A POOR season on the pitch, a sharp drop in season ticket sales and the collapse of Setanta Sports in Britain were blamed yesterday by Celtic Football Club for pushing it into the red last season.
The famous Glasgow club, whose biggest shareholder is Irish financier Dermot Desmond, made a pretax loss of £2.1 million (€2.5 million) in the year to the end of June 2010.
This compared with a profit of £2 million in the previous season, when the club competed in the Uefa Champions League.
Celtic plc saw turnover fall by 15 per cent last year to £61.7 million while net debt almost quadrupled to £5.85 million.
The Scottish club trimmed its operating expenses by 6.7 per cent to £57.2 million.
The recession played its part in the slump in Celtic’s finances. The club sold an impressive 48,000 season tickets for the 2009/10 season. But this was down 11.5 per cent from the record 54,252 shifted in the previous year. The club said it expects this trend to “continue this year”.
Chairman John Reid, a former secretary of state for Northern Ireland in Tony Blair’s Labour government, said “reduced merchandising revenues from one kit launch rather than two, and a drop in domestic media income following the demise of Setanta [Sports]” had also affected its bottom line.
In an interview with BBC Scotland, Mr Reid said it had been a “disappointing” year on and off the pitch for Celtic. “We can pick ourselves up and start again,” he added. “We’re up to the challenge. We’re optimistic about the season ahead.”
He said the club’s increased level of indebtedness was a “sustainable” burden. “It is sustainable debt; it’s not out of control by any means. We will be prepared to spend money if it is sustainable.”
Celtic signed 13 new players last season and hired a new management team, led by Tony Mowbray. But poor results led to Mowbray being replaced by Neil Lennon before the season ended, with Celtic paying compensation to its former manager and his backroom staff.
“It was a false start so we start again,” Mr Reid said.
On the plus side, Celtic extended its kit deal with Nike to 2015 and agreed a three-year shirt sponsorship with beer maker Tennant’s, which is owned by Clonmel-based drinks company CC.
On the outlook, Celtic said the “beginning to the new financial year has been challenging in a difficult market place”.
“The biggest challenge . . . is the management of salary and transfer costs whilst achieving playing success in order to yield satisfactory financial results. Clearly, European progression remains key in enabling the club to achieve its financial objectives.”
