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Scottish football finances - 2020 edition

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hislopsoffsideagain

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On the one hand, it must be noted that these figures are essentially a year old, as they are for the 2018/19 season. There can also be pretty legitimate reasons for clubs either losing money or not making as much as expected, such as investment in infrastructure.

On the other hand, we now have access to the 2018/19 season accounts for eighteen of Scotland's twenty-two full-time SPFL clubs (assuming no-one is counting Airdrie as full-time yet). We also have an idea of what's to come in two other sets. Of those twenty clubs, just eight turned a profit last season. Most of those eight come with a caveat of sorts as well. The rest were in the red, and in a number of cases spectacularly so.

That can't be healthy.

Today let's take a closer look at the twelve clubs that were in the 2018/19 Premiership. If I get round to it, I'll put up a further post looking at the state of play in the lower tiers.


SOME THOUGHTS FIRST
There's nothing to suggest that any of these clubs are in imminent financial distress (though as explained in the link further on the situation at Rangers is complicated to say the least). There are two areas of concern that I can see.

The first is what it takes for clubs to run a profit, full stop. It seems that, if a club finishes in the league position one would expect given their budget, only gets through a round or two in the cups and doesn't sell a player for at least a high six-figure fee - a realistic outcome, basically - they will lose money. I can't see how that is a good thing in the long-term. It also means that clubs are running to stand still, in that they are having to budget higher than they really should just to keep themselves at the level they are at, in the hope that they hit the jackpot in one of the above areas every so often.

The second is the potential effect of relegation. The experience of recently demoted sides is that turnover falls by about a third on going down. Long-term player contracts are not all that common at all but the biggest Scottish clubs so often a rapid cut in the playing budget is possible, but that in itself is rarely sufficient to deal with such a rapid drop in income. Those clubs struggling to break even as it is would face proper trouble if they ended up in the Championship.

(addendum - almost at the same time as this blog was published, this story about the potential effect of coronavirus on Scottish football clubs went up. Given the high dependence of gate receipts, I can absolutely believe this would cause significant problems.)

Onwards...

IN PROFIT
CELTIC
TURNOVER: £83.4m (2017/18: £101.6m)
PROFIT: £8.7m (2017/18: £17.3m)

Celtic made a profit of £11m on transfers in 2018/19, which meant they were still profitable despite their turnover taking a big hit from missing out on the Champions League. That's the way of it for them at the moment - either get to the Group Stage or make up the shortfall by selling a player, as they have done again this season with Kieran Tierney. The club also spent a decent amount of cash on infrastructure, such as (shudder) disco lights. With £39m in the bank as of last summer, they are in rude financial health.

HEARTS
TURNOVER: £15.1m (2017/18: £12.1m)
PROFIT: £1.6m (2017/18: £1.8m)

Hearts' staff costs for last season were £8.2m, which puts them fourth in Scotland. Whilst their profit looks impressive, they received £3.25m in donations and Ann Budge described it as "a challenging year on and off the pitch".


HIBERNIAN
TURNOVER: not known yet (2017/18: £9.5m)
PROFIT: £2m (2017/18: £214k)

That profit looks juicy for Hibs, who haven't yet published their accounts but had their AGM at the end of February. But it comes off £2.8m of profit in the transfer market thanks to the sale of John McGinn. New owner Ron Gordon said himself that "without the McGinn money, the club would have made a significant loss".

But Gordon has paid off the club's mortgage and invested a seven figure sum that leaves them with £5.5m in the bank. That looks like a pretty decent platform to build from. He has made it clear that he intends Hibs to be profitable going forward...but they all say that, don't they?


KILMARNOCK
TURNOVER: £6.6m (2017/18: £5.1m)
PROFIT: £126k (2017/18: loss of £180k)

Given Killie finished third in the table, I expected profits to be higher than this; if they had come fourth, they would have posted a loss. They do seem to have spent a fair bit on infrastructure - not least the laying of a new artificial pitch, and the wages to turnover ratio is fine. Apparently the budget was increased for this season, which means it will be interesting to see what effect a lower league finish and the binning of Angelo Alessio has on finances going forward.


LIVINGSTON
TURNOVER: not known yet (2017/18: £1.4m)
PROFIT: not known yet (2017/18: £46k)

I'm told by Livingston fans that Chief Executive John Ward has recently said the club made a small profit in 2018/19, but accounts have not been filed yet. Their turnover will have jumped spectacularly after their promotion to the Premiership


ST MIRREN
TURNOVER: £4.1m (2017/18: £2.8m)
PROFIT: £99k (2017/18: £77k)

It's notable that the Buddies made £1m from 'profit on disposal of player registrations' which in fact is their share of the fee for John McGinn's move from Hibs to Aston Villa. Without that, they wouldn't be in profit. That said the Buddies had to pay off Alan Stubbs too. And with the McGinn money coming in early in the season it's likely that it was added to the budget.

Promotion meant nearly half a million more in gate receipts and £600,000 more in prize money. The total wage bill for staff leapt from £2m to £3.2m which pretty much tied up the whole of the extra income. But they do have nearly £700,000 in the bank for rainy days. The club continues to plan for Fan Ownership, perhaps as soon as 2021.


LOSSMAKING
ABERDEEN
TURNOVER: £15.9m (2017/18: £15.4m)
LOSSES: £1m (2017/18: £800k)

The Dons increased their turnover, but increased their losses as well. That's due to a combination of another increase in the wage bill from £8.5m to £9.2m and finishing lower in the league. The good news is that new chairman Dave Cormack has brought in considerable new investment. On the other hand, the move to a new stadium at Kingsford could be delayed till 2023.


DUNDEE
TURNOVER: £3.9m (2017/18: £4.6m)
LOSSES: £1.8m (2017/18: £425k)

Eek. Dundee have run a loss every single year since Tim Keyes took over the club, and its just as well he doesn't look like turning off the money tap any time soon. Getting rid of two different managers, along with pretty much bringing in an entirely new squad for Jim McIntyre, cost a fortune. Relegation will only reduce income further, and their accounts explain that significant losses are expected for this season and the next, with Keyes underwriting those. That said, with several million quid spaffed up against a wall since 2013, your guess is as good as mine as to where the cash for their proposed new ground will come from.


MOTHERWELL
TURNOVER: £4.6m (2017/18: £6.8m)
LOSSES: £436k (2017/18: profit of £1.7m)

2017/18 wasn't as successful on the park as 2016/17, and it showed. The wage bill stayed the same but with no cup runs, reduced prize money and reduced player sales (which still totalled £700k, mind) turnover dropped by a whopping 35%. They also spent a significant amount of the previous year's profit on infrastructure. Going forward, 'Well have now paid off loans to John Boyle and Les Hutchison, which leaves them with only £80k in debt now. But its no surprise that the accounts state "it is imperative to the good health and sustainability of Motherwell" that the club continues to do well out of selling on players; hopefully that big fee for David Turnbull will come after all.


RANGERS
TURNOVER: £53.2m (2017/18: £32.6m)
LOSSES: £11.3m (2017/18: £14.3m)

I wrote about Rangers' financial situation when these were published a few months ago.


ST JOHNSTONE
TURNOVER: not reported (2017/18 - not reported)
LOSSES: £149k (2017/18 - £258k)

Chairman Steve Brown has been a right sad sack in recent weeks, claiming the club has the sixth highest wage bill in the country (I dispute this) and suggesting losses for 2019/20 will be much higher. St. Johnstone still had £2m in the bank as of last summer which should protect them from any problems in the immediate future.


NOT KNOWN
HAMILTON ACCIES publish truncated accounts, as is their wont because of their low turnover. My understanding (which may be wrong) is that they lost nearly £500,000 in 2017/18, mostly because of a vishing scam. The 2018/19 accounts should be better, especially with £240,000 from Aberdeen for Lewis Ferguson.


I hope this information is useful...and most of all I hope it is right! Please let me know any errors and I'll amend them.

PS Kieran Maguire, to be found on Twitter at @PriceOfFootball, is the place to go for analysis of club accounts and finances, and covers Scottish clubs just as keenly as English ones.


Lawrie Spence has whinged about Scottish football on Narey's Toepoker since September 2007. He has a life outside this blog. Honestly.

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