Date: 5th October 2020 at 6:19pm
Written by:

Every single one of us wondered how Sevco intended to get through the next few months; the answer has become a little clearer this afternoon with the declaration to Companies House that they have issued 42 million new shares at the cost of 20p each.

This would raise a little over £8 million, if they’ve got buyers for them, which one would presume that they do. It is likely that these have gone to existing shareholders.

This kind of financial sleight of hand is all that’s keeping the lights on over this.

And every time they do this the price of individual shares falls further.

I’ll be honest; the 20p fee per share there is clearly a nonsense.

I don’t think Sevco shares would be worth the paper they were printed on if they were being issued on bog roll. For sure, Club 1872’s much vaunted 10% holding is pretty much in the toilet; it was long ago reduced far below that number and this today must take it down even further.

The shareholding in Sevco is like a giant Ponzi scheme; the people who are “last in” are not going to get fleeced – which is the standard technique that club uses on its fans. They are going to get skinned instead. The only way any of the jokers who have turned equity into shares up until now will ever see a return on them is to scam the fans at some future point into buying millions of share certificates will be worth less than the frames they hang in.

This stuff would not fly in any country which had financial fair play regulations.

Sevco has gotten by on this idea that it has no debts, but in fact this strategy is the mark of a severely distressed company and that’s something the media point blank refuses to write or accept; Sevco is in dire straits, addicted to spending money they do not have.

I know a lot people are sick and tired of this, and believe that Sevco always survives.

But all I can tell you is that they have survived up until now … but no company which operates this way is going to survive in the medium to long term. A reckoning will come here, and it will be sooner rather than later and most of us will be around to see it when it does.

Sevco does not function as a business should. In almost ten years of existence it has never once turned a profit. Indeed, they have consistently posted losses. The media seems largely unconcerned about this, and frequently touts mammoth “investment” which is said to be on its way in … investment which never materialises and which is largely fantastical.

They needed to sell a major footballer in this window.

They haven’t done so, in spite of offering most of their first team to clubs all over Europe. Even the strategy of selling off dreck like Barker and Jones hasn’t worked; both are now in the first team squad as the club tries to put them in the shop window prior to January. It will do no good.

I said in a piece earlier this year that wondering how long Sevco can last is like asking “how long is a piece of string?”

If their directors were willing to keep on funding them they could, in theory, go on doing so forever.

But in fact, of course, not only will that prove impossible but UEFA only allows it up to a point, and that point has been passed.

The club might buy a year’s grace because of the global health emergency, and UEFA’s temporary changes in the regulations, but they don’t amount to a write-off as some people have suggested, but merely a change in the reporting terms … in other words, they won’t count this season and last season as separate campaigns but will fold them into one reporting period … that period will end with Sevco on the wrong end of a loss in the tens of millions.

So the reckoning isn’t as far away as some might have you believe. In the club’s best case scenario – one where they don’t simply collapse in a pile of debt – UEFA will tell them to start making cuts of face the consequences. At that point, they have no choice.

Paul67 over at CQN, who was one of the first people to predict the downfall of the old Rangers, thinks that the collapse will come prior to next season.

He reckons that the campaign to stop ten in a row is their last hurrah and that following this campaign they will cut back severely, simply having no option otherwise.

I happen to think he’s right.

With this little move though they’ve probably – not definitely, but probably – done enough to get through until the January window. There are a lot of imponderables at this point, and there were always going to be, for us as well as them.

How many tickets can we realistically hope to sell for the Europa League?

It’ll be a TV package, and if they are open to season ticket holders only it’ll be one package per household.

They can’t be expensive either, because you can’t sell a TV game at £30 a time when they are all on BT Sport anyway.

A £100 package of games for season ticket holders would have been worth around £5.5 million to us for those three games … we can kiss that kind of money goodbye, which is to say nothing for how much we make in hospitality, concession stalls and elsewhere.

The total amounts we would have had and can no longer rely on will be in the region of £8 to £10 million easily … and that will be just as true over there. Both clubs will have to play a waiting game to find out how much they can bring in from the Group games; there will be no fans at those matches, that much is certain anyway.

Sevco has played its little game.

They’ve spent more than they can afford, they’ve sold nobody and they are plugging one of the holes with another debt-for-equity switcheroo. This is a game with no good ending for them, but still they play … because they have no other choice. And as bad as this looks from the outside, I know it’s much worse on the inside.

That club is sitting on a time-bomb.

All they’ve done today is re-set the timer … but every time they do they add another stick of dynamite.

Eventually it’s all going to blow.

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