Celtic’s transfer strategy: How to balance finances and squad ambition

I found myself in a sparsely inhabited island, metaphorically at least, upon the closure of the 2025 Winter transfer window.

Not an entirely unusual predicament to find myself in a minority but on this occasion, I was taken aback by the vehemence of some towards Celtic’s “performance” in said window.

I was relatively sanguine about the outcomes. Not because I do not harbour some long held and deep-seated reservations about Celtic’s operating efficiency (to be clear: I certainly do) but because I felt that on balance the team had been strengthened apart from not replacing Kyogo Furuhashi.

Brendan Rodgers covered this in a balanced presser prior to the Dundee match. Some of the machinations are explained in this piece as regards the efforts to bring in a new striker. It’s a complicated business and that is probably the half of it.

On recent huddlebreakdown.com pods I have been laying out how UEFA Financial Sustainability pillars will have complex and far-reaching impacts on how football clubs in Europe financially plan and manage their squads. Indeed, the Squad Cost Ratio (SCR) pillar whereby a club cannot commit more that 70 percent of their football revenues to managerial and playing squad wages adds a level of complexity some may take a long time to adjust to.

You only must consider the revenues from the respective European adventures of Glasgow’s two largest clubs as illustration. Celtic have, so far, pocketed over 43 million euros from the Champions League. Meanwhile, at Ibrox, over 17 million euros have been secured along with a direct round of 16 place.

Imagine planning over a, say, five-year period based on those variabilities of revenue. Because your wages must fall within the 70 percent limit each and every year. Not just a “Champions League” year. Celtic are estimated to have been at around 53 percent of football revenue as at the close of the 2023-24 accounts according to the Swiss Ramble account. That followed a campaign in the Champions League group stages. Had Celtic been in the Europa League, revenues would have been considerably smaller, and the ratio therefore higher.

It's tricky.

Better, then, to avoid splashing out large fees in a panic, and then repenting at a leisurely and amortised and painful rate over the length of the subsequent contract.

My hope, and it is only a hope given ne’er a flicker of encouragement that this is reality, is that Celtic have developed sophisticated financial forecasting models aligned to football market knowledge on valuations and trends in player costs.

My suspicion, based on prior behaviour, is that in the absence of the above, a blanket conservative approach will be taken. Hence the 53 percent number.

Back to the transfer window outcomes.

With the thoughts above in my mind, allied to the fact the window was a very quiet one especially in the United Kingdom with very little movement in England, I didn’t expect much activity.

Jota is clearly a massive upgrade on Yang and Luis Palma, and Jeffrey Schlupp is a physical upgrade bringing vast experience to the left-hand side.

All season we’ve coped with a front line alternate of Kyogo Furuhashi and Adam Idah. Now it’s Adam Idah or Daizen Maeda. I can’t get too aggrieved at that in the short term.

Kieran Tierney was never going to walk away from the last six months of circa £120,000 per week nor were Arsenal going to weaken their title challenge.

No new striker or returning prodigal son will make overcoming Bayern Munich anything other that an overwhelmingly difficult task. It will take something equally incredible for Celtic to not win the league title. And the Scottish Cup can be won with the players available.

None of the above is to downplay concerns about how Celtic are operating however and so I just wanted to review transfer activity in the three windows under Brendan Rodgers to pick out the major themes.

The Age of Ange

A quick reminder of where we came from as the incoherent manager search settled by luck rather than judgement on Ange Postecoglou.

New Chief Executive Officer Dominic McKay did not last much longer than the new Celtic manager publicly complaining how long it was taking to do deals. So frustrated did the short-fused Aussie get, mate, that he and his guru / super-agent Frank Trimboli took matters into their own hands and started working their way down the lists of players they knew.

This unearthed under-valued talent in under-valued markets. Especially as regards a cadre of Japanese players most prominently Kyogo, Daizen Maeda and Reo Hatate.

There was a sprinkling of City Group / Mark Lawwell networking in the sourcing of Josip Juranovic.

And some genuine market intelligence in the purchase of Liel Abada and Matt O’Riley.

Smart loan to buy options were exercised for Jota and Cameron Carter-Vickers.

As Postecoglou and Trimboli worked down their list the quality started to dry up – Kobayashi and Oh in particular.

Ange was soon away, and Celtic’s recruitment was back in the hands of a Lawwell, this time Mark, by the time Rodgers arrived for his second term.

Trouble At Mill

Rodgers has previously stated that much of the Summer 2023 transfer business was already in the pipeline by the time he arrived.

Under Lawwell (Mark) the club was adopting what was on the face of it, a wise strategy given the impending FSR SCR challenges. Namely, source priming young talent relatively cheaply that can be hosted on relatively low wages and generate high resale further down the track.

That chimes well with how clubs such as Celtic need to operate to try and smooth out the uncertainties of meeting UEFA cost control pillars year on year with variable revenues.

But only if you are identifying talent.

Unfortunately, that first season saw an almost universally poor-quality group of players arrive.

Odin Holm, Tomoki Iwata, Marco Tillio, Yang, Kwon, Maik Nawrocki and Gustaf Lagerbielke. I mean you’d think you’d catch a break on one of them.

The Winter window saw the only saving grace of the seasons’ dealings with Luis Palma who had a good first six months at Celtic, and Nicolas Kuhn, who has been sensational after an injury hampered start, arriving.

Incredibly the total outlay was over £20 million. However, thanks to Celtic’s continual excellence in selling players, over £45 million came the other way primarily from the sales of Jota and Abada.

This was shortly before Mark Lawwell and lead first team scout Joe Dudgeon were gracefully departed from role.

Second Season: Manager Takes Control

Paul Tisdale had apparently been used as a consultant by Celtic in the Summer but Celtic operated without a head of recruitment or lead scout.

We were back to the situation under Postecoglou whereby the manager and his contacts were the primary source of market intelligence.

Adam Idah and Paolo Bernardo followed the loan to buy model, but it seemed a bit less favourable than had Carter-Vickers and Jota.

Kasper Schmeichel was an ex-Rodgers player but still arrived late preseason relative to when the club were aware of Joe Hart’s retirement.

Luke McCowan was an example of playing the local market well and ensuring a flow of the best Scottish talent.

And Viljami Sinisalo was an example of exploiting the inherent inefficiencies in the bloated English leagues.

And then it got weird.

Celtic went all non-Celtic-y and broke their transfer record for a young Belgian international Arne Engels. On the face of it this is exactly the sort of deal smart clubs are doing for top young talent rather than wasting money on expensive older players with no resale value.

Engels is clearly a talent however he had never played in a system like Celtic’s nor shown any evidence of being able to play as a Celtic number eight plays. Because he is inherently talented, I remain hopeful this will work out, but it smacks of the club playing in the right markets but choosing the wrong player to fit the system.

From reports circulating, the late window striker hunt seemed like a case of a) working off old lists (Mathias Kvistgaarden), b) who the manager knows (Kelechi Iheanacho) and c) lazily relying on the expensive English market (Danny Ings).

So, Where Are We?

We seem to be in a situation where Paul Tisdale is still finding his feet and maybe there are recruitment restructuring plans going on in the background, but we haven’t seen any evidence of that yet.

It seems like Rodgers is still leading much of the recruitment activity. This is not a “good thing” - it isn’t his strength. He’s an elite coach and developer of players, and as proven at Liverpool, a poor recruiter of talent.

To what extent are the club’s hierarchy tuned into the market dynamics at play in the new UEFA FSR landscape? How sophisticated is the market intelligence and scenario modelling and planning?

Even if the operational blueprint is fit for purpose and the right roles in place, are they populated with sufficient intellectually able talent to position Celtic towards recruiting excellence?

There have been hints of this, but they are glimpses rather than sustained performance. The recruitment of Abada and O’Riley were tremendous examples of how it should be done.

Aaron Mooy and Schmeichel have proven to be great value in the older age market but were probably manager-led rather than scouting intelligence led.

There is no one, single answer to this but randomly falling upon the right answer occasionally will not protect and grow Celtic in the long term.

Finding value in the market requires you to be intelligent of and agile to several simultaneous but different drivers:

1. The need to pay for younger emerging talent recognising the cost of this is rising (see Kvistgaarden).

2. Getting back to exploiting the loan to buy market for players at top clubs who have lost their way but are young enough to possess high potential (e.g. Carter-Vickers).

3. Finding value at the older age levels where those players become a financial burden to top clubs battling FSR constraints, but who would represent huge value add for a club at Celtic’s level (see Schmeichel and Mooy).

4. You MUST grow your own – the academy is a near disaster – mainly due to the chronic environment the SFA have created but the club must take their share of the blame.

We have seen examples of great recruiting over the last few seasons but not because the club has a robust, repeatable process that is independent on the vagaries of managerial appointments.

There is now a de facto salary cap in place for clubs wishing to compete in European competition. That means the cost of mistakes will be amplified and be harder to correct.

The club MUST embrace sophisticated market data analysis, planning, and modelling capabilities but most importantly they must be operated by the best talent available.