Future of Celtic Part One. FC or PLC ?

There has been massive investment from both home and overseas concerns into British football over the past twenty years or so.
Ownership has shifted from local owners who in the main grew up supporting the club they went on to run to Multi millionaires and financial consortiums who do not have the same affinity with the clubs or the local communities that they serve and draw support.
This has had some mixed results. Celtic are a club who are now part of a PLC who’s majority shareholder is both foreign and not known to have been a supporter of Celtic for his entire life. At this time Celtic are a financially stable club but that brings its own concerns from supporters who feel the decision making process of the PLC has disenfranchised the typical Celtic fan.
Another example and one that shows what can go wrong with PLC or outside ownership are Liverpool FC a club and company which is now a subsidiary of an American sporting group.
Liverpool FC were bought in February 2007 by two American business men Tom Hicks and George Gillett who also had interests in American sporting franchises.
They purchased the club at £5,000 per share valuing the club at £174.1m (£202m if you add in the debt they said they would clear) with a promise to invest £215 million for the new stadium proposed at nearby Stanley Park. The Board unanimously recommended that the club’s shareholders accept this offer.
Fantastic, what could possibly go wrong? Well nearly everything as it turns out because these people seemed to view the club as a money making opportunity for themselves rather than a football club with a strong attachment to the community it had served for over 100 years.
In the beginning they told the fans that they would make funds available, both for team strengthening and the building of the club’s new stadium in Stanley Park and denied they had secured the club on borrowed money. They also announced that Rick Parry a board member would remain as chief executive to allow for continuity.
One prominent Liverpool fans said, “They have made clear their intention to move as quickly as practicable on the financing and construction of our proposed new stadium at Stanley Park and also to support investment in the playing squad.”
Unfortunately this did not happen in fact the opposite was true there was no money for the stadium and the Playing squad was which had been successful was not improved. There was also infighting at boardroom level which hit an all time low when Hicks hired a TV company to film him and his family dressed up in Liverpool kit at his Texas Ranch where he openly called for the removal of Rick Parry from the board.
We are used to the term “smoke and mirrors” in Scottish football and there was certainly a lot of that coming from Hicks and Gillett. They claimed that under their owner ship they had invested over £100m in the team. The truth is they did £172m however, they recouped £144m on player sales meaning a net spend of £28m.
Over their reign, we all saw how the fortunes of Liverpool plummeted. Now Liverpool did bring in some good players but they were not as good as the guys leaving with the exception of a few. The other major cause of the decline was that the infighting in the boardroom and especially the TV stunt and claims of swindling. This really affected the management team and the players. People like Steven Gerrard and Jamie Carragher both Liverpool to the core were very distressed along with the support by the way the club was being run and the debt that it was incurring.
The Liverpool support were on the streets demonstrating to have these two guy removed from the board and for the club to be sold. They did try and sell the club but they wanted far too much money from potential buyers. Meanwhile the clubs finances were in a perilous state. The clubs debt had spiralled to £237m and no one seemed to know where the money was going.
Hicks and Gillett were forced into selling the controlling stake in the company after the Royal Bank of Scotland took them to court over breach of contract. Mr Justice Floyd ruled that Hicks and Gillett had breached their contract with RBS, the bank owed the majority of the club’s £237m debt and they wanted their money back.
Liverpool have now been bought by US company New England Sports Ventures, owners of the Boston Red Sox. Here’s hoping history does not repeat its self.
There are a few examples that have been more positive like Chelsea and Man City but both these clubs are running massive debts and the rich foreign owners may get bored with their toys one day and it’s hard to see how these clubs will survive without their sugar daddies.
So as we Celtic fans look on with envy at the billions being poured into the EPL we need to ask ourselves what would happen to our club if we ever joined that league? It’s a good bet that our current owner rather than invest massive amounts of cash into our club would most likely sell up for a profit and move on.
Who would be in control of our club then and how safe would our future be? It is clear to see from the Liverpool example that the supporters lost all confidence in the people running the club and this lead to a large gulf forming between the community that follow Liverpool and their club.
I have a feeling this would be the same with Celtic fans. The problem with clubs being owned by a PLC is that once you go down that road it’s very hard to change back to a limited company or a fans co-operative.
The very least the club could do is appoint a member of the Celtic Supporters Trust to the board  to try and keep a clear line of communication open between the support and the club.
The bottom line is should we continue along this road or should we look at a different model for running the club and getting it back in the hands of the support?
Tomorrow we’ll be asking what we supporters want and expect from the club and it’s owners.
Today we would love your feed back yes
Hail, Hail

Comments

  1. At the moment the club has a very small debt due mainly to the sale of players last year. There has been very little investment in the playing squad this year and because of this we have once again failed in Europe. Surely it is in the clubs best interest to invest in some quality players and have a manageable debt that a club of our size can deal with. Because of our clubs meaness we are struggling to attract even the most basic of professional footballer, instead we are chasing loan deals and bosman. This to me is not acceptable as a life long Celtic supporter, so if the board don’t want to invest please sell up and leave.

  2. Dear Sir
    I really have got to object to your comments regarding  our major shareholder. There seems to be a rise among certain Celtic blogs questioning the "IRISH" influence at Celtic, whether it is the flags flown, or the passport of the majority shareholder. Let us not forget that without the Irish where would be no Celtic. I well remember when local guys ran the club and milked the fans for all they were worth, please refrain from implying that in some way the major shareholder is "foreign" with the notion of foreign implying that the guy has no clue about Celtic.
     It is also very dishonest to compare both clubs owners. Are you saying that Celtic's major shareholder is like the guys you mentioned in your article? Furthermore the manager of the club that you compare to Celtic and whom for many Celtic fans was a hero, was he not a big fan of the other Glasgow club. I don't think that stopped many fans from singing his praises. Yet in your article you raise the question of the major shareholder as "not been a Celtic fan". What are you attempting to suggest? This is a shameful article that  hints at an anti-irish agenda. Be careful what you wish for.

    1. There is nothing anti Irish about this. The term “foreign” is not used in a derogatory way. If the owner was English, Welsh or N.Irish in terms of Scottish football which is run (however badly) by it’s own independent Association the owner of the club would be classed as foreign as was Fergus McCann.
      I don’t think the article is about who runs Celtic FC it is merely examining the what can happen if the wrong people end up owning the majority share holding. Liverpool was used as an example of what can go wrong If the wrong type of people get their hands on a football club. I have actually mentioned that Celtic are a financially stable club and by extension the club is being well run. Therefore the majority share holder is doing a good job.
      There is an interview in the Times online from a few years back with DD where it is said he told a close friend that he really got involved with Celtic because his son was a huge fan. DD is more of a racing and golf man than a football man. I will try and find the article and send you a link.
      Nowhere in this article will you find anything questioning the “Irish connection ” at Celtic. I am proud of my clubs roots and it’s continuing close ties with our motherland.

  3. Dear Sir ,
    Thank you for your reply. Now, regarding your comments. Firstly, the term "foreign" is in my eyes a shameful slur on the owner. Would you rather that he was from the best small country in the world. The fact that he is from Ireland is a positive. I think the other club from Glasgow would take a "foreign" owner rather than the local guys. Secondly, just listen to what you have said regarding the fact that the owner "might" not be a Celtic fan. Your proof a comment from a guy who knows a guy. Wow, after all the problems with the press regarding Celtic and honest reporting, you quote an English newspaper as your source, amazing. Chinese whispers anyone.
    There is one club that totally blows out your argument and at the same times offers an insight into where the key problems are in Celtic.
    Man Utd have a "foreign" owner who is hated by the fans of the club. Mr Glaz has set out on a path to take as much money from the club as any other owner in the Prem, even more than the guys you highlight in your article.And yet, Man Utd have never been as successful, go figure? Yes the key to their success, listen up Celtic Fans, is not the owner, no , it two key figures, the manager and as important, if not more so, the CEO.
    The manager has used his vast experience and knowledge to BUILT a team, rather than buy a fantasy team. Money is not the issue, its what you do with the resources you have. You sell the best player in the world for £80 million and buy a Mexican replacement for £8 million. You have an excellent scounting network that get results even when clubs try to inflate the cost because you are a major club.
    The role of the CEO at Man Utd is often overlooked and yet given the finance constraints placed on the club by the Glaz.loan he has done an amazing job. The CEO has increased turnover by £100 million, not bad in a global recession.How did he do this? Well a digital revolution is sweeping the world. Large multi national that are not evolving are getting swept away by small nimble more pro-active companies. HP computers just announced that it was getting out of the computing business worth over £40 BN to them in turnover,. Why, well because a smarter company had invented a better product, the ipad, has just grabbed their lunch. Just as business is moving at a fast pace, so are the finances of football clubs.Let me tell you a story concerning the revoltion in social media.
    In Aug 2010, I noticed an article in Football Marketing which listed the top football clubs in the world based on their social media rating. I was surprised to note that the most popular club in the world based on facebook likes was……… not Barca or Man Utd , no the most popular club in the world was, wait for it ….Galatarsary with 4.5 million fans.Now move forward to Aug 2011 top 3 clubs with facebook fans Barca 19million, RM with 18million and Man Utd with 18million fans. So why is this important I hear you ask, well its important because brands follow fans and fans equal more revenue for the clubs. The march of the major European clubs into India and China is no dream, it is part of a strategy to follow multinationals such as coke cola and big mac into new locations and colonise the natives. That is why a company like DHL will pay £40 million just to get their name on the training jersey of Man Utd. The revolution in social networking allows fans in China or India to connect with their heros.
    After looking at this article I attempt to contact Celtic in order to find out their social media plans. The reply tells you everthing about why Celtic has not captured the attention of multi nationals. The figures for Celtic facebook members is about 300,000 yet we are supposed to have up to 9million fans around the world. That is why the CEO is so crucial to the success or failure of Celtic, not the owner, if we cann't speak to our own fans, what chance do we have of getting to play with the big guys. Who was it who said .."prepare to fail, fail to prepare.

    1. Honestly for the life of me I don’t know why you can say the use of the word foreign is an any way a slur. Apart from that I think you make a several good points in your reply.
      I’m hoping to move onto having a look at why a group of disaffected Man Utd fans along with other fans in English football had made the choice to set up their own club.Something I hope never happens at Celtic.

  4. Honestly for the life of me I don’t know why you can say the use of the word foreign is an any way a slur. Apart from that I think you make a several good points in your reply.
    I’m hoping to move onto having a look at why a group of disaffected Man Utd fans along with other fans in English football had made the choice to set up their own club.Something I hope never happens at Celtic.

  5.  
    Dear Sir,
    Thank you for your reply. Can I draw your attention to the latest financial figures for Man Utd. It does not matter who's in charge, the key figures are the manager and CEO. Man Utd owners have been absentee landlords yet they were smart enough to get the right guys in position to market the brand that is Man Utd. Having worked in the States, I have written to Celtic many times highlighting the need for a new tech strategy and money to be spent on  brand building. I am willing to give my time and expertise free, yet it would seem that the club are quite happy to plod along and watch this global brand wither on the vine. Can I also draw your attention to a fascinating article in P. Content, a premier U.S. tech blog, outlining Man City's digital strategy is includes, planning for giving their fans free content on the web. Their aim, to build Man City into a Global brand, yet they are not throwing money at the problem, since they have only 15 staff working in the digital dept., no,  they are using free content to target fans around the world.
    The power of brands and social networking has never been more powerful. Take, for example, Guniness and Rovio, two companies at different ends of the spectrum yet they  illustrate how brand building over time can flourish in G'ness case and new tech in Rovio case, can push your company to global awareness in a short space of time.
    Guiness have like Celtic,have been around a long time, yet unlike Celtic they have continued to invest in their brand, slowly but surely,  building up their Irishness and creating a feel good factor around the brand. They are known globally as an Irish brand, yet are owned by a British multi-national, why spoil a good story. They build on their Irish herritage, history and authen'city.
    Rovio, on the other hand, created the game "Angry Birds"  in 2008. The company set up by two guys in Finland realised in the digital age that people liked to play stupid games with their mates, or on their own. The launch of the iphone unleashed a massive untapped market who were exposed to this game for the first time. Within a few years the company have had over 300 million downloads of the game and were looking to launch an IPO, valuating the start up, with little or no revenue, at £1 billion.
    Now you can say, what have these two companies got to do with Celtic. Well, in my eyes they highlight the value of vision and business acumen in leading your company. You could argue that Celtic are more than just a brand and you would be right. However, unless you change and adapt, you will be left behind, as is the case in Celtic's decline, but even more so in the case of that Scottish inst'tion commonly known as "we are the people".
    Celtic have major problems, not least by the make-up of the board. The CEO comes from a business background steeped in a small town mentality as does half the board. Indeed, the new chairman comes from a cut price whisky company, who famously gave £1 million to our rivals. Who among the board has a flair for marketing or brand building? Who among the board has the ability to spot the potential of new tech. an opportunity that if handled well could create a massive revenue stream for the club? Take for example the club's position on just three sectors.
    Sponsorship. It has always been my opinion that the club has massively sold themselves short by partnering with the other Glasgow club . The fact that in this day and age, Celtic tops are plastered by a beer company logo, strikes me as symcomatic of a small town mentality. We are Celtic F.C. a proud and noble club. We can do better than that. What message are we sending to our young fans. Fail to prepare, prepare to fail. I myself talked to a fews guys in tech companies in the States who would, given more detail, certainly looked at a possible discussion with Celtic. This follows to my second point of contention.
    Digital Strategy. One of the questions asked of me by the guys in the States, what is the social strategy pursuit by Celtic in engagement with their fans and how do they monetise that strategy? Good question, so I attempted to ask Celtic. Eh, we get back to you. Finally,
    Perception, It does not help that around Europe Celtic are seen as a club whos time has come and gone. The chairman of Milan recently talked about the glorious clubs in Europe who are now consigned to history, namely, Benfica, Celtic and Ajax. It does not help Celtic's cause that important people like the Milan chairman talks openly about this. He is only stating what the power brokers truly think.
    There are solutions to the above problems. What it takes is vision at the top to implement long term goals which could and should see Celtic regain its former glory.
    Sponsorship. Using the slogan …"CELTIC A FORCE FOR GOOD"
    Give the jersey rights to SVDP or SCIAF at no cost. Lets uncouple ourselves from our rivals and get back to our roots. Lets us set the moral agenda. Any shortfall could be maked up by an increase in digital revenue. The response to our actions would generate goodwill around the world and in a footballing world dominated by greed and selfishness, it would allow Celtic to stand out as a club of the people.
    Digital Strategy. Lets get people who know how to monetise the vast fanbase around the world. I have many suggestion which would instantly generate revenue for the club. Just look at the Man City article to realise the potential on a global basis for new tech. Rovio have shown how small games can generate a huge tangible asset.
    Perception. By following the above we can show the world that we are a club on the move. We have what no other club in the world has and that is the, BEST FANS IN THE WORLD. Now is the time to use them or lose them.
    As I have stated in my prev. posts, the key man for me at Celtic is the CEO. It's up to him to step forward, or do nothing and watch the club, in the words of the Milan chairman "be consigned to history". It's your choice.

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