Celtic debt all but wiped out by Champions League run
CELTIC chief executive Peter Lawwell believes the club are arguably in the strongest financial position of their history as a result of progress to the last 16 of the Champions League this season.
The run has almost wiped out the club’s entire debt as they made a pre-tax profit of almost £15 million in the second half of last year.
The Scottish champions yesterday published their interim accounts for the six months to 31 December 2012, a period that saw manager Neil Lennon successfully guide his squad through a lucrative Champions League group stage campaign against Barcelona, Benfica and Spartak Moscow. The effect on Celtic’s accounts, released on the eve of tonight’s last-16 first leg meeting with Juventus at Parkhead, has been dramatic.
The club’s debt has been reduced to an almost negligible £130,000, compared with the £7.05m deficit they posted for the same period 12 months earlier. As well as the pre-tax profit of nearly £15m, turnover increased by 71 per cent to £50.06m. Although operating expenses increased by more than £6m, the overall picture is an extremely rosy one from Lawwell’s perspective. “We have not been this healthy for decades, if ever,” he said. “We are in a really stable position and very robust.”
The accounts do not include the last-16 tie against Juventus, worth about £5m in itself to Celtic, and further emphasise the gulf in financial rewards between the Europa League and Champions League.
“In the Europa League, the market pool is way short of the Champions League and so are the attendances,” added Lawwell. “We were only getting 30,000 here in the group stages of the Europa League last season. Clearly, the Champions League is where you want to be. What you do is have a financial model at the club which is flexible enough to cope with either or. If you put your eggs in one basket, hope for Champions League and it doesn’t come off, then you are in bother.
“There are a number of other dynamics within the business in terms of player trading and season tickets. It is a kind of a balance. You have to be agile enough to cope with any changes. These figures are better than we budgeted for, because we did not budget for the Champions League. Going back to the summer, we said we could operate on a stand-alone basis and we can.
“Part of the model is we bring in talent, develop them, give them a stage and then sell them on. We’re agile and flexible enough that we can move the model around. If we didn’t get into the Champions League, then you could look at the value we have in the squad. We are in the Champions League, so we don’t have to do anything with the squad. We can keep our big players. It gives you that very solid financial foundation that allows you to have choices.
“We are not complacent because there are constant challenges in Scottish football. But we have a good foundation here to take the club forward for a number of years. Our debt has virtually gone. The fact we virtually have no debt in today’s world is a great asset and advantage.
“There’s a real foundation to hopefully take it on. Hopefully the new SPL reconstruction proposal will be positive. Hopefully, we’ll win the league this year and we get into the Champions League again. We’ll do our utmost to try and get through again. In the longer term, people know our thoughts on that. For Celtic and Scottish football, we need to look at more radical solutions.”
In Lawwell’s view, that solution is a switch to a cross-border league, the concept of which he has previously declared is now at least being considered by Uefa. Ongoing discussions between Russian and Ukrainian clubs about a potential merger have encouraged Lawwell to feel more optimistic that Celtic could one day ply their trade against English clubs on a regular basis. “We know the Russians and Ukranians are talking,” he added. “Uefa are waiting on a proposition and if that’s accepted, will change the whole dynamic.
“For the first time in my time in football, there is a feeling of change. There is an acceptance that small nations just cannot compete with the big nations.
“That’s a big problem and also within the big leagues like Spain, Italy and England, there is a polarisation as well.
“That’s been realised and the financial fair play situation within the English Premier League will hopefully level it up as well. People are beginning to realise that competition has been lost. You need competition in any sport. Hopefully we at Celtic and in Scotland will be able to take advantage of that.”
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