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. NORRIEM @ 10:10 PM,



    Interesting suggestion but think it has very little chance of working…



    The original Wimbledon, before they moved go Milton Keynes and became the MK Sons wanted to move to Dublin… it was a no, no from the off…



    As far as the original Celtic floodlights go, when they were upgraded (early 70s) the floodlights were bought by Airdrie and installed in Broomfield.



    Hail Hail

  2. What is the Stars on



    You are bonkers but i love you.


    4 packets of Worcester Sauce and 4 creme eggs..



    That has to be the best post ever on CQN

  3. What is the Stars on 22nd March 2019 11:19 pm






    You are bonkers but i love you.



    4 packets of Worcester Sauce and 4 creme eggs..



    That has to be the best post ever on CQN






    Despite being crazy in the best sense I reckon you have No Idea.



    Me, I’m hanging in there.



    Cricket , and I’m a massive fan of the Legend games, was being played in Downpatrick.



    Jamesie is just a Soupherb Human Being. My Life has been enriched by jibber jabbering with him.

  4. Bada Bing



    Good luck with your procedure and best wishes with your health Nd recovery





  5. My friends in Celtic,



    I’m not complaining and as long as I’m able I will renew my ST.


    I’ll just put this to the blog though. My renewal for 441 is £625. A work colleague pays £650 for a platinum ST at Manchester City.




  6. Greenpinata



    So it is cheaper to see the famous Glasgow Celtic than it is to watch Man ( ufactured) Citeh?


    I hope Driveway Pete is not reading.



  7. fergusslayedtheblues on



    I was never one for Celtic ditching Scottish Football but after seeing what was going on (murray era till now )


    I must admit ,there is nothing here for our club .



  8. fergusslayedtheblues on

    CHAIRBHOY on 22ND MARCH 2019 9:16 PM


    SFTB’s @ 6:29 PM,


    I tend to agree regards someone drip feeding the new club to keep the lights on whether supporter or possibly political .



  9. fergusslayedtheblues on



    As for toying with Sevco 2012 as I say ,I think they feel they need the new club at this moment in time



    Not for much longer hopefully



  10. Good morning CQN from a dry, sunny but chilly Garngad



    FSTB from las night, well said.



    D. :)

  11. Good morning friends.


    A huge day in ole EK as, this afternoon EKFC have a home game against Cumbernauld Colts knowing that a win means the Lowland League Title is ours. Again.


    A stunning record so far – Played 23, Won 20 and only won loss, scoring 56 and conceding just 9.


    Being a glory hunter, today is the ideal day to actually attend my first EKFC game of this season ;-)

  12. Repost from last thread…



    BATEEN BHOY on 23RD MARCH 2019 9:31 AM


    LMS 12 Update







    Good Morning,





    With the number of entrants having passed the 90 mark, we are happy to announce that , in memory of Esther Fallon, Wife of The Original Holy Goalie John Fallon and Mother to a lovely family, Alzheimers Scotland will be the LISBON Beneficiary from monies raised by you through participation in LMS12..





    We’re all aware of the pain and distress which dementia can cause, and the effects it can have, not only on sufferers, but also on the family and friends of those affected.. If you want to learn more about the work done by AS, please visit their website at







    We will soon announce the SEVILLE Beneficiary for LMS12, but in the meantime, a very big THANK YOU to all who participate and time after time, are so generous in supporting our wee competitions.







    P.S If you haven’t yet made your pick for Round 1, time is short.All those who have picked will have received confirmation from us that their pick has been registered.







    CRC and Bateen Bhoy

  13. FSTB,



    Everything is here for this Incredible club.



    You and me just know that Something good is gonnae Happen.



    Celtic doing a Triple Treble is Mega and won’t ever happen again.



    Celtic were cheated @ Celtic Park when Juve rolled in when it really mattered. All Live for the World to Witness.



    It aint got any better since. Deeelighted to see Ajax knock oot Real howevaaaah.



    Go on the olde EK – I hope you smash it.

  14. blantyretim is praying for the Knox family on

    A great cause and jesture which is really appreciated by all the family.


    Thanks to Bateen Bhoy and CRC for asking if it would be ok to donate in my mother’s name.


    God bless and thanks to ali






    (Mother’s name was Esther , the bhoy sure have been made aware of the blip)

  15. blantyretim is praying for the Knox family on

    The bhoys have been made aware. Still can’t sort CQN out ?




    I wish to offer a sincere and humble apology to The Fallon Family.


    The Lady we honour is Esther Fallon. and I am so, so sorry for giving the wrong name, and apologise for any distress or offence which my stupid mistake may have caused.


    I have asked Paul to correct this in my post.

  17. Pog-AT- et al- Thanks, feeling surprisingly good,God bless the NHS,you hear horror stories, but my visit to Monklands was first class.HH

  18. BB- Don’t beat yourself up, S and family will be chuffed to bits,carry on the great work.

  19. blantyretim is praying for the Knox family on

    Bada Bing


    Glad to see you are feeling no I’ll effects from your procedure

  20. Dementia is one horrible condition that destroys everyone in its orbit. Our thoughts are with anyone touched by it.




  21. Delaneys Dunky on



    When the best person you will ever know. My mammy, disnae know who I am when I visit her, it breaks my heart.


    Dementia is so cruel for all

  22. DD, I hear you brother………


    same thing here. Horrible.



    Nothing prepares you for it. It makes one grow-up pretty quickly.




  23. Delaneys Dunky on

    Saint Stivs


    The Dalmuir Cat has been chasing the Dalmuir Moose in the Dalmuir Square for as long as I can remember. Always think Tom and Jerry. ?

  24. Delaneys Dunky on



    I lost my dad to lung cancer 5 years ago. My mam’s dementia is a more cruel disease.

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