Financial Crisis Swirls Around Ibrox Again, But Where Is The SFA?

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Much of the discussion over on Facebook and elsewhere on the article I posted earlier revolves around the SFA and what they are doing about the unfolding crisis at Ibrox.

Before I get to that, I think it’s important to point something out; the Bampots are not saying that a collapse of Sevco is imminent.

If they can keep securing loans from directors they could go on and on and on as long as the people giving them the money are still solvent or until they decide they no longer want to. How long will that take? How long is a piece of string?

What we are saying is that it’s inevitable … whether it happens tomorrow or a month from now or midway through the season; it is certain.

The only thing we’re speculating on is the timeframe.

The actual fact of it is guaranteed.

You don’t have to be a financial genius or some kind of psychic seer to be able to call this either; a simple grasp of numbers, of basic math, is all that’s required. As I said in the previous piece, fixed costs are around £17 million per annum. You can trim the fat but that number is essentially locked in place.

That money has to be spent or there’s no club.

It’s the consequence of trying to run a club with a 50,000 all seater stadium.

Our fixed costs are roughly the same, but the difference is that we’ve got the income to handle it.

Remember, all that is before a single member of staff is paid.

It’s before “rainy day” requirements, of which, at Ibrox, there are always plenty.

It’s before loan repayments and there will be plenty of those too.

Right now, income is about £1 million above their fixed costs.

It’s not impossible that the club could improve on that by a factor of ten; even then staff costs alone swallow up every single penny, and leave them needing more. Increase the wage bill – which they certainly have to if they want an SPL standard team, which can challenge for a European place – and those costs rise in direct proportion to that.

Finding a balance? Forget it.

This club will continue losing money for years to come, if they last that long, and the odds are against it.

Without a bank overdraft, without day to day credit facilities, when the directors stop carrying the debts that’s the ball game, and it’ll happen.

The chances of getting a bank to take them on when they constantly post losses like this is zero.

None of this is a secret. How can it be?

They post their accounts for everyone to see, and they can be spun but the numbers in them don’t change.

The club will be in around £40 million of debt when next season starts.

To give you some idea of how bad that is, the debt was £30 million in 2009 when Lloyds took over their account and told them to start making immediate cuts.

No other club in Scotland would be allowed to head into such dangerous waters without the SFA seeking guarantees about their viability as a business. It’s no exaggeration to say that this is a crisis that should be engaging the minds at Hampden, and that it hasn’t and isn’t, especially in light of what happened before, is absolutely outrageous.

They could have passed financial fair play regulations already and put a stop to this madness; that would have been beneficial to Scottish football and the club itself. Would they be top of the Scottish Championship? Probably not, but they wouldn’t be starting down into an open grave either.

Can it really be only four years ago that we were told how essential an Ibrox club was to Scottish football?

How can the SFA have been so lax that it’s come to this?

We could stand back and let it all collapse, of course, and at some point we’ll have to, but from now until then somebody, somewhere, has to put a plan in place that limits the damage the self-harming behaviour of the Ibrox custodians will do to the rest of the sport.

I know why the SFA won’t question King properly; it’s not that they’re worried he’ll lie. He lies constantly. They’re worried he’ll tell them the truth, and then they’ll have to choose between the good of that one club or the good of the game as a whole.

When he or someone else (I suspect the “someone else” part) finally does go to see them and tells them the size of the hole and that there’s no way to fill it, they better make the right decision.

They don’t even want to think about it, although they could, tomorrow, put in place a proper procedure for dealing with a club that crashes itself into the rocks and tries to dump debts and crawl out of the wreckage on the other side.

It’s not like it hasn’t happened before; what’s disturbing is that it changed nothing.

The regulations weren’t tightened or toughened up.

We’re the only football association in Europe that has a governing body but no actual governance.

Sevco’s directors should be asked what the plan is.

They should be told that until they can satisfy the SFA’s professional game board – and that of the SPFL – that they’re a viable business, a going concern, that they will not be permitted to enter the top flight next season.

Disruption to that league affects everything from European football to major commercial contracts; this is explicitly why UEFA requires all top flight teams to meet their own licensing criteria.

The awarding of a UEFA License to top flight clubs isn’t only about eligibility to play in their competitions; it’s about demonstrating the financial and structural viability of the clubs themselves, and therefore protecting the integrity of the leagues.

This is precisely why these regulations exist.

As we saw in 2012, financial calamity at Ibrox eventually affects every single club in the land.

It shouldn’t; a disaster there should unfold as it would anywhere else, with the governing bodies looking on and protecting the rest of the sport.

For those who ask “why do (you) care?” that’s the answer right there; don’t try to tell the rest of us that it’s none of our business.

This affects us all, and we have a stake in knowing this stuff.

We deserve these answers.

We require them.

So far, no-one seems even remotely interested in giving them to us.

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