State of the Club Report, Summer 2022

My friends in Celtic, a year ago I wrote, “Right now our chances of winning the league are probably 30% – held back by so many unknowns.”  The club had gone through a traumatic year in which we lost the league for the first time in a decade.  A new manager and chief executive were in place, our captain retired, while several of our most important players were angling for a move.

Under any normal circumstances, 30% would seem ambitious, circumstances were not normal, however, well not normal for the football industry, anyway.  Despite their year of trauma, Celtic were and are still run on a sustainable model, uniquely so, among clubs competing for the Scottish Premiership title.

A year ago I also wrote, “We can tip the balance in the weeks ahead”, a period which saw Carter-Vickers, Hart and Jota arrive, signings that would prove pivotal in the season’s outcome.  Celtic won the league because they had the sustainable structure enabling it to rebuild quickly.  It is that sustainability that brought Postecoglou, Kyogo and the other transformational figures to Glasgow.

No football club has a God given right to win.  They will certainly not win everything if they are competing against a club perpetually gambling with their own viability.  We lost our way in season 2020-21 and despite everything that went right last season, the title race was close, too close for comfort.

Newco looked dead on their feet (or hunkers, in one case), after they lost 3-0 at Celtic Park in February.  That night we reached the top of the table for the first time in the season and appeared unstoppable.  None of us saw the resilience Newco had to not only hang in there in the league, but cobble together an impressive run to the Europa League Final, and a sobering extra-time win over Celtic in the Scottish Cup semi-final.

Despite the title going to Celtic, Newco are entitled to believe they finished the season the stronger; for many reasons, they will be confident for the season ahead.

It has been so long since we reached the Champions League group stage without the difficulties of the qualifying rounds, our biometric systems are probably missing a summer of anxiety.  While everything was going well domestically last season, Europe was a blot on the copybook.  We exited CL qualification cheaply (and before recruitment was effective), suffered a sobering home defeat to German opposition (cough), while finishing third in the Europa League group, before truly humbling home and away losses to Bodo/Glimt.

If you are confident that we are ready for a crack at the Champions League group stage, you are made of sterner stuff than me.  Still, the golden goose resides on the Celtic Way.  Income will be determined by several factors yet to be confirmed, including performance and if another club from Scotland reaches the group stage, but, including gate receipts, I estimate we will earn £40m from the Champions League this season.

The club’s commercial department continue to ‘knock it out the park’ with each new round of deals.  Add in the Ange Homecoming Tour, and we know this season will produce Celtic’s highest ever income.  Income determines long term success in football, it is the climate, whereas results are the weather.

In the same State of the Club article last year, I also wrote, “What happens in [Newco’s} qualification tie against Malmo and if they progress, in the subsequent play-off round, will go a long way to determine how competitive the league race is over the next decade.  It is the sting in the tale of losing such a momentous title.”

You will probably not remember, so it is worth me going over the details of how that tie transpired.  Malmo won the first leg 2-1.  At halftime in the return at Ibrox, they were 1-0 down and had a man sent off.  Despite this, Newco managed to grab defeat from the winner’s podium; they missed out on the Champions League and the income it assured.

Despite this, a new manager and a new approach, allowed them to flourish in the Europa League.  As a consequence, the perceived value of their players increased exponentially.  They sold their best player for £6m and their best prospect for £20m, money that will enable them to recruit better and be stronger next season.

That transfer income and the considerable money earned from Europe last season will make Newco less dependent on shareholder loans.  It will allow the club to submit profitable accounts for the first time ever.  Such is their structural cost overhang, though, it provides only temporary relief.

They also have another crack at Champions League qualification.  If they get there, it is game on.  They are a club that previously always gambled beyond the edge of profitability, I expect them to throw everything at this season, irrespective of the consequences, in the hope of winning the title and through this, reaching the Champions League group stage in 2023.

Celtic will not follow them off the cliff.  We will continue to work on our own plans and in a sustainable manner.  But as you and I know, when you compete against a gambler, anything can happen.

As things stand, I am confident for the season ahead.  We retained all our important players, including those only loan, brought in a left back and a strong and experienced central mid.  I hear very encouraging things about Moritz Jenz, who it is hoped will become a big player for the club.

Crucially, the absence of European qualifiers enabled the squad to undertake more strength and endurance training than they would be able to do if they had competitive games to play.  Think back to all those tired players we watched last season.  A plan to address this has been executed.

So far, I think we have improve more than Newco.  Expectations of winning the title sit at 60%, which still leaves a black 40% waiting ominously.

I seldom look at the CQN reader numbers but at the end of the year I looked back and saw this enormous peak on 10 August, the highest number of 2021.  Curious, I typed “Celtic 10 August 2021” into my search engine.  Nothing.  I varied the search for a few minutes before it dawned.  That was the date Malmo won at Ibrox.

Some people will mock us for this, but you and I know better.  Football in Glasgow is a zero-sum game.  That Malmo win was hugely important in determining the outcome of the Scottish Premiership, season 2021-22.  If you don’t realise this, you have not been paying attention.

If Newco had Champions League income while Celtic were limited to Europa League money, all the parameters change.  This season’s qualification tournament will not be as critical, for Celtic, anyway, but it remains a key determinant in comparative competitiveness.

You are entitled to be proud at the way your club responded to the loss of our first title in a decade.  We have players, a manager, and a commercial operation that we have confidence in.  They cannot win everything and will make mistakes, but what an exciting time to be a Celtic supporter.

Take care and enjoy the season.

Paul67.