The authoritative Swiss Ramble reports on Celtic's 2019/20 accounts. They posted a small £0.1m pre-tax profit (£0.4m loss after tax), despite revenue falling £13m due to COVID. Figures boosted by £24m profit on player sales.
This year’s figures will likely see a large loss due to COVID, but the club “remain committed to the strategy of careful use of our financial resources”. This will probably mean the profitable sale of some of their better players like talented French striker Odsonne Edouard.
All three revenue streams were lower, especially match day, which fell £7.5m (17%) from £43.3m to £35.8m. Commercial dropped £3.6m (15%) from £24.4m to £20.8m, while broadcasting was also down £2.0m (13%) from £15.7m to £13.7m.
The club have posted pre-tax profits five years in a row, amounting to a £36m surplus in that period. In fact, they have generated profits in seven of the last eight seasons with the sole loss in 2014/15 being only £4m.
The figures greatly benefited from £24m profit from player sales, up £6m (37%) from previous season’s £18m, mainly Kieran Tierney to Arsenal. This was significantly higher than other Scottish clubs.
Celtic's strategy has become increasingly reliant on player trading with profits from player sales averaging £19m a season in the last three years. Money earned does not only include the initial sales proceeds, but also sell-on fees. They have generated £102m profit from player trading in the last eight years.
Revenue has now fallen £31m from the £102m high two years ago to £70m, mainly driven by £20m media rights, but also match day £7m and commercial £4m. On the other hand, revenue is up by more than a third (£18m) from £52m in 2016.
Celtic have enjoyed a substantial revenue advantage over their rivals Rangers in recent times, but the gap has narrowed over the last three years from £69m in 2018 to £11m in 2020. The Old Firm generate significantly more revenue than other Scottish clubs. For example, Celtic £70m is more than four times as much as Hearts £15m and Aberdeen £14m, followed by Hibernian £11m, Kilmarnock £7m, Motherwell £5m and St. Mirren £4m.
Their £83m revenue in 2018/19 was around £70 below the £154m required to be in the Top 30 European clubs, as shown in the Deloitte Money League, which ranks clubs globally by revenue. They were placed as high as 13th in the Money League in 2004. Since then, their revenue has only grown by £14m, while the club in 20th place has increased by £127m and the top club by £572m.
They are the proverbial big fish in a small pond. In 2018/19 the Scottish Premiership generated £240m revenue, miles below the likes of England £5.9 bn and Spain £3.4 bn, but also behind Belgium £344m and Austria £256m.
The Scottish Premiership TV deal is very low, so the club only received £3.4m for winning the title. To put this into perspective, Premier League winners got £152m, while last place was worth £97m. Even a Championship club (no parachute payments) got twice as much (£7m).
The Swiss Ramble estimates that Celtic earned €11.2m from reaching Europa League last 32, split between starting fee €2.75m, prize money €4.6m, UEFA coefficient €2.3m & TV pool €1.6m. Also received €1.1m for 3 qualifying rounds in Champions League. About the same as in the prior season.
European qualification is very important for Celtic who have earned €98m from Europe in last 5 years, almost five times as much as Rangers €17m. Champions League is the real differentiator with Celtic getting over €30m in both 2017 and 2018, when they reached the group stage.
Match day revenue is particularly important for Scottish clubs, given the low TV deal. According to Deloitte, this accounts for an incredible 48% of total revenue in Scotland with the next highest being Belgium 26%.
Commercial revenue fell £3.6m (15%) from £24.4m to £20.8m, comprising commercial/sponsorship £8.1m, retail and e-commerce £11.2m and other income £1.4m. This is by far the highest in Scotland.
The deterioration of the club's wages to turnover ratio to 77% means that this is the highest of the three Scottish Premiership clubs that have published 2019/20 accounts to date,
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