FFP, Newco’s loss and huge consequences


Two weeks ago, in the State of the Club Report, I noted, “What happens in [Newco’s] qualification tie against Malmo and if they progress, in the subsequent play-off round, will go a long way to determine how competitive the league race is over the next decade.  It is the sting in the tale of losing such a momentous title.”

The next decade’s power within Scottish football is what last night’s result is all about.  To explain why, let’s look at what is allowed under Uefa’s Financial Fair Play (FFP) rules:

Clubs are allowed to lose €5m each season without breaching FFP.  Some costs are deductible: spending on youth development and depreciation (often incurred to improve facilities) are deducted from your FFP loss.  In addition to this, clubs can convert up to €25m debt into shares, raising the maximum allowable loss for any period under consideration to €30m.

The monitoring period for FFP in normal times covers the three years before the current season.  In response to the current crisis, Uefa amended the reporting period for season 2019-20 to cover two seasons (2019-21), so currently, the FFP reporting period is for seasons 2017-18 until 2020-21.  Uefa also permitted crisis-related costs of revenue falls would be recognised, so clubs that are normally run prudently will not be penalised due to the mess the world is in.

Newco’s most recent accounts are for year ending June 2020.  Figures for the season just ended have not been published yet, but they were obliged to report their figures to Uefa at the middle of last month and are due to report again to Uefa in October.

See graph below:

I calculate three of the four FFP years show a cumulative loss of £32.76m.  This converts to €38.657m.  Unlike Celtic, Newco did not offer season ticket holders refunds for season 2019-21, though there will be some crisis-related loss of revenue, I estimate no more than £500k.

To align with FFP requirements, Newco would have to have made a profit after adjusting for the crisis of around £8m last season.  That did not happen.  It is more likely that their adjusted figure was between the trend of £11m loss and £15m loss.

All of this crystallises now.  Champions League revenue would have resolved this, but now they are in breach, and will be required to come into compliance if they wish to compete in European football.

So what happens next?  Uefa will investigate Newco’s financial housekeeping on receipt of the figures submitted last month.  This will be reviewed in October, allowing Newco to downsize and come into compliance during this transfer window.

If they do not come into compliance, Uefa will offer a Settlement Agreement.  The most relevant recent example is Milan, who were in breach for the monitoring period, seasons ending 2015, 2016 and 2017.  Uefa offered, then imposed, a two-year European ban in 2018.  Milan appealed to CAS, then in 2019, the club accepted a compromise one-year ban.

Other remedies short of a ban are available and have also been used.  These always include a transfer ban and reduced European squad size, and are only permitted when strict measures are taken to bring the offending club into compliance.  The process can be lengthened by appeal, so Newco can choose to bury their heads in the sand and compete for the title this season.

This latter possibility is dependent on them continuing to raise money.  Between November last year and June this year, Newco issued share capital on 10 occasions, giving the impression of a business living very much hand to mouth.

With Europa League revenue, everything else being equal, I estimate their loss for this season will be around £15m.  If they fail to reach the Europa, that figure will rise to a £25m loss.  That’s a lot of BMW sales.

I started CQN in 2004 because there was financial madness going on at Ibrox and many Celtic fans were asking why we were not working with the same gusto.  For 8 years, I predicted Rangers would crash and burn before they eventually did.  I predicted this would lead to a Generation of Domination – which it did.

Those were tough years in the Celtic financial blogging scene as we lost leagues and trophies to an outfit that seemed to always survive.  Like Oldco Rangers, Newco are playing casino football.  They run huge losses in order to become competitive.  If they lived within their means, they would have finished nowhere near the top of the table last season.

The predictions I made for Oldco were always likely but never certain.  We have followed Newco’s accounts for years.  The direction of travel was clear, but a team that was a goal up and comfortable against 10 men at halftime last night, blew their chance of competing for a £40m lifeline tie against a side from Bulgaria.

On the turn of a 4-minute spell last night, the world changed.  Football is a fascinating business; the complexity of risk is incomprehensible.  If you think it looks easy from the outside, you are almost certainly missing a huge part of the plot.

And permit me another point, if a grinning Jon Dahl Tomasson knows all of this, why do you have to come to CQN to read about it?  We are talking about publicly available information here, noted in Newco accounts and prospectuses.  A decade on and again, the mainstream are sleeping while the biggest story in football unwraps.

Click Here for Comments >

About Author


  1. only predicting a £15m loss Paul, I was figuring more than £20m.



    when is celtic accounts due out ?

  2. Through the rain on

    Newclub will wriggle and spin this out, they always do.



    It will be money laundering next mark my words!



    PS…. Glad Celtic are prudent but FFS get the players we need in. No ifs no buts this season… Just do it!

  3. Delighted with last night.



    My only concern (echoing comments from other posters) is that we now think our issues are less acute.



    We were brilliant against Dundee and the signs of progress under Ange are clear to see.



    Still, we likely have AZ in the next round. They will be the best team we have faced to date. Defeat to them would not make us look clever.



    We need to try and be the best team we can possibly be. That means getting in two full backs, a CB, a left winger and a striker.



    No more pegging our approach to where Sevco sit. Hopefully our board have learned their lesson…hopefully.

  4. The SFA will turn a blind eye to the finances over at The Rangers. UEFA always take the lead where the SFA freeze. Singing racist songs, had gone on for years, not a whisper from anyone in authority in Scottish Football, administrators, clubs, media, politicians nothing!! UEFA banned them and even then the SFA still tried to help by saying the Famine Song was just “banter”, over a million people starved to death, that kind of “banter”!



    They’ll go under, either by way of administration again, or cutting their cloth accordingly, they don’t own scissors, can’t afford them, so here we go again the same scenario, but this time probably a worse outcome than before, as it will be organised that it happens midseason so ST holders of clubs can’t block it. War is about to commence, hard hats on lads, it could get ugly, they’ll try to make sure that fans will not have a voice this time, you think so???? por cierto

  5. Certainly a problem not only for for the huns but also for any other business that bases its own long term strategy on their survival or viability.



    Any such business should now be considering alternative strategies.

  6. Nice one Paul – interesting recap. But when you say:


    ‘A decade on and again, the mainstream are sleeping while the biggest story in football unwraps.’


    The media is not sleeping.


    They’re ‘wilfully ignoring’ lest it marginalises their access to the biggest (shit)show in town.



    And despite your and Phil’s predictions of financial Armageddon down Edmiston Dr, they seem to have found a way for money – of indeterminate source – to wash in in and prop up their phoenixed fitba franchise.





    PS: I watched their 2nd half and – tho Malmo defended valiantly – the currants can still cause teams trouble with good, deep crosses that will trouble inept aerial defenders.

  7. GlassTwoThirdsFull on

    “I started CQN in 2004 because there was financial madness going on at Ibrox and many Celtic fans were asking why we were not working with the same gusto”




    Maybe some of us are not remotely interested in what is happening at Ibrox and just want Celtic to be the best they can be.


    I see Midtjylland join previous Champions League conquerors Cluj in not even reaching the group stage. AEK got there but lost all six games, while Ferencvaros even managed a draw! One point out of a possible 72 – and yet some people would have you believe that we can’t be expected to compete with these teams!


    But hey, who cares how bad Celtic are as long as It’s-Definitely-Not-Rangers are even worse!

  8. Tom McLaughlin on




    Paul’s £15m loss projection is dependent on them reaching tbe Europa League group stage.

  9. Through the rain on

    Bada….. Possibly. But this is an official competitive match under ‘professional’ auspicious so not in the realms of a freebie.



    Personally £7/8 seems appropriate. At least those without STs and maybe youngsters can get to see the Hoops live!




  10. !!BADA BING!! on 11TH AUGUST 2021 12:22 PM



    I am guessing the league sets a minimum price to charge. and to participate we have to do the same,


    thats a guess though.



    All football is too expensive imho.

  11. Very good article Paul.



    With regard to the OE story, the Daily Mail’s headline and story actually reads:



    “Odsonne Edouard is prepared to leave Celtic for free next summer if the striker fails to get his desired move away this month amid Brighton interest”



    We all know this is the last transfer window in which we can get money for him as he can sign a pre-contract in January so there is nothing new in this and no statement on intent by OE to let this happen.



    For all parties’ sake, he needs to move and we will have to compromise on the fee.

  12. the figures I was alluding to would be for thems full year to June 21, not this seasons coming.



    the full years loss of match day revenues must be big for thems.


    7,000 seats for 19 home games and 8 euro games.


    the hospitality, the parking, etc etc etc.



    interesting times.



    i am actually glad Paul restated why he (him, his) blog was started, it was about finances, not football performances per se.

  13. Garngad to Croy on

    I don’t foresee any change because of FFP, Rangers will ignore the rules and then blame everyone else. It’s the Rangers way !

  14. Through the rain on 11th


    August 2021 12:28



    Before the ‘ well don’t pay it’s brigade start again, it’s not the point, getting the impression, the Club are trying to get money from us by any means possible, and charging too much in certain cases IMO, sure it’s an expensive business to run ,but they had donations from 53,000 last season. HH

  15. Quality summary Paul67. I’ve followed the ‘crisis’ through CQN since you started the blog in 2004. A passive reader who used CQN insights to inform a number of bluenose colleagues of their impending doom. Whilst they financially speculated to stop the 10iaR, that speculation could be the final steps of the Frankenstein club that stands today.

  16. Huge congratulations to Malmo, the best team won…not something that you’ll hear coming out of the mouth of anyone at Der Hun ;-))



    As to the short term GS appointment…I can only think this is to give Ange time to concentrate fully on the 1st team squad development…but…after a worldwide search and this is the best we can come up with…disappointing



    PS…well done to all that got a lift from the bookies.



    BRRB…glad to see you back 👍




  17. Back to Basics - Glass Half Full on

    Brilliant Pablo. Just brilliant.






    PS – now we’ve got a large swathe of the chuckles, chortles, guffaws, jokes, jibes, japes and sniggers out of the way ……



    …. IMHO, last night’s result should motivate our board to accelerate (not temper) financial support for Ange this season.



    Don’t go mad …



    … but aim for the top end of the low-to-high range of any financial & resource planning.



    Hail hail



    Keep The Faith



    We’re Not Half of Anything






    We share a city AND NOTHING ELSE

  18. GlassTwoThirdsFull on

    Rolling Stone 12:25


    No more pegging our approach to where Sevco sit. Hopefully our board have learned their lesson…hopefully.




    I love an optimist!

  19. As someone tweeted earlier






    Hail Hail long may it continue

  20. Stx2 @ the madam



    Regarding our wager on the better player in the SPL this season SB vs JMcC …



    Meet you at the ground — it is a bet not a date.



    Consequently get your erse into gear — what is the wager and what is the criteria?


    Surely you are not feart of losing — are you?



    With CQN as the witness — you say SB will be better than JMcC this season in the SPL.


    You are standing for the Sheepy SB — I am backing the newly hooped up JMcC.



    Consequently what is the wager?


    What is the criteria we are judging them on?



    Points of TFOD2.1.


    Points of each other?


    Settled will of CQN?


    A.N. Other … ?



    Game for a laugh or a keyboard woose merchant?

  21. squire danaher on

    BIG JIMMY on 11TH AUGUST 2021 9:43 AM



    Just for the sake of clarity ERNIE..




    £100 is NOTHING to me..




    .I won more than £100 last night on Malmo AND the Horse Racing Bets coming up…THAT excess of £100 will NOT change my life nor will it determine ” How Much” I bet Today and Tomorrow etc on the Horses and Celtic…or ” How Much” I will spend in the Pub in the next few days ?




    Unlike you and the JHB Chump…I will ENJOY spending the Bookies money on Celtic, horses and Beer….and NOT MY own money







    I know you like your punt m8 and always glad to read of your bookie bashing exploits



    Let me tell you and all the punters on here what the wisest punter I ever met told all our punting crew.



    There is no such thing as “Bookies money”.



    When that money goes over the counter into your pocket or into your Bet 365 account, that money IS YOURS.



    It buys no more or less, and is equally as hard earned, as any wages.

  22. and we rent busses from this guy, it beggers belief.



    Fiscal year 2019/20 (ended 30th june 2020)



    took 5 months to publish, an indicator of how bad things are in any case.






    Rangers post £15.9m loss, with revenue up 11% to £59m



    20 November 2020



    Rangers’ run to the Europa League last 32 earned the club £20.7m



    Rangers’ run to the Europa League last 32 earned the club £20.7m


    Rangers have announced a £15.9m loss up to 30 June, an increase of £4.3m from the previous year, amid the “economic storm” of the Covid-19 crisis.



    The Scottish Premiership club say they need £23.2m in fresh funding by the end of next season, but chairman Douglas Park and director John Bennett will provide loans to cover the shortfall.



    Revenue rose 11% to £59m, with £20.7m for reaching the Europa League last 16.



    Park predicts the absence of fans will cost Rangers more than £10m this term.




    A new kit deal with Castore and selling out the Glasgow club’s season season-ticket allocation also helped to increase revenue.



    But with supporters still barred from most stadiums across the country due to the pandemic, Rangers warned that financial uncertainty remains as they face up to months without matchday revenue streams.



    “At the time of preparation, the forecast identified that the Group would require £8.8m by way of debt or equity funding by the end of season 2020-21 in order to meet its liabilities as they fall due with further funding of £14.4m required by the end of season 2021-22,” the club’s financial reported noted.



    It adds that Park and Bennett have reached an agreement with the Ibrox board to “provide additional loan facilities as necessary to meet shortfalls”.



    Park – who replaced Dave King as chairman earlier this year – has attracted fresh investment in recent weeks, with Japan-based businessman Stuart Gibson ploughing £8m into the club last month.



    Park said: “When I returned to Ibrox in March 2015, I advised my fellow shareholders and directors that I believed it could take us a decade to restore our beloved club to where it belonged, both on and off the field.



    “I think we are in a somewhat better position today than I had envisaged but there is much work to do.



    “The financial year under review is unlike any other, no matter the business or walk of life. The impact of Covid-19 will have far reaching consequences for our economy and society. Rangers is not immune to the severe effects of this unprecedented challenge.



    “Our club continues to attract investment from across the world, and I believe this will grow further as our resurgence builds momentum.”

  23. Through the rain on

    Bada… Yes 53,000 contributers but still a full playing, management and ancillary staff to pay.



    I’m not challenging your premis merely suggesting it’s not so black and white. But yes, irrespective of that, they do try to put the squeeze on!

  24. Afternoon all.


    I was just checking in to see Paul’s perspective on last night, then noticed an unopened WhatsApp message.



    Very , very sad news.


    The wife of Robinbhoy, who has posted on here for years, left me a message.


    Robin was undergoing surgery on Monday night and didn’t make it out from the anaesthetic and passed away.



    We’ve lost a good man & a good Tim .


    Rest in peace Robinbhoy.

  25. “Those were tough years in the Celtic financial blogging scene as we lost leagues and trophies to an outfit that seemed to always survive.”



    Paul, we lost three leagues in a row to Rangers while carrying net bank debt of £1.5m, £5.8m and £0.5m. We watched our turnover go from £72m to £61m to £52m.



    Rangers overspent. The Rangers are overspending. It does not get away from the fact that the ‘last’ regime ran Celtic in an ultra conservative manner, which we didn’t deviate from for near enough 17 years.



    We could (and should) have been more proactive in maximising our potential.



    Hopefully the ‘new’ regime takes that approach.

  26. squire danaher on

    ERNIE LYNCH on 11TH AUGUST 2021 12:25 PM


    Certainly a problem not only for for the huns but also for any other business that bases its own long term strategy on their survival or viability.



    Any such business should now be considering alternative strategies.






    You cryptic old scamp, you !!

  27. MM.



    i think its only fair, that if we want to bet, that we meet fairly in public, agree the wager with a witness, who holds the stake, we agree the terms, look each other in the eyes, shake hands (or fist bump) depending on social conventions , and meet at the same place to settle it at the end of the season,



    I can get you directions to the stadium or even arrange a pick up for you.



    Your call. Its not difficult to get there really.

  28. GlassTwoThirdsFull on

    Be interesting to know what made Strachan stand out above the other candidates.


    Maybe his progressive views on youth development? – getting big men and women together and seeing what happens?




    Now I’m all for a bit of out-of-the-box thinking, but it strikes me that this idea would take at least 20 years to develop (leaving a huge gap in between) and if it didn’t yield positive results you would be back at square one.


    Or maybe it was his wish to manipulate the leagues to get Rangers (sic) back (sic)? It’s certainly hard to imagine that one having gone down badly with the Celtic hierarchy!


    Wonder if it will be a similar three-month role as Neil Lennon’s “temporary” three-month role?