Newco spend cheerleader Smith: Destination Insolvency

10 years ago today Jimmy Calderwood was manager of Aberdeen. If a nostalgic journalist troubled the Tanned One on what his old club could do to prevent Celtic disappearing further over the horizon, can you imagine him saying: “The board need to bridge the gap with Celtic, spend big and put Aberdeen back where they belong”?

It would be a ridiculous suggestion. Celtic turnover circa £65m more than Aberdeen, trying to match the champions in any meaningful way would jeopardise the club’s 112 year history.

Calderwood, isn’t so daft. But Walter Smith, who 10 years ago was Rangers manager, now advises Newco to spend big in order to catch and stop Celtic. Newco will turnover around £50m less than Celtic.

Football clubs who are engaged in a competitive struggle, either cut their cloth to suit their circumstances, or are destined for insolvency. Of the tens of thousands of registered football clubs in the world, Newco, more than any, should be wedded to a strategy of matching expenditure to income.  They should know better.

Live within your means, pay your bills, build up a track record of responsible trading. Develop youth talent to the best of your ability, plan seasons in advance, and you have an excellent chance of improving as a football team year-on-year.  Whip up unreasonable expectations, become a serial loss-maker, crave short-term hits like an out of control addict, and your chances of sustained development are zero.

It beggars belief that in 2017, not five years since the shadow of liquidation walked up Ibrox’ marble staircase listing every asset in the building for sale, that a hugely experienced authority is putting a futile trophy hunt before the financial security of the club.

The ball is rolling on this now. The vast majority of fans only hear “Spend, spend, spend”. Responsible voices suggesting Newco spend what they earn, irrespective of the consequences on the league table, will be abused as heretics (been there).

David Murray’s ‘speculate to accumulate’ narrative needed Rangers to be competitive at the top end of an inflating market. It worked while these conditions were in place but fell apart when the market in England softened in 2001. Rangers could no longer sell their duds at a profit and the game was over.  It’s not been a viable strategy in Scotland for 15 years.  The subsequent crash and burn was inevitable (although liquidation wasn’t).

Any team wedded to a strategy which requires them to spend money they can ill afford, to achieve an outcome which is beyond their reach, is destined for insolvency.

Is competing for second place really that bad that you need to risk it all to ‘stop Celtic reaching 10’?  Aberdeen, Hearts and Motherwell seem to enjoy their football in this reality, most fans pitch up week-after-week despite lesser ambitions.  I haven’t heard a single voice of reason on the financial strategy across the city from within their own ranks.

You know how this story ends.