Celtic in good shape financially

The authoritative Swiss Ramble reviews the finances of Celtic.   He concludes that they are in good shape financially, despite the pandemic, thanks to their sustainable approach, though this owes a lot to their player trading model. Champions League qualification is also important, so the expanded format should help future prospects.

Comparing their cash flow with Rangers in the last 10 years, we can see a big difference in approach. Celtic have made much more money from operations and player sales, which Rangers nearly matched via £78m loans and £38m share capital.

The £2.5m debt is small, even by Scottish standards, and is a long way below Rangers £16.9m, which would have been even higher without them converting £66m of loans into shares in the last four seasons. Note: Celtic’s figure excludes £4.2m convertible preference shares.

Celtic spent £38m on player purchases in 2021/22 after Postecoglou’s arrival, easily a club record, including Jota, Carter-Vickers, Furuhashi, Starfelt, Bernabei, Abada, Juranovic, Giakoumakis, O’Riley, Hatate and Hart. The gross outlay in the last 5 years was £95m.   £38m player purchases in 2021/22 were far higher than Rangers £8m, though both clubs spent significantly more than the rest of the Premiership combined. However, there have been few acquisitions this season with Haksabanovic being the main arrival.

The wages to turnover ratio decreased (improved) from 85% to 67%, but still higher than 58% in 2018. However, this is still better than Rangers 77%.   The wage bill rose £7m (14%) from £52m to £59m, only slightly lower than the club’s high in 2018. Wages have remained in a relatively narrow range of £52m to £59m over the last six years.

Commercial revenue rose £3m (11%) to club record £32m, mainly due to higher retail sales, thanks to a “more normalised trading environment”. This is by far the highest in Scotland, well ahead of Rangers £20m, though they report their merchandising sales net of costs.

Match day income is particularly important for Scottish clubs, given the low TV deal, accounting for nearly half (49%) ofrevenue. This is in stark contrast to English clubs, e.g. we can again compare with Norwich City, where match day was  only worth 8%.

Average attendance in 2021/22 was 56,177, nearly 11,000 more than Rangers 45,314, followed by Hearts 15,723, Hibernian 15,043 and Aberdeen 11,608.