JD retail deal and David Murray-JJB from 2006

We created some value from nothing yesterday with the JD Sports retail deal.  Official Celtic merchandise will only be available through club and JD shops and online stores.  This allows JD to harvest all retail margins on Celtic kit from their 700+ stores, instead of earning a small percentage, as they otherwise would.  With some of that extra revenue, they will pay Celtic a fee.  Celtic will see a direct sales pick-up as there are one of only two retailers selling the kit.

No information was given on the value of the deal or its duration.  14 years ago, Rangers sold the next 10 years of their retail rights to JJB Sports for £18m up front, plus £3m each year, a total of £48m.

Celtic had similar offers at the time but declined.  While money was short and we were perennially in debt during that period, front loading revenue like this was thought likely to lead to a feast and famine existence.  At the time, David Murray said the deal would “enable further investment to be made in the team”, ahead of the memorable Paul Le Guen era.

What do you do when you are in an arms race with a club spending absolutely everything?  We brought our debt down slowly, lost three of the next six title battles, but won the war. When he needed revenue to pay creditors, instead of buying footballers, Murray could not rely on retail revenue.   The deal turned sour for JJB six years later when Rangers were liquated.  The episode became a morality tale.

I doubt anything like £18m is making its way to Celtic’s bank today because of this JD Sports deal, it’s more likely we have taken a slice of one year’s retail margins on our kit.  An indication of where we are in the current crisis and how we are working to make up the shortfall.  It takes 10,000 acts to build a successful season, not all of them happen on the park.  This is good work by a commercial team that know what they are doing.