By James Dailey
I have a 13-year old son and he is in that awkward period as he ascends out of childhood into adolescence and young adulthood. I joke with him that it is time to put his “big boy pants” on when he does not like the reality of increased responsibility as he grows up. For us to have a serious “conversation” about what the future of Celtic and playing within a Scottish league may entail, we need to put on our big boy pants. While the supposed “dossier” has predictably emerged as little to do about nothing, and The Rangers’ may have been acting in bad faith, it is time to get back to the business of SPFL survival, and whether or not Celtic will have a league to play within once the pandemic lifts.
The point of this piece is to try and provide an objective analysis of financial reality. I do not like the reality of pandemic, global economic depression, or The Rangers’ economic value to Celtic, but they exist, nonetheless. I started writing this piece with the intent of focusing upon on-field implications (that is still in the works) but decided that such an analysis would not be effective without first addressing the “elephant in the room.”
Good vs Evil
Without Darth Vader and the Dark Side of the Force, would our lives have been complete without all the 4th of May memes? Star Wars has thrived for over four decades based upon the age-old drama of good versus evil. From a commercial perspective, I can see no viable emergence from the pandemic period for Scottish Football without a “Rangers” taking part. Whether any of we supporters like this idea or not, it is most assuredly going to be something which is front and center for the SPFL and Celtic board. I can envision many people reading this, considering the idea that Celtic will need Rangers in the league, and screaming like Luke did when Vader tells him he’s his father. NOOOOOOOOO!!!
Here are Celtic’s revenue and average home league game attendance and season ticket sales over a sampling of seasons since the year 2000:
This data provides some framework for assessing what I will call the two “shocks” to Celtic’s business over the past twenty years. First was the global financial crisis (GFC) of 2008-2009, where we saw an initial hit of around 3,000-4,000 in tickets sold per game. The 2002-2003 season is reflective of pre-GFC attendance from 2000-2010. Recessions typically have lasting and residual effects, and that is reflected in the 2011-2012 season, which was the last with Rangers in the league while still feeling the effects of the GFC. We can then see the continued decline in attendance as the new Rangers played their way through the lower leagues.
The decline of about 8,000 tickets per game from 57,000 to 49,000 (the economic shock) and the 7,000 difference between that 2011-2012 figure and 2015-2016 (Rangers shock) combine for an impact of 15,000 seats per game, about a 26% hit to attendance. Throw in a loss in media revenues with the loss of the derby centerpiece, and the financial implications are massive.
Unfortunately, I believe there is legitimate concern that the economic shock to Celtic supporters may be worse in the coming months and next few years.
Really Bad vs Worse
This comparison offers some perspective as to the economic impact to Celtic from whether a Rangers are in the league – it is comparable to the worst UK recession from the period between WWII and the current pandemic. Initial GDP reports from just the last 3 weeks of March suggest that the current economic contraction is likely to be at least 25%, which compares to the 5.2% of the GFC recession. In fact, to place this into perspective, the last time the UK economy contracted at such a rate was from 1919-2021, when unemployment reached 17%. We may be looking at a similar contraction, or worse, over a period of months rather than years.
Would that climate be a good time for an entertainment product facing an existential crisis to eliminate its most compelling villain?
Closed Doors
With total media-related revenues in 2018-2019 of about £22 million for Celtic and £11 million for The Rangers, and just about £4.5 million of that due to domestic TV rights, the idea of playing in empty stadiums is likely unrealistic without massive subsidies from fans paying for “virtual” tickets. The Rangers’ first team wage bill is about £23 million, and I estimate Celtic’s to be somewhere around £26-£27 million. It is possible, if not likely, that every Premiership team ex-Celtic will have to enter administration or be liquidated and reconstituted in advance of games returning.
Conclusion
Our collective disgust with “Them” may be reaching a new level with the SPFL charade, and they may very well be in the midst of building a campaign to try and “normalize” liquidation and a Third Rangers. The path back to games is likely to be riddled with more theatrics and nauseating drama, but we will need our Darth Vader to have a viable league. In a reconstituted Scottish Premiership, concessions such as eliminating points deductions for administration or allowing liquidated clubs to reenter the Premiership immediately may be a necessary evil.
Or perhaps we can join a new European Super League and leave The Rangers to be the Joe Exotic of whatever domestic league is left.
The final sentencwas my favourite bit :-))
Surely sevco with the 100 million Pound Hagi And the 50 million pound Morelos would survive
Please don’t pen an article on a Celtic website telling us that we need sevco in the league for us to survive!
The SMSM have been peddling this pish for years.
What happened to Armageddon?
We may not have a full house every week, but what does it matter to the average Celtic fan if we have £20m or £30m in the bank?
Go and tell Lawwell to write his own article next time!
Hello Scott – I do not think it is a matter of survival for us. However, sports as entertainment require a degree of competitive uncertainty, and a league with only Celtic would lack that in the vast majority of seasons. For a domestic league to be attractive for quality managers and players, it has to have a competitive and marketable element. Otherwise, given the demographics of Scotland and long term trends in sports consumption, we could fall to levels comparable to eastern European leagues, in my opinion.
There is also a practical reality for many supporters who sacrifice massive time and resources, which in a prolonged period of economic distress, those resources become even more precious. A less compelling on field product combined with less ability for supporters to spend could result in dramatically lower turnover for the club, which means lower quality players, no European relevance, etc.
Sorry that’s a bit like saying WW2 wouldn’t have been the same without the Nazis or the Japanese.
Hello Del – I think a more accurate analogy would be whether anyone would go see Saving Private Ryan, or any Marvel movie, without the bad guys/villains?
No, not really. Captain America doesn’t march around threatening and spitting on priests and give incompetent the best jobs.
The financial benefits of having Rangers in the same league are obvious, but it’s all gone too nasty again. And it’s going to continue to be nasty and probably get even worse as desperation sets in. Lies and deceit like what we’ve been seeing now for nearly a decade, in the mass media too, have spoilt the sport in Scotland. Money of course is important, but football is a sport and this has always been the most important part of Celtic FC and should continue to be so. Other clubs who continue to be unsporting and nasty should be left to themselves, they’ve never appreciated what Celtic has done for Scottish football and by their recent behaviour in my opinion never will. I prefer to enjoy Scottish football again.
Great post!
Hello Kaiser,
I agree with all of your comment, but part of professional sport is offering an entertainment product which is marketable. An SPFL in a nation which has been devastated economically will have supporters who have to make tough value judgments on how and where to spend those precious resources. The clubs which survive are likely to be even less competitive vs Celtic than they are currently, and a league without a main rival which is at least in the same hemisphere financially lacks competitive uncertainty which is at the center of sport. I wish there was a viable alternative, and maybe a miracle will occur and new leadership will somehow emerge for whatever version of “Rangers” emerges. But even if that doesn’t occur, Celtic need some kind of domestic rival or else we run the risk of falling into a long term version of the Deila years….as a good case scenario. Bad case would be a fall to the stature of many of the eastern European leagues.
Frankly, I’d rather take my chances of a lack of competitiveness or a drop in standards or possibly a move out of Scottish football altogether if it meant not having a toxic Rangers or Sevco type club in the league.
I just want a level playing field. If they live within their means then they should comfortably be second for ever more. I want them to survive and suffer.
A financially doped ,bigoted entity caused its own downfall after a sustained period of Domination In Scottish Football.
Prior to that period our game was in relatively good health as the grip on our game by the big two was removed bye strong competition from the East Coast.
Our National side was competitive but alas not good enough to compete in the latter stages of International Competition but at least it was represented on the big stage.
Since the Murray revolution our game has been dominated by one side.
This is not healthy and as a result interest in our game has lessened.
We were affectionately known as the ugly sisters by these other Clubs,two cheeks of the same Glesga arse.
Who could blame them for thinking that way?
Whilst it has been a joy to watch and experience the inevitable collapse of Rangers and the subsequent domination of our game by a Celtic here has been an undercurrent of this simply isn’t right.
The 5 Way Agreement signed in secret even to this day has been the single most destructive piece of Legislation in Scottish Football history in my opinion.
It had facilitated the notion that Rangers didn’t die and has served only one purpose and that is too reinforce the quite astonishing belief by Huns that they are indestructible.
It has galvanised their core belief that as the chosen peepul nothing and no one can stop their climb to the top of life’s pile no matter what happens.
They have turned the abject failure of Liquidation into the heroic recovery and resurgence of Superiority.
It would be laughable if it wasn’t so sad and dangerous.
To promote this as something our game needs is quite frankly shocking.
Our game doesn’t need another Financially doped,sectarian,paranoid deluded mess destroying it again.
To suggest it does is laughable.
The new entity hasn’t posted a profit in 8 years,it hasn’t even posted its Interims this year and yet it is causing havoc in a time when cool heads and a united approach is needed at this time.
Yet this is the time they have chosen to put their hob nailed boot in and kick the game whilst it like the rest of Sport is down on the ground?
If our game is to flourish it has to do so with all Clubs behaving in a manner that will promote that.
The Clubs who are currently bucking that trend are those who are most likely on the verge of going out of it.
Self preservation is the name of their game and to hell with the rest of us.
Celtic will out live all of them.
We will do do that because like it or not hose running Celtic have done so with one eye on “what if”.
Well what if has now become what is.
The talk of reconstruction can only happen once you know how many Clubs are left to fill the slots available and as far as I can see knowing that right now is probably an impossibility.
Especially when you have Clubs being less than transparent about their own Financial situation.
See if the Huns go bust again NOTHING should be done to facilitate a 3rd RANG3RS.
Nothing.
We don’t need their hate,their twisted approach to life or Football and we certainly do not need their influence within our game for it to flourish because it is a fact that during the period of the late 70’s and 80’s when they were a Football irrelevance our game was most probably at it’s very best.
So in finality I say fuck them you reap what you sowing if it is sympathy that they are after then tell them to go look in a Dictionary between shit and syphilis
sow’
Hello Duncan – thank you for reading and the thoughtful comment. I think there is a tendency to conflate old Rangers with Newco. Tax cheating and titles which were ill gotten are a legacy of old Rangers. Newco has undoubtedly been run in a financially imbalanced fashion, but that has been the decision of their backers to monetize annual deficits. They actually don’t have that much in the way of external debt through their most recent filing. Since Newco reached the Premiership their annual 1st team wages have been approximately £6.5 million, £10.5 million, £15 million, and £22.8 million.
For comparison, our next biggest rival while Newco was in the lower leagues, Aberdeen, has a first team wage bill of around £4 million. It was only this past season in which Newco’s total wages reached a level which were analogous to a Dortmund vs Bayern – or about 60%. A long term SPFL with Celtic as the only big revenue club would not be a competitive or sporting enterprise.
There is no conflation here other than that within the minds of those who follow follow 2angers.
The Support/fanbase is the same
The mindset of the Club is the same
The Financial approach is based on the belief that they are the same
The end result will no doubt be the same.
That is complete chaos caused by the second biggest entity within our game going bust due to a reckless approach to finance regardless of the cost to everyone and everything else involved.
They Superiority complex that renders them and their Support oblivious to the norms that everyone else adheres to.
Hence why they have posted loss after loss after loss chasing pipe dreams and moonbeams.
They cannot accept what happened and they refuse to acknowledge Celtic is the Superior Club IN EVERY ASPECT.
Ground Size
Fanbase
Financially
Success
Future prospect
Youth Setup
Scouting
Global Marketing
Sponsorship
Financial Backing
These are known facts denied by them all.
You point this out to them and their response?
Bit Jock Knew,Child Abuse,Fenian Conspirators and all the other tinfoil nonsense that infects their psyche on a day by day basis.
The sooner they are gone the better for all concerned in the Scottish game.
The vacuum created Willa low space for the likes of Aberdeen,Hibs etc to move and grow into.
They deny other Clubs possible revenue by running at a loss and beyond their means.
That is not and never will be a greater good for our game.
Good bye and good riddance I say when it comes.
If The Rangers can normalise administration thus avoiding a points penalty if and when a new season starts, that is probably their only hope of having a flicker of hope of stopping 10 in a row.
If they manage to disappear into oblivion – blaming everyone and everything but themselves – and take the rest of Scottish football with them…then, not only will they have stopped the 10, they will have stopped ‘theym’ ever eclipsing the actual Rangers coveted 54 titles.
My next piece will be an analysis of how close this season actually was and the risks of what the league may look like on the other side of the current crisis. I think it is highly probable that multiple clubs will be facing some form of administration or liquidation and reconstituting, or some sort of concessions or laws/rules changed to address the structural issue of player contracts with zero or greatly reduced revenues. Unless the government is going to subsidize these structural issues or changes are made, many clubs are likely to face insolvency issues. That is the kind of environment in which Newco could possibly restructure or reform, I am guessing.
Hi James
A very interesting, thought-provoking and, ultimately, important article which highlights the stark financial situation facing all of Scottish football in the short to medium term. Lots of lateral thinking required, and I do not profess to have the answer. But, I am watching closely as to developments. I think you are correct in your analysis regarding insolvency events, and the potential resolution of same – however unpalatable that might be to the vast majority of Celtic and other clubs’ fans. There needs to be teams in existence for there to be any league at all.
Keep up the good work, I look forward to future articles.
The difference between 2015-16 and 2018-2019 is primarily down to the Invincibles, Treble after Treble, CL Group Qualification, Euro exploits and, initially (whisper it) the arrival of Brendan Rodgers..
The effect of our friends from the South (of Glasgow) has been mainly comic eg 4 and 5 goal humpings, “They’re coming!”, “Oh no, they’re not!” etc.
“It’s all about The Rangers” is a media lie and our astonishing revenue growth is down to ourselves alone and our exploits, no-one else’s.
Frankly, I’d rather take my chances of a lack of competitiveness or a drop in standards or possibly a move out of Scottish football altogether if it meant not having a toxic Rangers or Sevco type club in the league.
I fully agree with Duncan. Scottish football will recover and be competitive at a different level without them. They have been a cancer in our game for so many years – since 1999 at least, and probably before that – I hope they go bust and stay bust.