hackwatching

number crunching with the news of the screws and why football finance is still rocket science to some

‘Credit crunched’ was the scary headline above a story in the News of the Screws by Mark Howarth (22/03/2009).

“SCOTLAND’S debt-laden football clubs are paying around £1,000 an HOUR in interest to banks, we can reveal today”, wrote Howarth, clearly stunned at the enormity of the financial plight facing football clubs as the credit crunch bites deeper.

Indeed, such is the enormity of it, that the Screws’ sub decided that the next paragraph deserved some capitals, just for emphasis: “Our senior clubs currently owe £134 MILLION as the financial crisis deepens, a News of the World probe has discovered.”

The examples of how the current economic downturn is having a practical effect were confined to “crisis-hit Livingston” who were “this week SUED by Middlesbrough after they failed to pay a loan player’s wages” and “Division Two minnows Stirling Albion” who “have also been taken to court on Merseyside - over an unpaid bill of only £252.”

So while you might have thought that, say, offering everyone on your payroll redundancy, trying to sell your top scorer to an English Championship side to get him off the wage bill and attempting to flog three year season tickets to raise some dough in the short-term was an equally clear sign that there’s a crisis at certain clubs, evidently no so.

Which isn’t to say that this stunning probe by the Screws doesn’t mention what’s going on at the Death Star. Oh no, because, as Howarth points out, “The Old Firm’s bill is enough to make fans spill their Bovril.”

Don’t know about you, but I’d hate to be the person who has to do the accounts for this “Old Firm”. Thankfully for us, it’s only Celtic that’s of any concern. Still, mustn’t miss a chance to lump them both together, eh?

Back to the number crunching and, “Rangers pay a colossal £2.8m while Celtic fork out £392,000 a year for loans and overdrafts.”

To put it another way, if Scotland’s ‘debt-laden football clubs’ are forking out £1,000 an hour (or an HOUR as the Screws might say) then Rangers FC is having to contribute £320 of that, or just over a third of the total.

It works out at £7,692 a day (that’s a DAY if your prefer) or £53,846 a week (a WEEK!! more like) enough to pay the wages of two half decent players - or an entire squad of Kirk Broadfoots.

The corresponding figures for Celtic, using the Screws’ in-depth accountancy techniques, is £44 an hour, £1,076 a day and around seven and a half grand a week. Just over 4% of the total.

There was an admission that Celtic is in a state of fairly robust financial health in the article, even if it did come with a horrible reminder of the bad old days: “Champions Celtic - who came within 18 minutes of going bust in 1994 - are well placed to see out the downturn. Last month they announced their total debts were under £1m.”

It won’t do anyone’s mental health much good to dwell on the antics of the Celtic board of 1994 and their approach to high finance, but it is interesting to compare the attitudes of Celtic’s bankers back then to those of HBOS and their approach to Rangers these days.

The previous week the Screws crack financial analysts, Howarth and his colleague Lorna Smith, revealed the Bank of Scotland could claw back up to £20m of its lending to Rangers. They quote “A Bank of Scotland insider” as saying: “The debt has been deemed too big and it was felt the time had come to start clawing back some of the cash. The credit crunch means there’s no such thing as easy money any more - we cannot keep loaning companies big money against assets that leave us exposed. We don’t want Rangers to suffer on or off the pitch so we’ve pulled together some of our best brains to make sure that the club comes down as gently as possible. But the current situation cannot possibly continue. Ultimately, this is big business and, I’m afraid, sometimes it hurts.”

For the life of me I can’t recall anyone in a position of financial muscle over Celtic saying that they didn’t want us to suffer on or off the pitch. With Wayne Biggins and company on the pitch and the Kellys and Chris White running things, it wasn’t so much suffering as a full on session with Torqemada and the boys from the Inquisition.

There’s a certain paradoxical quality about all of this information, though, which the Laptop Loyal seem to be finding it increasingly difficult to explain. The official line from Murray is, as Smith and Howarth dutifully report, “The Ibrox giant’s finances have suffered like all businesses in the credit crunch.”

Yet here we see clear evidence that this is simply not true. Livingston, Stirling Albion and Rangers might be feeling the pinch, but Celtic, Hibs and several others are managing to live well within their means.

Things are going to get worse, before they get better, and some clubs will go out of business, that’s for sure. As long as Rangers have supporters with the financial savvy of John Macmillan, general secretary of the Rangers Supporters’ Association, it remains likely that they will be at the front of the queue: “It’s a pretty bleak picture - the fans won’t take kindly to this. Most really don’t care about who owes what to whom. But the club must recognise that it’s not the fans’ fault that Rangers are in such a mess - The way through this crisis is to put bums on seats, not to penalise the fans. The club should look at lowering prices and even letting in kids for free.”

Genius doesn’t do him justice

More paranoid ranting available at www.celticparanoia.blogspot.com

 

TONY BANANAS & HACKWATCHER