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-?


1 comment:

  1. Good post, Tony. It explains a lot. I see that Celtic's average gate this season has fallen to 51,000 and is heading down at an alarming rate. Investment and income are not independent variables. Lack of investment will, in time, lead to lack of income.

    The Scottish league is terrible and the fact that Celtic can't beat teams like Falkirk and Motherwell is an indictment of the team. The first Old Firm team to get its act together was always going to run away with the title -- and it looks like Rangers.