Credit crunch takes its toll on SPL as £23m profit becomes £22m loss

• With Celtic's average attendances falling by 12,000 last season, even they might not be immune to the SPL's fiscal problems Picture: SNS

Combined losses of around 22 million - following on from 23m profits the previous year - net debt up 11m to 99m and income down 15 per cent, are the terrible top-line financial figures from the 2008-09 season. Throw in an 11 per cent drop in attendances from the 2009-10 season just past, and there is a powerful temptation to come over all Private Frazer and declare that we're aw doomed.

Yet, delve deeply into the sums and the backdrop against which they have been stacked up and there is a case for saying we are not nearly as doomed as we might have been.

Scottish football suffered the perfect storm with the demise of television broadcaster Setanta depriving the SPL of its greatest single revenue stream at precisely the point the global recession hit with a vengeance. The impact of these two on sponsorship deals, corporate income and gate receipts was, according to many media scaremongers 12 months ago, enough to cause "at least" three top-flight teams to go bust.

Instead, even if they are operating in much reduced circumstances, all clubs have proven more robust in being able to trudge through the most difficult trading period imaginable. Indeed, for all the many downward pressures on their earnings, the combined 22m losses from two years ago can effectively be blamed on only two clubs - Rangers posting a 14m figure thanks to their Champions League qualifier elimination against Kaunas, while Hearts were 8m in the red.

Since then, the Ibrox club- at the behest of their bankers - have hacked away at fixed costs. With two titles and, therefore, two tranches of Champions League money, the club has achieved the twin aim of yearly profitability and debt reduction. Hearts are the SPL's only true basket case of a club. Their wages-to-turnover figure is an eye-watering 126 per cent, and debt roughly three times their 10m turnover.

PWC report author David Glen has arrived at gloomy conclusions as to where Scottish football is heading but in his overview to accompany the number crunching, even in warning of the SPL being caught in an "increasingly downward spiral" he is willing to acknowledge that the situation for top level football in this country could be far graver.

"Had what happened with Setanta and the economy occurred in the early years of the millennium, we would have been looking at five, six or seven SPL clubs falling over," Glen says. "England are now where we were from around 2002 to 2004, when Motherwell, Dundee and Livingston had to call in the adminstrators. Since then our clubs realised they had to address unsustainable spending and, more or less, have been pretty successful at balancing the books and getting by. "My glass is half empty, though, and the depressing aspect of the necessary acceptance from our teams that they have to find their level by paying out only what they can afford is how low that level could prove to be. Fine, all our clubs will make it there, but what of the supporters who follow them?"

The long-term concern for Glen is that a vicious circle is established. As witnessed by the inability to attract buyers for Rangers or the raft of the other Scottish clubs open to offers from would-be new owners, no outside investors deem the SPL glamorous enough to sink their money into it.

Ambition, then, has to be index linked to exceedingly modest income. In turn, this hardly has punters racing to part with their hard-earned to watch their team. Crowds dip, so too does outlay on personnel, with the corresponding impact on standards. And so it goes on.

Celtic this week published their figures for the season subsequent to those covered in the PWC report. Glen calls these "wow" figures because, even without a 12m Champions League bounty or any trophy success - but with a 5m net spend on players and the hiring and firing of a management team that cost 3m - the club only posted a 2m loss. Essentially, their underlying fundamentals allowed them to compensate for the absence of major income drivers. Chief among these, though, is season ticket sales and Glen points out that a 12,000 reduction in average attendances last season, compounded by sluggish renewals this summer, means even the revenue source that underpins Celtic's envied stability could be under threat.

In the short-term, next year's report is guaranteed to make better reading. Celtic's small loss will be more than offset by the healthy profit a stripped-down Rangers will announce shortly after their incoming transfer fees and Champions League participation last season. Glen, meanwhile, pinpoints Hamilton as the model for Scottish clubs to follow.

"They boast fantastic figures with a best league position in years [seventh place] achieved despite only bringing in 1.8m income, spending 1m in wages," he said.

"They actually posted a small profit while effectively carrying no debt. Raising money through the sales of young players such as James McCarthy and Brian Easton is what made it fit together for Hamilton and other clubs need to go down that route and produce players who can move on to bring in hard cash that can take the place of investors."