My expectation of a year-end bank balance that was over £80m was quashed, largely due to spending on the redevelopment of the Barrowfield training complex, an item which will hit again this year. We did, however, reach new heights of £77.2m, up £5m on 2023.
That aside, the eye-catching item in Celtic’s preliminary accounts to the year ending 30 June 2024, is that operating expenses (before player trading and exceptional items), was £17m more than our income was two years ago.
What does that mean? We don’t have the breakdown yet, this will come with the audited accounts, but we are spending £105m on wages for Brendan and Callum, a few hundred others, and in running the village which is Celtic Park.
All of that cash won another treble, it earned Champions League qualification, which begets more money, it platformed Matt O’Riley, who earned us yet more money in signing for Brighton (in this financial year).
By any measure, this is a virtuous circle. But spending £17m on operational costs more than you earned two years earlier is a significant risk. You and I both know what happens when the music stops, and a football club has multi-year player contracts to fulfil.
We were in a position to take this gamble because of the bank balance and the way we have been managed over so many years. We can cope with a hit to income without spiralling into vicious circle.
My get feeling on this, is that £105m operational expenses is higher than is comfortable. Operationally, we need to get so many things right to get over the line while running so hot.
This is the realpolitik of long-term sustainable success in football across the world. You can sign a great player, like Matt O’Riley, and lose him for the season, six minutes into his debut, or Ross County can come from behind and beat you 3-2, to dismantle your commercial viability.
We pay people to worry about this and to get it right. On this measure, we are the example others across the world aspire to.
An early exit from the League Cup contributed to a £1.5 drop in football and stadium income. Merchandising managed to add £1m, despite the drop-off in sales of Ange jumpers. The big bump came from multimedia and commercial activities, up £5m to £44.5m.
Much of that over the last two seasons has been Champions League money. However, it has been said before but is worth restating, our commercial team consistently bring in money our competitors fail to match. Deal with Adidas and Dafabet, as well as handful of other sponsorships, underpin Celtic’s ability to plan with certainty.
Football income can vary from season to season, but the commercial deals allow us to make medium-term decisions. Last week Adrian Filby, our commercial director, who has been responsible for the commercial and merchandising income streams since 2008, left to take up a similar role at Aston Villa.
The good thing about commercial deals is that their cyclical nature allows time to bed in new heads. Still, a lot of experience left the building last week. Newco’s James Bisgrove signed their Sydney Tournament contract for a fraction of what Celtic’s Adrian Filby held out for. The millions of pounds difference in those contracts is the value of experience.
Chief executive, Michael Nicholson, noted, “There is no room for complacency. We cannot stand still and we are determined to improve. In support of our strategic objectives of dominating domestic football and competing in the Champions League”.
Yesterday we noted that Dave King was talking about Newco dominating Scottish football. One man’s fantasy is another’s every-day reality.
Chairman Peter Lawwell reminded us that at the turn of the millennium, Celtic had won 80 major trophies in 112 years, and that we have since added 38 in 24 years. Peter didn’t use the word “dominate” in describing Celtic this century, but there can be no better description. This is Celtic’s century, we operate at an exceptional level, enjoy it!
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BIG JIMMY on 17TH SEPTEMBER 2024 1:39 PM
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Ffs!
R.I.P. John Burns
Poor boy.
We were on our way up from Liverpool and got diverted off the M6 because of that incident. Read the next day that it was a pedestrian.
Poor lad. Thoughts with his friends and family.
AN DÚN on 17TH SEPTEMBER 2024 1:35 PM
Sorry, I genuinely don’t understand what you mean
In order to reduce our company profits by the amount of profit from Jotas sale we would have had to increased our expenditure starting a full year before it by 15m. Which would have involved spending 60m on players.
Anticipate a 15m profit on the disposal of the asset in a years time and commit to a 60m cost over 4 years to not pay any tax on it
John Burns R.I.P.
I wrote a few lines the other week on something economists refer to as “money illusion”, which is something to be acutely aware of in times of high and rising inflation.
It was in relation to the MOR “record” transfer fee headlines, but it is also valid here.
Our operating expenses during the year to June 2022 were £91.7m (on revenue of £88.2m). During the intervening period to June 2024, government defined and calculated CPI inflation rose by 10.4%. Simply indexing year-end 2022 operating expenses suggests a year-end 2024 figure of c.£101m, not a million miles away from the £105.4m reported (on revenue of £124.6m).
I am aware the business of football can fire many slings and arrows, but I don’t see operating costs rising modestly above the “official” rate of inflation as a major cause for concern.
Regarding Jota transfer – I would have thought that accounting rules wouldn’t permit declaring income in the previous year when the transfer occurred on 3 July – if indeed it did.
Excellent set of financial results, when we see the work that’s going on at Barrowfield, upgrades at Lennoxtown and increased spend on player transfers and wages while maintaining good levels of revenue and profits we can really see a “virtuous circle” evolving at Celtic Park.
“My get [gut] feeling on this, is that £105m operational expenses is higher than is comfortable. Operationally, we need to get so many things right to get over the line while running so hot.”
Yes, PL stated inflation was a factor, also we are paying our high value players more yet hopefully by reducing the unwieldy numbers of our first team squad means the costs are more manageable this financial year.
PL stated…
“In the summer 2024 transfer window, we have acquired the permanent registrations of Kasper Schmeichel, Viljami Sinisalo, Paulo Bernardo, Adam Idah, Arne Engels, Auston Trusty and Luke McCowan and the temporary registration of Alex Valle. We permanently transferred out the registrations of Hyeon-gyu Oh, Sead Haksabanovic, Matt O’Riley, Michael Johnston, Yuki Kobayashi, Ben Siegrist and Tomoki Iwata. We also temporarily transferred out the registrations of Gustaf Lagerbielke and Hyeokkyu Kwon.”
Of course we can add Turnbull, Abada, James McCarthy, Ideguchi, Joe Hart and others who came off the wage bill
That level of smart recruitment and squad management should enable the costs to be manageable
Being able to back fill Joe Hart and Matt O’Riley is exceptional administration.
“Chief executive, Michael Nicholson, noted, “There is no room for complacency. We cannot stand still and we are determined to improve. In support of our strategic objectives of dominating domestic football and competing in the Champions League”.
A great statement from our CEO, and that attitude is key for Celtic to evolve in today’s football climate…
Well done all involved
Hail Hail
John Burns – RIP
Joh.n Burns RIEP.
CHAIRBHOY on 17TH SEPTEMBER 2024 2:40 PM
Excellent set of financial results, when we see the work that’s going on at Barrowfield, upgrades at Lennoxtown and increased spend on player transfers and wages while maintaining good levels of revenue and profits we can really see a “virtuous circle” evolving at Celtic Park.
Its already here. Its years of smart hard work in black and white.
A real tragedy:
https://www.glasgowlive.co.uk/news/glasgow-news/young-celtic-fan-killed-m6-29949382
Whoever they bring in,TOO LATE.That ship has sailed.A damn site faster than the ones transporting their steel..There has never been a gap like this in our history,not their 12 year old one either.The gap is too big,and only going to get bigger.
We have enters a new epoch of dominance.We have no automatic to the CL for a few years,but we can see the change.We will be favourites to reach the League stage,and hopefully,most times will,until it is automatic again.They are history.Enjoy the dominance and tears.
MELVIN UDALL @ 2:54 PM,
Absolutely tragic,
May he R.I.P.
Hail Hail
CELTIC40ME @ 2:53 PM,
Quite…
We must continue to strive for excellence…
Tomorrow evening will be a good barometer of where we are…
Hail Hail
CHAIRBHOY
Weren’t we a badly run club not so long ago?
I think the annual accounts also is a good barometer
Maybe not so bad over the last year as some have suggested
Its like the Summer never happened
Afternoon, all.
May John Burns rest in peace.
CELTIC40ME @ 3:10 PM,
Well it’s a bit churlish to bring that up…
We have won three in a row since the 2020/21, our revenue has doubled and we are now regularly in profit.
Agree with Paul67, we are in a virtuous circle and are really evolving, long may it continue, we have serious challenges ahead
Hail Hail
CHAIRBHOY
Talking of barometers and Wednesday night, I’m excited as anyone about it but I’m sure you’d agree it’s only fair to judge after all 8 games, not the easiest or the three hardest. Or even, as Brendan says, judge me in May. We’ve seen too many false dawns to jump to any conclusions after one game.
It’s not unlike judging a transfer window weeks before the end or being hugely critical of the clubs performance before we know the whole picture. Things often look very different when we have the full picture and we’ve all calmed down a bit.
CHAIRBHOY on 17TH SEPTEMBER 2024 3:35 PM
CELTIC40ME @ 3:10 PM,
Well it’s a bit churlish to bring that up…
I thought you’d be the last person to mind
Levein has been sacked in the afternoon.
Wage bill should be significantly down for the year ahead.
Not sure how common practice it would be or if it would risk players wanting to leave, but would have thought that it would make sense to have salary level (in contracts) dependant on competition participation for the year. Certainly the bonus element. £5m+/- per season on the wage bill depending on Champions league vs Europa would mitigate risk/cash flow issues.
CELTIC40ME @ 3:44 PM,
Yes, we are a work in progress, we haven’t even seen Valle or Trusty never mind bedded them in, Idah is still ring rusty for me and we are unsure of our best midfield
It was interesting that we went five at the back against Athletico and managed a result against them
It seems with one thing and another we’ve had little option but to go 4-3-3
A 4-2-3-1 may be interesting, BR Mk1 played that often, don’t know if he’s dead set against it but we now have a really goid option there once the players are bedded in
Playing Slovan first has good and bad points we’ll have a better idea on Thursday morning if it was for the best.
Hail Hail
Important information Celtic v Slovan
Celtic40me @ 12:45 pm
In total
6, 40 and 17 by year
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Cheers C40.
So we paid Corp tax on the £40m before the new (higher) rate came in?
BSR …
Important information indeed.
As of 7 minutes ago ….
… the sports bar is open !!!!
CHAIRBHOY on 17TH SEPTEMBER 2024 4:00 PM
Yes, football, isn’t it?
Shall we have a cuddle?
CELTIC40ME @ 4:07 PM,
Yes, a cyber one…
Hail Hail
BACK TO BASICS – GLASS HALF FULL on 17TH SEPTEMBER 2024 4:05 PM
Good spot. 👍
Nearly a million saved thanks to those middle aged etc
CHAIRBHOY on 17TH SEPTEMBER 2024 4:13 PM
How about spoons? Too much?
You choose which spoon you want to be
Apologies, no offense meant. Just a bit of fun
MALONE BHOY @ 3:59 PM,
Yes, incentivising your top players to qualify and then get results in Europe has to be the way to go…
We make a lot of money from European victories, we can afford to be generous there.
CELTIC40ME…
Spoons.!? You lost me there…
Hail Hail
CELTIC40ME @ 4:20 PM,
Ah right…
No….
Hail Hail
Levein, like Billy Dodds,as soon as they’ve bagged,straight back to Radio Scotland on our coin
Boring again (log ins)
!!Bada Bing!! on 17th September 2024 4:50 pm
Levein, like Billy Dodds, as soon as they’ve bagged,straight back to Radio Scotland on our coin
No doubt, BADA, the man has much to say. After all he is very experienced in all things European and International re. football. Perhaps he might give Brendan some tips on playing 6-4-0 in order to avoid a home thumping?
An erchie of a man.
BTW I really enjoyed wee Doddsy on Sportscene the night of the Glasgow Derby. His pain was palpable, actually stuttering at times. Good times for Tims, long may they continue (with no hint of complacency).
Ave Ave
Ave Ave