Transfer strategy, where we are

If anyone tells you we are about to bid €7m on a guy who scored fewer league goals than Billy McKay last season, and who was signed for €500k last summer, don’t listen to them.  Nonsense like this is 180 degrees away from strategy.  Where would such a player’s sell-on value increase to?  It’s just not going to happen, nor should it, it would be a vanity purchase, the likes of which old Zsa Zsa himself would consider.

The last season we have figures for (season 2011-12), when we had Europa League football, Celtic lost £7m.  Since then three significant things have changed:

We’ve sold Wanyama and Hooper for over £17m (before deductions).
We got back into the Champions League and earned an additional £20m.
Season book sales dropped and this season cost £100 less than before.

Cutting £100 off the ticket price will bring in £4m less than last season.  All other things being equal (which they will not be), this would give us an £11m deficit before Champions League income and any trading surplus.  In short, to retain equilibrium, we need to reach the Champions League group stage more often than not.  Money from Uefa is not so much a bonus, it is necessary to push us into the black.

I know we covered this last week, but £17m for Victor and Gary will not, on its own, equate to £17m for new players.  Gary and Victor were both on their first Celtic contracts when they left, neither of which was near the top earning position (although both were offered top earning contracts).

We’re not going to spend £17m on transfers and be able to pay the new players from the money saved by not paying Victor and Gary.  Instead, the boost to the football budget from these sales will almost certainly disproportionately increase wages, leaving a lesser amount for transfers (if we sign four players for £2.5m each, we’ll probably have to pay each more than the average of Victor and Gary’s wage).

Knowing where they came from, I reckon Victor and Gary cost approximately a combined total of £1m p.a. in wages, the bulk of which would have gone to Gary.  If we bring in four players, each costing multiple millions, they could easily cost us an extra £2m per annum in wages, or £8m over their four year contracts.

In short, there is enough money available to buy several good players, for decent money, on high wages (for Celtic).  This is a good, sustainable, place to be, but it is not transfer window nirvana.  We have moved from a position of carrying a perpetual loss to being able to afford an increase in football budget without splurging into debt to fund it.

This isn’t a detailed budget analysis, there are lots of other variables (McCourt, Rogne etc off the wages, not Murphy, whose wages were off the books already), non-football budget cost inflation, considerable drop in one-off ticket sales (20k seats for £42 each at Rangers games twice a season) and commercial income from 2011-12, variations in season book sales (I hear they are marginally up on same time last year but still down on 2011-12).

The big challenge for the club is to ensure the playing squad is good enough to qualify for the Champions League group stage, and to compete when there, more often than not, without indulging in casino football every year.

We stick to plan, scout and recruit players within budget and with high potential sell-on values.  €7m on a striker from Heerenveen?  Better stick it on black.

The Kano Foundation have around 40 bucketeers for their annual drive at Celtic Park on Sunday.  They could do with a few more.  If you can do your bit, get in touch: contactus@thekanofoundation.com.

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