Celtic PLC figures and why a new Champions League strategy is more vital than ever

The overriding message from Celtic’s PLC 2020 annual results has to be the board are backing the manager as best they can – and probably against their better financial judgement – for the historic battle for Ten-in-a-Row.

For the first three and a half months of this pandemic there has already been a keenly felt financial impact on the club, that of course is to be expected. Somehow Celtic have still produced a profit of £100k up to 30 June 2020 but much of our impact will come to light in next year’s figures. That’s why it surprising given the unsettled time, the reduction from £28million to £18million in the club’s cash balance and the decision to increase the club’s credit facility from £2m to £13 million as a safety net if required, to not only not to have cashed in on a playing asset, it’s surprising it wasn’t more.

We’ve clearly gone all in on Ten-in-a-Row, from the season ticket holder spending money for what looks like it will amount to a TV pass to the chairman Ian Bankier and the board who have kicked the financial can as far down the road as possible to allow for a full on assault for this historic attempt to bring home the Ten.

Celtic have not only held off when it comes to cashing in on the assets, they’ve made the decision knowing those assets such as Kris Ajer and Odsonne Edouard’s value is depreciating as they head towards the final year of their contracts. Added to that the board has authorised the purchases of Vasilis Barkas, Albian Ajeti, David Turnbull on permanent contracts and long-term deals, as well as the extension of Moi Elyounoussi’s loan deal from Southampton, Diego Laxalt from AC Milan and Shane Duffy from Brighton.

While the can has indeed been kicked down the road, there will come a time when hard financial decisions will be made. Next summer when hopefully a record breaking tenth consecutive title lies in the Celtic Park trophy room will make for some interesting times.

It is likely Celtic will have ridden out more than full years’ worth of the financial impact of the pandemic. If supporters end up back in football grounds it will be in far less numbers, even a third full Celtic Park seems a long way off at the moment. Come the summer the pressure to sell players will be immense. If we still don’t have fans in stadiums the hard sell operated this season for season ticket holders won’t include the 10-in-a-Row carrot and may be an altogether harder sell for the marketing team next year, especially against the backdrop of player sales and likely wage reductions.

That’s why next year Celtic will need to take advantage of every possible revenue stream, the biggest of those being the Champions League. Celtic have qualified only twice in the last seven years for Europe’s richest competition. There have been hard luck stories along the way, but for the last three years we have missed out entirely and that’s not down to luck alone.

To simply qualify for the Group stages could see £30million swell the club’s coffers. Celtic it appears take a very short-term strategy when it comes to these qualifiers. We appear from the outside looking in to sell players, then go about buying replacements during the transfer widow. We often spend enough money in theory to reach the play off at least, unfortunately of late we’ve been out the tournament before it starts and without the player’s in situ for a real crack at qualifying. The issue has rarely been about the figures spent, the board have rarely been spendthrifts of late after all, it’s more been about how we strategise so we are ready in advance of the qualifiers. We fall short in this area.

Nick Hammond, as Head of Football operations will by now be feeling he has a handle on Celtic’s recruitment policy, he’ll know well enough that Celtic not making the champions league is very much a strategic issue as to how we maximise our opportunities for reaching what should be low hanging fruit of Uefa’s millions. To fail at the play-off stage on occasion you could understand, yet when we’ve been failing prior to that – and this year earlier than ever- it has been down to that old Einstein quote “Insanity is doing the same thing over and over again and expecting different results.”

We try and qualify with pretty much the squad we had the season the season prior, often with player sales it’s a weaker group that the manager has to call on. Either that or we get some new faces in in but without enough time for them to get up to speed to have an impact. We often delay spending the money until we know if we’ve qualified and readjust our playing budget and the selling of our assets based on the outcome.

Next season, no matter the outcome of this year’s title race Celtic is likely to be in the champions league qualifiers again as a second qualifying place comes Scotland’s way. Next year the money Celtic can gain from qualifying is going to be absolutely vital to the club, not just as in years gone by for profit and shareholders dividends but on this occasion for the ability of Celtic to keep their head above water.

Hammond and Peter Lawwell have overseen a huge turnaround in players over the last three transfer windows. Wages are down and a bloated squad has been trimmed by financial necessity but also at the manager’s behest to work with quality over quantity.

What we need now more than ever is a strategy for European Champions league qualification, one that ensures the manager has the vast majority of what he needs, one where he knows who is sold by the time the qualifiers begin, one that takes into account our season starts early and the most important encounters occur while other clubs are still ordering cocktails from their sunbeds.

Too often a succession of Celtic managers has entered a most important stage of the season with one hand tied behind their back. If Celtic can be ready this time around, we can certainly qualify for the group stages and with it the safety net of Champions League money. A transfer and recruitment strategy where the majority of our business is done with planning 12 to 18 months in advance shouldn’t be beyond the club. We all appreciate there will still be challenges, clubs will still want our players and their timescales may be out of kilter with our own, but we can minimise the effect of such disruption.

Celtic’s figures released yesterday were hugely encouraging as we negotiated the first part of Covid19’s impact on the club, we’ve a long, long way to go and a tough road ahead to negotiate. Celtic PLC have shown through a number sponsorship deals that they box clever when it comes to some income streams for the club, it is those deals and a constant support that has got Celtic to this point. Yet there is a cash cow waiting to be taken advantage of next season and it’s one where standards have slipped, one we rarely get right.

There isn’t much room for error this time around it’s going to be essential that a genuine strategy is in place, one that can suit our needs around early season readiness in the years ahead. When it comes to Champions league qualification, we’ve flown by the seat of our pants too many times when it comes to the riches available. Given the financial prudence, planning and strategy evidenced elsewhere, it’s been a longstanding and damaging oversight. It’s not something we can afford not to give our full attention to next time around and in the years ahead.

Celtic are not in a position to forego the money available for qualifying never mind the possibility of progressing from the Champions’ League group stages, as the impact of this pandemic could easily see losses of £10million plus next season. We of course have assets we can sell but with a little organisation and strategic planning we also have prize money we can target that could help minimise the financial hit this pandemic will have on future accounts and the impact on Neil Lennon’s player budget.

Niall J

About Author

As a Bellshill Bhoy I was taken to my first Celtic game in the summer of 1987. It was Billy McNeill’s return to Celtic Park as manager and Celtic lost 5-1 to Arsenal . I thought I was a jinx, I think my Grandfather might have thought the same. It was the finest gift anyone ever gave me when he walked me through Parkhead's gates.

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