“Money in: £101, money out: £99, happiness. Money in: £100, money out: £101, distress.” Of the millions of words left on Celtic Quick News over 19 years, a few regularly come back to mind, including this one from Kojo, circa 2006.
Money determines long-term success in football, and CQN started by explaining our finances, in particular, our position in relation to our then-rivals, Rangers. Documenting the last 8 years of their journey around the plughole was educational. People refuse to believe the patently obvious until the final moment. There is no helping them.
A new era and a Newco is jostling with Celtic for the prizes in Scottish football. Who generates and spends money wisely will again determine long-term outcomes in our game.
Newco released their accounts for the year to 30 June 2023 yesterday, a year in which they matched Celtic’s operational spend (Newco: £95.2m, Celtic, £95.4m) in an attempt to bring down our dominance, “like a pack of cards”. You already know that despite achieving Champions League qualification for the first time, those cards proved remarkably durable.
Newco turnover was down £3m to £83.7m, a whopping £36.2m less than Celtic generated during the same period. That chasm reflects our higher earnings from the Champions League, domestic prize money from winning a treble, higher ticket sales and, importantly, more lucrative commercial deals.
Newco made a loss for the year of £4.1m, Celtic’s profit was £33.3m, that is despite Newco making a profit on the sale of players of £23.6m, and Celtic ‘only’ reporting a £14.4m corresponding figure. Year-end cash at Newco was £5.3m, compared to £72.3m at Celtic.
Post year-end, Michael Beale and others were sacked, resulting in a £13.1m hit to this year’s figures. The accounts note, “Our thanks go to Michael Beale and his staff for their efforts during their time at Rangers (sic.)”. I think we can all echo that.
Barring an exceptional run in the Europa League, Newco’s income will drop significantly this year. Their playing squad was overhauled in the summer, so wages will vary, quite possibly going down from the £64m of last season, a figure which eclipsed the treble winning champions’ £60.8m bill.
Both clubs are subject to the vagaries of Champions League qualification, but Celtic can afford to carry an operational cost of £95m, without needing to massively adjust if they only reach the Europa League, Newco cannot. They are trading miles above safe levels, with enormous risks which should worry fans who lived through earlier times, and have a modicum of perspective.
Administrators for Elite Sports Group have a £9.5m action raised against the club. Newco signed a kit contract with Elite and Hummel, but after an action by Sports Direct, a court ordered the club could not “wear any Official Rangers Technical Products designed by, supplied by, gifted by or manufactured by Elite or Hummel, or bearing the Hummel brand.”
The £9.5m figure is what Elite’s administrators estimate the company lost due, they have asked the court to force Newco to reveal sales of Castore kit, to allow them to prepare a detailed claim. Newco are confident the contract they signed with Elite is nothing to worry about. Good luck with that, they have an admirable track record in legal matters.
In September last year Uefa placed Newco on their financial monitoring list. Uefa requires club who participate in their competitions to meet break-even criteria. A £4.1m loss will not move the dial much either way, but the storm clouds are gathering.
No Champions League football this season, no player sales to speak of, the spectre of Elite lurking in the background, and still dependent on financial support for day-to-day operations, all add up to an acute scenario. Uefa sanctions are a risk.
We’ve been here before, you know how this plays out. This club needs to significantly downsize to give it its best chance of avoiding punitive repercussions. Let the voices of worried fans be heard loud and clear today. If they are not, there will be no sympathy when we hear “we were hard done by” claims, when the bell finally tolls.
The direction of travel could not be clearer, memories from 2012 are still fresh, and yet there are still news outlets today writing “profit” headlines accompanying these results, who do they think they are helping?