Celtic-Newco financials: Celtic’s huge advantage


One of the surprising elements when we compare Celtic and Newco’s accounts is that the former have a higher wage bill: Celtic, £60m; Newco, £64m, despite Celtic having a bonus liability for winning all three trophies.  The variance is even more stark than it looks.  Celtic’s wage figure includes 130 retail staff, Newco’s retail operation is outsourced, pay to staff in their shops is not included in that £54m.

One area I prefer the Newco accounts to Celtic’s is that they show fixed costs.  This appears as ‘Other operating charges’ in their accounts, Celtic do not offer as clear a figure.  The Newco figure is £28m, consistent with the previous season and up from £23m in the last full season before Covid.  Celtic’s fixed costs will be much the same (we have comparable electricity, stewarding, rates, insurance and other non-football costs).

Those fixed costs left Newco with an additional £55m for football operations.  Assuming Celtic’s fixed costs are the same, their money available for football operations for the year was £92m.  Let’s park this for a moment, until we look at the current season.

Celtic’s profit was assisted by exceptional items.  £13.5m came from Covid insurance and compensation for Ange Postecoglou’s departure.  Neither is likely to happen again.  Despite selling Jota, Juranovic and Giakoumakis, our profit (sale minus kick-back to previous club and minus current asset value) was only £14.4m.

If we develop another Kieran Tierney and sell him for £24m, all of that money goes to the bottom line, but buying players in creates a completely different financial model.  The latter is more likely going forward than the former.  I doubt we will repeat anything like the sales of Jota et al this season, or for a while.

A couple of points on insurance and player trading figures noted above.  Notes to Celtic accounts indicate insurance and compensation for a manager “do not meet the definition of revenue under IFRS 15”.  Player sales also do not meet this definition.  So although these payments significantly benefited profit and the cash position, they are not included in our £120m turnover figure.  We have fewer cup games this season and one less trophy prize money, but income should be in much the same space.

Newco’s income will be down this season, I estimate to £70m.  Subtract £28m fixed costs and they are looking at £42m available for football operations, before player sales income (but who can they sell?).  It is not just that our income is 45% higher than Newco’s, which is significant enough in itself, the money available for football operations, by my estimate, is 215% higher.

You could say, “For every fiver they spend, we’ll spend £10.70”, but in reality, we’ll spend £10.70 and they’ll spend much more than this, until the day they don’t.

You see what is at play in Glasgow right now?  Newco are in a horrible position if they are serious about trying to move Celtic off the podium.  The new chairman John Bennet made disparaging remarks in his statement about the regime he took over, “Having spent recent months getting closer to the daily operations of the club, it is clear to me that there is widespread scope for improvement.”

“Widespread scope for improvement” is a clear dig at outgoing execs, Stewart Robertson and Andrew Dickson; Douglas Park may also have flinched on reading that one.  But Bennet still banged the drum for good times to come.

There are two other things I would like to talk to you about: the new Uefa Financial Sustainability regs (which Celtic played a big role in designing) and our own bank balance, we’ll pick up on both later.

I started writing about Rangers’ finances here eight years before they went out of business.  The direction of travel was clear and an outcome similar to what happened, inevitable.  The only thing I didn’t know was how soon, or by what method, the walls would crumble.

This story has a few (?) seasons left to run, but the path is clear.

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  1. Back to Basics - Glass Half Full on

    Great article BTW Pablo.



    IMHO – an appropriate and necessary fact laced counter to the dung with hogwash chaser being fed to the irretrievably stupid.

  2. WESTCRAIGS on 16TH NOVEMBER 2023 2:10 PM



    ” could we pay higher wages so we can attract better players to improve our results in the champions league?”



    I see this so often on CQN but I am at a loss as to why posters feel it is as simple as this.


    No doubt some clubs will attract better players and improve results but I strongly suspect ( logically ) a greater number fail in that venture.


    Also, how much would we have to spend to get these `better` players and would they really be interested in coming to the SPFL?


    I agree it looks simple: Buy better players; improve performance ; do better in CL but I feel it is far from being as simple as that.

  3. How much do you think our board would spend to stay top dog in a league without a form of the huns ?



    Presently I feel we use them to promote our own aspiration.



    Domestically we set the standard, we sometimes need a wee ” prod ” to ensure we maintain or better our standard.



    Is that wrong ?




  4. was waiting on the invitable taylor bash



    Behave yourself



    Greg was inside, christie was at fault for not picking up his man



    taylor was no where near the cross as he was inside so not sure how he was to block???



    Where was the midfield/cover as the chap run from deep

  5. HOT SMOKED on 16TH NOVEMBER 2023 4:17 PM



    Like most interesting things, obvious once it’s explained to you. And it’s always good to hear it from an expert.



    I spoke to someone from the academy at an elite pro team once and he said they are as interested in attitude as ability in younger players because once the talented kids are coached there’s not much between them but you can’t coach a winning mentality.



    It’s what sets teams that win consistently apart from the others.



    I see it with my kids’ teams – I had a conversation with someone at my younger boy’s game on Sunday who turned out to be a west ham scout. I heard him on the phone to his boss talking about one of the boys you’d expect and another who you wouldn’t who’s a strong, aggressive greedy goalscorer.

  6. BTB @ 3.44



    We are 1 trophy behind them which will likely become 2 in December.



    So, a league win this season will equal their old club’s 54 and a Scottish Cup win will equal their total trophy haul.



    A century of waiting may come to an end.

  7. BETS…


    I had Scotland to draw 2 – 2 with Georgia ( CORRECT SCORE ), and the odds were 12/1.


    I also had MCTOMINAY to Score at ANYTHIME and 2 – 2 Correct Score at odds of 25/1.



    Not too shabby.





  8. bigrailroadblues on

    Good evening all from the Penny Farthing. Time for home or there may be a murder most foul. Mine, probably.

  9. setting free the bears for Res. 12 & Oscar Knox on 16th November 2023 5:47 pm



    Looks like we’re playing a team from R.A.D.A. here.






    I have had, had to google R.A.D.A



    I was so outside my comfort zone @ the Theatre in Edinburgh with Aidan’s Mum, She is a cultured Babe. I was also going Mad Too.



    Talkin’ fitba is where I feel alright.

  10. Payouts relating to the Rangers malicious prosecution scandal could end up costing the taxpayer more than £60 million, according to a report by auditors.



    The Crown Office has allocated £60.5 million in unplanned costs for cases brought against the Lord Advocate by people connected to the acquisition and administration of the club.



    Audit Scotland’s annual section 22 report into the Scottish Government’s accounts detailed the costs, with £51.7 million being paid out in compensation and legal costs as of March 2023.



    A further £8.8 million has been set aside for cases which are still to be finalised.



    Read more: Apology failure for wrongful arrest of ex-Rangers exec to cost up to £72 million



    The Audit Scotland report said: “To date, the (Crown Office) has accounted for £60.5 million of unplanned costs in connection with these claims against the Lord Advocate.



    “Some cases have been resolved, with sums paid to the pursuers totalling £51.7 million to March 2023 with a further £8.8 million provided in respect of cases still to be finalised.”



    Several people involved in the administration and acquisition of Rangers were wrongly prosecuted, later launching civil claims against Scotland’s prosecution service.



    Administrators David Whitehouse and Paul Clark were arrested in 2014, though the Crown Office later dropped charges and admitted their prosecutions were “malicious”.



    Read more: Lord Advocate’s fraud case against ex-Rangers exec was malicious




    The Lord Advocate also admitted Charles Green and Imran Ahmad should never have been prosecuted, with Mr Green receiving more than £6 million in compensation, plus legal costs.



    The Scottish Government and the Lord Advocate have said an inquiry can take place once the civil cases have concluded.



    In November last year, MSPs were told the costs connected to the Rangers malicious prosecution litigation was just under £51 million.



    Scottish Conservative shadow justice secretary Russell Findlay said: “While the financial cost of this scandal looks set to smash through the £60 million barrier, the reputational cost to Scotland’s prosecution service is incalculable.



    “It’s sickening that every penny of this vast sum is being diverted from frontline services including our justice system.



    Read more: Lord Advocate looks to axe £60m malicious Rangers fraud case



    “A fearless and efficient inquiry, chaired by someone from outwith Scotland, must robustly get to the bottom of this malice and incompetence – and hold those responsible to account.”



    A Scottish Government spokesperson said: “The settlement of these cases will not be met from the COPFS resource allocation.



    “The overall budget is managed across the Scottish Government and, as happens every year, any overall funding changes required to support expenditure are confirmed as part of budget revisions”

  11. Hot smoked.


    Mark lawrensen signed for Liverpool from Brighton in 1981. Liverpool were the dominant team in England and Europe at that time. The next time Brighton played Liverpool one of his former teammates asked him what was the secret of Liverpool’s success. “They keep buying good players.”


    That is how simple it is.


    Kenny Dalglish won the double as a player manager.


    Keep it simple. Spend what’s available in buying the best players available and keep on buying better players when better players become available.


    With £72m in the bank I think this team can be improved.

  12. Hello again all you young rebels.





    JOE GALLAGHER was a good pal of my wee da back in


    the day, and the first trip on a supporters bus as a young


    lhad to Engerlund was on the Glenties bus from Gorbals




    I believe round about 1966 at Roker park Sunderland.


    Absolutely thrashed them, with Jim Baxter and Harry Hood


    playing for the opposition.


    My abiding memory of that trip was Jock sending our bhoys


    out onto the park half an hour before the warm up to play


    one touch soccer which we had never witnessed before


    and surprisingly applauded off at the end by the Sunderland




    You just knew it was the start of something special.


    H H. Mick

  13. MM


    The opening friendly in 66 against Man United where we beat them 4-0 with Charlton, law, Best in their team – that was confirmation something special was going on.

  14. BB



    The call by Russel Findlay for an independent enquiry by people from outside Scotland should certainly investigate him.

  15. Thank you for the dates lhads, just remember that


    special feeling as we were leaving Benny’s bar and


    Travelling to this strange place called SUNDERLAND.




    Getting off the bus, and hundreds of other busses


    from Ireland and elsewhere, and meeting up with


    the Sunderland CSC.


    What a joy to behold for a young tim on his first trip


    down south.


    H H. Mick

  16. MM


    I travelled from Benny’s bar a couple of times


    Aberdeen and Stirling are 2 that I remember.



    Off to bed

  17. Paul 67



    You mention returning to FSR later and perhaps this document will help.






    when I say help I mean understand the impact of FSR rules on the Football Earnings limiter which suggests that sooner or later what RFC spend on players will have to have been 90% this season , then 080% next then 70% less than their football earnings thereafter.



    Where it might not help Celtic is that it asks the question will Celtic take advantage of the FSR change in rules, which as you say, Celtic were involved in the development of? (with all the RES12 evidence to persuade UEFA something was rotten in Scottish football.)



    The item at the link does not look at whether RFC’s spend on wages for players was in breach last season although the limiter was at 90% and their last seasons accounts were better than this.



    However going forward many would be interested in what use Celtic will make if any of our advantage to outwage them under FSR and of course if RFC will actually abide by FSR and SFA will make sure they do?



    It would be a bit daft to be part of creating a set of rules that hobbles RFC’s ability to improve the quality of their squad and not take advantage of what FSR Football Earnings rules deliver for Celtic.



    The questions are will Celtic :



    a) Use the ability to out wage RFC under the rules to maintain an unbridgeable gap by having a squad of Pot 3 CL standard or best of Pot 4 teams




    b) maintain the illusion of domestic competition between both under a Willo Flood approach to recruitment?



    Surely Celtic did not get dressed up fur nuthin and they could put on their best sharp suits at the AGM and clarify their position to an audience with a better understanding of the issues Celtic face as result of their audience’s experience of financial matters via FFP and now FSR since 2012?

  18. Yes GENE done the Aberdeen trip a few times from BENNYS BAR


    on an old double decker, which broke down on the big hill outside


    PERTH or was it DUNDEE ? trying to push it up an icy hill one time


    when it couldn’t make it was a joy.


    Things you do for the ones you love eh?


    H H. Mick

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