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Celtic's financial challenges

In the 1990s listing football clubs on the stock exchange was all the rage. With lucrative TV deals still getting off the ground, it offered a welcome source of funds.

There are just two listed football clubs in the UK after Stan Kroenke took Arsenal private last year (it was listed on the Nex exchange). Manchester United is listed in New York. Its shares have fallen from $18.70 to $18.20 this year.

Celtic is the only club listed on a mainstream exchange, the UK's Aim. Dermot Desmond, the Irish entrepreneur who owns 35 per cent of Celtic, says that the objective is to allow 'the Celtic family' to own a small piece of it, not to attract rich investors.

In three years Celtic's share price has risen from 75p to 162.5p, despite paying no dividend, valuing it at £151m. With Rangers still recovering from its demotion to the fourth tier in 2012, Celtic is the dominant football force in Scotland. It has won the 'treble treble' in the last three seasons. Its latest league championship was the eighth in succession.

In the 2017/18 season Celtic's revenue hit a record £101.6m to make a pre-tax profit of £17.3m. The Champions League accounted for £30m of Celtic's income as the club reached the group stage. However, the failure to qualify last year has since hit the bottom line. In the six months to December 2018, revenue decreased to £50m from £71.5m. Pre-tax profit was £18.8m thanks to player sales.

Asset managers Lindsell Train upped their stake to 18.4 per cent last year. It also has shares in Juventus and Manchester United, believing that broadcast revenues will rise. However, value can only be realised when a club is sold and the owners of Celtic have no intention of doing that.'

In the 2018 annual report, chief executive Peter Lawwell wrote, 'Our ambition remains to create a world class football club.' That looks like a challenge. While average crowds are big at 58,000 Celtic only just scrapes into the top 50 worldwide and is trapped within the Scottish league serving a country of 5.5 million people.

As David Goldblatt notes in his excellent new book, The Age of Football, Scotland 'has the highest number of professional football clubs per capita in the world, and an attendance per capita exceeded only by Cyprus.' Membership of the English Premier League would solve many problems for Celtic (and Rangers), but that is a long standing dream that is unlikely to ever be fulfilled.

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