Celtic yesterday released figures for the six months prior to December 31 2010, they have ploughed almost £6M extra into their bank debt, trebling what was just a £3m debt before these figures were released. The debt has been blamed on a heavy investment in players after the summer overhaul in management. Gary Hooper moved north of the border in summer for £2.5M in one of their biggest summer signings, totalling almost £10M before new wages and signing on fees had even taken effect.
This news coupled with the 15% loss in turnover, stemming mainly from losing the vital Champions League revenue sees Celtic post a loss before tax of £2.1M. This news cannot be good for Celtic, as they try not only to keep ahead of Rangers on the pitch, but also not be dragged into further debt off it and be pulled into the same poor financial situation that their city rivals have been having over the past few years, who's debt now stands at roughly £25M.
Celtic however, wanting to obviously make this a one off year, will struggle with projections seeing them hold struggling finances in coming years with reports stating they have lost 20% of season ticket holders in recent seasons. The economic climate has hit clubs such as Celtic ( & to a lesser extent Liverpool), with many travelling fans from Ireland not able to afford the trips to mainland UK anymore. This has left season ticket sales down 15% this season from 50,000 to just over 42,000. It has also pushed merchandise sales down by 10%.
This rapid increase in debt for Celtic bores many of the same features that Rangers have also had in previous years with money being highly spent on players and management. Not forgetting that Celtic have also been splashing out behind the scenes as well, with CEO Peter Lawwell seeing his salary rise 150% in three years from £300,000 to a jaw dropping £753,000 despite the poor performance of the club financially, which has co-incided with the stock price of Celtic FC dropping from 68.5p to 42.15p (A staggering 38.5% drop) in the space of just three years since Febuary 2008.
The major problem that Celtic have however in trying to plug this gap is that on the pitch they now are forced to perform, even more so now than ever before. They currently top the league by 5 points, with Rangers having 2 games in hand on them. However, the league title in Scotland is not the only prize that the Old Firm are trying to win, as the title also gives the victors a passage to Champions League qualification. In previous seasons Scotland had two Champions League spots, with one giving a direct passage to the group stages, this is now not the case, and starting from next season, only one Scottish club can qualify for the Champions League. This puts a huge burden on both Celtic and Rangers to succeed domestically.
Neil Lennon who replaced the unsuccessful Tony Mowbray at the end of the 09/10 season is under a lot of pressure at Celtic. This is his first management job, and Celtic need him to succeed. Without regular income from the big games in Europe at Parkhead, Celtic may find that being part of the elite two in Scotland becomes a lot tougher in coming years.
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