To read the papers this weekend, you would think that Sevco is the healthiest club in all of Scottish football. Everything’s optimism. Everything’s on the up and up. They are “ready for Celtic” and not just for one game. They believe they can challenge us for the title in the next campaign, based on a handful of wins since January.
Yet Sevco is in a position of danger that is unprecedented in the recent history of Scottish football. That is the truth, and I write that with authority because I’ve researched this matter widely and I know what I’m talking about.
Sevco is a club running on fumes, and with no plan for how to move forward. They seem to believe that spending money will make more money magically appear; in any other industry you would call this out as clear insanity. If it were happening at any other club, I do believe the media would be doing the same. But this is Ibrox and there facts and common sense and logic do not belong on the same page. The whole club exists in a half-light of delusion.
And I find that fascinating for many reasons.
But where the media fails, the bloggers have consistently stepped in. I will not pretend that we have gotten everything right, but we differentiate between what we know to be facts and what are opinions. We do not present rumour as something dressed up as more than it is, and when we draw conclusions we like to base them on historical precedent or good old fashioned common sense. That’s why when we say Sevco is in trouble you should believe it.
These are just some of the reasons why.
Accounts Past, Present And Future. A Story Of A Business Destined To Fail.
Sevco’s accounts for last season have yet to be filed.
They are expected to be horrendous.
The six month figures were spun, scandalously, by our media who swallowed Sevco’s lies whole and made no effort whatsoever to challenge them. The club said that the figures showed them in profit; I am going to call that what it is; a lie.
Since the club was founded in 2012, they have posted losses year in year out. They have never even looked likely to post a profit. The current estimates of their total debt are around £20 million, much of it to their own directors. But there’s the small matter of the money they got from a “Far East consortium” and now the Close Brothers loan.
The financial position of the club remains precipitous.
With director’s loans almost certainly now off the table, they face an enormous cash shortfall for the next campaign.
Quite how they intend to bridge the money gap I don’t know and I suspect they don’t know either.
Nobody is giving money to a Scottish football club which has never turned a profit.
Nobody is “investing” in pipe dreams and fantasies in this financial climate. The idea that there are Real Rangers Men out there will millions to waste on those things has been scotched time and time and time again. They do not exist.
Sevco fans are convinced that they do, that they only need an “opportunity” to invest in the club and they will do it.
This is via a share issue, of course … but there are problems with that.
There Are Issues With The Shares That Can’t Easily Be Untangled.
The trouble with Sevco shares has been explored extensively here and elsewhere, so I won’t bore you by going into mega-detail on the subject, but their problems come down to three things.
First, how will existing shareholders, owed money by the club already, and who have the option of converting that to shares, benefit from a share issue unless it’s their shares being offered in it? And if they do that, how then does the club make money?
Secondly, why would these current shareholders want to buy more? If some of them take on more shares they put themselves in danger of Takeover Panel scrutiny and being forced to make the same offer which Dodgy Dave King is presently sweating over.
The position some of them are already in seems difficult enough. A debt-to-equity swap makes it worse.
Third and finally, when you consider the debt for equity deal, the likely cost of shares and that most of those on offer will be worthless in terms of voting power, who is going to buy them? Fans? The last share issue relied on institutional money.
In fact, numerous share issues at Ibrox have ended up being subsidised by directors and owners … and this, we know, is impossible this time around.
And as for “institutional investors” … Jesus wept.
No chance at all.
Dave King: More Trouble Than He’s Worth.
All of this is to do with Dave King, a guy who the club is going to have to continuing issues with as long as he’s there. We don’t know what King has been up to over the last few years, not all of it, but based on his previous behaviour we can speculate.
If some of us are correct and he’s been lying to the tax authorities back in South Africa then the Takeover Panel court case is even more perilous than it already looks. I don’t believe this is the last time the words “Dave King” and “courtroom” will be mentioned, let’s put it that way.
Not only is King not the sort to change but the SFA has allowed him to do what he pleases using Sevco’s name and their license … and I would not be surprised if that leads to scandal for all involved somewhere down the line.
The trouble is, he takes the public posture that other members of their board don’t want to assume. Paul Murray would be the obvious candidate, but he would get laughed out of the room by those who know his proper role is as someone else’s nodding donkey.
King is club chairman. Ending that means voting him off the board, and that’s what it’s going to take because he will not willingly walk away, with all the ego he’s got invested in that club … far more than any money he’s put into it.
Trouble In The Family; Sevco’s Uncivil War.
Trouble is also brewing in the Sevco support. We just drew them in the cup semi-final and a win for us in that game almost certainly leaves them with nothing to play for this season. Their fans are on the edge of revolt. But revolt directed at who?
The most powerful of their supporter organisations is firmly controlled by the Sevco board.
Any attempt to oust King and his cohort would be savagely resisted by them; King learned early that neutralising fan opinion was critical to his success here. Having used them to whip up anti-Ashley sentiment, he was not about to let someone else do the same to him.
What that means, of course, is that when it comes time for the next battle of Ibrox the first phase of it will involve the fans tearing each other’s eyes out, and the most incredible thing about that scenario is how ready, how up for it, some of them actually are.
You have to see the level of loathing their fans have for each other to believe it. When one section of the support becomes convinced that what’s holding the club back isn’t a lack of quality on the board or on the park but their fellow fans … well that’s going to be a sight to see.
And it’s coming.
You cannot read their forums and be in the slightest doubt about it.
A Rising Wage Bill And No End In Sight.
The wage bill at Ibrox is rising.
Every single year.
With no end on the horizon.
The running costs continue to escalate and all the while revenues cannot rise to adequately meet them. All the euphoria over the “renegotiated” Ashley deal … we’ll see what that’s worth when their “new” arrangements are made known. Why do I suspect Ashley will still be running it?
The grand business plan which requires European group stage football to meet estimates is bonkers; they need a team capable of reaching them first, and that costs money.
In January they increased the wage bill in spite of the financial demands on them to reduce it.
They were hoping for at least one major sale to off-set it, but that sale never came.
This is why so many of their January signings arrived as loans. No transfer fees and a fraction of the salaries. The trouble is, Sevco expects many, if not all, of these players to be made permanent signings come the summer.
If Murty gets the job the imperative to do that is all the greater. Even if they sign no-one outside of the current crop, their wage bill in the summer will escalate beyond the level of sanity. We know there was no Morelos bid, the story did not stand up for two seconds. So we suspect that there will be no big, saving, bid in the summer … what do they do without one?
What did they do if they need to find a new manager, as I believe they will? Do they give him – do they give Murty – a transfer budget? How can they not? How else can they sell season tickets but with more promises of bling?
And that brings me to the last point …
The Future Holds Only One Certainty: More Turmoil.
Things at Sevco are not going to improve.
That club needs money, large quantities of it, just to stabilise it. In the absence of European group stage football they will never be able to assemble a team capable of catching us over a season … and the seasons they need are running out. If we get seven and then eight we’re on the verge.
Can you imagine how far they will go to stop the nine?
Fail in that, and what will they be willing to do to stop ten?
If their club has even survived that far I believe that will place it in existential peril in an all-or-nothing bid to halt us at that crucial juncture.
When do season ticket sales start to fall off?
They are lucky Murty has put together something like a winning run; the decision to appoint him was a nonsense, but one that hasn’t yet ended in disaster. But when the disaster comes we met yet see the tipping point when the fans lose faith completely and are no longer willing to fund failure as they see it.
It is incredible to me that they have lasted this long; that’s what faith and hope does I guess, but those things can’t be sustained long if the raw materials which produce them aren’t available to hand, and I see no sign that Sevco is getting any of this right.
Everything at their club screams “temporary.” King will not be there by the time we reach ten. Murty may or may not be there at the end of this season, but he definitely will not last for much of the next one unless he hits the ground running, and that means in Europe as well.
With so many players on short term deals or loans, there’s a feeling that people at Ibrox are just marking time.
The complete absence of a long-term vision is perfectly obvious to anyone who looks at this; they are like the Brexiters, bluffing and bullshitting their way through days and weeks as if the big ticking countdown clock wasn’t really there.
But it is there, and time is running out.