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Newco accounts, a way forward if they take the medicine

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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. Celtic get no support from other teams, Scottish football organizations or authorities. Celtic want Res 12 dealt with in Scotland by the Scottish football authorities, not in Europe. Typically this will be done poorly and probably unethically. When All of Scottish football goes pear shaped due to incompetence and illegal activity Scottish football will come looking to its biggest club for support and Celtic will be busy planning its future elsewhere; in fact Celtic are planning that future now!

     

     

    T

  2. Jobo

     

     

    Best wishes to the new parents and to yourselves on becoming gran and granja again.good luck,health and happiness to all

     

    :-)

     

    HH

  3. BSR

     

    it happened behind Ajer and he saw it and was one of the most vociferous in calling for it

     

    Get rid of the CHEATS

     

    Professional referees for a Professional sport.

  4. an tearmann

     

     

    That was the doc. I was referring to earlier big fellah.

     

    And another £65 million since 2012.

     

    All told thats enough debt to have kept the Titanic afloat!

  5. After liaising with all the relevant authorities, we strongly advise that supporters making the trip to Rome read the guidance below before embarking upon their journey.

     

     

    Alcohol

     

     

    – No alcohol on sale in the city centre from 6pm on Wednesday, 6 November, until 7am on Friday, 8 November.

     

     

    – Be aware that drinking alcohol on the streets will be prohibited and will incur an on the spot €100 fine.

  6. If you were the victim of fraud would you say I can’t do anything about it because I need my wee maw and paw to take me to the station and hold my hand because without their support there’s nothing I can do about it.

     

     

    Same scenario here with RFC and the SFA it’s an excuse so stop trying to protect Celtic football club ff ma we’re the biggest victims here so sort it out Celtic ffs.

     

     

    Our club are complicit and have been since 2012 and if they weren’t they would be shouting fraud from the rooftops.

     

     

    Get me the silver bullet and I’ll fire it, taps feet still waiting on pistol Pete.

     

     

    Infinite patience leads to infinite results my arse.

  7. remarkably accurate and truthful comments on 2nd Rangers in that Forbes article.

     

     

    calls them out as being deided.

     

     

    i did find the comments about mcgregor and davis getting offered new contracts, the same as happened in 2012, as quite funny.

  8. BIGBHOY on 4TH NOVEMBER 2019 2:14 PM

     

    In comparison, Rangers are supported and protected.

     

     

    ‘Rangers are part of the fabric of Scottish society.’ Then FM, Alex Salmond

  9. Tobago Street.

     

     

    TOBAGO STREET on 4TH NOVEMBER 2019 3:13 PM

     

    Celtic get no support from other teams, Scottish football organizations or authorities. Celtic want Res 12 dealt with in Scotland by the Scottish football authorities, not in Europe. Typically this will be done poorly and probably unethically. When All of Scottish football goes pear shaped due to incompetence and illegal activity Scottish football will come looking to its biggest club for support and Celtic will be busy planning its future elsewhere; in fact Celtic are planning that future now!

     

     

    ==============================

     

    I really hope so and if what is in the Res12 Archive, that has been updated to cover Celtic’s response to the most recent Resolution to bring Res12 of 2013 AGM to a conclusion, is not part of the argument for getting out of here then jobs aren’t being done.

     

     

    If you are not a shareholder it explains what was proposed & why and what Celtic actually oppose. All at 25th October date.

     

     

    https://www.res12.uk/timeline-two-part-three-continued-after-the-trial-was-over-june-2017-to-date/

  10. I think it’s fair to say that the conception of the final being played on December 8th could prove in many ways to be immaculate.

     

     

    Hail Hail

     

     

    Matt (or should that be Hail Hail Mary)

  11. We slag them and call them gullibilies but some of our mob take the biscuit when it comes to believing certain nonsense on here from certain individuals.

     

     

    The biggest victims of fraud can’t tackle it without other clubs. 😂😂😂😂

     

     

    Brilliant PMSL

  12. It will take a performance and discipline of mammoth proportions to win the League Cup Final por cierto.

  13. Rock Tree Bhoy on

    Forbes report on sevco account…

     

     

    The simple reality of the matter, however, is that the funding gap to Celtic is essentially insurmountable within the time required to stop the ten unless someone is willing to consciously and deliberately lose tens of millions of pounds to do so. Dave King, the major benefactor of Rangers, is currently losing upwards of £10 million a year to watch Celtic win every trophy, and no matter how big a fan of the club he claims to be, that is completely unsustainable. Now, he must find another £10 million to keep the club solvent until the end of the season.

     

     

    Sounds great!

  14. POR CIERTO on 4TH NOVEMBER 2019 4:58 PM

     

    It will take a performance and discipline of mammoth proportions to win the League Cup Final por cierto.

     

     

    ————

     

     

    Said Steven Gerrard.

     

     

    Its not 1995 btw. We do our job, we win.

  15. Good evening, friends.

     

    I’ve owned a handful of Celtic shares for a few years now but now that I’m partially retired this will be the first time i’m free on AGM day. I’ve received my copy of the accounts and an ‘attendance’ card. And my ‘AGMs for Dummies’ question is – do I just go along on the day (with my card) or do I have to indicate in advance that I’m attending?

  16. AULDHEID

     

     

    So, if Celtic PLC do not take any action and the matter is referred to the Police, do Celtic PLC then become suspects in the said “fraud” and could be charged if found to have been collaborating with the fraudsters? por cierto

  17. Rock Tree Bhoy on

    That was worth a read, fair cheered me up, here’s another wee extract…

     

     

    Inexplicably, in the time since the announcement of their financial reports, stories have appeared that suggest that Rangers will offer new contracts to Allan McGregor, Jermain Defoe and Steven Davis. Parking for one second the irony of McGregor and Davis’ situation—they were also offered new long-term deals in the summer before Rangers were liquidated in 2012—it makes absolutely zero financial sense for a club that should be predicated on selling young talent to the riches of the Premier League to invest valuable wage expenditure on players aged 37, 37 and 34 respectively. The youngest member of their first team squad is 22 and the average age is 27, while Celtic’s is 25 and includes the likes of Jeremie Frimpong (18), Ajer (21) and Edouard (21).

     

     

    Luvlly Jubbly!

  18. Do you know what excuse I’ve not heard in a while Auldheid ?

     

     

    The media will make it a Celtic and Rangers thing.

     

     

    😂😂😂😂

  19. DAVID17

     

     

    Thanks for the comment. Surely after what we’ve learned in the past few years it is far far worse than 1995? por cierto

  20. Henrik 1967

     

     

    I now see why you c&p other people’s work/posts,original thought appears to gave given you a miss.your comment the other night bout those who have had death threats was despicable

     

     

    HH

  21. Rock Tree Bhoy on

    You have to admit it is surprising that since their inception in 2012, on average they’ve lost just over £9 million per year, they’re totally dependent on a Sugar Daddy, they openly acknowledge they will need another £10 million hand out to get to the end of the season, this is all out in the open for all to see – and the SPFL just waive it thru as though its all perfectly normal. Presumably, its all OK within their carefully prepared rules.

  22. POR CIERTO on 4TH NOVEMBER 2019 5:04 PM

     

    AULDHEID

     

     

    So, if Celtic PLC do not take any action and the matter is referred to the Police, do Celtic PLC then become suspects in the said “fraud” and could be charged if found to have been collaborating with the fraudsters? por cierto

     

    =================

     

    As the potential victims of fraud I doubt it, although they might tell the police why its not in the Company’s interest to prosecute. It would be better if shareholders were told why first though, no?

  23. HENRIK1967 on 4TH NOVEMBER 2019 5:05 PM

     

     

    Do you know what excuse I’ve not heard in a while Auldheid ?

     

     

    The media will make it a Celtic and Rangers thing.

     

     

    =====================

     

    Not one of mine H.

     

     

    With regard to the Resolution Celtic oppose, the lack of support from other clubs was dismissed or did you miss that point? Here it is.

     

     

    15. In the course of discussions Resolutioners were told by Celtic that the representatives of other football clubs who make up the membership of the SFA, have no appetite to refer the charges to the Court of Arbitration for Sport and have expressed no interest in ensuring that the breaches of the SFA and UEFA rules alleged within the charges brought by the SFA after investigation, are considered by any judicial forum with the appropriate jurisdiction, or in ensuring that the rules of the SFA and UEFA are seen to be complied with and if necessary enforced.

     

     

    16. Whilst it is alarming that member clubs do not appreciate the importance of having a set of licensing regulations that all clubs can rely on to be followed in good faith by all fellow clubs and properly policed by the SFA, nevertheless this apparent licensing failure impacts negatively on the financial value of Celtic shareholdings ===> and should not be used as an excuse to prevent Celtic from pursuing answers from UEFA <======= whose rules after all appear to have been breached in a manner that is not bound by their statute of limitations if corruption is involved. Something a UEFA investigation would help establish.

     

     

    The whole proposal can be read at the Res12 Archive that the tooth fairy created.

     

     

    A link was posted earlier.

  24. HENRIK1967 on 4TH NOVEMBER 2019 4:47 PM

     

     

    If you were the victim of fraud would you say I can’t do anything about it because I need my wee maw and paw to take me to the station and hold my hand because without their support there’s nothing I can do about it.

     

     

    Same scenario here with RFC and the SFA it’s an excuse so stop trying to protect Celtic football club ff ma we’re the biggest victims here so sort it out Celtic ffs.

     

     

    Our club are complicit and have been since 2012 and if they weren’t they would be shouting fraud from the rooftops.

     

     

    Get me the silver bullet and I’ll fire it, taps feet still waiting on pistol Pete.

     

     

    Infinite patience leads to infinite results my arse.

     

    ==================

     

    Indeed you are.

  25. I am not wellup on Financial Fair Play. Is a Club allowed to survive only because of money given by rich supporters ?

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