The Financial Future at Celtic Park: An Open Discussion

This is a very important topic and I would invite all fans to raise their views, regarding the financial future of Celtic Football Club. It is my intention to analyse, here, some personal views and set the basis for what, I hope, would be a constructive discussion. I emphasise the point that these are only my personal views and they do not relate, nor are they linked, to any other official views that may exist within the club.

Some of the most important thoughts of mine, regarding this issue, were already analysed earlier this year and could be seen in my previous posts. They were, inevitably, connected to the demise of Rangers Football Club and the issue of sporting competition, within the SPL. I had explained that in the long run, there may be financial consequences, regarding broadcasting money and other sponsorship opportunities that may or may not come to fruition.

Celtic FC is moving towards the correct direction and this year's European achievement, so far, demonstrates a healthy financial existence. We all know, however, that the financial existence of a football company, does not only depend on the football achievements of the present time, but, most importantly, on what happens in the future. There is a fine line between the present time and the near future, which would determine how the club moves forward. The financial existence of the club, very much depends on what happens on the pitch. A continuous success would safeguard the financial future of the club, but such success always comes at a cost. 

It is the hope of every Celtic fan that the club continues to be successful in Europe. Not only because the history of the club demands so, but, most importantly, because the financial gains from the national competitions are rather small in comparison. This is a fact that must not be dismissed at face value. Celtic will continue to attract television money whether they are playing a club from the SPL or from a lower division. But a collective bargaining agreement, may not, from now on, be the most attractive option for Celtic, given that the SPL negotiates with TV broadcasters, on behalf of all SPL clubs. Although the European games may require different broadcasting agreements, it is my view that the current deal does not represent the true value of Celtic, nor does it take into consideration the history and the stature of the club. 

I have also previously explained that the 'commodification of sport' principle requires the club to make a distinction, or rather, proceed with a choice between 'profit-maximisation' and 'win-maximisation'. Unfortunately, football is now a commodity and, as such, non-footballing considerations would take precedence over purely footballing ones. The players' salaries [and demands] would determine the financial position of the club in terms of buying and selling assets [the word 'asset' incorporates players too].  The more successful the club on the pitch, the stronger the negotiating power when it comes to broadcasting agreements [not collectively] and other sponsorship agreements. But more success on the pitch would also generate more demands for higher salaries. The club, it is believed, has set a limit of what it is prepared to pay. Anything beyond such limit would be dismissed, with the inevitable conclusion of having to sell assets [players], as such assets may not be satisfied, or complain that they deserve a better contract, given that they have contributed to the sporting success of the club. 

If the club is willing to sell such assets for a reasonable transfer fee, the club must consider, at the same time, that such loss [from selling the player(s)] would not jeopardise the success on the pitch, especially, when such success very much now depends on European competitions. I am not convinced that stability and continuation of such sporting success would remain, if the club decides to enter into a frenzy of buying and selling of players on a frequent basis. These are important considerations that would, eventually, determine the fine and delicate balance between success and failure. 

With such considerations in mind, I would invite all fans to share their views and seek to constructively analyse their thoughts regarding the financial future of the club. The discussion, it is hoped, would provide us with a valuable basis of what the financial future for the club holds.

Dr. Gregory Ioannidis

9 December 2012