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Sevco Releases The Squirrels, But Celtic Still Manages To Crush Their Good News Story.-

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Image for Sevco Releases The Squirrels, But Celtic Still Manages To Crush Their Good News Story.-

As the dust was still settling to the floor of the Sevco dressing room at Hampden on Sunday, and as a senior member of the management team was being picked up from it, Phil MacGiollabhain tweeted the following gem.

The imperative for a good news story has been obvious to everyone at Ibrox since the full-time whistle blew.

That became especially clear yesterday when Celtic were announced to have been the recipients of over £27 million in TV cash alone from their participation in last year’s Champions League. Sometimes, when you’re down, the hits just keep on coming.

I am going to write a big piece today examining Sevco’s dire position and why it is not like ours was back in 1994. Our comeback is the straw a lot of them clutch to. I suggest that if you want to fully understand that article you check out Paul Larkin’s documentary The Asterisk Years; there’s a piece in there I’ll be talking about, which is that even in our darkest days we financially outperformed Rangers in almost every year … which is to say that we made profits, consistently, whereas they made massive losses. The moment Fergus came in with a plan to max out our capabilities we were always going to own them in the long term.

That’s never been more apparent than it is this morning.

The squirrel arrived this morning, on cue.

A so-called “£10 million deal” over three years with sports manufacturers Hummel, to produce the next round of Sevco kits.

According to The Daily Record, the Sevco board’s weapon of choice for bludgeoning thick fans over the head before dragging them to the cash machine, people inside Ibrox are cock-a-hoop over this and the fans should be too.

But really, should they?

Because even the most basic comprehension of maths should clue you in to what screams from that headline; £3 million a year.

And that’s before you get to the devilish little detail that the deal is only worth “as much as £10 million over three years”, which means the £3 million isn’t a lock. And you know what? It’s not even close to what they’re going to get because as Phil reported late last night, there’s an even bigger fly in the soup.

Sevco currently has no retail outlet.

Which means that Hummel can make all the orange away tops they want, but if there’s nowhere to sell them they are just going to rot. And rot where? In Shropshire, in a big warehouse with Sports Direct on the side of it. And thanks to King’s wonderful renegotiation, every single one that sits on a shelf and takes up space costs the club money. Any unsold stock, well the sportswear firm has to dispose of that and that costs the club as well.

They have gone from a decent working relationship with a guy who, yes, was taking the lions share (and putting up the warehouse space and supplying the sales outlets) to a confrontational situation which bears no resemblance to the one before and in fact is more like this one:

Now, I do believe that this is a problem they will struggle to resolve.

I’ve long told Sevco fans if they believe they’ve seen the last of Mike Ashley they are deluded. He is the only option the club has, and if it suits him he will ride to the rescue at the last kick of the ball and offer them the use of Sports Direct’s vast merchandising arm. But it will cost them. Oh boy, he will make it cost them. And to be honest, it will probably cost them a lot … not that there’s much for him to skim off the top in such a poor deal.

The papers are spinning this as positive because the club will suddenly get “the lion’s share of profits” from the shirts they sell; the point the geniuses in the media offices have missed is the “shirts they sell” part. And even a one-sided deal in favour of the club would still entitle a retailer to a cut, and a big one, from the total take.

And if Ashley decides he has enough money and doesn’t need to worry about Sevco, he can walk away and leave them with nowhere else to go.

Think of what Sevco is spinning here like this; imagine a small company that was in the bidding for a big contract, and whereas they didn’t get the meat in the pie, they got some of the crumbs. But those crumbs were worth £2 million a year.

Now imagine the same company going back to its shareholders and telling them that the days of crumbs are over, and announcing a “big deal” which netted them the whole pie … but the whole pie was only worth £1.5 million.

Their directors would be calling for the crumbs in no time at all, and the heads of the managing director and the CEO whilst they were at it.

I read some of the fanciful nonsense on their forums last night about a deal that had £15 million paid upfront; what I find hard to credit about those stories is they are believed by so many Peepul who clearly suffered a delinquent education but were, to quote Montgomery Gentry, “cane-switch raised and dirt-floor poor” and so really ought to have realised before now that the world is a much harder and less forgiving place than the dreamy one they inhabit.

This website predicted that King’s temper tantrum with Ashley, and which destroyed the relationship with Puma, would have dire consequences. One of the biggest sportswear manufacturers in the world vowed never to do business with them again as a result of it, and they can forget ever landing Reebok, Adidas or Nike. Hummel have a small market share, and a lower profile. Some say their goods aren’t exactly top tier.

But this was the inevitable result of the absolutely shocking, and unprofessional, attitude of the Dave King board.

The truth about this deal is that if they are very lucky they will net around £3 million per year.

To understand why that’s nothing, you have to consider that back in the days of Rangers JJB Sport did pay them an upfront fee – £18 million – and a guaranteed £3 million per annum from sales revenues. It was a ten-year deal worth £48 million.

Think about that for a minute.

This deal is nowhere near as lucrative as that one was, and that’s a reflection of many things, but most important is where Sevco is at right now.

To put it another way, we just got as much from Champions League TV revenues for one campaign than Sevco will make from its kit deal in the next three years ….

Life is a bitch, right?

Do you remember the days of these headlines?

Money, money, money.

It’s a rich mans world.

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