Celtic’s turnaround in fortunes on the pitch during the 2021/22 season will live long in the memory and the release of the accounts for the season on Tuesday are further proof of how a few crucial weeks in the transfer market last summer steered the club back on a steady course.
Supporters are forever skeptical at the idea of selling players, but there can be few better examples of how a well-functioning player trading model can work than the transformation of the Celtic squad under Ange Postecoglou over the past 15 months.
The decision not to cash in on key assets such as Odsonne Edouard, Kristoffer Ajer and Ryan Christie in the summer of 2020 in an attempt to win Ten-in-a-row meant all three were depreciating assets with just a year left on their contracts last summer.
But by raising £29 million in player sales, helpfully topped up by add-ons for Crystal Palace and Brentford surviving for another year in the Premier League and Christie playing his part in Bournemouth’s promotion, Postecoglou was given the funds to rebuild a team in his image.
Celtic’s accounts for the year July 1, 2021 to June 30, 2022 show a colossal spend by Scottish football standards of £38.4 million for 12 months.
However, that figure includes the vast majority of this summer’s transfer spend of an estimated £18 million on permanent deals for Jota, Cameron Carter-Vickers, Daizen Maeda and Alexandro Bernabei.
Therefore just £20.4 million – £8.6 million less than the sales of Edouard, Ajer and Christie plus small fees for Vakoun Issouf Bayo and Jack Hendry – went on transfer fees for Joe Hart, Josip Juranovic, Liam Scales, Carl Starfelt, Liel Abada, Giorgos Giakoumakis, Matt O’Riley, Reo Hatate and Yosuke Ideguchi.
Despite a club-record transfer spend over the 12 months and the lack of Champions League football, Celtic still posted a £5.8 million net profit.
The end to coronavirus restrictions on crowds was the key to a return to profitability. Revenue was up 45 percent to £88 million, with nearly half of all income coming from matchday.
Looking ahead, the combination of prize money and a boost to matchday from the return to the Champions League, plus appearance fees for the Sydney Super Cup, is likely to see Celtic break through the £100 million revenue mark for just the second time this season, even without a marquee player sale this summer.
The only previous time the club achieved this in the 2017/18 season (£101.6 million) in similar circumstances thanks to Champions League qualification.
During Celtic’s five-year absence from Europe’s top club competition, the prize money on offer has further increased and with nearly €1 million on offer for every point and €9.6 million on offer for reaching the last 16, the final four games in the Champions League group stages will play a big part in determining the budget for upcoming transfer windows.
Money to spend in January?
So, coming to the question any fan has when faced bombarded with pages of figures on a spreadsheet, what does this mean for future transfer windows?
In broad terms, Celtic are in a good position to continue supporting Ange in the transfer market within the usual restrictions that come with playing in the Scottish football market.
Don’t be too fooled by the £30 million cash in the bank figure. This largely comes from £31.5 million worth of season ticket sales and is used over the course of the year to fund the day-to-day running of the club.
The largest expense of any football club is the wage bill. Although an exact figure for last season is not available until the annual report is published in a few weeks’ time, there was a 23 percent increase in operational costs for the year to £91.7m. A 23 percent increase on last year’s wage bill (£51.7m) would take that figure to £63.8 million.
That would make Celtic’s wage/turnover ratio 72 percent and broadly in line with UEFA’s new financial sustainability rules, which aims to bring down clubs spending on wages, transfers and agents’ fees to 70 percent of revenue by 2025/26.
How can the club make a profit with revenue of £88 millon and expenses of £91.7m you may well ask? The answer being that money from player sales is not included in the headline figure for revenue as it is highly volatile from one season to the next.
Of course, so far this season there has been no big money sale but it appears from Ange’s own words that Celtic are preparing themselves for what is expected to be a busier than normal January window as it comes hot on the heels of the World Cup.
Juranovic, O’Riley and Abada have already been linked with some of Europe’s richest clubs. Impressive showings in the Champions League or the World Cup are likely to lead to more interest.
“We will look to bring in players in January that hopefully then insulates us in case any of our players are taken off our hands,” Postecoglou said last week. “It’s part of our planning and we’re well underway in ensuring we are ready for that.”
The scale of further spending is therefore likely to depend on departures. For example, it is hard to imagine the rumoured interest in £8 million-rated Oscar Gloukh from Maccabi Tel-Aviv would materialise without the sale of a major player.
But, there is a crucial difference now to Postecoglou’s first months in charge. All of Celtic’s major assets are tied to the club till at least 2025. In the cases of Carter-Vickers, Juranovic, O’Riley, Hatate it is 2026 and 2027 for Jota and Hasksabanovic. There is no time pressure to sell like there was in the cases of Edouard, Ajer and Christie and the asking prices should therefore be much higher.
There is also now a confidence in Ange and the recruitment team behind the scenes to spend any money from sales wisely that has not always been the case at Celtic.
Post-2024 opportunity knocks
Another factor which should be playing into those in charge of the purse strings at Celtic Park are the changes to the structure of European football on the horizon.
From 2024/25 the group stages we’ve become accustomed to watching in Europe will be replaced by a one big group of 36 teams, with each club playing eight games in the Champions League and Europa League against eight different opponents rather than the traditional home and away fixtures.
Although, the expansion will only make it marginally easier for Celtic to qualify for the Champions League with one extra guaranteed place for a domestic champion, there is a huge opportunity to be grasped.
Revenue for Champions League clubs will increase again with the TV rights sales for 2024-2027 in the UK and France already sold for 20 percent more than the current value.
In Ian Bankier’s statement on the accounts, he says of the changes: “Our task is to be prepared to maximise the opportunities that will evolve by remaining financially strong and stable, whilst investing intelligently in the player squad, the football department and the sporting infrastructure and facilities.”
The Scottish champions will almost certainly again qualify directly for the Champions League group stages next season and are well-placed to do so again in 2024, although the advent of the Europa Conference League means maintaining Scotland’s current position in the coefficient table is unsustainable without more input from clubs other than Celtic and Rangers.
The best chance to maximise the opportunities post-2024 is to invest over the next 18 months to stay ahead of the competition in Scotland and ensure Celtic’s place at the top table of the Champions League becomes the norm.
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