Dave King’s remarks about Celtic’s “pack of cards”
finances don’t add up

Dave King’s remarks about Celtic’s “pack of cards”
finances don’t add up

By Stefan Bienkowski

On Monday Rangers chairman Dave King sat down with the Scottish media to answer a number of questions about his and the club’s plans for the future. Steven Gerrard was naturally a popular topic, as was the ongoing issues with the Takeover Panel. However, it was one of King’s remarks about Celtic’s financial health that stood out to us.


When asked about catching Celtic, King suggested that the Scottish champions are in a rather precarious situation. “We only need one league,” noted the Rangers boss when asked about making up the gap between the two Glasgow giants. “We don’t need two or three. We need one. Once we take one away, it’s a pack of cards.”


King went on to compare Celtic’s current financial superiority to that of Rangers 10 years ago before once again stating that a single season outside of the Champions League would bring the club crashing back down to earth. “Take that away for one season and it will change the numbers in the Celtic side very very quickly,” he said. “They have the comfort levels we once had of knowing we were going to get Champions League money. We have to take that away from them and hopefully, we have started that process on Friday.”


So is King right? If Rangers, under the stewardship of Gerrard, could beat Celtic to a single league title and cut off their Champions League revenue for one season would that cripple their cross-city rivals? Let’s take a look.


How reliant are Celtic on Champions League money?


From the outset, it’s probably worth noting that Celtic’s business model is undoubtedly built around qualifying for the Champions League group stages every year. And that’s not exactly a huge secret. The club itself are pretty clear about the strategy in their financial results each year, with Celtic chairman, Ian Bankier, stating that the most recent figures were largely down to “the paramount importance to the company of participation in the group stages of the UEFA Champions League.”



Due to Celtic’s dominance in Scottish football and the relatively small income available to them from within the SPFL, the Glasgow club have always strived to buy or coach players that will help them get beyond the qualification rounds. And when they do the financial windfall is undoubtedly huge.


This is pretty apparent from the most recent financial results. As we know from UEFA’s own statements, Celtic netted no less than £26 million in prize money from their participation in the competition in the 2016/17 season. Which works out at just under 29% of their revenue for the duration of the campaign.


Of course, that figure is just one slice of the money Celtic would have made off of the competition. Although the club doesn’t specify how much they made from the additional home games in the premier European competition, we do know that they made £12.4 million more from “Football and Stadium Operations” than in the previous season in which they played in the Europa League.  


Although we can’t say for certain, we’re pretty confident in estimating that from gate receipts, commercial opportunities and of course prize money, Celtic made about £34.7 million from the Champions League last season. Which comes out at no less than 38% of their total revenue throughout the financial year.



What would happen if they didn’t qualify for the Champions League?


Although Celtic have done superbly well to qualify for the group stages of the Champions League in each of the two seasons Brendan Rodgers has been at the club, that level of consistency hasn’t always been as readily available to the club.


Most fans don’t have to venture too far back into the club’s history to remember when Ronny Deila’s side failed to qualify for the competition on two, consecutive occasions and instead took part in relatively decent Europa League campaigns. These two seasons may be best forgotten by most fans but they are important markers in what could happen if King’s predictions were to come true.


In the 2014/15 season, Celtic’s revenue dropped from £64.7 million to £51 million after going from one season in the Champions League groups stages to one in which the Scottish champions made it through the Europa League group stages and were then knocked out in the next round. The following season the club once again made it to the group stages of the Europa League but failed to get out of them, and subsequently saw their revenue stagnate somewhat at £52 million.



As we can see in the graph above, which notes Celtic’s revenue over the past six years, the amount of money the club has made has varied quite dramatically depending on which European competition it ends up in.


And while Europa League payments may have improved marginally since 2016 it’s still fairly safe to say that if Celtic were to end up in the Europa League next season or the season after that then their revenue would drop down as it has done before.


Not exactly a “pack of cards”


Indeed, that last point is perhaps the most important one to note throughout all of this. While Celtic may be making a huge amount of money right now in the Champions League, fans can rest easy at night knowing that Peter Lawwell & Co. have spent the duration of their time at Celtic Park budgeting on the premise that playing against the likes of Barcelona or Bayern Munich each season is by no means a foregone conclusion.


We can see that from the way Celtic’s finances are organised. Unlike clubs south of the border, the Scottish champions have kept a pretty smart cap on the amount of money they’re willing to fork out in wages. Although Celtic undoubtedly pay their players far more than any other Scottish side, they could actually spend a lot more – but then they would be under far greater financial risk.



When we look at how Celtic’s wage bill has changed over the past six years we can see that it has largely kept in line with how much money the club has made in total. When the club stopped playing in the Champions League after 2013 it then reduced the amount of money it spent on wages to correspond with a drop in revenue. And as such we’ve seen that figure also move up in the past two seasons in line with Celtic’s total turnover.


In last year’s figures, Celtic’s wage-to-revenue ratio – i.e how much of the total amount of money earned was spent on wages – stood at 57%. Which is actually lower than four of the five years that came before it. Although that figure did jump up to 70% in 2016, Lawwell and his team have brought it back down to a comfortable level.


Remarkably, Celtic are pushing their revenue to unseen levels but the amount of money spent on wages is just £12 million more than what it was in 2014. It’s also worth noting that if Celtic were forced to reduce their wage bill to what it was between 2013 and 2015, it would still stand at around two or three times the amount Rangers can currently afford in wages (£17.6 million).


This would also explain why the most recent results not only showed Celtic making a profit of £6.9 million but also noted them harbouring a cash reserve of £24.5 million. To put that into context, Rangers’ total revenue for 2017 stood at £29.2 million.


So what does this all mean? Well, while King is right in stating that Celtic’s financial results are heavily reliant on money made from the Champions League, the Scottish champions are well placed to handle a season or two outside of the premier competition.


If Rodgers’ side were forced to spend a campaign in the Europa League the club would continue on paying its players, buy new ones and most likely still run a turnover twice that of what their rivals in Govan can currently muster. If King was suggesting he had a silver bullet to stop Celtic’s dominance of Scottish football then he was sorely mistaken. 

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