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Excellent financial results for Celtic

Celtic’s pre-tax profit  in 2022/23 surged from £6.1m to £40.7m, a record for Scottish clubs, though chief executive Peter Lawwell pointed out that this included “some material items of a one off nature” which amounted to £13.5m. This was thanks to a £10.0m business interruption insurance claim and £3.5m compensation received following Big Ange’s departure.

Revenue rose £31.7m (36%) from £88.2m to £119.9m, another Scottish record, though profit on player sales more than halved from £29.0m to £14.4m.

The main reason for Celtic’s revenue increase was participation in the Champions League, as opposed to the prior season’s Europa League. This resulted in healthy growth in both broadcasting, which more than doubled from £13m to £31m, and match day, up £8m (18%) from £43m to £51m.  To complete the “financial treble”, commercial also rose £6m (18%) from £32m to £38m.

Celtic have posted profits seven times in the last eight years, the only exception being the COVID-impacted loss in 2020/21. Over the last decade they have generated an impressive £79m profit before tax.

Celtic have always emphasised the importance of player trading to their sustainable business model. This involves “creating value in player registrations from both academy graduates and acquisitions”.

In this way, the club has delivered an impressive £150m of profits from player sales in the last ten years. As Postecoglou noted before exiting stage left, this is “part of the process of bridging the financial gap that exists with other clubs.”

Norwich City, the club that finished last in the Premier League in 2021/22, had £134m revenue, which was £14m more than Celtic’s record-breaking £120m.  Norwich received £102m from the Premier League’s colossal broadcasting deal, which was streets ahead of Celtic’s £5m.

Celtic’s wage bill slightly rose by £2m (3%) from £59m to £61m, due to performance related bonuses and inflation. This was once more a new club high, though wages have remained in a relatively narrow range for the last seven years, as Celtic have seemingly applied their own salary cap. In fact, wages have grown by less than 3% in five years.

This is obviously an excellent set of financial results, as Celtic set new records for both revenue and profit, while also maintaining control over their cost base.

Chief executive Michael Nicholson re-iterated that the club’s objective was “to balance our commitment to football success with the crucial importance of financial sustainability.”

It’s difficult to argue with this strategy, which has proved to be pretty successful over a number of years, but the challenge for Celtic is whether they can build on their domestic accomplishments, in order to be more competitive at the higher levels of the Champions League.

As always, this is a tricky balancing act, but Celtic are fortunate that their model at least generates enough cash to present them with a decision on how to spend it. Very few clubs enjoy this luxury.

 

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