Tuesday, 5 January 2010

Another Winter of Discontent?

Written by Gaudd (E-Tims)
Thursday, 31 December 2009

"It’s a wait and see scenario. It’s about balancing your squad, and balancing what comes in as opposed to what might go out." - Tony Mowbray 2009

"We have a good Stadium, good Chief Executive, good Manager, good fan base, good balanced finances and we have a strategic plan, which we’re implementing, so we’re improving the Club all along." - Dermot Desmond, 2005.

Let's face it, it's not a happy time in Paradise. Not only are the huddled masses fleeing the gloom of the stands for the sanctuary of anywhere lacking the presence of Glen Loovens, Rangers are scoring for fun and making a mockery of Celtic's much vaunted financial superiority. Yes a team who haven't brought in a player since the Peloponnesian War, who carry the debt of a third world nation just after the last Junta head flees to the safety of his Swiss bank accounts, are sauntering ahead while Celtic are left behind listening to the thin, wheedling voice of Peter Lawwell complaining about frosty pathways at Rugby Park; let it never be said that the bonus is unmerited. Of course the most annoying aspect of the situation isn't even the incredible mismanagement that has brought Celtic to such a sorry state, it's the fact that even with all the self-inflicted damage the team's position would be far better if The Sieve hadn't decided to commit public suicide just when the team's overall performances had dramatically improved.

The shroud of despondency that settled over Paradise following the team's descent into the absurd had lifted, to a certain extent, thanks to three straight league wins and a Europa Cup act of revenge against Hapoel Tel Aviv. Tony Mowbray no longer looked as if he was about to be dragged in front of a firing squad, and it seemed only a matter of time before our esteemed embarrassment of a chairman surfaced with yet more insightful sabre-rattling as is his wont when the going is good. All in all it was a rather remarkable turnaround, well in parts, bits, here and there even. They key factor in the change was a rejuvenated midfield at last functioning in a competent manner, this more than anything breathed new life into the lacklustre forward line and allowed the team to start scoring more goals than the number conceded at the other end of the pitch (no mean feat).

In the midfield Crosas and N'Guemo began to form a solid partnership, McGeady was on top form, most of the time, and while Robson hardly likely sent Pele sobbing into his hankie out of sheer joy, he did bring that much needed backbone. All too often this season the midfield has had the tenacity and determination of a depressed jellyfish, and if the bold Robo is unable to pass without a mishap occurring then at least he actually wins the ball in the first place. Up front McDonald still looked as if he's about as happy as Gordon Brown at socialist rally while The Greek Tragedy was finding the net again and our Brattbakkesque £3m signing, Fortune, underwent a transformation. All great so far. Celtic had climbed out of the large hole and now resembled a reasonably competent team, but it was a short-lived resurgence that was comprehensively undermined by a defence so feeble that eight-stone weaklings would spent their day at the beach kicking sand in its face.

I needn't bother detailing the failings of The Sieve, after all there are aliens in distant galaxies who when standing in the leavings of domesticated animals shout "Oh no, I've stood in Caldwell". Suffice to say that if anything should be done during the January transfer window it's a wholesale restructuring of the defence, especially the Three Stooges laughingly described as centre backs. Some of course are pinning the blame for the defensive implosion on the manager, yet such a position can only be promoted if their failings over previous seasons are ignored. The difference now is that the tactics of Mowbray expose the shortcomings of Caldwell, Loovens and McManus whereas the previous incumbent had the midfield sitting deeper in that marvellous testament to atrocious football. Expecting a more attacking, creative minded midfield has helped our failing forwards, but at the same time the defence has been stripped off its fig leaf and left naked in the full glare of public ridicule.

Just a lack of ability isn't the only issue affecting the defence of course, and in this Mowbray has to accept responsibility. Being honest about the shortcomings of your players is all fine and well, the sight of Strachan repeatedly praising a player who had resembled a confused albatross trapped in mud for the entire game was rather annoying, however there's no denying that Strachan's sole positive, when it came to performances, was to imbue a strong team spirit In many games, especially in Europe, that team spirit managed to overcome mediocre displays, not always by any means and it wasn't enough in the final season ,but its absence rendered poor players even worse. When Tony Mowbray publicly declared team to be not one that he rated, and more over mused on his desire to see the back of many of them, the knock to their shaky confidence was noticeable. Honest no doubt, but wise? Doubtful.

The board must have known of course that the defence was in drastic need of a complete overhaul, but in the best traditions of Celtic's fiscal stupidity, Mowbray was given "just enough" in the summer. Did he spend the little he had in a competent manner? Few would argue that Fox has not been an improvement on Naylor, even fewer would gripe about the contribution from N'Guemo, and Fortune is starting to show some signs of being worth his transfer fee. Yet the problems left by Strachan demanded a far greater investment to repair immediate problems, foremost amongst the areas left to care for itself was The Sieve. Costing Celtic's subsequent financial loss due to the board's failure to invest is rather difficult, the accounts will reveal all when published, suffice to say though that it is without doubt in excess of the cost required to adequately strengthen. Is this really a sound financial strategy? If so I simply fail to see it. Champions League money lost, no "Seville Run © Peter Lawwell", collapse in season ticket purchases, falling attendances and no doubt falling merchandise sales all have an impact that is directly due to investment failure.

So here we are on the eve of another January transfer window where the need for adequate investment has passed the critical stage, sadly though there is no sign that the disaster has influenced the club's obsession with zero debt. Mowbray has already stated that money spent must be balanced by players exiting, a net spent of £1m has reportedly been approved by the board an if this is so then unless Mowbray can offload some of this struggling assets on some real mugs then the prospects of adequate strengthening do not look good. Last season of course, despite the tripe from club officials and their apologists, Celtic's complacency during the January transfer window handed the league title to a poor Rangers team. A repeat of that lunacy would seemingly be an impossibility, yet time after time we have seen the club custodians set their foot upon a path and ignore all the resulting carnage in a manner that makes you wonder just what they are up to. No, it wouldn't surprise me to see last January repeated.

So far of course Celtic have been linked with all manner of waifs and strays, some such as Kilgallon are still being touted by the media, others like Verkhovtsov are already on their way home after an incredibly quick assessment after failing to impress when tying his boots. Osman Chavez did impress though, as Mowbray stated "He did exceptionally well for us." Yet Chavez too was on his way home after a rather bizarre farewell from the manager: "I have made the decision that he is not quite right for us and we will wait and try to find extra competition for places in that area of the team at the right time." So there it was, a highly rated centre back who impressed Mowbray punted out the door, if now isn't the right time to find extra competition for the centre of defence then when is? The suspicion is that one again the board's strict financial policy left the manager unable to timely strengthen a key area of the team.

So with players coming in dependent on players exiting, there will be no strengthening unless Celtic can generate the required income from transfers and freed wages, so it could well be that the club's position in the transfer race is fundamentally weakened - unless of course the players earmarked for disposal are already boxed and waiting postage. Another failure in the transfer window will have its own financial impact; the mood amongst the support is deteriorating and the club may well witness further haemorrhaging in attendances with of course a knock-on effect in season ticket sales. After all the usual BS that emanates from Kerrydale Street during the renewal period is simply ignored now, such is the level of mistrust that exists. No longer can the club drop hints of coming marvels, or bring patsies on trial, and for this to be lapped up by the gullible, they've successfully destroyed any trust - another one of their successes.

The board may simply be hoping that the January transfer window witnesses a bank-led clearout at Mordor, in this though they may be disappointed as given Celtic's weakness, the income generated by winning the league and having a chance to qualify for the Champions League may override short-term considerations. Even a limited clearout may not be enough to tip the balance without major surgery on the gaping wound of Celtic's defence. The "Just doing enough" strategy only worked when Rangers were in free fall, the arrival of even a mediocre manager such as Walter Smith was enough to tip the balance and see a financially destitute Rangers first run Celtic to the last day of the season, and win it the next time round. That itself is a shocking indictment of those running the club. For Rangers to go even further, to win the league will having nary a sheckle to spend, to heap humiliation on humiliation as the board gloat about the balance sheet and Lawwell picks up another huge bonus will be too much to bear (no pun intended).

If there is no adequate strengthening in January then the message will have been delivered; the board are perfectly willing to accept the resulting damage no matter how bad. Quite what the thinking is behind such a strategy is anyone's guess, for the club certainly aren't about to explain. Recently during a meeting of the investor season ticket holders at Celtic Park no one from the Plc deigned to turn up to explain the financial strategy, the disappointed attendees were informed that they were all too busy. Peter Lawwell was also absent on 'business'. Symptomatic I would say of the club's attitude in general to supporters. You'll note though the change from the days of Fergus McCann when roadshows were open to all, now the club only find time for the comfy-seat fat cats and even then they're treated like crap. The rabble of course weren't even meant to know what had occurred as those attending were asked to 'respect the integrity of the meeting', fat chance of that happening but again it displays the current mindset of the club.

Mowbray confirmed during the meeting that anything incoming would have to be funded by those outgoing, that wasn't utterly surprising but what was a bit of a shock was the revelation that the funding may be cut for the youth system. Celtic are not convinced the youth system is producing the required goods, well hell anyone can see that, but rather than address the problems the apparent intention is to go in the opposite direction. Extremely odd since youth development was recently cited by club officials as one of the strategies to compensate for the club's unwillingness/inability to compete in the transfer market. If this comes to pass, and the issue of promising young players hitting a glass ceiling is cause for a reduction in youth development commitment, then where does that leave the club's long-term strategy? Assuming it has one of course.

Another pillar of the much vaunted Diamond In A Midden strategy appears to be crumbling after moves by the European Professional Football Leagues to ban the movement of young players between countries until the age of 18. Two weeks ago The Times reported that the EPFL is supporting FIFA's determined effort to halt the drain of young talent to the richer leagues which is undermining the youth development capability of those less fortunate nations and exploiting the kids involved. Returning from a EPFL meeting in Cologne, the SPL's representative, Ross Wilson of Falkirk, revealed: "What Fifa and the EPFL are trying to do does not really affect clubs like Falkirk. Our youth system is recruited almost entirely from local players. However, there are a few other clubs, such as Celtic, Rangers and Hearts, who have brought in youth players from abroad in recent years. The EPFL agrees with Fifa that the protection of minors is a big issue.”

So where does that leave Celtic? If our own youth development system is cut back and FIFA succeed in their efforts to regulate the movement of young players between countries, then the options are extremely limited. Celtic will have to compete in the transfer market, however reluctantly, and the competition will be all the fiercer. In the long-term Celtic really have no option but to invest heavily in youth development, and especially scouting and coaching. It may make short-term financial sense to cut back in the light of poor returns (well sense for some) but only if you ignore the fact that Celtic's primary business is football. Equally failure to adequately invest in the transfer market may keep debt out of the picture, yet this is only achieved by further cutting back when the investment failure results in a further income fall; a vicious circle that the board appear happy to scuttle round in, like a demented overfed hamster on a shoogly wheel.

It is often said that Celtic is a well run business, well it's hard to square that with the reality of investment failure, "customer" dissatisfaction, falling income and a pall of gloom hanging over the club that is all the more depressing for the fact that nearly all our woes are the result of self-inflicted wounds. Is the worship of zero debt so fanatical at the club that the inevitable consequences of a disastrous season, and losing the league to Rangers this season will be a disaster, are treated with distain? Even limping in ahead of that penury-stricken mob will be an embarrassment that will do little to raise morale. Mowbray was reported by Ewing Grahame at The Scotsman to be of the opinion that little will happen in the transfer window until the third week of January, if so that will mean a nervous few weeks for those supporters desperate to see some sign that reality has intruded into the hallowed confines of the Celtic boardroom.

January will reveal what's really going on at the club. Investment failure will make it plain that for whatever reasons, the board are simply not interesting in maintaining a competitive football team; a desire to avoid bankruptcy isn't a justification, it's an outright exercise in deceit. If that occurs then we may well enter another dark period of Celtic's history just at the time our only real competitor in the SPL should be dragged to an open grave and buried six foot under. It really is staggering that we have come to this position in the first place, how can anyone seriously doubt that mismanagement has been the cause? Yet there are still those supporters out there who are only too willing to rush lemming-like to the cliff of absolute denial. Well if it all goes pear-shaped against Rangers on the 3rd then Celtic will be a stomach-churning 10 points behind in the league albeit with a game in hand, an incredible position to be in given the respective financial clout of the clubs. Celtic can redeem the situation, but it may take some sign of bold ambition that has been so noticeably lacking for too long now.

Cadbury's Dairy Milk (Orange) Gorilla

Saturday, 2 January 2010

How did Celtic end up 4 points behind a bankrupt mediocre Rangers team?

(Brian Quinn quoted in the Official Biography of Celtic by Graham McColl which I was given as a Christmas present).

The Zero Debt Policy:

“It was on a freezing cold night in Donetsk, in Ukraine, in 2004, that Celtic’s second footballing and financial phase of the 21st century was set in motion. Brian Quinn, chairman at that time, recalls a meeting he had that night with Dermot Desmond was the catalyst for change.

“Dermot and I sat one evening in Donetsk in Ukraine. We had just been beaten 3-0 and this was late 2004, and it wasn’t going well, and we knew it wasn’t going well. We just weren’t doing anything commercially or financially that was sustainable – we were losing money as we made it. So we sat that evening – Peter Lawwell sat with us too – and we agreed that we had to build a different business model. We had to organise ourselves and sustain ourselves to such a degree that we sustained ourselves year-in, year-out: in other words you don’t lose money, you’re trying to break even every year at worst – that was the concept that informed the business plan. Peter then went to work with the people on the finance side and the football side and fleshed it out and produced a business plan. It’s a lot of work, but you find in business that once you’ve got a clear goal then things begin to fall into place”

“Season ticket money is 45 to 50% of your total revenues, and you’re selling season tickets because you’re successful in football, so you then have to say “What kind of football squad are we going to have?” We needed a football squad that was consistent with the objectives we had set ourselves of breaking even, which takes you to your cost base of the football squad. It was too high. It was running at over sixty per cent of total revenues which was above the arbitrary, although it is arbitrary, waterline, so we said “Let’s change that”

You should run your affairs so that you can pay players’ wages out of your normal income. That all came out of that meeting in Donetsk, and we’ve turned it around. There’s no doubt that it’s worked.”

Seems clear to me then, that in 2004 the Board took the decision that Celtic were to become a balance sheet club rather than a football club and that that management of the football team was to become a means to the end of meeting the over-riding number one priority of breaking even every season. This can be the only interpretation consistent with Quinn’s claim that this dogmatic approach has “worked”.

These comments are received rapturously by the author. An interesting insight is offered as to the effect on the position of Celtic manager –

“As Quinn speaks, energetically and engagingly, of performing this intricate piece of emergency financial surgery on the club he has loved since growing up in straitenend circumstances in Govan [pass the sick bucket please – this could be Traynor and Moonbeams over a succulent lamb], the process sounds irresistibly logical and inevitable but it is one that would have enormous ramifications inside the club.

In September 2003 Martin O’Neill stated that Celtic would have to, as he put it, “get used to life in the slow lane” if they failed to replace the players he had brought in – for huge transfer fees and on enormous wages and, as it turned out, with little future transfer potential – with others of similar ilk. So the new policy was always likely to be a difficult one for O’Neill, especially with the discovery of his wife’s illness.

After the Donetsk game we said to Martin, “Look we need to change the way things are done here because we’re just eating into our capital all the time and the team is getting older”, and he said “OK we’ll do it”. Then he came back some months later and said “I’m sorry – I can’t do it. I’ve got to go up and down [to England] to see Geraldine and I’ve got to be supportive of my two girls… I can’t do that and make the kind of change you’re talking about”

O’Neill’s subsequent parting of the ways with Celtic in 2005 ushered in the arrival of Gordon Strachan, a different type of manager and one attuned to the new, more financially stringent era at Celtic[this is new to Celtic is it???], a manager prepared to work hard at coaching and improving the players at his disposal and willing to make the most of whatever funds might be available to him. “Gordon’s terrific” Quinn says “He says, “You tell me what I’ve got and I’ll take it from there”. He doesn’t make a fuss, he doesn’t argue, he does the best he can with the resources given to him. Martin was quite different. Martin was always trying to persuade us to loosen up a bit.

Good on Martin I say.

“And Martin would be on the training ground twice a week: the coaching was done by John Robertson and Steve Walford. Gordon is much happier being on the pitch with small numbers of players or working with them individually; he doesn’t want anything to do with transfer negotiations. That’s down to Peter and I think that’s healthy”

Doesn't exactly give you an enormous amout of confidence in the Board's criteria for choosing a new manager.

As a blatant attempt at propaganda this seems to me like a spectacular own goal and indicative of how far out of touch the Board are with Celtic supporters. If this is supposed to convince me of the merits of the zero debt policy than this guy is on another planet.

Incidentally, this Official History of Celtic has an appendix of fascinating statistical information such as top goalscorer in every season, most appearances, a list of all Celtic managers, captains etc. and also... details of the club's annual turnover from season 1994/5 to the present.

Celtic Football Club 1888-2004

Celtic Balance Sheet Club 2004-?