Attack of the clones: Celtic could hit jackpot if they buy other clubs
Football finance expert believes looking overseas could attract new sponsorship
CELTIC can increase their income from sponsorship and boost their chances of competing in Europe as a result – by following the lead of Ajax, Atletico Madrid and Manchester City and buying clubs in other continents.
The Parkhead club, who are poised to win their sixth consecutive Scottish title, continue to perform as well off the field as they do on it.
They announced yesterday they had almost doubled their revenue to £61.2 million and had made a profit of £21.6m in the past six months of 2016.
However, financially, they still lag far behind their counterparts in the “Big Five” leagues in England, France, Germany, Italy and Spain due to the sum they bank from broadcasting rights being significantly less.
Their chances of competing with the likes of Barcelona, Bayern Munich, Juventus and Real Madrid in the Champions League are non-existent due to the colossal salaries those clubs can offer players.
It is a source of constant frustration to the board of the Glasgow club, which will celebrate the 50th anniversary of its historic 1967 European Cup triumph this year, as they have 50,000 seasonticket holders and one of the largest fan bases in the world.
Tim Bridge, a senior partner with the Sports Business Group at Deloitte and one of the authors of their football money league, believes Celtic could benefit from exploring a route that several major clubs have gone down in recent years – multi-club ownership.
The City Football Group, the holding company that runs Manchester City, also has stakes in A-League club Melbourne City in Australia, MLS franchise New York City FC in the United States, and J1 League outfit Yokohama F Marinos in Japan.
Elsewhere, Spanish club Atletico Madrid, who were beaten in their second Champions League final in three years last summer, have raised their profile considerably in the lucrative Asian market by becoming co-owners of Atletico de Kolkata in the Indian Super League.
In addition, Dutch giants Ajax are also the parent club and majority shareholder in Ajax Cape Town, a club which competes in the Premier Soccer League in South Africa.
Bridge explained there are numerous advantages to owning clubs in other continents – and suggested that Celtic directors would already have looked into the merits of expanding their empire outside Scotland.
“Celtic are an extremely well-run club,” said Bridge. “The best thing for Celtic to do, as they are doing, is to run, a very tight ship. I would imagine they budget around qualifying for the Europa League and if they make the Champions League then it is a bonus. The players’ contracts will reflect that appropriately.
“From a financial perspective, they are secure even if they don’t make the Champions League.
“When you look at Celtic’s numbers and compare them to some of the other clubs in the money league, in terms of match day they are up there in the top-30 clubs with what they make. But it is, unfortunately, the broadcast figure that lets them down.
“The SPFL lags behind many of its European peers and doesn’t give the financial backing to Celtic to allow them to challenge. Going forward, they have to look towards new and innovative ways of making money.
“That could involve buying the best talent at a young age and then developing that talent to either move on or stay at Celtic and win trophies and progress to the Champions League.
“I would imagine the people in the Celtic boardroom are working very hard to try to discover innovative revenuegenerating possibilities.
Bridge added: “If you look at the environment around football at the moment you can see what Manchester City’s owners do in terms of buying other clubs around the world. We have seen Atletico Madrid’s owners do something very similar.
“With the strength of the brand and the following that Celtic have globally that may be something that they may consider in the future. Who knows?
“There are two aspects to it. One, we have seen clubs purchasing other clubs as a way of developing players, to give their youth players the opportunity to play competitive first team football at a good standard.
“But the Manchester City model has been that the collective power of two clubs, three clubs or even four clubs in their case in the commercial market is more attractive to commercial sponsors than just one single club. That is the reason they have gone down that route.
“They have got a club in New York, they have got a club in Melbourne and they have got a club in Japan. The idea is they provide their commercial partners with opportunities in all of those markets.
“Anecdotally, you would have to suggest that it would increase your global fan base. I still feel that, overall, a fan is most likely to support the club in their territory. But, by nature, you take an interest in the other club.”
Man United continue to reap rewards from Ferguson’s legacy of success
Manchester United are still cashing in on the extraordinary success they enjoyed under Sir Alex Ferguson – nearly four years after the Scot retired as their manager.
United are the highest-earning club in world football, just ahead of Barcelona and Real Madrid, thanks to an overall revenue of £595 million last season.
But the Old Trafford club finished fifth in the Barclays Premier League in the 2015/16 campaign and failed to qualify for the Champions League.
They were also unable to progress beyond the group stages of Europe’s premier club competition last term and were knocked out of the Europa League by English rivals Liverpool in the last 16.
The Reds have struggled on the park since Sir Alex stood down after no fewer than 27 years in the dugout back in 2013.
Both Davie Moyes and Louis van Gaal failed to emulate the achievements of Ferguson – who won the English title 13 times and the Champions League twice during his record-breaking reign – and were replaced.
But Tim Bridge, a senior manager with the Sports Business Group at Deloitte and one of the authors of their football money league, revealed the dominance United enjoyed when the Glaswegian was in charge is responsible for their astonishing financial performance.
“Over the past 20 to 25 years, Manchester United’s sporting success has led them to the position where they can have an off season or two and still maintain their commercial power,” said Bridge.
But Bridge, who has helped to produce the annual Deloitte Football Money League, has warned their position could be jeopardised if current manager Jose Mourinho fails to deliver silverware domestically and in Europe.
“You just have to look at some of the Italian clubs, AC Milan and Inter Milan, to see what happens when sporting performance falls over a slightly longer period,” he said. “Their position in the money league has fallen as well.” As well as being the highest earner in world football Manchester United have the largest net debt – the amount of money they owe dramatically increased to a staggering £338m due to the value of the pound falling following the vote to leave the EU in the referendum. Bridge, though, envisages no problems arising as a result of that with United executive vice-chairman Ed Woodward predicting the Old Trafford club would make record revenues once again this season. “In industry across the world, debt is used as a way to finance the business, to ensure that the business keeps operating to its maximum potential. “If Manchester United’s revenue continues to grow at the rate it has been then they’re not going to struggle to repay that debt.”