The problem of relative poverty


A CQN’er prepared this forensic analysis of the relative poverty of Newco (formally named for analysis) compared to Celtic.  It covers where they currently are and, more importantly, brings into sharp focus their financial projections for next season.

A storm is coming.

It’s International week, so it seems like a good time to look forward. Whilst most fans will be focusing on the matches remaining between now and the end of May, Managers and Football boards have to look further ahead. Budgets are being planned, appointments being considered and money, as always , is foremost in the thoughts of Directors and Managers.

Money, if you have it , can solve short term challenges, set in place long term strategy and is a mechanism to energise the fanbase. When you don’t have money, the problems and challenges are of a completely different nature. Celtic have money, a lot of money.

The cash balance on 31 December 2018 was £44m. Of course, some of that money has to be spent on wages and suppliers before the year-end. However, Celtic will also receive stage payments on Dembele sale circa €7m before 30 June (it’s common for large fees to be spread over 2 years), management team contract buyout of £9m, SPFL final distribution for 2018-19 season £2.2m, Valencia gate receipts and Hospitality £2.2m, and close to another £2m in match day ticket sales for the 11 SPFL home games taking place since 1 January.

None of this cash was shown in the Interim accounts. Payments will be received for players sold as well as payments made for players already purchased. The Year End cash balance will be a record high beating last year’s figure of £40m.

Everyone will have an opinion of where and how much we should invest, and that will be the subject of another article nearer the season’s end.

The challenges across the City are of a completely different nature. As always the demands there aren’t supported by financial reality, and having gone all in on Caixinha and Gerrard, a new and more challenging reality is looming.

Rangers posted an operating profit of £3.8 Million in the 6 months to 31 December 2018. The Rangers Chairman in his financial review that accompanied the interim accounts stated, “the Club is forecasting to be close to break-even for EBITDA for the year”.

I’m sure that was designed to provide comfort to shareholders and fans alike, however some context is required.

In the full year to 30 June 2018, Rangers produced an EBITDA of a loss of £4.18m. I guess that’s close to break even in some eyes. In the full year to 30 June 2017, Rangers produced an EBITDA loss of £105k. There is no question that is close to break even.

The problem though is that EBITDA (earnings before interest, tax, depreciation and amortisation) is only part of the picture. The more relevant numbers relate to Operating Profit. That and Cash Flow tell a more complete picture on financial health.

From a 2018 EBITDA loss of £4.18 Million, Rangers produced an operating loss of £13.16m and from a virtual break-even 2017 EBITDA, Rangers produced an operating loss of £6.3m. The 2019 Operating result will be another significant loss.


·      Rangers had Revenue of £35m in the first half of the current financial year

·      Much of that Revenue will not recur in the second half of the year

·      There were 7 home games in the Europa League that will have generated close to £9.6m in gate money

·      Rangers earned £4.4m in Uefa prize money in the first half , nothing in the second half

·      Rangers will play 3 less home SPFL games in the second half resulting in a £3.1m reduction in gate revenue, as season ticket money is allocated to each individual game

·      With 10 less home games in the second half , Hospitality and Match day revenues such as parking, catering and programmes, will be down by possibly £3.3 Million

·      Other less significant revenues will reduce in line with less games played at home in the second half

·      It’s estimated Rangers will have revenues of close to £14.9m for the second half which is 12% growth on the second half of the financial year to 30 June 2018


·         Rangers won’t have the cost of travel and accommodation for European away games. This should deliver a saving of around £1.5 Million

·         There are 10 less home games, which will deliver savings on part time staff, security, Police and utility costs. Should save around £400k

·         Pena is now gone. It’s unknown if he was paid off or fired without any contractual settlement. It’s anywhere between a £340k saving or if paid in full (unlikely) an extra expense of £2m. Assumption is he got nothing, so a saving achieved

·         Defoe and Davis won’t be cheap, and even Kamara will add a significant amount compared to the first half. Estimate an increase of £1.1m in player wages for these 3 for 6 months

·         The first team squad and the management team will have earned bonuses for Europa League Group entry. That won’t recur in the second half . Estimated at £1.5m

·         Nothing much happened in terms of players being bought, only Kamara for a small fee. Amortisation charge should be similar to the first half

·         All in all, expenses will have reduced by around £2.65m to £26.4m for the second half, making a full year total of £55.5m

The second half of the Year will deliver a large loss of over £14.5m, unless significant player sales are undertaken in June, making an annual operating loss in excess of £11m.

“Be moderate in prosperity, prudent in adversity”, Periander

Nobody could argue against the reality that Rangers have had a mountain of adversity to deal with since 2012. Equally, nobody is ever going to claim they have been prudent. They have borrowed money from the likes of Mike Ashley, raised significant sums in multiple share issues organised by

Charles Green and Dave King, been loaned large interest free sums by shareholders and borrowed at ferocious rates from Close Bros.

What they have never done is provide funding through operational profitability. They are now on their fifth manager since 2012 with none of the major trophies available in Scotland to show for all of the debt and losses incurred. They have only managed to reach one Cup Final in 21 attempts, and even then lost memorably to a Hibernian team inspired by individuals with strong Celtic connections.

The question for Rangers now is what appetite do the shareholders have for risk? There is very little opportunity to grow revenues. Ibrox is full for every game, season books are maxed out. It would take Champions League Group revenue to be a game changer. Celtic are 1/100 to win this year’s SPFL. Rangers are 25/1.

It’s highly unlikely Rangers will even have an opportunity to qualify for the Champions League Group stages before season 2020-21. Even that remains a long shot. In the meantime, the Rangers board have to decide how much appetite they have for risk.

This season is likely, as shown, to deliver an operating loss of £11.2m, which will be reduced by the £2.8m already banked as profit on the sales of Windass and John. Give Gerrard the same budget for 2019-20 and if he delivers the same result, then another £11m operating loss will be the outcome.

Selling Morelos for £20m is the stuff of fantasy . His record pales next to Dembele’s . In fact his record isn’t as good as Leigh Griffiths and we weren’t fending off bids for even 30% of what it’s claimed Morleos will be sold for. Fail to qualify for the Europa League Group Stages and the operating loss will be rocketing towards £22 Million. Who is going to cover that? Will the shareholders continue to fund ever increasing losses for no silverware, or will they prudently use whatever they raise in asset sales to fund some of the losses, and take a long term view by living within their means.. History would suggest they will roll the dice yet again.

As noted earlier, Celtic have very substantial cash reserves. Rangers do not. They effectively have no cash. They exist on Close Bros debt and shareholder loans once the Season Book money runs out, which with the significantly increased budget given to Gerrard, happens earlier than ever and without Europa League Group Revenue, could happen well before the next winter break.

Gerrard improved the European record significantly; he was aided though by as soft a draw in the qualifiers as was possible. There is a strong chance of much better opposition next season.

The Rangers Directors have provided the funds to cover shortfalls up to this point. They are now facing significant challenges. They have seen Gerrard in action for a year. His League and Cup record is no better than Pedro’s. The money from shareholders has all been spent. The Close Bros money will be gone in a few weeks and will then have to be repaid.

Celtic will rebuild in the summer. No guarantees it will be successful, but it will be funded by our own resources and financial reserves. Rangers have no resources of their own and absolutely no financial reserves. At some point those lending money and buying shares will realise this isn’t a calculated risk, it is extreme rashness.

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  1. Useless information:



    There are more cars than people in the independent Republic of San Marino. No demonisation of cars there then.


    Seemingly there is no ” Backstop” although San Marino is not part of the EU.


    The ” Tartan Army” will be able to use Euros to buy their swally as that is the official currency.



    Imo population of countries is a ” red herring ” when talking footie. It would be more accurate stating :- How many persons are eligible to play for the country” to get a true comparison.




  2. Just to say again – Lustig is NOT an injury scare – he played the full game yesterday and played very well!

  3. Ok, maybe he did come off, I must have missed that, lol, but I don’t think he’s injured and I still expect him to be available for next week.

  4. Tontine Tim



    Sorry, despite enjoying most of your post, I can’t accede to your request.



    “3 days later and we really nearly did turn it around winning 4-0 at Parkheid. David Marshall and Stan Vargas were the fall guys for the previous 2 games as WGS revamped a MON side that had capitulated on Black Sunday, please no comments about ebts and honest mistakes, his side was burnt out”.



    First home league game of that season, Rangers(1872-2012) 4-0 Livingston.



    At least 6 improperly registered players on the field and on the bench, so, under the laws of the game, as more recently demonstrated by the punishment meted out to Dundee Utd, that will become a 0-3, thank you very much.



    That of course leaves the Champions of that season entering the field at Fir Park in an unassailable position, 5 points clear on the last day, according to my records. Hardly a position from which a team can “capitulate”, and a remarkable feat, considering the pressures put upon them by their nearest challenger’s cheating having provided such an unfair advantage in sporting terms.



    I am, of course, showing great generosity of spirit here, just docking the runners-up for one match, despite their team on the last day at Easter Road being improperly packed, registration-wise.



    You may, of course, prefer to go with the official records for season 2004-5, but those, don’t forget, show a 7 year old club having won 54 top-tier titles.



    All Hail Martin’s 5-in-a-row Champions, given that the above also applies to season 2002-3.

  5. mild mannered Pedro delgado on

    Hvratski Jim


    Banton Loch(the dam)


    Hope you took in Colzium estate 200 yards further west .and the curling pond said to be the site of the earliest recorded report of the game of curling


    Cause everybody needed to know that

  6. And BRTH, no I haven’t forgotten the case you outlined about Licences and Registration, but don’t remember enough of the detail to use it!

  7. Tontim tim. Good post mate .


    Could be wrong but ,I would imagine Boyata was on transfer business.


    With regards next week ,


    We could do with some of our players back. KT a worry , likewise Boyata, and joso ,(is he still with us ) we will need to go for it , they will be up for a battle ,and as certain as we can be ,the 4 officials will be hand picked for the occasion ,and we know what that means . One thing about lenny he will have let our bhoys aware of what to expect .HH

  8. Bring on the Sevvies.


    As long as we do not play Cal Mac at left back (a position he can play no bother) we will beat Sevco.


    Cal Macs energy and range of quick thinking passing can see us beat Der Hun. It would be nice to have Tom Rogic back as well, as you can never get enough naturally talented players in your first 11.


    By the way I would keep Weah as an impact sub next week.






    D. :)

  9. MMPD



    I noticed last night that I had written Barnton which was the street where my wife came from rather than Banton.



    We do walk round Colzium as well but I don’t know that it was the site of the first recorded curling game.



    Something new learned every day. Thanks.

  10. Asupporterwhogotlucky on

    TONTINE TIM on 23rd March 2019 11:16 pm






    Thoroughly enjoyed your post, and agree with what you wrote, almost to a fault, I’m not sure if the following part was meant to be satirical, a stab at humour, or perhaps there was a genuine sense of anger in it, but to me it was the single most truthful and important part of the whole post



    * We were told as weans that the dear saint of our isle drove all the snakes out of Ireland, unfortunately it looks like he missed one on the Antrim coast. *




  11. Asupporterwhogotlucky on

    Hrvatski Jim



    As an aside Banton Loch used to be a gathering place for Baptism’s early 1900’s



    Sadly more recently it seemed to draw youngsters on school holidays, and became more famed for teenage drownings.




  12. Asupporterwhogotlucky on

    The baptism’s were carried out by Edward Cooney (The tramp preacher) from Enniskillen Fermanagh in the North of Ireland.




  13. Just listened to an extended interview on radio Scotland with Brian McLaughlin ? interviewing John Kennedy I thought it was a really good listen and was impressed by John and his views on all the managers he was worked under and with, I couldn’t even remember that he went on loan to Norwich on loan

  14. hi ghuys im glad its a 5-0 clock kick off, cause the wife has just brought me in a bottle of Glenmorangie from asda. come kick-off ill think im watching kirkintilloch rob roy against shots bon accord.hh.?




    Didn’t know that either about the baptisms.



    Nor the drownings but we read so many stories about youngsters not understanding the dangers of water especially when we get the first really hot days and they think that the water is as warm as the air when it is still much colder under the surface.



    Grandson has arrived so my tranquility is over for the day.

  16. Keep an eye out for young kelvinbhoy in the hoops at the Valspar golf today. Both of us down from Orlando to see the final day. Hail Hail

  17. !!Bada Bing!! on

    An orange band on the pitch at Blackpool yesterday, for one of the huns now legendary ‘charity ‘games,i wonder how that sits with King’s statement from a couple of weeks ago…

  18. hvratski jim, if your around later could you help me put a photo of the dugs on for jimthe tim53.hh.

  19. Mahe the Madman on

    Tontine Tim,,


    I cant let that go without a proper response . You already knew that and that was youre aim Im thinking ;)



    Youre clearly upset at how Brendans departure played out and thats understandable but my goodness thats quite a one sided character attack if I may say so.


    Your post opens acknowledging that we have been gash in Europe many times under many managers yet the AEK defeats get BR a kicking .


    I would ask why ? Why did you think we would beat them ,, as you clearly do see it that way ?


    How was it a dreadful defeat ?


    They play in a bigger more competitive league against a better standard of players with no masonic refs and in a better climate more conducive to the finer skills of the beautiful game so I am very perplexed as to why use that as a stick to beat Brodge with ?


    We had no right whatsoever to come out of those ties victorious especially at the very beginning of the season .


    I find it strange using Europe as a measuring stick when we are a third or fourth rate club coming up against and for the most part getting beaten by better resourced teams playing in better environments.



    MON’s team and capitulation get thrown together in a sentence. You shouldnt need me to tell you those bhoys didnt capitulate , they consistently gave us everything and if they did become jaded at the end of the season its hardly their fault but sorry please dont say that team ever capitulated ,,, got beat yes , but never wilted and fell away. They and their gaffer were much too prideful for that to happen.



    “ Also, unlike some ex-Celts born tae support us, he wullnae hear a bad word about us,”


    Not sure who you are talking about and it doesnt matter but just for the record I find that dont talk bad about the team in public to be pathetic ,, if something needs said say it ffs.


    “Its good to talk “ is much more preferable than holding it in because it happens to be the team you follow and you dont wish to speak ill of them in public ?


    I have heard the saying dont speak ill of your wife or team in public and agree with the wife bit but the team bit is cringeworthy imo. Slaughter them if they deserve it. Why not ?



    “ But none of the above European failures compares with the humiliations we’ve suffered with clodagh, how many hid behind the couch hoping it widnae go intae double figures or when we lost a 3 goal margin against Be’er Sheva or what about Lincoln Red Imps, we are no longer fortress Parkheid and its actually been said in Europe that we are now an easy 3 points, the Big Mhan must be birlin in his grave.


    Oh wait a minute; it’s all the heated driveway mhan’s fault. “



    Funny I was thinking its hardly our fault Europe has moved soo far away that the last sentence could be “ oh wait a minute , its all the managers fault “


    As for the Big Man turning in his grave Im sure he would at the state of the game today and how far his beloved Hoops have fallen since our finest hour but that has very very little to do with anyone on the footballing side who are victims of geography for the most part in that being located a couple hundred miles means approx 30 times more tv rights money.


    He might well turn in his grave over a huge chunk in the bank while the team has needs and the suits pat themselves on the back with big bonuses though.


    He has plenty to turn in his grave over , and I suspect Peter would be above Brendan on that list.



    “ Cast your mind back 9 months ago when we signed big Odjob fae PSG on a four-year deal in the biggest transfer in our history. We were all over the moon and salivating at the thoughts of him and the Moose rampaging against domestic and European teams. “


    Im not sure why anyone expected any loyalty from Moussa and he was only gonna stay 2 or 3 years . We might have had a season of them together but more than likely only one would have played as two up front isnt the done thing in Europe and our Spl system is mainly one up front also.


    I felt and thought many did that he would lead the line in Moussas absence.



    You then get into BR’s alleged China approach and leaks plus question his signing targets .


    The China thing and 8 million bucks up front to go there show our gaffer was in demand . Thats a fact . But I fail to see the problem here .


    Guy comes in and is doing great job offered mega deal elsewhere and talks to bosses about it ,,,, wheres the problem ? Happens every day . Why give Brendan a hard time over this ?


    Because he still had a contract ? That would have been paid up and bought out ,, so again wheres the problem ?


    Because you didnt want him to go ? Get me a violin.


    Where was the problem with Brendan going to China exactly ?


    And as far as Dermot goes wtf was his problem ,, I know exactly what I woulda told him.


    Let me get this straight ,, businessman gets told by employee they are considering other job and gets incensed ? About what exactly ? Employee leaves shocker ?


    This episode amazes me , some of the thinking and rational behind some things that are said over it.


    Then you mention leaks,,,seems they were all at it so no fingers can be pointed except the general finger in the direction of the club as the whole episode leaks episode was unbecoming .


    Signing targets,,, its easy for you to sit and ridicule but I believe those guys were actually willing to come and play under Brendan for a while. Naka turned down Seria A and the fantastic Mediterranean lifestyle for us as an example . It would be a waste of time now though to discuss whether they would come or not as that ship has sailed .



    Hades and poor team selection,, thats certainly one way to look at it but on the day I thought it had to happen at some stage , and it has . At some stage every team we meet regular will beat us ,, its that simple and thats life.


    And then for that particular game its a different animal and the old saying is in a derby tactics go out the window. One team wanted it more , and had the MIB and crowd with them .


    Youre more than entitled to that view you hold of course but I think you would be a small minority if a poll where held on reasons for that defeat personally.



    “ Just look at the European draw we had AEK FGS we should have been in the CL after


    Christmas but no we drop intae the Europa and we only qualify for the post Christmas games due tae Rosenberg stealing a late point at Leipzig, he must have been gutted the best laid plans etc, and then a poor Spanish side take care of us. “


    Youve got be there to take advantage ,,, “only qualifying because of “ is a game that could be played all night for example we only qualified because we actually put in the effort to keep us in the hunt .


    If youre saying Lady Luck smiled maybe she did ,, but you cant hold that against anyone but her.



    John Barnes was twenty years ago when the landscape was soo very different so no point harping back to that and Villareal Napoli or the Arse would wipe the floor with us as we are a third or fourth rate team and they are in the top two brackets.



    “ How did Celtic get along ? “ he has an interest as he was a huge part of the journey plus when the team takes the title Im sure it will be a weight off his shoulders ( not that I care ) as the history books will show a successful season and not an almost rocked to disaster scenario .



    Next he was not unemployable he was unemployed and there is a huge difference .


    You then slate China and Leicester,,, one has the potential to win the biggest league in the world working with the top bracket of players on the planet and visiting some of the most iconic stadiums in the game and you are young enough to actually grow into the position and hope to make a real imprint on the footballing landscape as had happened previously ,,, and the other offers approx 20 million smackaroonies for a mere three years work which you wont need me to say is life changing money.


    Why choose either over the bent farce that is Scottish football indeed.



    “ He’s nothing but a phony bassa that took a loan of us all, “


    Peter or Dermot or Brendan or all three ?



    “ Don’t forget that DD is the real mhan that calls the shots “


    Do I detect a shred of respect for him in there ? If so would you share why ?


    I certainly wouldnt shake the bassas hand.



    “ We were told as weans that the dear saint of our isle drove all the snakes out of Ireland, unfortunately it looks like he missed one on the Antrim coast. “


    If its snakes youre looking for you will find plenty in Scottish football rest assured . Look around our club of choice first.



    “ The well run organisation that is Celtic FC “


    Glasgow Celtic are only a well run club off the pitch . They are a shadow of their former selves and now dominate a third or fourth rate league that is extremely poor and getting worse .


    Trophies are collected by dint of having more resources than the rest with little competitiveness domestically .


    As things stand we approach next seasons Champions league qualifiers with no permanent manager ,, one crocked left back and one who hasnt cut it in years , Jozo and Ajer at the back with only Hendry in reserve ,, and Ralston at right back .


    If thats well run,,,,



    “ Should we eventually reach the magic 10 and Lenny, Ronny and whoever is in charge then are invited back for a celebration I hope he isnae, in fact I hope he NEVER darkens the Celtic Way again. “


    You would have someone who is responsible for a chunk of that success not return to celebrate it because that someone left at a time you have deemed inconvenient even if it turns out actually we won everything anyway so it didnt make any difference ?


    Do you not think thats petty ?




    You gave your own version of events and said if any dont like it ah well thats democracy ,, and I appreciate that and will reciprocate if you dont mind.



    A fellow Antrim man is lured by the Glasgow giants and is well aware of how big the club is and how passionate the fans are. The owner said the right words in getting him and he thinks its a great match so goes in and starts giving it his all and is successfull.


    However CEO starts acting like defacto Director of Football despite not being qualified for the role and then when sent to procure transfer targets that would come for an in budget amount starts effing about and loses the deals thus having major impact directly on successful manager.


    Successful manager finds himself extremely frustrated with said conditions but simply must hold his tongue as he has signed a non disclosure agreement.


    Realising the CEO intends to play him and do whatever he wishes to hiding behind this NDA and a number of friendly media outlets thats have been cultivated such as this blog the successful actually qualified football manager decides hes out.


    He then does what many disgruntled employees do and give the boss ( in this case the CEO ) as little time as possible when leaving .


    He knows he will burn his bridges with some but simply must for his professional reputation as next season was looking particularly bad already .




    Hope youre well Tontine and remember to judge the new guy on Europe next year.


    Hail Hail



    Hrvatski Jim



    As an aside Banton Loch used to be a gathering place for Baptism’s early 1900’s



    Sadly more recently it seemed to draw youngsters on school holidays, and became more famed for teenage drownings.







    As a Kilsythian I was interested in the Baptisms, from Google the founder of the movement of Evangelicals, William Irvine was from the town, Irvine being a well known name. Edward Cooney became his co-leader.


    As for the drownings as far as I can recall over 60yrs there has been some, a few in local quarries too, always an attraction to young people.




  21. Europe is nice, CL group stages only, none of the Europa Crap, but the league is the one for me.



    Keep on winning our own league and as many cups as possible.



    Is that narrow minded and not very forward thinking, well maybe.



    8,9,10,11,12,13,14,15 IAR and if CL follows then great.



    D. :)

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