Newconomics: Interest payments 75% above transfer spend


Celtic net financing cost £201k (interest paid minus interest earned), Newco net finance cost £2.997m, that’s 6.25% of their income paying for previous season’s spend.  This percentage is a key metric for distressed companies.  David Murray’s Rangers paid 7.7% of their income in finance costs 19 years ago.  That was clearly unsustainable.  Rangers subsequently converted loans into shares (sound familiar) but were unable to apply a tourniquet on the losses, which eventually led to liquidation.  Newco are walking the same path.

Celtic and Newco both had a reduction in income, minus the reduction in costs due to the lack of fans, of around £9m. Newco state this net loss at “over £10m”, which gives an indication of what they will present in reporting to Uefa.

If we correct the reported losses for the 2020-21 exceptional items, Celtic’s loss is reduced to £2.3m, Newco’s to £14.5m.  The sale of Bayo and Hendry more than covered that trend loss for Celtic, leaving income from the sale of Edouard, Ajer and Hendry for new signings.  Newco’s entire transfer income was £1.7m.  They pay 75% more than this in interest.

When I started writing here about Asset Management, the moans came back about becoming ‘a selling club’.  If you are not selling players at the right time, for the right fee, something else is picking up the pain and you are underachieving.

Signing the finished article is more likely to help you succeed in the short term (although loanee Shane Duffy was 28 when he arrived), but the return on your investment from players purchased at that age is likely to be low.  They have been around long enough for their perceived values to be fixed.  When performances drop, you cannot move them on at a profit and need to cut elsewhere to replace them.

Sales from a hugely underperforming Celtic squad took in £34m transfer fees this summer.  20 times more than Newco’s £1.7m from a title winning squad.  And let’s be clear: before the summer they acknowledged they needed to sell, an admission their accounts confirm.

There is a trade-off: the instant hit or a more strategic play.  Strategic players win more often, that £34m has been transformational to what Celtic have been able to do this season.

How much of your income to pay to service debts inhibits what you can spend going forward.  Not all spending is equal.  Some will perform long-term, providing reinvestment funds after the player has moved on.  Others not so much (we have been there, think of the £6m signings of Sutton, Hartson and Lennon and the chasm when they aged).

Dave King clearly felt slighted by the tone of Newco’s accounts and responded in The Herald today, when he confirmed his £5m loan, plus £832k interest, had been repaid a little over a week ago.  There was an insistence that despite King, Douglas Park and others (let’s call them the Concert Party) saying they would provide interest free loans to the club without taking security, the South African authorities would only allow him to give Newco loans if they were at a commercial rate of interest – 8%, if you don’t mind.

I have no reference point for this kind of insistence.  He does not elaborate on what “authorities” we are talking about, but he has a bit of form in South African, so is perhaps wise to not be too specific and do what he is told.  He also reiterated his pleasure that “the authorities” allowed him to make the loans unsecured.  They sure are involved authorities.

The secured, interest paying, loans from others in the Concert Party clearly irk King, always a man of his word.

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  1. They might not be bigger, but their the ‘same’ price on the tickets, thanks to the sleekitry of Cellic PLC.


    And 53k salute the ‘same’ sleekit PLC who sold them oot, year in, year oot.


    Who would win the BlueBillys, or the GreenGlaikits?



  2. its been hours and hours since someone talked rubbish about celtic supporters or george gallow,



    i think 3 will be along in a moment.

  3. 3 million for the manager and ALL his backroom staff.



    just about pays all the interest on the “interest free” loans

  4. According to Chris McLaughlin on the teatime news there, “Rangers always think one manager ahead” so everything will be fine.



    The article immediately following was on those catholic child abusers. Just coincidence.

  5. JOE ORDINARY on 10TH NOVEMBER 2021 6:56 PM


    Ah George Galloway….the one that no one will go head to head with. 👊






    No wonder have you seen his head, and


    that hat? why wear it indoors, is there something wrong with the man

  6. He wears the hat for protection because he was a victim of attempted murder once, and not one androgynous arsehole on the MSM has uttered a single word about it to this day. If they had reported that an MP was assaulted and brought in tighter restrictions, then a number of MPs after Galloway might not have been killed?

  7. Listening to Clyde – its a riot.



    As Gerrard is likely Tchaikovski, He is getting out of Dodge ASAP.



    It will be interesting if he becomes a Sevco helper Paying over the odds for any of his ex players. Somehow I doubt it!!!!

  8. for protection,



    is it a steel hat ?



    a magic hat ?



    how does a hat offer protection, your all over the place josie.

  9. PETEC on 10TH NOVEMBER 2021 7:09 PM


    Listening to Clyde – its a riot.



    it is really funny, they will end with a sviet type funeral dirge.



    ange up next, he is superb.

  10. Rumours emanating from Birmingham, saying Gerrard on the verge of becoming a Catholic again…

  11. Protection for the viewers so that they don’t have to look at an attempted murder victims scars and chunks ripped out of his head.


    That clear enough for you, Stiffy?

  12. tommorrow i will be wearing steel toecap boots to the beach to protect the viewers from cathcing a glimpse of my blackened toe-nails.

  13. Gerrard, 2 years after leaving Liverpool under18’s coaching post, prevents the GreenGlaikits of Glesga from clinching 10 titles in a row, in the Scoattish one horse puddle league.

  14. BBC



    “…Gerrard’s work in revitalising Rangers and recapturing the Scottish title in 2021 from Celtic – who had won it for each of the previous nine seasons …”



    I know it doesn`t say so but would a neutral reading this assume that Gerrard had put a stop to Celtic`s title winning escapades at his first attempt?

  15. Wish McCarthy would settle into the team.


    Biton has played not bad recently, but he has a tendency to turn into Norman Bates mother every now and again.


    Where is Soro?

  16. Tonight I will be watching Lyon v Bayern Women CL game.As I like both teams,I don’t know which ring to throw my Hat into.




    Gorgeous George.

  17. blog was going great until snidey stivs sneaked in wan !! ps havnt seen your m8 bankiebhoy on recently, let him oot the cupboard for an hour or two !!

  18. Big G-Mac scored a cracking goal a few weeks back, from a quick Ralston cross.


    I don’t think G-Mac has had too many ‘strikers’ chances with this, Ange ball, malarky, G-Mac missed a penalty, then a loose ball broke to him in a flash and he failed to convert it, probably because his head wasn’t right so soon after the missed penalty. “Park The Bus” poster guy has a point just from his name, get the ball over the top of the midfield, G-Mac nods down to Kyogo, 9/10 it’ll be a goal. Move Turnbull to left back, the Tommy Burns route, not because he’s bad in midfield, but because he’ll have more room to play diagonals for Kyogo’s pace, and because the hugely talented Juranovic will bring the dynamism, tough streak, all action, workhorse ethic next to Callum, who it looks to me is being left with too much to do.


    Big Jock said “The game of football is simple, its people who make it confusing” or words to that effect. Big Jock was right. Big Jock was always right. Apart from Milan 1970, and signing, Roy Kay,Frank Munro, and a handful of others.


    Willie Maley’s hat CSC

  19. Listening to Clyde as well, what a first class host Gordon Duncan is.


    Bluenoses are turning into Comical Ali . Gerrard will be on Sky News with Villa scarf above his head and they will still be on the phone in saying A’h think he’ll stay.

  20. Whilst George Galloway’s political views have undoubtedly degenerated over the years I doubt they would ever degenerate to the level that he would support legislation like the The Offensive Behaviour at Football and Threatening Communications (Scotland) Act 2012.



    Which is more than you could say for every single SNP politician.

  21. Joe Ordinary



    My first impressions of Giamakous(sic) is that he is average. My expectation when we signed him was that he would be above average. Time will tell



    My expectation when we signed Ajeti was that he would be mince. Reckon I got that right



    I wonder if Ange signed G-Mac, or just went along with it?


    Ajeti is another player who seems that nobody knows who signed him.


    Don’t know what to make of him.

  23. So the league is there to lose.



    There is no money and a need to sell.



    Celtic are improving.



    Their next 7 games are :



    Hibs semi final


    Sparta in a must win game


    Livi on the pasta pitch


    Hibs at Easter Rd


    Dundee at Home


    Lyon away


    Hearts away.

  24. SAINT STIVS on 10TH NOVEMBER 2021 7:20 PM


    tommorrow i will be wearing steel toecap boots to the beach to protect the viewers from cathcing a glimpse of my blackened toe-nails.



    Ever thought about setting up an onlyfans account?

  25. Jeez bad day furra blog when even its resident sniders/attention sookers are out attention sooked by charity georges dango’s here.



    Jhb/tam how many trolls are you operating here?


    P.s your rancid unionist hun friends are a little to obvious

  26. JOE ORDINARY on 10TH NOVEMBER 2021 6:56 PM



    When parliament adjourned for the 2010 election, Chris Mullin (author of ‘The Birmingham Six’), said that a large number of Labour MPs made really good speeches to the PLP. But easily the most outstanding and most inspirational was George Galloway’s.


    Mullin’s verdict on George was, ‘Absolutely brilliant, but absolutely unpredictable.’


    I don’t know if George had ‘front bench’ ambitions but what a fighter he is if he’s on your side.