Accounts: running hot, dominating, virtuous circle

154

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!

Click Here for Comments >
Share.

About Author

154 Comments
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5