You and I have been discussing football finances here since 2004. In our early years Celtic lost several million pounds each year, CQN’s call was ‘we must breakeven over any business cycle’, an incredibly controversial view in those times of indulgent bling.
By 2004 Celtic hadn’t added a player who held down a sustained first team place for three years (since John Hartson in 2001). We also lost a talisman that summer. The pressure was on to spend, from the stands and the dug-out, but Brian Quinn, our chairman, had concerns about running at a permanent loss. In the face of considerable criticism from the bling-brigade he stood firm.
Celtic won three of the next four league titles while reaching new territory in the Champions League as others continued to spent beyond their means and exploit unconventional taxation policies, which ultimately saw them liquidated, but while the end game was predictable, most didn’t predict it. This resulted in strife at our club.
Finance was a focus of CQN in the early years when we produced granular analysis of accounts and budgetary forecasting. As we became less of a basket-case the time spent debating money reduced.
We can all talk about strikers and defending, policing and political influences, good corporate governance and the SFA, but if you scratch below the surface of those with many years of CQN behind them, I suspect you’ll find people who can’t resist a football club’s cost and revenue breakdown spreadsheet….
The document which appeared on the internet yesterday on a former football club [let’s call them ExCo] was a joy. To me, anyway. It provided many small details which add up to one or two enormous conclusions.
ExCo forecast current year spend for 2011-12 on cleaning costs to be £380k, electricity at £455k, insurance at £374k, postage and carriage at £146k, IT at £261k, professional fees at £613k and telephone costs at £149k. Stewarding was £593k, policing, £343k, match day ambulance, £89k. They spent £160k on finance salaries and £176 on press office salaries while ticket operation salaries cost £268k. The list is exhaustive, 10 pages of costs detailed.
Operating costs, before items like our old friend, amortisation, and tax (don’t laugh), were predicted to come in just shy of £37m, but the key message in all of this detail, is that if you want to operate a football club which can accommodate circa 40,000 spectators you need an infrastructure which costs around £20m.
The police, building maintenance, insurances, grass seed and everything else has to be budgeted for before you can look at player wages, not to mention transfer fees. £268k might sound like a lot to pay for ticket office staff but if you need to issue tens of thousands of tickets you need fulfilment staff. All those assets: enormous properties, thousands of fans, blanket media attention, can feel like liabilities to the guy with the responsibility to pay for them.
On reading this the overwhelming memory I had was of former Rangers director, Paul Murray, who a year ago told the world that Newco Rangers would not be viable, and he was hoping a Newco would have SPL football back then. New clubs cannot qualify in European competition until after they have completed three years trading (a minimum of four years without Europe).
With no European revenue for four years, Newco would be unable to pay all those ‘fixed’ costs and put a competitive team on the field. A big club can’t survive trapped in a small league with no European revenue.
This is reality. Scotland has one healthy large club and has a dozen or more potentially healthy small ones, but nothing will ever be the same again.
Thanks to everyone who has bought Willie Wallace autobiography. Orders in from Belfast, Blackpool, Bonnybridge, Burntisland and Blackrock. If you order now you will receive a copy signed by the man himself….
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