Newco accounts, a way forward if they take the medicine


It was around 5pm on the evening of 30 July 2003, Celtic were a couple of hours from playing a Champions League qualification game against Lithuanians, Kaunus, when an alert I had setup informed me the accounts for season 2002-03, the Seville season, were released.  I had been tracking our accounts for years and the cumulative losses, accrued since Dermot Desmond replaced Fergus McCann as the largest shareholder, was alarming.  We needed to break even and the Seville season would surely be the time.

Immediately I knew this was not a good sign.  Celtic Park had been packed out all season and the European ties extended into May for the first time in over 30 years.  There was also a massive splurge on retail memorabilia, as shirts, DVDs and Seville programmes were bought in their thousands.  After years of consecutive loss, we could be hopeful of some black ink at the bottom of the accounts.

The ominous timing of the publication was for a reason; income was up but wages rocketed, Celtic were spending 10% more than income.  Putting the information out hours before a Champions League qualifier was an attempt to divert headlines away from a harsh reality: Celtic were underwater.  Again.  We were borrowing to pay wages we could not afford.

So when Newco released their accounts late on Friday evening, you did not need to read them to know what they contained.

Last season was the first Newco competed in group stage European football, meaning this document would be significantly different from all previous Newco accounts.  Income was up substantially at £53m (2018: £32m) but operating expenses also rose, to £58m (2018: £39m).  This resulted in an operating loss before player transfer considerations of £4.4m.  A transfer amortisation charge (don’t start me!) of £7.2m, finance costs and £3m from player sales took the annual loss to £11.2m.

A year earlier Newco predicted they would require £3m additional funding this year, that figure has been revised to £10m.  The board also said a “material uncertainty exists which may cast doubt over the Group’s ability to continue as a going concern”.  Which is disarmingly frank.

By contrast, Celtic went one extra round in the Europa League, but turnover was £83m, a full £35m more than Newco.  Gate receipts were comparable: Celtic £35m, Newco £32m, as were media rights (including Uefa money), Celtic £16m, Newco £11m.  The big gaps came in sponsorship, Celtic £10m, Newco £2.8m, Retail, Celtic £13m, Newco £4m and stadium operations, Celtic £7.6m, Newco 3.5m.

Newco remain, but their own board’s admission, in a perilous position, but there is a workable way forward.  Revenue is within touching distance of operating expenses, shaving £5m in costs would get them there, and a significant portion of that would be taken care of if they stopped futile court actions against Mike Ashley.

They would have no money to buy players without first selling, but every other club in Scotland, bar one, is in the same boat and most manage quite successfully.  Ambitions would need to be tempered; becoming the top team in Scotland could only be achieved through, scouting, coaching and generally good housekeeping.  Of course, no amount of good housekeeping would make them likely to be the top team in Scotland, but they have more money at their disposal than Cluj have ever seen, so such dreams are not impossible.

There are also inordinate risks of running at such a loss.  It is more likely that next season they will fail to reach the Europa League group stage than overcoming Celtic, significantly increasing the burn rate.

My guess is that Dave King will continue to bankroll losses for as long as he can afford.  When he eventually goes, there is a chance a less flamboyant character will take control and deliver that harshest of medicines: living within your means.  They have done remarkably well to market their chances: the brilliant city trader, the exotic Portuguese, the A-list celeb.  There are surely limits to how many times you can resurrect failed aspiration.  They question is, are Newco viable as perennial runners-up?

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  1. I think most of them realise they’re over reaching and will need to scale back very soon.



    In the meantime they will go all out this season to stop the 9.



    This season represents the greatest threat to our dominance and if we over come it, their Ardennes offensive is finished.

  2. Rainy day here in Arbroath so I will run the risk of indulging in a`You said;I said` type of `discussion`.



    HS “The RISK of trouble is 100% so it cannot be increased.”



    Macjay 1: Opinion expressed as fact.



    Rainy Day Response: That is not an opinion. The RISK of something happening is very different from the LIKELIHOOD of that thing happening.



    MJ 1:You feel that insulting and deliberately antagonising Lazio fans will make no difference to the safety of Celtic supporters in Rome ?



    HS: I feel nothing of the sort. I do feel that the behaviour of Lazio fans HISTORICALLY should make Celtic supporters concerned about their (ie Celtic supporters) safety.



    MJ 1: Intentionally antagonising fascists may well have dire consequences . No ?



    HS: Of course it MAY WELL have dire consequences. Playing Lazio at any time MAY WELL have dire consquences.



    HS :” Should we never show disapproval lest it annoys ? ”



    MJ 1 : Who is ” we ” ?



    HS Anyone and everyone.



    My opinion In a nutshell:



    Antagonising a known , badly behaved support is not a good idea but it is not the reason said support is badly behaved.

  3. MNcelt





    the action or process of gradually writing off the initial cost of an asset.

  4. Reading a report from Forbes on E-Tim’s,regards the perilous state of the Huns.


    Anyway,we are beginning to look in great shape for the upcoming hectic schedule.Mikey,Griff,back ,added to the continuing return to full fitness of Rogic,gives us a real option throughout the team.Add in Ntcham,and Kenny can rotate a bit with confidence.If Boli does not make it for the final,no updates yet,it will be Hayes at left back.


    Great chance for us to totally sicken this mob,before New Year.

  5. But, but….but……they sit second in the “League”…………….helped and facilitated by a bent officialdom who apparently operate unfettered by rules, regulations or policy.



    How long do we sit idly by……………… How long? When will the powder be sufficiently dry?



    Soon the circle will be unbroken. The Peoples Front of Judea……and the Judean Peoples Popular Front will slug it ooot and the “blame” will fall heavily on Celtic’s door with the huns escaping scot-free.



    A perception gleefully, gratefully and gratuitously welcomed by our real enemies everywhere.




  6. Paul67



    The Rainjurz are coming?, whether they’re here in time or not to save Sevco is another matter 1872 to 2012 was some going compared with Titanic FC, who are sinking at a meteoric rate in just seven years.



    The publication of their spectacular losses which carefully omitted key amounts was a charitable appeal to ‘Scotland’ to help ‘bail them out’, in operation anybody but Celtic, which is underpinned by the SFA, SMSM, Douglas Park and anybody else who is fed up with Celtic’s dominance.



    A miracle that Celtic are top of the league and into another final, after front loading Sevco’s SPL home games, cherry picking their preferred referees, burying yellows and reds, they’re still behind because Celtic have bought better players, and than they can afford.



    Only time will tell if “pure beautiful inventive football” will see us through against the combined forces of evil.



    God Bless Neil Lennon CSC

  7. South Of Tunis on

    HOT SMOKED @ 12 42 .



    Sadly -there is no shortage of empirical evidence re football related violence in Rome …. It is a way of life for those responsible . . They don’t need an excuse .They like it . People die , people are seriously injured .

  8. There is an inbuilt moral hazard in TRFC’s ” business model” to Celtic as well as a financial hazard to all clubs, not just Celtic.



    Ostriches with their heads in the sand feel perfectly safe until the nano second before lions take a chunk out of their rear ends.



    There is gross irresponsibility from Hampden to Scottish football but if member clubs are happy to accept it, then they had better be prepared to lose a chunk of their respective rear ends.



    ” As oil is to the oil industry so stupidity is to football” Soccernomics quote.

  9. macjay1 for Neil Lennon on

    HOT SMOKED @ 12 42 .



    Semantic hair splitting.



    Risk = Consequence x Likelihood; where: (i) Likelihood is the Probability of occurrence of an impact that affects the environment; and, (ii) Consequence is the Environmental impact if an event occurs. … Essentially, the higher the probability of a “worse” effect occurring, the greater the level of risk.






    ” MJ 1 : Who is ” we ” ?


    HS Anyone and everyone.”



    Never would I wish to be associated with the juvenile loose cannons of the G.B.


    Sadly , as a Celtic supporter , that association is imposed on me.


    Time for P.L. to put a stop to their nonsense once and for all .

  10. I have not been able to see a set of these accounts of newco but I understand that they have spent about £3m on legal costs which i assume are mostly associated with Sports Direct.



    Has any provision been made within these figures for the estimated costs of the full settlement with SD and Hummel?



    If so, it would be a one-off and a sign that the underlying finances were coming into line.



    If not, oh dear.

  11. I can feel the mother of all FLOUNCES being readied……………..



    Indeed, a “Quantum Of Flounces”…… just as The Fat Lady clears her throat while standing unsteadily atop The Elephant In The Room.



    Places, everyone!

  12. Bournesouprecipe



    “They’re still behind because Celtic have bought better players, and than they can afford.”





    Not according to Lord Nimmo Smith. The biggest load of crap shed on us and supporters of all clubs.



    Yet when presented with non disclosed evidence that the Commission was a sham in 2014, the SPL of which Eric Riley was a Board member and occasional Chair, did nothing.



    When Regan invited the SPFL/ Celtic to approach LNS with SDM’s testimony to the FTT iro the competitive advantage ebts gave RFC, there is no record of the SPFL taking up the offer.



    So whilst your statement is true, officially it isnt.



    Cognitive dissonance?


    Double think?


    Treating us like mugs?

  13. Worried for the support going to Rome and being met by these nutters, which is probably a given now, if it was ever in doubt.



    Hope all bhoys and ghirls stay safe.

  14. Hvrastik Jim



    There is admission of a potential liability (where have I heard that before) but an argument against revealing quantum when the matter is still within legal jurisdiction was made.



    Check Phil’s Ruggerchap or fanswithoitscarves on Twitter for full answer.

  15. GuyFawkesaforeverhero on

    Scottish football’s crazy fixture schedule has our ten remaining league matches in 2019 split two in November, eight in December. We lose the hearts(a) game on 8th Dec in deference to the cup final.



    Celtic should immediately make representations for the rearranged hearts(a) game to be played sometime in 2020.



    There has already been concession to Sevco about their December fixtures, before the two cup finalists were known, leaving them with one less league game than us to fit in.

  16. !!BADA BING!! on 4TH NOVEMBER 2019 1:47 PM


    Another squirrel, let’s talk about the huns finances…






    Sevco & Rangers’ (RIP) finances have been the focus of CQN for a long time.

  17. T29- I know mate,but the delay in pinning a tail on a particular donkey is becoming tedious….

  18. Auldheid is right, Celtic receive no support from other clubs in SPFL or at SFA. When we push an issue we fail to attract significant support. In comparison, Rangers are supported and protected.



    Petrie in the SFA and his counterparts in the SPFL are hostile to their biggest club. They know that the Media are also in the fix and will not call them to account.



    When you try and explain this to friends in England, they don’t believe you, they think you exaggerate or are Paranoid.



    What I don’t understand is why we don’t stand for election in the Committees. We have the PLC Board and the Football Board and have the numbers. With a Celtic person on the various Committees it will at least know what they are up to.



    In the Interview last season with Tom English, Peter Lawwell, spoke about the people at the SFA who were good people. Maxwell and the modernisers were to be the future and it was implied that Petrie and the blazers were to be sidelined. Well that hasn’t went well, Maxwell comes across as incompetent. He is in Hiding. It has been suggested that he is in fact one of the Brothers. Either way it appears he is will not do us any favours.



    If the 7PLC directors don’t have the time to attend these committees then create more directors who can attend and to put the clubs views forward.




    We stand aside at our peril

  19. HRVATSKI JIM on 4TH NOVEMBER 2019 1:28 PM


    I have not been able to see a set of these accounts of newco but I understand that they have spent about £3m on legal costs which i assume are mostly associated with Sports Direct.



    £3.9m more than 2018, and reportedly £9m in total.




    Has any provision been made within these figures for the estimated costs of the full settlement with SD and Hummel?




    There’s a note in the accounts, they claim to have included an estimate in the numbers.




    If so, it would be a one-off and a sign that the underlying finances were coming into line.




    Hardly, they’ve admitted they’re £10m short for this year, without a potentially huge bill from the SD case and with the Europa League Group Stage football that is far from guaranteed next season.

  20. Paul67 et al



    The other day somebody, and I didn’t note who (note to future self, nota bene!), posted a list, which detailed the annual losses, or otherwise, of Rangers FC from 1989 to 2011. Fascinating little document, which showed that the total losses over that period were £180.2 million. Over £180 mill. (To the best of my knowledge does not include various MIH write-offs/write-downs of £109 mill by a Knight of the Realm.) Wouldn’t necessarily bestow a sporting advantage of course if the debts were actually paid! Now obviously some were over the course, but the fact is the latest BDO Creditors Report (June 10 2019) still shows that creditors were still owed just under £170m. Though £20.3 million of that is owed to Dave KIng, to be fair. Now the idea of a Scottish football club shedding debts heading towards £300 million, and remaining extant and not extinct, would stretch the imagination of a Philip Pullman if not a Captain Nimmo. Or, in the spirit of things, it would take more than a spoonful of sugar to swallow that medicine.

  21. Lazio Marketing director Marco Canigia: “For the game on Thursday we’ve sold over 14,000 tickets but the majority of that number has gone to Celtic..There will be around 9,000 fans from Scotland in the away end.”

  22. Have Celtic commented on Bobby Madden’s cheating at the weekend ?



    Or are we still keeping our powder dry ?



    We need to highlight this before the Cup Final V Sevco.


    Keep the MIB’s firmly in the spotlight and highlight every bit of cheating.



    Sevco desperately need a victory at Hampden.

  23. Auldheid – Gaffer @ 1.38



    Celtic are perfectly well aware ‘ straight from the horses mouth ’ that LNS was a sham, and this was confirmed in a much later court hearing with the words of


    none other than Sir David Moonbeams.



    Every Celtic supporter is a mug, more so since 2012 when Celtic silenced themselves into deciding that Rainjurz starting all over again with the spare licence was punishment enough.We have a massive financial advantage legitimately gained, so big that having to compete on a near level playing field, has upped the handicapping this year, and possibly next, see disciplinary records see penalties, see fixture list, see SMSM media.



    It’s a wee Diddy league and its bent like never before.



    Eyes on the prize CSC

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