I want to take a look at what Uefa might do this week that could have an impact on others, as well as our finances. Expect lots of news from Uefa, who have a videoconference on Wednesday and Thursday. We should learn how last season’s Champions and Europa Leagues will conclude, what next season’s qualification competition will look like and the calendar of dates for next season, with guidance on transfer windows.
A relatively minor point with more bearing in Scotland will be discussed on Thursday, how Financial Fair Play (FFP) will be enforced with respect to the crisis. You will remember we discussed Newco’s position with respect to FFP in a lengthy article in February. Without revisiting detail, the scenario required them to sell significantly before the 30 June financial year end to prevent them breaching FFP regulations.
FFP breaches do not instantly or automatically lead to disqualification from Uefa competition, but it would require the club to take “rehabilitative action” or else face consequences, including the ultimate Uefa sanction. Rehabilitative action means cutting costs, significantly so, in the case of Newco.
Current FFP rules allows for exemptions due to exceptional circumstances, which the current crisis certainly is. The process effectively adds-in revenue or subtracts costs you would otherwise see were it not for the exceptional circumstances, so in theory, Newco could claim allowance for a few lost revenue (although unlike Celtic, this will be very limited as they did not offer refunds).
We have to hope that no substantive changes are made to FFP rules.
Scottish football was a different place when we looked at Newco’s finances in February. Celtic’s interim accounts to 31 December showed £32m in the bank, we were on our way to nine-in-a-row and finances were very stable. 10 of the 12 others in the Premiership were living within their means and we had a new TV deal to look forward to. Since then, red ink has bled everywhere.
Our operating expenses for the first 6 months of the financial year were £7.6m per month. The manager, coaches and execs have taken pay cuts, while furloughed staff costs are met by the taxpayer, but I expect the deferrals players took will all have to be paid by the time this financial year closes on 30 June. Cash burn since 1 January will not be as high as £7.6m per month, but it will be close to this until lockdown started on 23 March and no lower than £4m per month since. There has been very little income since the new year (Copenhagen, some Scottish Cup and league receipts, retail), with money going out for refunds.
So what does this mean for our finances? The £32m balance at 1 Jan is likely to get us through to the financial year-end, plus or minus a couple of million either way. By 30 June, season ticket money will be in, but there is no way of knowing how well tickets will sell compared to previous seasons (we’ll not sell more, clearly).
Until lockdown is over, there will be close to nothing from stadium operations (£7.6m last season) and retail (£12.9m last season). The SPFL hopes to have fans attend games by October (the Championship business plan is counting on it), but we are looking at July, August and September with little income from many revenue streams. Next season’s finances are down to season ticket sales, Uefa qualification and a late bump from 10-in-a-row merchandise during what is likely to be a recession.
Champions League qualification brought media rights income to £33.9m in season 2017-18, the following season this dropped to (a still impressive) £15.7m for the Europa League campaign (other Euro revenues, like ticket sales, are not included in these figures).
If we qualify for the Champions League next season, I expect we will break-even. Progress through the Europa group stage and we will make a sizeable loss and a return to debt. Failure to reach the Europa League group stage would see us return a larger loss than at any time in our history by a huge margin.
Having spent this week looking at our finances and those of others in the Premiership, there are lots of unknowns ahead and just one certainty. Uefa are expected to confirm qualification competitions will be a single game each round, drawn randomly, home or away. Celtic should be seeds all the way through, but that advantage is lessened by an expectation of some away legs. Luck of the draw will never be more important.
We are going to win the league; I could not be more sure of this. I have not touched on Newco’s finances here but if you are interested, you can read back what we discussed in February. We might have problems to manage but they are a busted flush. It will all play out in the months ahead.
The season ahead could return the largest loss in the next 50 years of Celtic history. If so, we will need to work our way back, which will not be done overnight. Even the ‘sell to England’ strategy is not likely to be effective, as transfer fees are likely to suffer due to the crisis. Oh, and I think we need players for several positions, at least as cover.
When you look at Partick Thistle and others throughout the world, these are First World Problems. We have 10 to focus on, but just as winning nine-in-a-row did not happen as we wanted, the journey between here and next May is likely to be a rocky road.
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Paul67 et al
Mmmm
We have a broadcasting which deal excludes any number of Celtic supporters.
We have a new sponsor on board and, and even the third top is tip top.
We have the opportunity to benefit from European football, down to manager and players
Failing which…
Of course Paul we could always carry out a new share issue….
We’ve done it before and we can do it again
Our church open for private prayer starting Thursday night – 19 page risk assessment document, pews blocked off, signs everywhere 2 stewards at all times and someone to clean the pew when vacated.🙏
TIMALOY29 @ 1:51 PM,
Jullien, Forster, Elyounoussi, Elhamed, Frimpong and Taylor would disagree with you.”
You seem to have forgotten Bolingoli, Bauer and Connell.
Forster was a good bit of business hastily arranged when Bain got injured but he is a loanee.
Frimpong was brought in as a prospect and has excelled, great little player, whether he makes it as a fullback time will tell.
Jullien for me gets pass marks but I’m sure like me you can name a dozen better Celtic centre halfs from the last 20 years.
For me the other signings didn’t improve the team and it needed to be improved.
I wasn’t talking up Rangers merely looking at a few facts. You are correct, they are a second rate team, we are better than the second rate team, as you say that is what we focussed on.
In my opinion we had a poor European campaign, getting beat by Cluj and Copenhagen, we had good draws and should have made more of an impact.
AN DUN @ 2:06 PM,
Well this is the point is it not? We don’t know how Rangers finance themselves but they do.
They are selling property at the moment and are upping some revenue schemes, this was a ,”survival” policy before the pandemic.
Rangers costs have soared recently but for the last published accounts they were £25m less than ours. That is a significant figure.
Hopefully we’ll have a high number of ST renewals, this is new territory for us but remember Rangers have been selling season tickets and had fans funding projects like Club 1872 in the lower tiers of Scottish Football paying money to watch the same old Alloa…
They will be expecting to sell 40,000 again… They gave away £25 “vouchers” instead of issuing ST refunds, why? They didn’t have the money…
Hail Hail
I’ll tell you what, I’m bloody glad now that we sold Tierney last summer
That’s a well timed article Paul67, on the same day as emails and texts are released by Celtic on season ticket renewals, remarkable coincidence😱
Very informative article Paul. If we are going to burn our way through £30m, where does that leave the hun.
Season ticket renewed this morning. Looking forward to getting some of the new Adidas training kit for my 60th in July
Great article, but terrifying in its impact.
The thing that I don’t get is, if while we have greater liquidity and the road ahead looks rocky how come the huns haven’t spectacularly kombusted???
I renewed yesterday via my online Celtic account and it took less than 5 minutes to fill
card number in and to process the transaction
On the other hand Celtic are dealing with last seasons refunds using the most dinasauric
way possible
Still cant believe how they went about things
Please name for me a dozen better centre halves in last 20 years than Jullien.. He is certainly no Virgil, but I cannot name a dozen better than him since 2000. His first season was encouraging.
Even Virgil, Paul Elliott etc took time to settle.
Good afternoon all from sweltering Govanhill.
CHAIRBHOY on 16TH JUNE 2020 2:59 PM
“You seem to have forgotten Bolingoli, Bauer and Connell.”
First of all, I reject the notion that a failed signing undoes all the other good done in that window.
Bolingoli hasn’t worked out as well as anybody would have liked. But he did have some good games and we will see how his second season pans out.
Connell was a teenager signed for token compensation. He’s for the future so we will see where he ends up. He finished the season strongly for the development side.
Bauer was a relatively low-risk signing. His time on the park was limited mainly due to the brilliance of two other summer signings Elhamed & Frimpong. Bauer filled a gap nothing more.
“Forster was a good bit of business hastily arranged when Bain got injured but he is a loanee.”
I don’t think loanees are bad signings. We are unable to afford Forster permanently due to his excessive EPL wages. However, we were able to take advantage of his situation to bring him in. He’s a better keeper than we already had and Celtic only had to pay some of his wages.
It was a great deal.
“Frimpong was brought in as a prospect and has excelled, great little player, whether he makes it as a fullback time will tell.”
I don’t understand how he hasn’t already made it. He’s established himself in the team at that position…
Great signing
“Jullien for me gets pass marks but I’m sure like me you can name a dozen better Celtic centre halfs from the last 20 years.”
Go ahead and try to name 12 that are better. All I can think of is: Mjallby, Van Dijk and MAYBE Denayer.
“I wasn’t talking up Rangers merely looking at a few facts. You are correct, they are a second rate team, we are better than the second rate team, as you say that is what we focussed on.
In my opinion we had a poor European campaign, getting beat by Cluj and Copenhagen, we had good draws and should have made more of an impact.”
European competitions are cup competitions. Bad results can happen in knockout football.
We had the quality to beat Cluj the first time but we didn’t. We had the quality to beat Copenhagen but we didn’t. It’s cup football.
I’ll never understand your mentality. Domestic dominance isn’t enough. Any sort of poor performance in Europe has to mean massive structural upheaval.
Forget the fact we beat Lazio… all that matters is we lost to Copenhagen.
Does anyone know if Sevco have had access to the Government Financial assistance for Covid 19? I reckon they could have got upwards of £10m allowing Close Bros loan to be paid off with their high interest. With wages deferred then the purge of the 6 players, as the price they had to pay in order to qualify for the loan. Remember no Bank would give them a loan under normal conditions.
SFA and UEFA will consider FFP under the pandemic as special circumstances and will not be heavy handed with sanctions. There really are special circumstances, Every club has lost money due to Covid19.
With the pandemic Sevco would be able to take advantage and narrow the financial gap on Celtic. They didn’t offer a refund like Celtic which would costs us upwards of £5m.
With a bigger ground we have a higher starting point when we consider closed doors. We take more in matchday income therefore we have more to lose.
This is 10 in a row therefore we need to stretch ourselves we can push the boat out and recoup some finances during 11 & 12 in a row,
I reckon that after the 10 we might see an exodus of players and coaches and even among the Board. In my opinion Peter Lawwell might retire. With a financial recovery to plan, then I wouldn’t like to see it without our Financial big hitter in charge. I hope, if he retires as CEO, then he stays on the Board
BANKIEBHOY1 on 16TH JUNE 2020 3:22 PM
Great article, but terrifying in its impact.
The thing that I don’t get is, if while we have greater liquidity and the road ahead looks rocky how come the huns haven’t spectacularly kombusted???
____
They will be bringing in season book money right now. That will keep their head above water for now. It’s what happens when that dries up a few months from now.
Covid 19 is a financial ‘get out of jail card’ for sevco – they won’t go bust – they are in their element with buy now pay later or pay never approach to finances
Big Chris Julien is doing just fine…….
Over 41,000 deaths from Covid 19 a shocking number.
209,000 abortions in 2019 – one unborn child being killed every 2 and a half minutes of every day.
Jesus wept.
Chairboy…you cant be serious about Julien as well as being a very good centre half he has chipped in with a number of goals whilst also passing his experience onto Ajer who was bought as a midfielder…every signing comes with risks especially the market we operate in some of last years were excellent in my opinion Forster and Julien,Friimpong was a revelation, Elyounouusi and Elhamed were very good when fit Bolongoli has been somewhat disappointing and Bauer was brought In for cover so on the whole a pretty successful window with as ever a couple of projects for the future that may or may not work out we also added klimala and Soro in January who will need games before an opinion being formed.
EUROCHAMP67
The way I see the VST , is that sky have given a concession to all SPL clubs to let only season ticket holders access, encouraging fans to purchase their season books but not detracting from sky,s other programmes like golf etc . The club can only allow those who sky have permitted to access otherwise they would breach terms of deal. I have decided to renew my season book , as I have CFS/ME my immune system is low so probably won’t see any games this side of Christmas but if I can be there next year to see us perhaps make 10 in a row then it will be worth it. HH
Sorry Chairbhoy I should have wrote.
Eurochamps.
Sky hold the sole rights for all live broadcasts of the SPFL in UK & Ireland.
They only agreed to virtual Season Ticket Broadcasts as a one off gesture to try & keep Clubs solvent.
There is no way they would allow Celtic to extend this service to non Season Ticket Holders.
I hope Celtic sell as many season tickets as possible I renewed mine on the 10th MARCH seems to get earlier every year…the unfortunate thing is lots of people have lost their jobs including friends of mine and finding just shy of £700 in those circumstances is not easy.Football plays on our heartstrings and makes us make choices in buying tickets that aren’t logical so I hope Celtic make sure we strengthen the areas of the field that we need.
https://twitter.com/Castore_UK/status/1272925715898552322?s=09
Well run, high pedigree clubs, use debt in a useful and correct manner. Celtic are A+ credit worthy, and as Bada has said, the price of money has never been so cheap. Our nearest rivals cannot, repeat cannot avail themselves to this type of money, so even if we do burn through some of the bank reserves we have the ways and means to maintain the financial clout that we already have, the more things change, the more they stay the same por cierto
MPSHANKS @ 3:27 PM,
TIMALOY29 @ 3:42 PM,
THE HAND OF GOD @ 4:47 PM,
If you feel Jullien is the third best centre half we have had in the last twenty years then your opinion of him and my opinion of him differs immeasurably.
That’s not to say I don’t like him. He’s a big unit, good in the air, has become more commanding as his confidence has grown and is good going forward. A good signing no doubt, a centre half that’s good in the opposition box is a great asset to any team.
Why I wouldn’t rate him that high at the moment is a certain lack of dig… Lydon Dykes and others have exposed him imo.
Now, maybe I’m underestimating him, maybe as we see him get used to Scottish Football his physicality will improve.
I’ll bow to your better judgement and keep an eye out for him next season.
9iar has been great, triple trebles brilliant, our consistency domestically last season was immense.
However my point on signings was more general.
We have lost some great players in the last three Seasons or so, we needed a good window last summer with real calibre coming in. We do too much tinkering on the periphery
I understand we plan for the future and look forward to seeing the development lads improve and get first team opportunities, that wasn’t my bugbear.
My issue was not seeing players who would assist us getting UCL qualification coming in. I’m really not seeing that in the first team players we brought in last Season.
Hail Hail
BIGBHOY on 16TH JUNE 2020 3:48 PM
Does anyone know if Sevco have had access to the Government Financial assistance for Covid 19?
—-
I know Spurs took near £200 million out under the government loan scheme – at very good rates.
However, to avail of the scheme, it’s my understanding that businesses had to provide audited accounts to prove their viability.
I don’t believe Sevco would have qualified for the covid loan scheme given their previous year end accounts, not to mention the missing interims for this year.
Gene 4:23PM,
Shocking but True.
God Bless those that oppose this offence to Our Lord & Saviour.
CHAIRBHOY,
I generally say when in discussions that exaggerating does not help reinforce any position taken.
Saying that you can name a dozen better Centre Halves in last 20 years than Jullien and then not doing so when asked to does not help anyone to understand your position. I also never stated he was the third best CH in last 20 years. He may prove to be, but that is for the future that none of us can predict.
That said, I note your other points.
Hail Hail.
If Celt9c need to lose the Support for that wan hame game.
10 isnae gonnae be Easy to get.
In Neil Francis Lennon – we have an absolute Gem of a Man Manager.
David17s point was very valid about the technical side of things. John Kennedy knows the way Brendan went about things.
Our Club is ready to Flourish.
Together we are unstoppable.
If Celt9c need to lose the Support for that wan hame game……..
Sorry.
H W G 10 in a R
I think we Will get 10 in a row.
Noone knows though. It is on a knife edge.
The newco are Mega determined.
Speaking of wee Budgie….
The one and only original played by Adam Faith is on Talking Pictures tonight CH 1 on Freeview.
Written by Keith Waterhouse, who also wrote Billy Liar back in the 50s, dates back to 1972, and includes, at some point Ian Cuthbertson as Charlie Endell. Great Character. Period piece which captures some of that time in ol London town.
Soro will be playing.
The Stokesy Final was Braw.
Lenny is Legendary already.
The colour is Green….. I like the colour blue too.
Honesty is Always the best policy at the end of the Day.
Petec
I don’t believe determination matters. Skill matters, squad strength matters, management matters.
We’re better across the board.
Might I suggest that should Celtic sell all their season tickets at the same level and games go ahead behind closed doors the actual cost of operations on a match day will be much much much lower than a standard game.
I would also hope right now that all non safety infrastructure projects are on hold and that the lights are actually off.
It’s not rocket salad.
https://twitter.com/ETimsNet/status/1272945287951237120?s=08
Norwegian league game live on Eurosport 😳
Porto on Freesports at 9
Dragon is another name for Satan, amongst so many others.
Noone knows Anything.
I wouldnae castigate anyone from Donegal quickly.
Genuine Giants afterall.
https://youtu.be/kELW4CUA-QY