Four pillars of Celtic finance

The £11.5m loss Celtic reported yesterday was a significant upside on what could have been.  Most revenue streams were cut to the bone, or in the case of match day spend, eliminated completely.  That the cub survived without having to drastically change its trading levels was down to four factors.

Season book sales have been the bedrock on which Celtic’s foundations have been built since Fergus McCann took over.  Fans buying tickets in the middle of a pandemic was absolutely critical, be in no doubt, you may have never scored a goal, but you played your part for Celtic.  You pushed Football Operations income to £20.8m.  This figure was £15m lighter than a year earlier, but with no European or cup ticket sales, no food and drinks, it was a remarkable return.

My eye was drawn to Merchandising income: £22.6m, the highest ever figure and up a remarkable £7.6m on the previous season.  Achieved with zero match day walk in and very little footfall all season.  This was the first season of our kit deal with Adidas and, just as importantly, our retail deal with JD Sports.  If season ticket sales are the first leg on terra firma, these commercial deals are the second.

The baseline for Merchandising income is now higher than for Football operations.  What does that mean?  It means we can budget with a lot more confidence.  Multi-year commercial income deals reflect our exposure to multi-year player contracts.  This is how you build a football club; enormous credit to the unsung commercial team.

Europa League football help generate £17.3m in our ‘Multimedia and Other’ segment that also includes SPFL payments.  This is £2m down on the previous season; second prize does not pay as well as first.  The Europa League is not where we want to be, but when we miss out on the Champions League, it is absolutely where we need to be.

Notwithstanding the list of Japanese, Greek, English, Croatian, Israeli and Swedish internationals who arrived this summer, the contribution to our stability from those who left since our last interim reporting period ended on 31 Dec 202, is enormous.  If we had not sold Odsonne Edouard, Kris Ajer, Jeremie Frompong and Patryk Klimala for the money we did, the playing squad would look remarkably poorer today.

Every club needs to manage its assets, even the biggest.  Buy them at an age and profile you can develop and sell profitably.  Not all will make the grade, so those who do need to compensate.  The profile of the squad is not looking just as suited to this strategy than it was been for the last decade.  Win the league and qualify for the Champions League, and that’s not a problem, but this is not a sustainable strategy.  Celtic need to get back on the Asset Management track.

It is probably only after such an appalling season you get to see how robust the club is; built on solid granite.  Let’s hope it’s a while before we get to test this again.