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.

Click Here for Comments >

About Author

  1. Pages:
  2. 1
  3. ...
  4. 7
  5. 8
  6. 9
  7. 10
  8. 11
  9. 12
  10. 13
  11. 14

  1. DAVID66, luv ya to bits pal, but winning the spl for the next 200 years aint gonna get us anywhere, we need European football or in all honesty we are done hh. hope you are well.

  2. Chairbhoy



    If you don’t mind others joining in …..



    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 ?




    I think the main problem with the China thing is the timing. It happened when Brendan had been relatively well backed- both Moussa and Odsonne were there and paid for.



    Brendan told them he WANTED to go to China- he did not just tell them he had had an offer and was asking- “what do you guys think?”. Trust was lost at that point. He was not leaving Celtic for the prestige of a big club offer or exposure in a big league with a middling club like Leicester- he was leaving Celtic for the Elephant’s graveyard where no reputations are made but big bucks are earned.



    Brendan knew what he was getting. when he came to Celtic. He knew that Peter Lawwell was, in some ways, a de facto DoF, as he had been playing that role with previous managers. He had been as involved in the Moussa and Odsonne signings as he was in the “failures” to land Piccini and McGinn. Most modern managers know they have to work with (not against- like in the days of Clough and the last of their gang, Harry Redknapp) the Money men at their club, or, in PL’s case, the moneyman’s representative.



    I am guessing that, when the China offer came in, BR was offered an inducement to stay on and it cost us money to get another year out of him. But, all trust was lost from that point on.



    I depart from Tontine’s analysis in that I think BR (and Boyata, except for his AEK tantrum) behaved fairly professionally for their final 6months and final year. I don’t think BR tried to harm us with AEK and the Sevco line up with Callum at LB. I think they were honest mistakes as he was trying and expecting to win games. But there were times when he was less than professional and washed our dirty linen in public in front of our press, such as the reference to the Shved signing and downplaying or denying his knowledge of the player (despite revealing that he knew he was a winger). In doing so, he was playing to a gallery and preparing the ground for the narrative he wanted to play i.e. that he was an ambitious man driven out by unambitious backing). China and Leicester-?? Some fame ?? Some ambition??



    In doing so he contributed to the atmosphere of angst that has surrounded this successful season. I will credit him and his coaching staff on doing a grand job in Dubai to prepare for the run-in but, when this title is secured, I will be offering most thanks to Neil and the players for seeing us home. Brendan got us a handy-ish lead in the league but the title was still lose-able.



    So, come May, I will not be trashing or revering BR’s memory. He will get the credit he is due for what he did. But people who choose to leave do vanish their reputation a little. The people who stay are the ones I support.

  3. Just had a chat with Russel Knox at the golf……great guy and posed for a photo with us and commented on the hoops.

  4. Nye Bevans' rebel soldier on

    Ex hertz left back leads the line for Scotland.



    Some one leave a post on here when Scotland hit rock bottom.

  5. Mahe the Madman on

    Bsr I’m glad you agree he was right to leave rather than stay and get used and abused by a guy hiding behind an NDA and friday media.


    Hail Hail



    Wits,,I assume thats aimed at my post.


    We have all noticed your PL championing but it tends but like above it tends to be an off the cuff remark usually and not a framed defense that can be debated.


    Write out your take on him and have it out no?


    I’ll be polite as usual. Might liven the blog up.


    Hail Hail

  6. Thanks for the kind words on my phosting last night, I took a bit of time reflecting on what I had written, plus added more, before I phosted it as I didn’t want it to be a reflection of my anger over any disappointments I had, unfortunately I do hold grudges although I try not to let them consume me.



    BEATBHOY, I’m well aware of the cheatin plus the kid on Irish club playing a player on closing day who was on a bossie tae them, at least Jim McIntyre had the decency tae drap kamara after he pledged himself tae the dark side, however we should have had enough in our tank plus Bellamy tae clinch it that day but just ran out of steam.



    I would never criticise MON he truly put us back on the fitba map again and had the decency tae say he wisnae a supporter growing up, Sunderland was his team as they played in the same colours as his first true love Derry City, we were his da’s side who told him if offered the job he should walk on broken glass tae take it.



    He was also very honest with us and his players telling them he would always tell them the truth however they would hear him telling one lie and that was deidco were the benchmark, he promised them a treble if they turned out for him and if they didn’t believe him they were free to leave, which they did, win the treble that is although some like raphael and terribly did leave, and and so did he.



    Seemingly in the tunnel before the 6-2 game wee bammy 8 said they knew they were beat before they got on the park as our players were bouncing up and down thumping the walls, that’s the way tae prepare a side no like December 29 when we, apart fae big Craig, seemed tae have thrown the proverbial towel in, and his reward was tae get drapped.



    He was also very loyal tae them, something it seems clodagh isnae, but IMHO it was too a fault as he stuck them on long contracts which was to our undoing.



    However, God bless and keep him, like the Big Mhan he made us a team tae fear again.



    As WGS said we were a support like no other, we take players and staff to our hearts and they are broken when we feel they have let us down, not too often I hasten to add.



    ASUPPORTERWHOGOTLUCKY and the St Patrick and the snakes analogy, I don’t like the word “rat”, bikers and the mob use it and we shouldnae be associated with them. So when looking for a descriptive word snake came tae mind as did the wee mhan fae Old Kilptarick, patron saint of Dumbarton.



    MAHE THE MADMAN I did highlight that it was my opinion and it being a democracy as you said I was entitled to it, I still think he back stabbed us and bailed oot as soon as it looked like the going was getting tough.



    One item slipped my mind and that was big Dedryck, not a fan favourite for a long time but sheer hard work earned him a berth and it paid off. He did want tae leave and I believe that we the support wurnae all that perturbed and would happily have taken the money, and some would have personally drove him tae the airport themselves lol, especially after the AEK fiasco, however sleekit made a big deal out of it stating he could only go if we brought in a replacement, at the last minute FGS, we lost the transfer fee and it now looks as if he was tapped and will also be down in the East Midlands.



    Now that he’s mysteriously pulled out of the Belgian squad I would leave him and Ben, another surprising signing from Leicester hmmm, in the stands for the rest of the season, the latter spends a bit of time there anyway and only strip players that want tae turn out for us.



    Wishing now that big Erik the Viking, who still speaks well of us, was still here, even if only for back up.

  7. CELTIC MAC on 24TH MARCH 2019 4:11 PM



    Hell hath no fury like a Celtic fan scorned……



    *damn right

  8. What is the Stars on

    Mahe The Madman


    I find it boring and childish to be honest


    All the constant anti Lawwell stuff


    Hes bad


    He wears a suit


    He has loads a money


    Hes a big bad baddie


    Celtic are successful despite him.


    When something good happens its nothing to do with him.


    When something bad happens its all his fault..


    Genuinely I would love it absolutely f***ing love it if Lawwell just left first thing tomorrow.


    Then we would see what all the whinging malcontents would moan about.


    Its childish tiresome nonsense


    Up the Rebels…Lawwell must go.

  9. SFTB Cork Football has been in disarray for a few years, we have our own problem with the suits in Cork.


    This might be the best thing that ever happened, might trigger a revolution in Cork GAA.




    Draw back your rod, not biting.



    O.K. – I will then.



    Wish I could get ‘used and abused’ by my bosses like that. I posted last summer that it was millionaires falling out when BR spat the dummy for the cameras, and nothing has changed my mind thats all it is, at Celtic. I also promised I’d posted my last post on BR, but his spectre is everywhere on the internet, with some queuing up to traduce NFL, before he attempts what he has to do, which includes getting the Celtic gig for the second time.



    Like MON WGS and NFL ( to a lesser extent ) all before they go so far at Celtic, then they take their millions provided by PL via us, and head for the iconic stadia all over the world and end up in Bolton and Nottingham, because they can only win ‘the bent farce’. Maybe, they aren’t really that good after all. Nobody in the modern Celtic era has won anything away from Celtic and most Celtic fans expect BR will go down a plughole he deserves at Leicester.



    I gave up with ‘coaches’ when PL really did transgress for his salary, with mibbees Owen Coyle and mibbees Tony Mowbray, I don’t think there exists, the perfect coach for Celtic, and I think Celtic saved Brendan Rodgers rather than the other way round. The internet discussing the Celtic manager, a unique position in global football is fine, the sad part is that the power moguls at Celtic haven’t even given it a second thought even on the golf course.



    The Celtic common man’s dream boat turned out to be a phoney because he upped sticks to Leicester to buy expensive diddies again ( Benteke £32Million ) replacing his choices like Marvin Comppost?



    The only people that were ‘abused’ in the BR tenure were the rank and file, probably from every street in Glasgow.




  11. BP1- I understand the need for European footy, but we have to be realistic.



    CL group stages, is as far as I see us getting for the foreseeable future, with the rich clubs getting richer etc. Group stages for us would be great and a real step forward, that’s it. If anyone thinks we are going to go further than that, then they are misguided.



    In order to get to CL we have to win our league, so 15 IAR and upwards for me.



    D. :)

  12. glendalystonsils on




    Dermot Desmond…Celtic supporter?


    Brendan Rodgeredus……Celtic supporter?


    Peter Lawwell……..Celtic supporter?



    To varying degrees of mibbes aye/mibbes naw , but they don’t live on the same Celtic supporting planet as the rest of us.


    Right , I’m away to watch Calmac and Scott Bain.

  13. Back to Basics - Glass Half Full on

    “It’s been a great week apart from the result”


    (Peter Grant)



    With this management team Scotland cannot possibly fail.



    An unemployable ex-Ger supported by two Uncle Tims of the thick nut variety.

  14. So Scotland are 1-0 up againt the worst International team in world fitbaw…all’s well then ;-))

  15. GreeninbingleyinOslo on



    “It’s been a great week apart from the result”



    (Peter Grant)






    Just read that on the BBC. I thought it must be an attempt at irony, but the rest of his quotes sadly prove otherwise. “When you think of Kazakhstan, people think of Borat.”



    Jesus wept.

  16. Watching Ireland v Luxemburg Under 21s. Ireland leading 2 nil, Scorers Idah & Farrugia, sign if the times, Now if someone here could contact the Dublin lad Armstrong Oko-Flex he would be as welcome as the flowers in May

  17. Jeezo, If I was watching this dross, as a neutral, with absolutely no knowlege of football…insert yer joke here…I’d be struggling to differentiate which team was hundreds above the other in the rankings ;-))

  18. RODGERS was a good manager for us, he led us to an undefeated domestic season, 7 cups in a row, 2 x c/l group stages and 2 x last 32 in e/l, he walked away when we had an 8 point league and were still in scottiah cup. celtic picked up 9 million for him and two others from the management team with a million + in wages saved.



    We have the core of a good young team and bhoys in the academy pushing hard. We have about £50 million in the bank.



    We have 11 or so players due to leave at end of this season, but few will be missed greatly.



    We will need a new manager, a rightback and a centreback (2 centreback if we move on hendy or comperr) for next season. The shite about a whole rebuild being needed is just that. I trust Lenny to see us Over the line.



    Overall we are in a very good place because of and despite of RODGERS, funny old world.




  19. OVERSEASBHOY on 24TH MARCH 2019 5:36 PM


    San Marino quick news in meltdown – calling for coaches head……







  20. KELVINBHOY on 24TH MARCH 2019 4:06 PM


    Just had a chat with Russel Knox at the golf……great guy and posed for a photo with us and commented on the hoops.






    Enjoy, I’ve been watching all week, looks like a great course and tournament.

  1. Pages:
  2. 1
  3. ...
  4. 7
  5. 8
  6. 9
  7. 10
  8. 11
  9. 12
  10. 13
  11. 14