Any team can win any game, but sustained success in football is all about money; how much you earn and how you spend it. Everything went wrong for Celtic last season and they currently trail Newco by four points, although there are reasons for optimism. Where the clubs sit structurally and financially will always be a greater determinant of long-term success. We are going to have a look this week at both clubs’ accounts, what indicators they reveal and how they are run differently.
For a season when Celtic were trophy-less, exited the Europa League, Scottish Cup and League Cup earlier than Newco, you would expect the clubs incomes in season 2020-21 to balance out for the first time. Other things being equal, Newco should have earned more, particularly through their extended run in Europe.
Instead, Newco undershot Celtic’s £60.781m turnover by a clear £13m. The difference was all in the commercial department. Celtic’s deals with Adidas and JB Sports brought merchandising sales to £22.609m. This figure excluded “other commercial activities”, which were noted along with multimedia income.
When announced, Newco made great play of their first kit and retail deal after parting company with Sport Direct. However, their total figure for sponsorship, advertising, commercial and retail was £9.278m, £13.331m less than Celtic’s. Not that this inhibited their spending, the apple never falls far from the tree.
If you recall, Newco ended up with Castore after asking bids for their kit contract online. This was an indication that winning attractive deals is not as simple as those who have never concluded a deal like this could imagine. Celtic’s commercial team landed Nike 8 years ago, then improved their deal with New Balance. The move to Adidas in 2020 was a commercial game changer (it also landed before the reality of what lay ahead was revealed).
They were able to demonstrate performance and fine-tune a route to market with JD Sports. As a consequence, despite shops being closed for much of the season, merchandising income rose by £7.6m. To achieve this, you need to attract and retain staff capable of performing on a level off the field that Kyogo would be pleased with on-field. At the top of the page I wrote “commercials are key”. It would be truer to say an ability to attract and retain high-performing professionals is key. You cannot do this if you are the football equivalent of an aggressive fantasist.
This is not the sexy part of football, but it probably determines where more trophies end up than differences in scouting resource. Corporate governance up next.