on >10k per week so if 6 of them go thats >3 million from the wage bill. Which wold still leave us >2 million per year that we could use to bring in players.

There is no way that 6 first team players will leave and we won't bring in replacements. The quality of the replacements is what worries me.

Fuck it though, lets worry about that after we win this league

[Irwin Sparkes 97]

I remember reading that as part of our agreement with Lloyds, we had to reduce the wagebill by £1 million every year

That is simply a £20,000 a week player leaving the club every year

Cuellar in 2008

Ferguson in 2009

Mendes in 2010

Weir in 2011

Nothing to see here

[gunslinger 270]

I remember reading that as part of our agreement with Lloyds, we had to reduce the wagebill by £1 million every year

That is simply a £20,000 a week player leaving the club every year

Cuellar in 2008

Ferguson in 2009

Mendes in 2010

Weir in 2011

Nothing to see here

no we need to pay back a milion a year not reduce the wage bill by that

[Irwin Sparkes 97]

It is essentially the same thing. £1 million given to the bank that we would've been giving to a player.

[disgruntled_bear 157]

I'm glad McCoist has cleared up the rumours regarding this, he'll have a tough job on his hand next season.

[SirWalterSmithLegend 206]

How in the fuck is it the banks 'fault'? Christ. The only people to blame are the idiots in charge who once again got in serious debt.

Once again Totti, nail on head. You might be pretty negative and too honest for some on here, but my God, you are fucking spot on!

[donegal_ger 253]

By the way, I just talked to a guy who regularly goes to see Dortmund.

As some may know, Dortmund play good football and will most likely win the Bundesliga this season (12 points ahead of the second).

However, he also said that they have gone through years of downsizing wages, set up a great scouting system which allowed them to pick out young talents for next to nothing and develop them over the years, causing them to be top in Germany now.

Being forced to downsize wages might not be such a bad thing, provided it forces the club to look at other places for young, talented blood (and use our own youth as well).

I watched them beat Bayern away convincingly 3-1 on Saturday with a team with a average age of 22 and the oldest player on the pitch for them being 26 (Lucas Barrios) and at least 5 of them came through Dortmund's youth system.

I hope Ally's transfer policy is to buy players in their early to mid 20's for low fee's that we can get a few seasons out of and if they are successful sell on for profit just like Dortmund are doing now because their starting 11 on Saturday only cost around 10M to assemble and now you would be lucky to get any one of those players for 10M each.

I wouldn't mind if we started next season with guy's like Ness, Wylde, Fleck, Hutton and Cole as regulars and got rid of high earning poorly performing players such as Beattie, Lafferty and Edu.

I believe if we are to remain successful in the next few seasons we have to have a core of players from our own youth system complimented with a transfer policy of buying young, hungry, cheap players that can be moved on for profit once we have had resonable service out of them.

[gunslinger 270]

It is essentially the same thing. £1 million given to the bank that we would've been giving to a player.

how is it anything like the same thing.

the money you save in the first year from cuellar in your example can pay it every year.

doing it your way has you in 15 years paying no wages to players thats 3 years at least before the loan is paid off.

[minnbear 30]

I will try to answer your post in 'laymans' terms and I will TRY not to make it technical or condecending (try - no promises). (I can also say to the accountants amongst you that this will not be for the pureist!)

Firstly you are right without the CL money things would have been worse - BUT the only people who can force you to go belly up are people you are due money to - thats anyone we are due money to but as the biggest wedge is due to the bank they have 'The Power'.

Lets first deal with the banks 'Power' to put us into admininstration: We are due them money and we will have a contract to pay them that money back, and when we dont pay that money back they can go to the court to force payment. If it went to court the court (In essense) can force us to sell assets to recover these monies and the mechanism for doing this is usually to appoint an administrator (and out side manager - and there JOB (which they take personal liability for) is to do their best by the people that are owed money, and they make a determination of how best to do this (carry on trading, sell the business as a going concern or dispose of parts of the biusiness (assets) (sorry if this is a bit dull but it is improtant). One way to trade on is to settle debts for less that due - but that means the folks you are due money to have to agree. This 'Power' is being weidled by Lloyds who are 'entitled' to their money back and what they will be doing is threatening this in order to get a deal. (Now the actuality of this is slightly more involved - in that it would be a PR disaster - all round) but also Rangers have MORE than enough assets to pay the money owed, its just not in cash.

Leave that now.

Onto the basic question - why dont we have lots to spend given our turnover.

The main reason is PROFIT. It does not matter how much we turnover what matters is how much we spend in relation to our turnover. If we spend more than we earn we make losses and losses have to be funded. The losses can be funded by shareholders putting more money into the 'pot', selling something to make up for the losses (say a player) or getting a bank to extend a lending facility (with some promise that you will pay that back) - this is in esence what we have been doing - spending more money than we earn so have buillt up losses, which the bank have funded and they have said enough! With CL cash and reducing costs we have managed a small profit over the last couple of years, but the profit is small. £2M - £3M here and there and some of that profit has went to reduce the debt and some has went on players (we have spent). (In a normal business some profit also goes to the shareholders in return for their share cash input - a dividend)

Then we have the (vexing) subject of cash flow. Cash flow is nothing to do with profit (as such) but can be confusing as we could have a portion of debt that is actual cash flow. For instance if we start the year (August - ay) with £0 in the bank, bring in £25M in season ticket sales, Spend £10M on players (LOL) and have a wage bill of £2M per month and the TV Money comes in at the end of May. Our accounts go like this. £0 +£0M = £25M - £10M = £15M. (10 months later) £15M - (10 x £2M) = -£5M (which someone has to fund - normally the bank.

Then add in TV cash of £5M and we are back to £0 (then in this example 2 more months of wages takes us back to -£4M (then say league money comes in of £4M then at end of year we are back to even. Although we have spent all we have generated and not made a loss or profit we have needed £5M from the bank to make sure our staff get paid. A portion of our debt to the bank will be 'normal' cash flow needs - without digging I dont know when everything comes in but the example shows the mechanim. Now if we do our accounts (which are a SNAPSHOT in time only) this would show as debt all be it shortterm debt.

When looking at next year the Board will have to look at income and expenditure AND cash flow needs and they will have to make ome assumptions of where the revenue comes from - take out CL football and you can see that to plan for next year on a sustainable buisness model we will have to reduce outgoings.

Now lets go back to profit - the great thing about generating profit is you can use those profits next year to 'invest' but lenders dont like a great deal of investment while they are still out on a limb and usually some form of negotiating will take place about what to invest and what to pay back or more likely what lending facility we need next year and in the current environmement the bank wll look to reduce there exposure. We and the banks have a circular dilema - the more sucessful we are the more we can pay back, which takes investment, but in football the investment is no guarantee of sucess.

(Sorry about the lecture but if you dont get these basics its difficult to undersstand where we have been)

We had been making losses mainly due to high player wages and fees. We have now GOT TO work within our means to stop losses and generate profit (as we can only invest that profit).

Our accounts show where we have spent money (Transfers in, wages etc are NOT detailed) but are there in big terms. We can see what the directors get paid (and whether Bain is worth what he gets paid is a different debate). What I will guarantee you is that NO cash is going to MIH from Rangers (or it would be in the accounts). SDM is not getting cash our (unless he was drawing a directors salary - there are no dividends being declared either). What is clear is that with current wages we can only make a profit with CL football - if we cant guarantee that prudent palnning says cut the wages (and other cost) to fit with what you know you can bring in).

I hope this helps - if it doesn't then feel free to PM me or ask again.

Thanks for taking the time to explain, and I am grasping what you're saying. I still wish our board at Ibrox would come out with more details in a statement rather than just Walter and Ally saying "more cuts to follow". You surely must see where the less financial savvy of us could be wondering, when the hell is this ever going to end.

My big fear is that if they squeeze us too much, then it could lead to a real downward spiral.

I know we will have to bring through the youths, but I also know that our fans are not famous for being patient when we are winning hee haw. I think we are treading a real fine line here.

[Totti 0]

I watched them beat Bayern away convincingly 3-1 on Saturday with a team with a average age of 22 and the oldest player on the pitch for them being 26 (Lucas Barrios) and at least 5 of them came through Dortmund's youth system.

I hope Ally's transfer policy is to buy players in their early to mid 20's for low fee's that we can get a few seasons out of and if they are successful sell on for profit just like Dortmund are doing now because their starting 11 on Saturday only cost around 10M to assemble and now you would be lucky to get any one of those players for 10M each.

I wouldn't mind if we started next season with guy's like Ness, Wylde, Fleck, Hutton and Cole as regulars and got rid of high earning poorly performing players such as Beattie, Lafferty and Edu.

I believe if we are to remain successful in the next few seasons we have to have a core of players from our own youth system complimented with a transfer policy of buying young, hungry, cheap players that can be moved on for profit once we have had resonable service out of them.

we are incomparable to any German clubs because they always have advanced infrastructure where as we have an archaic one.

If we focus on young players, instead of talented foreign ones they will be mediocre players from other spl clubs

[Muff 245]

Funny you say that; I went to the game yesterday with 3 Dortmund (and now Rangers ) fans. The eldest guy was there for the first match at the Westfalenstadion in 1974....he said that Rangers are the same standard of a German 2nd division side

Yet The Rangers are still in Europe and Borussia Dortmund are not.

[krissg910 110]

Funny you say that; I went to the game yesterday with 3 Dortmund (and now Rangers ) fans. The eldest guy was there for the first match at the Westfalenstadion in 1974....he said that Rangers are the same standard of a German 2nd division side

i wouldnt say 2nd div, but we are not as good as a top 6-8 team in any the worlds

big lges at the moment. but we need to accept this as being in scotland there is

no way we can financially compete with teams from the bigger lges.

[gunslinger 270]

Funny you say that; I went to the game yesterday with 3 Dortmund (and now Rangers ) fans. The eldest guy was there for the first match at the Westfalenstadion in 1974....he said that Rangers are the same standard of a German 2nd division side

and yet we have pumped any number of them out of europe.

[Muff 245]

In fairness, we were hardly brilliant yesterday. I think we play according to the standard of who we're up against.

Still managed to win 4-0, whilst missing a number of chances and being denied a stonewall penalty.

Opposition is not the best, neither are we, but you still have to get out there and do the job.

VfB Stuttgart, Werder Bremen, Eintracht Frankfurt, St. Pauli, Kaiserslautern... are rotten. VfL Bochum, FC Augsburg, MSV Duisburg, SpVgg Greuther... aren't a match for The Rangers, nowhere near it!

[PaulRFC1 115]

2nd division

[Del 667]

Its all If's But's and maybe's!!

We have to cut down the wage budget by £1m from what it is this season...fine thats done already!!

Miller would have been on a fair whack and although i doubt we will be paying wages for all of our loans, we will be paying part of them.

Some of Millers wages might have been used to get Diouf or that in but when you take Miller's wage, Velicka, Weir, Papac (unless he renews) and a portion of Weiss and Fosters wages that will add up to the best part of 15-25k a week easy!

The hard part isnt going to be reducing it, we wont need to sell any players to do that, the part will be replacing 3-4 players with the wage of Kenny Miller. Even is we did sell Bougherra, McGregor, Davis etc the fee will be decent but we will have to use the wages they free up to pay new players and its going to be hard getting 3-4 good players in for so little!

[gunslinger 270]

Its all If's But's and maybe's!!

We have to cut down the wage budget by £1m from what it is this season...fine thats done already!!

Miller would have been on a fair whack and although i doubt we will be paying wages for all of our loans, we will be paying part of them.

Some of Millers wages might have been used to get Diouf or that in but when you take Miller's wage, Velicka, Weir, Papac (unless he renews) and a portion of Weiss and Fosters wages that will add up to the best part of 15-25k a week easy!

The hard part isnt going to be reducing it, we wont need to sell any players to do that, the part will be replacing 3-4 players with the wage of Kenny Miller. Even is we did sell Bougherra, McGregor, Davis etc the fee will be decent but we will have to use the wages they free up to pay new players and its going to be hard getting 3-4 good players in for so little!

exactly

this is what all the people who say we shoud have spent the jela money on 4 or 5 players fail to understand. the wage bill doesnt alter and splitting one wage 4 ways sees a serious drop in quality.

[Bluepeter9 5,167]

Thanks for taking the time to explain, and I am grasping what you're saying. I still wish our board at Ibrox would come out with more details in a statement rather than just Walter and Ally saying "more cuts to follow". You surely must see where the less financial savvy of us could be wondering, when the hell is this ever going to end.

My big fear is that if they squeeze us too much, then it could lead to a real downward spiral.

I know we will have to bring through the youths, but I also know that our fans are not famous for being patient when we are winning hee haw. I think we are treading a real fine line here.

The issue with the board saying more is they dont know - they can make a reasonable asumption on season ticket sales and TV cash, but they wont know the exact budgets unil we see where we are in the league at the end of the season and what cash we generate from cups (and one reason we may make late deals is even if we win spl we need to go through 2 qualifying games to get the big bucks - and that might free up cash. Also transfers out influences budgets - so the reason the board cant say to much now is that everything changes alll the time making planning difficult.

[minnbear 30]

The issue with the board saying more is they dont know - they can make a reasonable asumption on season ticket sales and TV cash, but they wont know the exact budgets unil we see where we are in the league at the end of the season and what cash we generate from cups (and one reason we may make late deals is even if we win spl we need to go through 2 qualifying games to get the big bucks - and that might free up cash. Also transfers out influences budgets - so the reason the board cant say to much now is that everything changes alll the time making planning difficult.

Fingers still crossed for a buyer with a few bob.