Every So Often,,,
Celtic : Championship Winners 2021
Every so often, I experience the frustration associated with Celtic playing in the SPL. If we are being honest, playing in the SPL causes a number of problems for Celtic. Firstly, it is difficult to attract top players to the club. Secondly, the quality or impartiality of the officiating leaves a lot to be desired. Thirdly, the financial rewards are limited. In particular, as TV revenue forms an increasing proportion of a club’s revenue, Celtic is put at a severe disadvantage by the meagre sums paid to Scottish clubs. You might say money is not everything….which is true….but there is a very clear association between the wage bill and success on the field, especially in Europe.
It has been said, cynically, that Dermot is only involved with Celtic because in the long term he hopes that the club will eventually be accepted into the English Premier League. Attempts have been made in the past by both Rangers and Celtic to gain acceptance into the financial goldmine that is the EPL. Given the recent on field and off field performances of the various forms of Rangers, it is unlike that entity would be seen as an attractive addition to the English pyramid, so if Celtic is to go down this road, it should do so on its own. I suspect that memories are still fresh in Manchester as the fans of a certain club tried to recreate the Visigoths sacking of Rome.
In this article I shall explore what it would be like if Celtic gained acceptance into the English Championship. Although it is far from a given that Celtic would be accepted into that league, the thrust of this piece is to look at the pluses and minuses of joining this league.
In season 2016-17, 19 of the 24 clubs in the Championship made a loss. An estimate of the total revenue for this league is just north of £720 million, or 16% of the £4.5 billion generated by the EPL….quite a gap. Bear in mind that Celtic tends to earn £90-100 million per season if we qualify for the CL. Let us deconstruct the total revenue figure for the Championship. Currently, clubs relegated from the EPL received three years of parachute payments starting at £41 million for the first year. If we factor this in, we see that these parachute payments account for about 30% of total revenue for the league. Now these payments are good for the clubs that get relegated from the EPL but they are bad for the league as a whole because they distort competition. They allow relegated clubs to maintain high wages and thus give them an advantage in securing quick promotion to the EPL. Other clubs, who have promotion ambitions are forced to up their spending on wages, often through soft loans from a sugar daddy. There you have a fag packet analysis of the dynamics of this league!
Newcastle were relegated in 2016-17 but spent only one season in the Championship. Whilst they are not your typical Championship team, their case should be of interest to Celtic. After relegation they gambled on getting back up to the EPL in one season. Throwing money at it was their preferred strategy. They were not the only ones to try that, Aston Villa, John McGinn’s destination, did the same.
Newcastle’s wage bill of £112 million was the highest in the Championship and makes Celtic’s £60 million look conservative(if I dare to use that word). Total revenue was a bit less than Celtic’s, coming in at £86 million. Their actual loss was in the £90 million range but factor in the 42 million parachute payment and the bottom red line was £47 million. Fortunately or unfortunately, throwing money at the issue is no guarantee of promotion to the riches of the EPL, poor old Aston Villa failed at the playoff stage, plunging the club into financial extremes.
Brighton and Huddersfield got promoted using more modest financial strategies, so alternative strategies can work.
What are the advantages and disadvantages of Celtic being in the Championship? Firstly, using Newcastle’s revenue as a benchmark, Celtic could expect to achieve similar revenue levels to what it currently gets if we qualify for the CL……..which is by no means certain, as we know. Our wage bill would suggest that we would be competitive in this league, perhaps, even gaining promotion quite quickly. The latest comprehensive data on Championship club’s accounts (2015-16) show that Celtic would have had the second highest wage bill next to QPR, who were subsidised by parachute payments. We would have had the largest turnover….and remember that 2015-16 was a year we did not qualify for the CL. In summary, the financials would be in place to give the club a very good chance of promotion to the EPL. Even if we did not get promotion for a couple of years, our financials would be as if we had qualified for the CL. Once in the Premiership, of course, it is a completely different ball game. Winning it would not be a realistic objective, at least, not in the short term…just look at the wage bills of the top clubs in the EPL. However, if we filter out TV revenue, Celtic have a higher turnover than Newcastle, Southampton, Everton and Leicester, and are just a little behind West Ham. On the wages front, we spend more than Brighton and equivalent amounts to Burnley and Middlesbrough. Both Burnley and Brighton have survived in the EPL.
So, what does it all mean? Assuming reasonable management, Celtic could expect to prosper in the Championship and probably gain quick promotion to the EPL. Once there the club would have to increase its wage bill considerably to be sure of staying up. On the downside, there would be no Europe for a few years, with the objective being to finish in the top four after a few years in the EPL. No more SPL trophies, nor cups. No more humiliations of Sevco. Is this what the majority of the fanbase would want?
Guest post by Rebus67
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