The Swiss Ramble blog looks at Scottish football finances

mdingwall

Administrator
Well, mostly demolishing myths about Ra Hoops having £100m stockpiled in a bank somewhere.

https://twitter.com/SwissRamble/status/944151067591364608

A few uncomfortable truths in there for Timmy.



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Swiss Ramble
@SwissRamble
Brit blogging from Switzerland, usually about the business of football.

Zurich, Switzerland
swissramble.blogspot.com
Joined October 2009


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Swiss Ramble‏ @SwissRamble
Celtic’s 2016/17 accounts provide evidence of financial dominance domestically, but also highlight reliance on the Champions League and the widening gap to the richer European clubs. Some thoughts in the following thread #CelticFC #Celtic

10:22 AM - 22 Dec 2017

55 replies216 retweets341 likes


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    1. New conversation

    2. Swiss Ramble‏ @SwissRamble 22 Dec 2017
      Celtic’s profit increased from £0.5m to £6.9m, as revenue grew by 74% (£38.6m) from £52.0m to £90.6m, largely due to the additional income generated from qualifying for the group stage of the Champions League, but all revenue streams were higher #CelticFC

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mdingwall

Administrator

  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Multimedia & other commercial activities rose £22.3m to £36.6m, due to Champions League money & increased sponsorship; football & stadium operations was up £12.4m to £37.6m (season ticket sales plus CL); and merchandising up £3.9m to £16.5m as 3 new kits were launched #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    On the other hand, profit on player sales dropped £10.4m to just £2.3m (Virgil Van Dijk sold to Southampton previous season), while there was much cost growth: wages £15.3m, other expenses £3.8m and player amortisation/impairment £1.8m #CelticFC

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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s profit after tax of £6.9m is the largest in Scotland, followed by Hearts £2.3m. Most clubs break-even (or make small losses), though the exception is Rangers with a £6.7m loss #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic are essentially a profitable club, reporting profits in eight out of the last 11 seasons, though we’re not talking enormous sums: a total of £24m for the last 5 years #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s EBITDA (Earnings Before Interest, Tax, Depreciation & Amortisation), considered a proxy for cash operating profit, shot up from £(4)m to £16m. Including player sales, EBITDA was £18m. In prior years, Celtic have been quite dependent on player sales, e.g. 2014 #CelticFC



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mdingwall

Administrator

  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s revenue of £90.6m is 20% (£14.8m) more than their previous high of £75.8m in 2012/13. Football & Stadium Operations and Multimedia & Other Commercial Activities both contribute around 40% of revenue #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    To emphasise their domestic dominance financially, Celtic’s revenue of £91m is more than three times as much as Rangers £29m, followed by Aberdeen £15m and Hearts £11m #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    However, to place this into perspective, Celtic’s £91m revenue would have only placed them above Bournemouth in the Premier League in 2015/16 – and that will not be in the case in 2016/17 with the advent of the new English TV deal #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    The rise in TV money in England has pushed Celtic out of the top 30 in the Deloitte Money League with the financial gap continuing to widen, e.g. Manchester United’s 2016/17 revenue of £581m is an incredible half a billion a year more than #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    The club references the “paramount importance” of participation in group stages of the Champions League, which can be clearly seen in 2016/17 with £27m of total £91m coming from prize money alone, helped by weakening Pound (excluding increases in match day & commercial) #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    In fact, Celtic’s €32m was the 19th highest payment in the 2016/17 Champions League, in between Sevilla €33m and Porto €31m, even though they did not actually win a game in their group #CelticFC



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mdingwall

Administrator

  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Around half of Celtic’s Champions League €32m distribution is their share of the British TV pool (€15.5m), as Scottish clubs receive 10% if they qualify for the group stage #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    In stark contrast, Celtic only received £2.8m from the Scottish domestic TV deal, even though they again won the league. This was £0.8m more than Hearts received #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    For some perspective, the Premier League winners received £151m, while the last placed team got £93m. Even Championship clubs get more than twice as much as the Scottish champions (£6.6m) with £43m for those with a parachute payment #CelticFC



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mdingwall

Administrator

  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s wage bill grew by 41% (£15.3m) from £36.9m to £52.2m (their highest ever) in 2016/17 with the addition of some players on relatively high contracts, but the wages to turnover ratio was still cut from 71% to a very respectable 58% due to the revenue growth #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s £52m wage bill is around three times as much as Rangers’ £18m, followed by Aberdeen £8m and Hearts £6m, so their monopoly of the Scottish Premiership should be no great surprise #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    For some more context, Celtic’s 2016/17 £52m wage bill would have been lower than all English Premier League clubs in 2015/16 (smallest Watford £58m). Wages at the two Manchester clubs of £264m are five times as much #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Despite their prosperity, Celtic had net player sales in last 3 seasons, not because they have cut purchases (£10-11m a season), but they have made higher sales. They spent £6m in summer with less than £1m sales (though rumours suggest a 10% sell-on clause for Van Dijk) #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic have gross debt of only £6.8m with net funds of £17.8m after considering £24.5m of cash balances. The debt comprises bank loans with The Co-operative Bank (part of an initial £20.4m loan facility, refinanced and reduced during the year to a facility of £12.3m) #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    Celtic’s board has been accused of hoarding cash, but that has not really been the case – until last season when the cash balance was increased by a hefty £14m, largely due to the improvement in operating profits #CelticFC



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  • Swiss Ramble‏ @SwissRamble 22 Dec 2017
    In the last decade Celtic generated £61m from operations, spending around a third £21m) on improving Celtic Park and Lennoxtown training ground. Just £9m went on players (net) with much spent on financial issues: debt repayment £6m, dividends £5m & interest £2m #CelticFC



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Sebo23

Well-Known Member
Sure this was on a couple of days days ago, and yeah it's quite revealing.

Over £50M in wages, I'm sure overall operating expenses topped £70M, so without CL money they face a loss even before taking into account player trading. You can't imagine them signing anyone of note now without players leaving.

Quite like the Swiss Ramble stuff, even a dunderheid like me can understand most of it.
 

Bigfoot

Well-Known Member
In stark contrast, Celtic only received £2.8m from the Scottish domestic TV deal, even though they again won the league. This was £0.8m more than Hearts received #CelticFC

two points here. dont they mean Aberdeen and does the tv money get paid based on league position.
 

Captain Black

Well-Known Member
It looks like we should give up all tv deals and put a pound on to the gate fee ,every one better off
No thought put into my calculations
 

Rickymck

Well-Known Member
We win the league a couple of years on the trot and they will need to do a lot of number crunching to make that model work. Us on the other hand need to keep a sensible head on our finances.
 

Mr_Miscellaneous

Well-Known Member
"Celtic’s wage bill grew by 41% from £36.9m to £52.2m in 2016/17"

It grew 41% in the year we got back in the league.

It has only increased further as they have tried desperately to keep their team together by offering them bumper deals and signing more and more also-rans on crazy wages without really cashing in on any sale-able assets.

Their wages this season could easily dwarf their turnover. That is absolutely insane! How on earth did they get themselves into that position.
 

Arminius

Well-Known Member
Official Ticketer
The 32m Euro CL money they made season 2016/17 was favourably increased by the slump in the value of Sterling from 2015, through to date. That alone boosted their £ Sterling receipts by an estimated £8m from season 2015/16 to season 2016/17, by my loose calculations. So, the increase in turnover is partly due to currency movements making it appear that they were growing much faster than the reality.

Also interesting to read the comments about their previous reliance on player sales to make a profit. This certainly explains the media hawking of anyone worth selling following their CL exit the other night.

Lastly, that increase in wages is astonishing.
 

Koba

Well-Known Member
"Celtic’s wage bill grew by 41% from £36.9m to £52.2m in 2016/17"

It grew 41% in the year we got back in the league.

It has only increased further as they have tried desperately to keep their team together by offering them bumper deals and signing more and more also-rans on crazy wages without really cashing in on any sale-able assets.

Their wages this season could easily dwarf their turnover. That is absolutely insane! How on earth did they get themselves into that position.

Good question when you think they needed to spend very little to dominate domestically. You could maybe justify it if they made a mark in Europe but under Rodgers its pretty much been an embarrassment. It would seem they need to qualify for the Champions League next season unless they can offload some wages with maybe getting a good price for one or two players. If I was a Celtic fan I'd be raging at this.
 

BucksBear

Well-Known Member
"Celtic’s wage bill grew by 41% from £36.9m to £52.2m in 2016/17"

It grew 41% in the year we got back in the league.

It has only increased further as they have tried desperately to keep their team together by offering them bumper deals and signing more and more also-rans on crazy wages without really cashing in on any sale-able assets.

Their wages this season could easily dwarf their turnover. That is absolutely insane! How on earth did they get themselves into that position.

I would imagine their wage bill wont be as high. would be big bonus's for the champions league. I bet Brendas bonus will be massive for that
 

SmileyBear

Well-Known Member
Good post this kills theory they have mountains of surplus cash ready to buy if we pose any challenge to them.
Skint without the champions league money.
 

jf1960

Well-Known Member
£21m on Sellik Park and Lennoxtown maintenance you've got to be having a laugh. How do you maintain breeze block and the banners around the park are hiding all the rust on the steel or metal. Unless the Trophy Centre supplied the banners I could see then where all the money went
 

Hammy

Well-Known Member
Interesting reading. No Champions League qualification and they've messed up the sale of Boyata (surely interested clubs will now low-ball Celtic knowing there's an unhappy player and Celtic won't be getting CL money).

Tuesday night was massive for us, we now have a fighting chance to be able to compete financially in the future.
 

Grigo Yossarian

Well-Known Member
We win the league a couple of years on the trot and they will need to do a lot of number crunching to make that model work. Us on the other hand need to keep a sensible head on our finances.

Agree. If we win the next two leagues they are in big trouble.
 

Grigo Yossarian

Well-Known Member
£21m on Sellik Park and Lennoxtown maintenance you've got to be having a laugh. How do you maintain breeze block and the banners around the park are hiding all the rust on the steel or metal. Unless the Trophy Centre supplied the banners I could see then where all the money went

I read it that they’ve spent 21m over 10 years in improving Paedo Dome & Lennoxtown, rather than maintenance.
When did they open Lennoxtown ? Could it’s whole cost be part of this ?
 

Hillheadbear

Goooooooooaaaaaaaaaaallllllllll
Celtic's business model is the same one we had before we got fecked over. They need CL group stages just to break even and they need to sell players to make a profit. So a couple of years without the CL and they run into trouble and are forced to start selling their best players and downsizing the squad.

But let's talk about Rangers because this highlights our challenge going forward. How do we build a team that can win the SPL and be competitive in Europe without taking huge financial risks? What kind of business model do we build that will allow us to do that?
 

douzpwa

Well-Known Member
"Celtic’s wage bill grew by 41% from £36.9m to £52.2m in 2016/17"

It grew 41% in the year we got back in the league.

It has only increased further as they have tried desperately to keep their team together by offering them bumper deals and signing more and more also-rans on crazy wages without really cashing in on any sale-able assets.

Their wages this season could easily dwarf their turnover. That is absolutely insane! How on earth did they get themselves into that position.

OBTRTS Obsessive Beat The Rangers Titles Syndrome?

Who knows, we can just sit back and hopefully get to enjoy their struggle?
 

Bobby_Dazzler

Active Member
Celtic's business model is the same one we had before we got fecked over. They need CL group stages just to break even and they need to sell players to make a profit. So a couple of years without the CL and they run into trouble and are forced to start selling their best players and downsizing the squad.

But let's talk about Rangers because this highlights our challenge going forward. How do we build a team that can win the SPL and be competitive in Europe without taking huge financial risks? What kind of business model do we build that will allow us to do that?
Buying young talented players, developing them and selling them for a profit. Invest heavily in scouting and try and copy the 'Ajax model' of old.

Very, very difficult to replicate successfully but the only way we'll ever punch above our (financial) weight.
 

-ZED-

Well-Known Member
Although their turnover will fall dramatically this year, we have a way to go to close the gap. We need to find a way of getting more expensive seats installed at Ibrox, Bar72 style.
 

Hillheadbear

Goooooooooaaaaaaaaaaallllllllll
If we are to avoid the old, failed, business model then we need a basket of measures:

1. We need to learn to grow and sell talent.
2. We need to find ways of increasing ticket revenue.
3. We need to turn catering into a money maker.
4. We need to rebuild our retail operation
5. We need to explore ways of increasing non-game day revenue.
6. .......
 

Papasmurf

Scum Evictor
Official Ticketer
So, about £25m cash in the bank. Which is there or there abouts with the deficit they will see this year because of Tuesdays results?

Without a good run in the Europa, big players sold or cost cutting, they will be at done to nothing come the end of the year?
 

carlosapicella

Well-Known Member
Celtic's business model is the same one we had before we got fecked over. They need CL group stages just to break even and they need to sell players to make a profit. So a couple of years without the CL and they run into trouble and are forced to start selling their best players and downsizing the squad.

But let's talk about Rangers because this highlights our challenge going forward. How do we build a team that can win the SPL and be competitive in Europe without taking huge financial risks? What kind of business model do we build that will allow us to do that?
Agree with your last part let's talk about the Rangers how do we build a team etc,I never imagined we would be in such a good position as we are under the new management team,but looking further back is it possible all that's happened was being arranged while murty was in. Charge!signings ,loans, fitness levels as in management team,I honestly think this has been sorted with mrGeven before he signed and between Allen,Mr g and Dave king there will be a plan to build again but not in a way to get us in a mess with overbearing debt!
Tell you what, no wonder we are seen as such a soft touch when members of our own support are condoning the actions of an opposition player assaulting one of our own because "it's part of the game" McKenna's action s weren't during a free kick

oney to buy katic,golds
fJ









d
 
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Grigo Yossarian

Well-Known Member
So, about £25m cash in the bank. Which is there or there abouts with the deficit they will see this year because of Tuesdays results?

Without a good run in the Europa, big players sold or cost cutting, they will be at done to nothing come the end of the year?

No Papasmurf. That 24.5m was last June. They made 14m Cash inflow to get to that so in the year to June 2018 we need to assume a similar cash inflow, so I’d expect them to be around 35m maybe above in June 2018.
They’ll probably lose a good few million this year without further player sales in this year so we really need a repeat next year before we can get at least close to financial parity mate.
So if we do EL this year & next & they miss CL next year then we’re getting to a more competitive financial situation IMO.
 

DechmontLoyal

Well-Known Member
Loads of good info in there.

In short, over 5 years

All the money in
minus all the expenses
= £25m in the Bank


How much has gone sideways to Fritzl, and in other Boardroom bonuses over the last 5 years?

And still to come -
No CL money coming this year
The Co op debt due next year
Extensive stadium repairs needed
and possibly
Compensation to abuse victims
 

Papasmurf

Scum Evictor
Official Ticketer
No Papasmurf. That 24.5m was last June. They made 14m Cash inflow to get to that so in the year to June 2018 we need to assume a similar cash inflow, so I’d expect them to be around 35m maybe above in June 2018.
They’ll probably lose a good few million this year without further player sales in this year so we really need a repeat next year before we can get at least close to financial parity mate.
So if we do EL this year & next & they miss CL next year then we’re getting to a more competitive financial situation IMO.
ah ok. With you.

Apart from being utterly amazing, if we win the league, get into the CL, we will be there or thereabouts
 

Grigo Yossarian

Well-Known Member
If we are to avoid the old, failed, business model then we need a basket of measures:

1. We need to learn to grow and sell talent.
2. We need to find ways of increasing ticket revenue.
3. We need to turn catering into a money maker.
4. We need to rebuild our retail operation
5. We need to explore ways of increasing non-game day revenue.
6. .......

Good post Hillhead. 1,2& 4 are the big guys if we get them right. If we do, we have a viable & sustainable profitable club.
On the first one we seem to already be doing well at identifying talent at OOC status or for cheap purchase.
Players on the way out we really need to improve on, regularly ripping up contracts or taking bugger all from others eg Waggy.
On your second point I would love us to do Safe Standing. It would be cheap to implement & would be popular with the fans, and help the atmosphere but it would also add maybe 5k to the capacity ? So further revenue that you suggest we need.
The fourth one sounds like it’s being addressed & I don’t know yet how well we will do but either way it will be an improvement from last year.
Final comment is EL Group Stage target as a strategy. This is now decent money available & is much less risky than the required strategy to go for the CL. I think we should use this as a strategic aim, and CL qualification is a big bonus if it comes along.

Thoughts ?
 

Earl of Leven

Well-Known Member
Official Ticketer
Celtic's business model is the same one we had before we got fecked over. They need CL group stages just to break even and they need to sell players to make a profit. So a couple of years without the CL and they run into trouble and are forced to start selling their best players and downsizing the squad.

But let's talk about Rangers because this highlights our challenge going forward. How do we build a team that can win the SPL and be competitive in Europe without taking huge financial risks? What kind of business model do we build that will allow us to do that?

We will somehow need to scout and coach better and therefore bring in money from player sales....we can't rely on gate money and TV money as it's not enough. A friend last night said he felt £6,5m for Alfredo wouldn't be 'good for club'....guy cost £900k. We have to start thinking about 'conveyor belt of talent'...
 

the count

Well-Known Member
No Papasmurf. That 24.5m was last June. They made 14m Cash inflow to get to that so in the year to June 2018 we need to assume a similar cash inflow, so I’d expect them to be around 35m maybe above in June 2018.
They’ll probably lose a good few million this year without further player sales in this year so we really need a repeat next year before we can get at least close to financial parity mate.
So if we do EL this year & next & they miss CL next year then we’re getting to a more competitive financial situation IMO.




If we do EL this year and CL next how would that affect the financial parity
 

BlueMalky

Well-Known Member
The £12.4million increase in football and stadium activities from 2016 to 2017 must be due in no small part to our reappearance in the top league. Probably 50/50 with the CL.
 

Grigo Yossarian

Well-Known Member
If we do EL this year and CL next how would that affect the financial parity

If we do that it’s gonba be very close.

If we make EL this year we should make our first profit in a long time. Also we should generate cash. Next year with the CL money instead of EL money we should be close to 15-20m better so we may have a 20m bank balance with a bit of luck & no significant player spend.

If they started this year at say 35m then they should ( even if I assume EL achievement both years ) lose somewhere from maybe 3-8m a year ?

So it would take both clubs to almost parity by next year BUT this is very dependent upon player purchases & sales. They may sell Boyata & Dembele & buy a few cheap replacements for them & end up having a cash inflow this year ?

So it’s very fluid & dependant upon so many variables, but us getting EL & then CL football the next two seasons would put us in the same general condition as them.
 

Hillheadbear

Goooooooooaaaaaaaaaaallllllllll
European football is where the big money is. The problem is that it cannot be relied upon. We could get in one year and get knocked out in qualifying the next year. So we need to be building reliable revenue streams that are independent of match day results.
 

Johnnieblue

Active Member
This year's accounts will still show them to be in a healthy position. Next year's accounts will show a big loss but still in a decent financial state. But if they don't make the CL next season, then the only way to keep their heads above water will be to cut those wages in a big way while still trying to maintain a competitive squad. That is when the trouble starts for them unless they get hit with some sort of big cost in the next 12 months to speed the fire sale up.
 

Stanley

Well-Known Member
Excellent post. Gives a clearer view of what is happening on the East side. They sold their soul to the devil for 7 years. The tarriers time is up.
 
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