Scotland's poor TV deal hits club revenue

From his fastness in Zurich, the authoritative Swiss Ramble has been reviewing the 2019/20 accounts of Scottish Premiership clubs.

Most Scottish Premiership clubs aim for break-even with five making small profits, led by Hearts £0.5m and Motherwell £0.3m. Rangers’ £17.5m post-tax loss is the big outlier, especially compared to Celtic’s£0.4m deficit, largely due to their recent investment in the squad.

Celtic had the highest revenue with £70m, though the gap to Rangers £59m has narrowed. Both Glasgow clubs earn at least four times as much as other Scottish clubs with closest challengers being Aberdeen £14m, Hearts £12m, Hibernian £9m and Kilmarnock £5m.

However, it is worth noting that Celtic were boosted by £24m profit from player sales, largely due to Kieran Tierney’s move to Arsenal, which was significantly higher than other Scottish clubs. The next highest were Kilmarnock £1.2m, Motherwell £1.0m.

The Old Firm had by far the largest operating losses (i.e. excluding player sales and interest) with Celtic being highest at £24.5m then Rangers £15.9m. Next highest was Hibernian with just £1.4m. Hearts was the only club with an operating profit, thanks to £3.7m donations.

Revenue for most Scottish clubs fell in 2019/20, partly due to the impact of COVID-19, but Rangers increased by £6m (11%), due to reaching Europa League last 16. In contrast, Celtic’s revenue dropped £13m (16%) with match day and commercial heavily affected by the pandemic.

Poor TV deal

The Scottish Premiership TV deal is very low, so Celtic only received £3.4m for winning the title in 2020. 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.

There is a new five-year Scottish TV deal with Sky Sports worth £30m (€34m) a year from 2020/21 (up from £25m), but this is not going to move the needle by much. It’s still much lower than Poland Ekstraklasa €58m and Belgium Jupiter League €83m, let alone Premier League €3.6 bn.

Reaching the Champions League group stage can make a big difference to Scottish clubs, e.g. the last time Celtic managed this in 2018 they received £30m TV money. On top of that, a club would have higher gate receipts and an uplift from performance bonuses in commercial deals.

Wage bills and debt

Celtic had the highest wage bill with £54m, ahead of Rangers £43m, though the gap has narrowed to £11m from £35m in 2018. There remains an abyss between the Old Firm and the other Scottish clubs, i.e. the next highest are Aberdeen £10m, Hearts £9m and Hibernian £7m. Most Scottish clubs have reasonable wages to turnover ratios, just above UEFA’s recommended upper limit of 70%, but that’s not too bad in a COVID-impacted season.

Scottish clubs do not often pay big money to sign players. In fact, Celtic’s gross transfer spend of £20.7m in 2019/20 was easily more than the rest of the Scottish Premiership combined with the next highest being Rangers £11.0m, followed by Aberdeen £1.3m and Hearts £0.4m.

Rangers’ £19.3m gross debt is more than all the other Scottish Premiership clubs combined (£15.7m) with the next highest being Hearts £5.7m, Celtic £5.4m and Aberdeen £1.3m. These numbers are significantly lower than most English clubs.

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The Political Economy of Football V2

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