Dundee United look forward rather than backwards

IT HAS been a long time since Dundee United were referred to as part of the “new firm”, but the club’s management are confident the hurdles of the pandemic may soon be consigned to the past. The Tangerines’ finances took a hit in 2020-21, but the club managed to limit their losses to £ 2.5 million for the campaign. 

Dundee United aim to be a top six Premiership club and qualify for European football. In 2021-22, they are currently in a Conference League position and are still in the Scottish Cup, their objectives look realistic at the moment.

The club’s turnover in 2020-21 was down by around 2.5% to £ 3.8 million, while their deficit was an improvement on 2019-20 when they lost £ 3 million. Like all other Scottish clubs, the lack of matchday income decimated turnover, but Dundee United fared better than some – Hearts saw their revenues drop by 38%, Aberdeen 22% and Celtic 13%.

With revenues dropping, the wage bill became more of a drain on the club’s finances. In 2020-21, the wage bill was up by 7% to £ 4.9 million and this represented 132% of income. In 2019-20, the wage to income ratio was 120%. Ideally, the club would like to see the ratio closer to 80%, still high but much more manageable.

Scottish football benefitted from the government’s relief measures and Dundee United secured £ 2.8 million from the debt facility which has a zero interest rate and is repayable over 21 years. The club estimates it has lost around £ 4.2 million from the pandemic.

In addition, the club’s owner and chairman, Mark Ogren, a US-based businessman, has made interest free loans of over £ 9 million to the club since taking over in 2018. He is committed to the club in the medium to long term and is aware that success on the field is the best way to get a return on his investment. 

Covid has got in the way of his plans and his claim the club is “going places”, and he has received some criticism from a section of the fanbase. However, Dundee United won the Championship in 2020 and returned to the Premiership.

The club expects to return to profit in 2022 partly due to income from transfers involving Lawrence Shankland (who was sold to Beerschot for £ 1 million) and youth product Kerr Smith (£ 800,000 to Aston Villa, rising to £ 2 million), and also a return to normal income streams. 

There is also considerable upside to match attendances. In 2019-20, they averaged 8,500 at Tannadice, but the 2021-22 gates are around 6,500. There is potential at Dundee United, although the gap between the “old firm” and the rest of Scottish football is enormous and growing all the time.

The fans have played a major role in assisting the club during the pandemic, with most of the 3,000 season ticket holders waiving their refunds and the Supporters Foundation donating £ 100,000 towards the development of the academy site at Gussie Park. 

Dundee United could end 2021-22 in a better financial state and bound for European football, that would certainly be a case of going places, to quote the club owner.

“Big fish” Rangers still trailing Europe’s elite

ALONG with their Old Firm rivals, Celtic, Rangers continue to enjoy the status of being Scottish football royalty, earning way more money than every other club in Scotland. The Gers’ finances for 2020-21 underlined the gulf between the Glasgow duo and the rest of Scotland, but it also highlighted the challenge facing Rangers in competing with Europe’s top names.

With an appetising Europa League encounter with Borussia Dortmund on the horizon, Rangers will be reminded of how far they still have to come. Dortmund may not be Bayern, but the Ibrox club will be only too aware that they were once in the same ballpark as BVB and met them in the 1967 European Cup-Winners’ Cup. In 2022, they will be the underdogs.

Rangers won their first Scottish Premier title in a decade under Steven Gerrard in 2020-21, but their losses increased by 43% to £ 24.7 million. The last time Rangers made a profit was in 2013.

The club’s revenues dropped from £ 59 million to £ 47.7 million (-20%), largely due to a dramatic fall (-49%) in matchday income, which was partially offset by increases in both broadcasting (+39%) and commercial revenues (+9%).

Rangers’ wage bill rose by 10% to £ 47.7 million, which entirely absorbed the club’s revenues and was a marked difference from 2019-20 when wages were 73% of income. By way of comparison, Celtic’s wage bill totalled £ 51.7 million and was 85% of total earnings.

Scottish football still appears to be undervalued by many people. According to data produced by football analyst Swiss Ramble, the TV deal, for example, is paltry compared to many leagues, just € 34 million per annum compared to the € 3.6 billion awarded to the Premier League and € 2 billion paid to La Liga. The total income of the two leagues is also eye-opening; the Scottish Premiership generated € 221 million while the Premier League earned € 5.1 billion.

Consequently, matchday income is far more important to Scottish clubs than their counterparts across many leagues. Overall, 48% of revenues is derived from matchday, although Rangers’ matchday cash amounted to 38% in 2020-21. By contrast, matchday income amounts to 13% of Premier League income, 11% of both France’s Ligue 1 and Serie A, 15% of La Liga and 16% of the Bundesliga’s revenues.

One area that Rangers need to improve is in their player trading activities. Over nine seasons, they have made less than £ 10 million in profits from player sales, versus the £ 100 million made by Celtic.

Rangers have started the 2021-22 season reasonably well and are top of the table once more, although they have been beaten. They went out of the Champions League rather cheaply but they go into 2022 with the Europa League play-off awaiting them. In November, they lost manager Gerrard to Aston Villa, replacing him with Giovanni van Bronckhorst. The odds are they will probably retain the league title they won earlier this year, but can they make a splash in Europe?

Celtic’s loss is manageable, but the pain of the Rangers revival will be worse

CELTIC may find losing their league title was considerably more painful than the losses made during the covid-19 pandemic. Rangers ended the club’s nine-year run at the top of the table, but the manner in which they did it, going the entire league campaign unbeaten, signalled the end of an era for the hoops. From a financial perspective, an £ 11 million pre-tax loss probably seems a lot less damaging.

Scottish football has its cycles and Celtic have presided over the rest of the nation while Rangers recovered from their meltdown and climbed their way back to the top. When Celtic were all-conquering in the 1960s and early 1970s, they went nine years at the top of the league table. Rangers did likewise in the 1990s, just falling short of 10 years. Now Celtic have done it again. Modern football being what it is, it’s hard to see anyone outside the old firm winning the title in the foreseeable future.

Celtic’s revenues for 2020-21 held up remarkably well, a £ 10 million (13.4%) drop in a season without supporters coming through the turnstiles. Compared to the 25-point gap between them and Rangers, the discomfort is bearable. 

Celtic’s near decade of superiority, arguably, was never fully exploited. They were still found wanting in Europe, a sad fact for a club that has been to three major European finals. In short, they have been flat-track bullies in Scotland and, financially, they cannot compete with the elite clubs. Over the past decade, they have reached the group stage of the UEFA Champions League four times, winning just five of their 24 group games. Only once, 2012-13, did they get out of the group, no great surprise given they have come up against Paris Saint-Germain, Bayern Munich, AC Milan and Ajax. The gulf between Celtic and the top names of Europe was highlighted when they were thrashed 7-0 by Barca in 2016-17.

Celtic’s current position in Europe can be determined by the status of the teams that have eliminated them from the Champions League and Europa League – Ferencvaros, CFR Cluj, AEK Athens, Maribor, Midtjylland, FC Copenhagen and Malmo.

Regardless of this, Celtic remain a big club with enormous cachet in Scotland and the United Kingdom and enjoy unwavering support from their fans. But the pendulum at home has swung across, perhaps temporarily, to Ibrox Park and the feeling of coming second in a two-horse race isn’t good for a club that won 19 of 27 Scottish prizes between 2011-12 and 2019-20, including four consecutive trebles.

While revenues dropped in 2020-21 from £ 70.2 million to £ 60.8 million, so too did expenses, which were down 7.6% to £ 74.4 million. Celtic managed to make a profit on player sales of £ 9.4 million, a drop from 2020’s £ 24.2 million, but still a demonstration of the importance of player trading to the club. According to Transfermarkt, Celtic spent £ 14.1 million in the market and recouped £ 16 million. Rangers spent £ 11 million and received just under £ 1 million. These figures dwarf the rest of Scottish football. Over the decade, Celtic spent over £ 100 million, Rangers around £ 50 million.

Of Celtic’s £ 60.8 million of income, £ 20.1 million was attributable to “football and stadium operations”, a third of overall earnings but some 56% lower than 2019-20. Merchandising rose by 50% to £ 22.6 million, but multimedia and broadcasting contributed £ 17.3 million, falling 11% compared to the previous season.

Celtic’s chairman, Ian Bankier, spoke of Celtic’s robust business model and how it allowed the club to navigate through the pandemic. “In the face of this adverse swing in financial performance, we are satisfied we took sufficient and appropriate steps to mitigate the losses and control costs in the business,” he said.

Meanwhile, with Celtic’s team now managed by Greek Australian coach Ange Postecoglou, they have had a mixed start to the 2021-22 season, losing three of their first six league games. They’ve also been knocked out of the UEFA Champions League and lost their first Europa League group game at Real Betis. Things will, surely, get better, both on the pitch and on the balance sheet. How they react will depend on what goes on over in the Govan district of Glasgow.