| Celtic & Porto: A Sporting and Financial Analysis |
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| Written by Mark Cooper |
| Sunday, 25 September 2011 13:11 |
 There is an increasingly common assertion that due to the financial limitations of playing in the SPL, Celtic are unable to successfully compete against the very best teams in Europe, whilst it isn't even countenanced that Celtic could ever win the Champions League.Although finance is clearly an important factor in a club's success, it is obviously not the only factor otherwise Celtic would have comfortably overcome clubs with far smaller budgets than their own such as Sion, Utrecht, Braga and Aalborg in recent years. Evidently there are other factors in a club's success. With this is mind, we at Celtic Underground have compared and analysed Celtic with FC Porto, attempting to understand their contrasting on-field success by analysing their respective finances, including wages and transfer spend, investigating the differences in player recruitment and concluding with a clear vision that can bring both financial and on-field success to Celtic. Celtic and Porto share some obvious similarities; both are large clubs within domestic leagues that receive small media revenues that are dwarfed by larger neighbours whose leagues receive global media attention. Therefore Porto can be used as a valuable means to compare Celtic's financial and sporting results. The contrasting strategies that have brought about these results shall be examined and conclusions drawn. RELATIVE SPORTING PERFORMANCE - CELTIC AND PORTO CELTIC PORTO 2000/1Domestic 1st 2nd European UEFA Cup 2nd Round UEFA Cup Quarter Finals 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 Domestically both Celtic and Porto have been the most dominant clubs in their domestic leagues with 6 and 7 titles respectively over the past 11 seasons. However, it is performance in European competition that provides a better gauge of the standard of the team. Here Porto has a distinct advantage. In the 21st Century, Porto has outperformed Celtic in European competition on no less than 8 of the past 11 seasons. Celtic have reached a stage further than Porto in just one season during this period and on two occasions both clubs were knocked out at the same Round of 16 Phase of the Champions League (in seasons 2006/7 and 2007/8). Furthermore, since the turn of the millennium Porto have won four international trophies; the UEFA Cup in 2002/3, the Champions League in 2003/4, the World Club Cup in 2004/5 and the Europa League earlier this year. Their international success dispels the myth that it is impossible for a club that does not compete in a major European league to be successful in European competition. FINANCIAL STRENGTH – CELTIC AND PORTO Both clubs provide annual financial reports on their club websites and these results for turnover have been reproduced below. The Porto financial figures have been converted from Euros into Pound Sterling using the exchange rate on the 30th June of each particular year, as this is frequently the date when their annual financial reports are published. Table 2: Annual Financial Report Year of Report Turnover (excluding player trading) Profit/(Loss) 2005 £62.2m £31.2m* (£3.7m) £0.7m 2006 £57.4m £31.9m (£4.2m) (£21.1m) 2007 £75.2m £37m £15m £1.6m 2008 £72.6m £43.5m £4.4m £6.3m 2009 £72.6m £58m £2m £4.3m 2010 £61.7m £47.3m (£2.1m) £0.1m *The 2006 Annual Report provides two different sets of results for the year 2005. Those shown above are in accordance with International Financial Reporting Standards (IFRS). The second set of results provided in the 2006 Annual Financial Report that are not shown in the table above are in accordance with Portuguese 'Generally Accepted Accounting Principles' (GAAP), however these results differ substantially from the results in all prior Annual Reports with respect to calculating amortisation and depreciation. **Unfortunately the Porto's Annual Financial Reports published online for 2003 and 2004 respectively do not provide consolidated profit and loss accounts, otherwise these results would also have been shown above As can be observed, Celtic's turnover has been greater than Porto's every year for the previous six years. Indeed, the annual reports of 2005 and 2007 show that Celtic's turnover was approximately double that of the Portuguese club. The Annual Financial Reports from 2005-2010 show that the cumulative turnover of Porto is less than 61% of that of Celtic. Over this period Celtic have made an accumulated profit of £11.4m, whereas Porto have made a loss of £8m. Regarding the first two tables shown, there seems to be a disconnect between Celtic consistently having a significantly larger turnover than Porto, yet Porto consistently outperforming them in European competitions. Of course, a club's turnover will not necessarily indicate the amount actually invested on the playing side. It has been known for clubs to spend more than 100% of their turnover in order to have short-term, if not sustainable success. It is therefore essential to analyse the annual wage expenditure of both clubs. Table 3: Annual Wage Costs Celtic Porto 2004 £40.5m £28.4m 2005 £37.4m £26.9m 2006 £32.5m £24m 2007 £36.4m £22.9m 2008 £39m £30.6m 2009 £38.8m £40.5m 2010 £36.5m £32.3m Similar to Table 2 which shows Celtic with significantly higher turnover than Porto, the above table shows that Celtic consistently spend more on wages. In the past 7 years, only once has Porto had higher wage costs (in 2009) and this was by a small amount, just £2m. In 2004, the season that Porto won the Champions League, Celtic's expenditure on staff costs was more than £12m above Porto's i.e. more than 40% higher. From the table above it is apparent than Celtic's wage bill has decreased since 2004, yet even in 2010 the wage bill was £6m more than Porto's in their Champions League winning season. If Celtic's turnover and wage costs are significantly greater than Porto's-how then can the Portuguese club produce playing teams that are consistently better than Celtic's? The answer seems to lie in player recruitment. Using a German football database that records player transfers across Europe, the figures for transfer expenditure and income for both Celtic and Porto have been reproduced below. The figures remain in Euros and have not been converted into Pound Sterling as the conversion of every transfer(both incoming and outgoing) for both clubs using the correct conversion rates for those dates of transfer, would have been overly complicated. Table 4: Transfers Transfer Spend Transfer Income Transfer Net Celtic Porto Celtic Porto Celtic Porto 2000/01 €31.2m €3.9m €10.7m €16m -€20.5m €12.1m 2001/02 €12.2m €8.1m €2.5m €0 -€9.7m -€8.1m 2002/03 €6m €11.4m €0 €17.8m -€6m €6.4m 2003/04 €0.5m €14.7m €2.3m €10.4m €1.8m -€4.3m 2004/05 €0 €40.4m €0 €100.3m €0 €59.9m 2005/06 €12.5m €22.8m €1.5m €45.3m -€11m €22.5m 2006/07 €16.4m €6.4m €16.7m €10.8m €0.3m €4.4m 2007/08 €17.1m €17.6m €8m €71.4m -€9.1m €53.7m 2008/09 €11.5m €46.7m €1m €54.9m -€10.5m €8.3m 2009/10 €15.3m €29.7m €10.5m €71.7m -€4.8m €42m 2010/11 €12.2m €34.3m €20.6m €39.8m €8.4m €5.5m 2011/12 €3.5m €37.5m €1.1m €45.3m -€2.4m €7.8m TOTAL €138.4m €273.4m €74.8m €483.6m -€63.5m €210.2m Source: Transfermarkt TRANSFER POLICY AND ASSET MANAGEMENT – CELTIC AND PORTO As can be seen in the table above, Porto have received a remarkable €483.6m in transfer sales over this period and have made an overall net profit on transfers of €210.2m compared to Celtic's loss of €63.5m over the same period. Porto seem to approximately double their money with regards to player recruitment and the re-sales of these players, whereas Celtic's signings halve in value by the time they leave the club. A worrying concern for Celtic supporters and shareholders will be the incongruity of Celtic spending half as much as Porto on transfer fees, yet consistently having higher staff salary costs. Celtic may purchase players that are less valuable in the transfer market, yet these same players are commanding significantly higher wages than players deemed to be of a greater value, signed by Porto. To understand why this is the case, it is necessary to analyse which markets both clubs recruit their players from. Using the German football database 'transfermarkt', the cost of every transfer, both incoming and outgoing has been recorded since 2000. The cost of transfers and the subsequent sales of these same players has been analysed and as a consequence it is possible to determine and measure the profitably of these markets for both Celtic and Porto. Table 5a: Celtic's transfer spend in markets and subsequent re-sale value from 2000-2011 Transfer Spend in Market Transfer Resale Income Transfer Net Resale Value England €46.9m €5m -€41.9 10.6% Scotland €12.4m €8m -€4.4m 64.9% Continental €36.9m €8.7m -€28.2m 23.6% *Transfers from Spanish, Italian, French, Dutch and Polish leagues Table 5b: Porto's transfer spend in markets and subsequent re-sale value from 2000-2011 Transfer Spend in Market Transfer Resale Income Transfer Net Resale Value Portugal €22m €134.6m €112.6m 613.2% Brazil €28m €65.5m €37.5m 233.9% Argentina €33.7m €89m €55.4m 264.5% Europe* €43.3m €22.2m -€21.1m 51.2% *Transfers from Spanish, Italian, English, Greek, Turkish, Polish, Dutch and Hungarian leagues In cases where less than 5 players have been bought from a particular nation, the market will be referred to in terms of its region. In cases where even the region (from which players have been bought) has less than 5 players, those results have been excluded. The markets have been placed in order of the highest number of players bought from a particular market. Note that these figures do not include the sales of players developed by the club's themselves or players bought prior to 2000, nor does it include players that were signed as free transfers as these players were not purchased from a particular nation's market. As can be observed from Table 5, the English market has been woeful for Celtic in terms of transfer spend and the sale income recouped from those same players. Losing 90% of the value of such a significant investment should be alarming for any business-especially so as the club invests more in this market than any other. When dealing in their domestic market in Scotland, Celtic fare far better economically yet they still lose more than a third of the value of these players when they are sold-the purchases are comparatively low-cost but are sold on for even less. The figures for continental Europe are poor; with players losing three-quarters of their value by the time they leave the club. However, there is a danger in overanalysing the figures for Europe, as they are collected from a variety of European markets that may differ greatly. For example the markets in Spain and Italy may be quite distinct to that of Poland.
Porto's domestic market has been their most profitable source of transfer income with these players becoming six times more valuable by the time they leave the club. This indicates that not only are other Portuguese clubs are grossly undervaluing their players, but the figures are also a testament to the influence and exposure of the Champions League. Perhaps the best example of Porto profiting from their domestic market is the case of Aly Cissokho. They bought the Vitoria Setubal left back in January 2009 for €300,000. He played just 22 times for Porto, including 4 Champions League appearances and was promptly sold 6 months later for €15m. Interestingly, when Porto have looked towards other European markets, like Celtic, they have experienced large losses in the value of their players. Indeed, on the two occasions that Porto have purchased players from the English market, their value has plummeted by more than two-thirds. Significantly they have not signed a player from England in more than 7 years. Perhaps Celtic too are taking note of the poor return on players signed from the English market. In the past year, the club have signed players from a variety of markets, including Honduras, Israel, Belgium, Sweden and Mexico amongst others, with mixed success. One would assume that the values of Kayal, Izaguirre and Hooper have increased since joining Celtic, however it also has to be acknowledged that within the last 18 months more than €8.5m has been spent on Hooiveld, Rasmussen, Juarez and Murphy, all of whom have been surplus to requirements and have subsequently been loaned to other clubs. Their combined value will surely be lower now than at the time of purchase. Of course, not every investment in the playing staff will be successful, but in comparison to Porto, Celtic's player recruitment over the past decade or so can at best be described as 'hit and miss'. Furthermore, none of the markets that are consistently used by the club have been profitable. The three main markets that Porto utilise (Portugal, Argentina and Brazil) have not been used once by Celtic in the past 12 years. It seems perplexing that Celtic should neglect these markets that not only have provided huge profits for Porto, but also provide high quality players for Porto and clubs throughout European football. It was far easier to peddle the myth that South American footballers would not settle in British football when there were almost no instances of them playing there. Now though, their presence and expertise is inescapable as Javier Hernandez, Carlos Tevez, Luis Suarez, Sergio Aguero et al demonstrate that they can comfortably adapt to living and playing in Great Britain. It is often remarked that clubs in countries such as Portugal, Holland and Belgium have an advantage in obtaining non-EU players due to the their rules on immigration. However, this ignores the increasingly lax entry system for footballers in Britain that allows for innumerable players to receive work permit that do not come close to satisfying the official Home Office criteria. The fact that Celtic themselves have been able to secure work permits for the likes of Du Wei, Koki Mizuno, Ki Sung Yeung and Victor Wanyama in recent years makes it even more baffling that they are not purchasing players from South America.
Worryingly for Celtic supporters and shareholders, poor asset management appears to be a consistent theme in the past decade. In the years following the UEFA Cup final in Seville, players such as Liam Miller, Jan Vennegoor of Hesselink, Thomas Gravesen and Shunsake Nakamura amongst others have left Celtic without the club receiving a fee, all of whom would have commanded significant transfer income for the club shortly before, when under contract. At the time of writing, club captain Scott Brown is expected to sign a new contract for Celtic, however, it is not implausible that he could wait for three months until the January transfer window when he will be able to sign a pre-contract agreement with another club. It could be yet another example of Celtic receiving no transfer fee for a previously valuable asset. Effective asset management dictates that Celtic should be selling their players when they have at least 18 months remaining on their contract in order to recoup the maximum transfer value of their asset. This approach contrasts with Porto who have a very coherent transfer and asset management policy that has been very successful and remains regardless of the manager of the playing squad. The vast majority of their players are bought from the three aforementioned markets; Portugal, Argentina and Brazil. The Portuguese club purchase them at a young age, evidenced by the fact that for the past 4 years they have not paid out a transfer fee for any player over the age of 24. By purchasing players from Portugal and South America, Porto obtain high quality players that demand far lower wages than the players obtained from the markets that Celtic use. Porto use and develop the player, but always with the clear intention to sell when the player's value is high. The Portuguese club have positioned themselves as a 'gateway club' for young talented South American players. It is a mutually beneficial exhange-the players get the opportunity to play in the Champions League and use it as a shop window to get a subsequent move to a major European league and Porto obtain high quality young footballers on comparatively low wages. The footballing and financial success of this policy is evidenced in Tables 1 and 4. Whereas Porto have had a coherent and consistent transfer strategy over the past decade, it is difficult to attribute such a plan to Celtic. At least from the outside, any such transfer policy (if there is one) seems to change from manager to manager. From focussing almost exclusively on the British markets from 2000-2005, Celtic now purchases players from a wide variety of leagues. It may be claimed then, that Celtic are finally (if slowly) arriving to the conclusion that they need to focus their player recruitment on more profitable markets. However, statements from the chief executive regarding the resale value of players and the subsequent reinvestment of that transfer income seem at odds with acknowledged interest from the club in ageing players from the English market such as David James, Jimmy Bullard, Sol Campbell and Craig Bellamy (and the signing of Frederik Ljungberg), all of whom would have commanded large wages with little or no future re-sale value. The past decade will surely be described as the golden era of FC Porto. They have been dominant in their domestic league and have achieved remarkable success in winning 4 international competitions, including the Champions League. The basis of this success has been their superb player recruitment and asset management policies that has enabled them to earn almost half a billion euros this decade in player sales, allowing them to reinvest and obtain high quality players maintaining their competitive level. CONCLUSION Another factor that offers Celtic even more potential is its proximity to the English market - the biggest spenders in Europe. Instead of Celtic lamenting themselves as the poor relations of their English neighbours, perhaps they should be embracing their situation. Within the Scottish league, Celtic can have regular access to the Champions League where they can showcase their players to English customers who are aware that these players have already undergone a cultural and playing adaptation to Britain. Of all the clubs out-with the major European leagues, Celtic with their resources and proximity to the richest league in the world, is in an enviable position to take advantage of selling their players to the English market. There is a symbiotic relationship between sporting and financial results. By observing the sporting and transfer income success of a much smaller club in FC Porto, Celtic supporters and shareholders should demand improvement in player recruitment and asset management in order that Celtic can reach its huge potential. As Porto stated at the beginning of their golden era in their 2003 Annual Financial Report, 'The policy of equipping the team with high-quality athletes has not only provided excellent sporting results, but has also resulted in improving the potential of most of the company's sources of income, particularly the growth of receipts of transfers; an essential factor for the financial equilibrium of the company.' Celtic should take note. |
| Last Updated on Monday, 26 September 2011 17:46 |
The huge profits from transfer dealings that Porto receive can be attributed to three main markets; Portugal, Brazil and Argentina. When selling players bought from the Brazilian and Argentinian markets, the players on average more than double in value. An example of a successful and profitable signing for Porto was Radamel Falcao from River Plate for €5.4m in 2009. He played for 2 seasons, scored 72 goals in 85 appearances and helped win them two domestic titles and the Europa League before selling him in the summer of 2011 for €40m.
Porto obtain their players from markets that have been shown to be far more profitable than those used by Celtic, but also importantly the Portuguese club have a far superior level of asset management. Porto frequently sell their best assets when they are at a high value. With reference to the two playing squads that played in the 2003 UEFA Cup final, Celtic received a transfer fee for just one player that started that fixture; Stilian Petrov, who was sold for €10m. In contrast, Porto received fees for 9 of their starting eleven, totalling more than €100m. From Table 4, it can be noted that Celtic invested more than €40m in the playing staff for the two years prior to the final. It was this outlay that was to provide Celtic with improved sporting results both domestically and in Europe. However, this surge of investment seems flawed and the success unsustainable when such expenditure is not aligned to an intention to recoup transfer fees and re-invest in the playing squad. That so many of the playing staff were allowed to run out their contracts and leave without the club receiving a fee reflects badly on the asset management of the club.
Comments
the celtic hierarchy needs vision and imagination to get us out of the decline (oh yes we are in decline!) that we are now in.
if the celtic board DID have vision and imagination we would not be in the 3rd division of europe teams right now.
answer?
we need a new board, clearly the people directing the club have little or no idea how to take us forward.
will the board do the decent thing in the interests of the club... no they wont.
answer?
a united front from all the supporters groups to demand change.
let's hope DD reads it as well....
hi walsh, this is a misconception. in the last few years countless non-EU players who have not come close to fulfilling Home Office criteria have been granted work permits e.g. rafael, fabio, denilson, lucas, figueroa, valencia, rodallega, obua, alex, ramires et al.
in the cases of rafael and fabio da silva at man utd, they were granted work permits not only before they had ever played for brazil, but before they had ever played a competitive league game in brazilian football!
this isn't confined to other clubs either. celtic have sought and recieved work permits for du wei, mizuno, nakamura, wanyama and most recently bangura. none of whom had fulfilled the official Home Office criteria.
work permits are no longer a key issue. we can get them for many non-EU players. the issue is that we don't scout the south american market to obtain these players that are available to us. this was actually an issue i remark upon within the article to alter this misconception.
hail hail
Lyon operate a similar policy to Porto but what both Porto and Lyon have that Celtic do not is vast in population terms ex colonial empires where the numbers of young men taking up football as a means of escape from poverty mean that the cost of recruiting is relatively low with the chance of success being high because of numbers and motivation. (had we been cricket club we might have done better)
Portugal is obviously a more attractive proposition to a young Portuguese speaking Brazilian or even Spanish speaking Argentinian than Celtic. Not sure who the ex French speaking colonies are but there are many and France is their destination of choice.
The French also have countries overseas that are treated as part of mainland France. We on the other hand have dependencies and the likes of Anguila is more likely to turn out a champion scuba diver than footballer.
I remember Gordon Strachan expressing his exasperation at the recruiting restrictions immigration puts on Celtic so it is not as if they have not made representations.
However putting that aside if we could offer CL football that might land us the Izzy's or Kayals but we have a rival who would endanger their very existence to stop us being able to offer that CL opportunity (hopefully that situation will end this season).
All the large ex English speaking colonies for some obscure reason have eschewed football as their national support, so we have to ferret away in smaller countries where the demography means less gold nuggets per 1000 than per 100000.
I wish I were less negative I really do but your article shows just what we are up against and is an excellent contribution to the debate.
Escaping the SPL and Rangers is still I fear our best if at present forlon hope.
thanks auldyin-Portugal may be an attractive option to young south americans, but the fact is that footballers follow the money. No brazilians ever grew up dreaming of living in Donetsk, but if shakhtar pay them, they'll go. Celtic have been paying far more than Porto in wages, so we too could be an attractive option.
Furthermore, from living in south america, i think people back in scotland underestimate the desire for south americans to get that first move to europe, no matter where. luis suarez went to groningen, alvaro perreira went to cluj, pepe went to maritimo etc off the top of my head...even Zico went to Udinese!
if we scout them, they will come ;)
My own perception of where we fall down in regards to our signing policy is that our board have decided that loan signings offer us our salvation. On top of that we are scouting for bargains but are we scouting as aggressively as we should be? Kayal and Izzy for example are two fantastic buys but both were established internationals before we snapped them up. The fact we got them from "unfashionable" leagues, on the cheap, is good business but they were both established prior to coming to Celtic.
I spoke to friends about this in the past that I felt we were neglecting our scouting and relying on agents or other clubs informing us of who was becoming available on loan, then frantically trying at the last minute of a transfer window to get them to sign up. We wasted so much money on players who seen nothing but another pay day instead of putting that money into players who wanted to progress and had something to prove.
Can anyone truly say they were overjoyed at the Ljundberg signing? Gravesen anyone?
We are a club that is a worldwide brand. Our name is recognisable to almost any follower of the beautiful game, wherever he may be in the world, yet we are not capitalising on this. For example the establishment of football academies in places like US, Asia and South America may initially be a large outlay but we would in effect be laying the groundwork for what could turn out to be a very lucrative stream of both new players and revenue! I'm amazed we're not looking at that more seriously.
Agree 100% with your last comment Mark...if we do scout them, they will come....but if we can give them a Hoops identity in their own country through football academies, they'll not only come but they'll be falling over themselves to come!
I must say the captures of Kayal, Hooper and Izzy have been quality and it can be argued they were established players before we bought them. I was bamboozled when we bought hooiveld, I had seen him tons over here ( i live in sweden) and found him to be very weak in the challenge and to me that would be a pretty major setback in the SPL so that to me was poor scouting. I also have it on good authority they were well informed of Ola Toivonen and gave him a pass (they felt £3m was too tasty), Fans at PSV can testify, they got a tall, strong striker with good feet and confidence and now said to be valued at 10mil. I also thought there was a bit of the Chris Sutton about him, so our scouts should have seen his value.
But this goes back to your point if we change our mindset regarding our asset management we will be more inclined to take punts and players who will grow as opposed to trying to find instant hits. Lets also be clear the prices we are willing to pay per player will not get us too many readymade wonderboys. So we are too inclined to dump them if they don’t make immediate impacts and the last few seasons transfers show that fact.
One final thing you are spot on in how we should view our position I actually argue and use the Dutch league and Belgian league in my thesis and their proximity to France and Germany respectively. The past few years have seen a huge exodus of Swedes, Finns and Norwegians to play in especially the Dutch league with the simple view of progression to the bundesliga and beyond.
We need feet on the ground so think if we haven’t covered our bases so close to home it’s a big ask to expect an effective south American scouting network overnight, these networks have been built up since the 70’s by the Portuguese clubs, especially the Brazilian network.
But again excellent piece. Maybe DD has a job for you ?
It is like Ebbe Skodval's comments about stats being like miniskirts - they reveal everything except the most important thing. The 3 big problems you have when comparing ourselves and Porto is that
1. As Auldyin mentions - it is far easier a transition for a young Brazilian to go to Portugal than it is to Scotland, culturally,language wise and importantly football wise.
2.The English market - you say in your article this could well be a positive. I'm sorry but in the 10 years you have compared us with Porto - the valuation of English players has gone "Ga-Ga". This market much like the way Brazil is for Porto - is our main market for buying players, and over the last 7 years we have been priced out of moves for players. Alarmingly in recent seasons this has been for players in much lower divisions.
3.Scotland is a country of 5 million with a decreasing volume of young players coming through the ranks. Furthermore we are very poor at football in comparison with Portugal.
As I said before there is a lot in your article I agree with, and we should be looking into these markets, but I also feel you have overlooked a lot of key factors which account for the huge differences in the levels of success both clubs have had over the last 10 years.
klubber, to be honest i think most celtic fans have this for a while now. i had an incling about how the figures were going to be, but even i was surprised by how much it backed up our suspicions
karlstad-thanks a lot. i'd be interested in reading through your thesis as you're writing it. my twitter acount is @markocooper if you wish to send it on. good luck with it.
eeramacaroonbar, just to respond to the three points briefly;
1-i do think it's easier for a brazilian to culturally adapt to portugal than to scotland, however the process is far from insurmountable...there are so many examples to mention, but just a few romario/ronaldo at psv, countless successes in russia/ukraine, perreira at cluj, luis suarez at groningen-scotland would have been as easy a cultural/playing adaptation as any of these places. furthermore, last year there were more brazilians playing in the CL (78), than any other nationality. not all play in portugal/spain, of course.
i accept and agree with the general point, but it does not preclude these boys from also suceeding in other cultures too. at the risk of labouring my point, it may be easier for a scandanavian to culturally adapt to the UK, but it doesn't prevent him from also being successful elsewhere.
one related point that i didn't go into within the article is that with the increased wealth of the brazilian economy, i'd forsee their clubs being able to retain their players for a bit longer than before and demanding more money as well=brazilians may be more expensive. personally, i'd suggest that celtic look at argentina, paraguay, uruguay and colombia in particular. very good players and substantially cheaper than brazil
2-i'm not sure if you've misread/misunderstood my point re the english market. sorry, i may not have made myself perfectly clear when i was writing it, but i was meaning that we should embrace our position only in terms of selling to england, due to the fact they spend more than any other league. when buying, it would be preferable to look towards other markets. it is rare to get value for money in a market that values henderson at £20m, carroll at £35m etc etc
3-i fully accept your third comment. scotland have not produced the same level or quantity of decent players as portugal in the last decade. regarding this point though, 2 small things; there is nothing stopping us scouting portugal as well-admittedly we'd be at a disadvantage to the big 3 there, who have deep scouting networks, but we should be covering this league due to the amount of talented players and excellent youth systems they have there. secondly, although scotland hasn't produced many good players in the last decade or so, we've largely missed out on the few decent ones-fletcher, mccarthy, dorrans, bannan (in the last 3 years alone).
thanks a lot for the comments-i really enjoy reading and discussing them with you. also thanks to the excellent response and messages on twitter. much appreciated
One question I have about the turnover figures is that it seems Porto don't include player transfer income into their turnover as for some years this is higher than the turnover. I believe the Celtic figures do include player trading.
i thought i'd made a big mistake there...i was going through the accounts again! :)
thanks
Sorry I disagree strongly with this part. You have mentioned Holland and Russia there and said that Scotland is just as easy to adapt to playing wise. Not in a million years. Both the Dutch and Russians are renowned for technique and skill. The transition football wise here would be minimal for someone from South America.
I would go as far to say that the British game is the hardest to adapt to in World football. Plenty do succeed in adapting but there are also just as many who don't. It is the physical nature and high intensity that does it. They either sink or swim in Britain. Most other countries football is based on technique and skill just like the South American countries.
Porto are probably the benchmark in terms of balancing income vs results (both domestic and in Europe), helped by their youth system, scouting network and their ability to unearth gems from South America and sell them on for a healthy profit to 'bigger/richer' clubs.
This is a model that we have to follow, but instead of the South American market, surely Scandinavia is a more obvious target for scouting (closer for travelling to and from, similar weather, similar footballing styles). Ajax have always had a mixture of young South Americans and Young Scandinavians (Littmanen, Ibrahimovic, Molby, Jesper Olsen, etc...) who have usually been sold on for a decent wedge.
German clubs also seem to be able to field teams of young Scandinavians and South Americans.
One of the most important points is finding players who are hungry. If they come to Celtic and use us a stepping stone to a richer (maybe not bigger) club then, if we make a profit on them, the model will work.
I can agree with this but in recent years isn’t Scotland renowned for one of the best coaching courses in the world at largs. The products from this system are some of the most influential coaches in Europe
So I can’t see player development being an issue, still feel we would have more success trying to attract northern Europeans as they are already in tune with British culture and the leagues also or influence in Ireland has slipped.
Unfortunately for us and most SPL teams the media coverage we get outside is negative and this will impact on any teams ability to attract quality players, which is why I agree with Mark Cooper, we have to be realistic and we should remarket the league as the best shop window for anyone who wants to progress to premier league football and the riches it provides, anywhere you go in the world now there are pubs full of locals and expats crowded round tv’s watching the EPL so I believe south Americans are now in tune with wanting to play in that league.
If we became the league that helps them adapt to the pace and physicality whilst acting as a shop window it would also mean we can add a greater value to our players plus every now and then we get a deco, falcao, hulk who become 20mil players during their stay. But recently we are producing valuable assets McGeady’s transfer fee and realistically Hooper should be worth similar if premier teams are willing to pay 9mil for Connor Wickham same for kayal, ki and in the dark forces case jevlavic and Davis these are quality players who should command a decent market value transfer fee, we have been held to ransom in the past by the premier league where they use the players desire to force down the transfer fee, this also needs to change and by repositioning the goals of the clubs in our league this can be achieved, we aren’t going to be let in to the party so we have to re-evaluate where we are at and as fans accept this.
i see your optimism at the end there, but even if theywere sucessful in selling players on, it'd years until we are at those heights again imo
#15 macaroony, to be fair to the guy, he did so there are too many examples to mention. he could have gone fur suarez, mascerano aguero, rodalega chicarito tevez or whoevr. all play in british fitba
#17 i too would like scandanavians. we've done well wi the swedes so far! ;)
The last pod discussed asset management a real bugbear of Harrys. In the last ten years we have had good money for three players, McGeady, Petrov and MacDonald in that order. Others have been allowed to run down contracts (Brown may well yet do this), leave for washers or be shunted out the door on loan. I agree in the last pod that McManus and Caldwell were not good enough however the fact we still have nothing better is surely the point worth making.
Asset management of the goal keeper must be addressed. A club of our size not owning a decent goalkeeper is beyond belief. Why was Boruc sold when he could win us games? Neither of our current keepers would win us a game yet we chased one all summer no doubt paying Newcastle a handsome loan fee and of course his wages. Would we not have been better keeping the best goal keeper we’ve had for years and paying him a bit more?
There is often an acceptance there is only two sides to this coin. Spend and put us in debt or don’t. At least you are showing a third way. Spend better. Scout better. Develop youth better. The first McLeish report took a couple of pages from the end before someone asked who coaches the coaches.
Buying from England where wage pressure is at the highest end of the spectrum is madness, however anyone seeing Daryl Murphy in his first game against Braga and witnessing the lack of quickness of both feet and thought would make you wonder why we purchased him in the first place. Porto must suffer the same wage pressure with Spain as close.
Are the board frightened of having their fingers burned again ala Scheidt and just what is the story with Juarez? Remember he scored two goals in Europe last year.
Manchester United has a tie in with Deportivo Brasil and recently had five boys over at a match at Old Trafford. They are also looking to tie up with Twente in Holland to get the boys an EU passport as they lack youth level appearances (if we are all in the EU why should rules be different in member states?). Deportivo Brasil will not win the league; they bring through youth players and sell them on. Owned by Traffic they also retain a 50% sell on clause and Man Utd send their South American players there to be held for development and future transfer.
The last time we played in the Europa League against Hamburg the winning goal at Celtic Park was scored by Marcus Berg. A guy signed by Groningen for £2.5m from IFK to replace Luiz Suarez. Player and top scorer of the 2009 Under 21 Championship he moved to Hamburg for e10.5m and a friendly match. Also playing that night was Jonathan Pitroipa a guy from Burkina Faso who we will see again as he signed for Rennes over the summer. There are players to be found
It’s no longer satisfactory to say we can’t compete, the board chose not to. Please Santa can I have a rock of a centre half. It’s not too much to ask, please.
neil, good to speak to you the other night in the pub. yeah, the asset management thing is pretty poor, yet so obvious. a player should not even be allowed to get down to his last year-boruc is the prime example. he could have been sold for a significant fee-following good performances in europe for us and his impressive world cup in 2006. as you well know, the fee we recieved was a fraction of his previous worth, due to the fact that he only had a year left with no intention to resign blah blah blah. yet we repeat these mistakes. re scott brown, even if he does sign, we've put ourselves at an awful negotiating position. you could put forward an argument that resigning him for even £50,000 a week would be worth it, because at least then you could sell him in jan or july and get something. otherwise, we get no return at all in july. a ridiculous situation.
the juarez story is truly bizarre. we buy a 22 year old mexican right back, even though we have hinkel, wilson and cha there. so he plays in friendlies in centre midfield. the obvious initial thought is that it might actually take a latin american right back and bit of time to settle in playing in a new culture in a completely new position. he plays in the friendlies, does v well. plays in the euro games in his new position, scores in both the home games...
then he only starts 7 more games in the entire season! incidentally, we won every single game
but i just don't understand the reasoning. why invest a considerable amount of money in a young boy who has played at right back all his life, to then play him in midfield? even when he plays there and does fairly well, he is dropped and doesn't get a look in. even when we get injuries at right back, he seemed to be 4th choice! :) finally we give him out on loan to zaragoza in la liga. scored at the weekend btw...if anyone wants to write an article on that one, feel free
the desportivo brasil thing i was reading about in the argentine press last year because they also have a tie-up with the team i used go and watch, san lorenzo. not really related to us, but brazilian football is going to be very interesting over the next decade as the country (and clubs) become richer. players are staying younger, coming back from europe earlier. huge commercial deals-in terms of cumulative team sponsorship, the 3rd biggest in the world...dwarfing spain and italy. not far behind eng and ger at 1 and 2 http://globoesporte.globo.com/futebol/noticia/2011/01/futebol-brasileiro-e-o-3-que-mais-arrecada-com-patrocinios-em-camisas.html
the clubs are competing with european wages now, ronaldinho getting £100k a week. huge economy, growing middle class and incredible fan bases for the teams. i'm going off on a tangent here, but i read an article about how for the first time ever, portuguese graduates are moving to brazil in their thousands-more opportunities, more money. fascinating to see what happens to brazil (and their football) in the next decade.
hail hail to all
Direct comparisons are always difficult due to lots of other small factors which can all add up to a big difference. In relation to Portugal, quality of the other teams and style of play due to league structure will impact. And despite being hardy souls, used to this rain, the weather in Scotland is a factor, both on the way we play football and on attracting people here. In general however the economic facts in your article speak for themselves.
As I have said & your figures highlight - asset management!!!
Not to touch too much on the earlier work permit debate, see below;
http://sport.stv.tv/football/scottish-premier/rangers/193378-explained-uk-work-permit-rules-for-footballers/
If we looked further out & used other Portuguese examples, Benfica or Sporting I imagine we'd fare just as poorly. Looking wider still most leagues in similar circumstances (the big neighbour syndrome) Belgium, Netherlands, Switzerland & Poland all rely on selling on their assets to counteract the discrepancy in broadcasting money. Again Scotland cannot be reaching the standard we should be expecting. They're examples of McGeady, Petrov & Hutton still though the Scottish League hasn't had that many big hitting transfers out. Van Bronkhurst & Arteta of the hun have gone on to bigger & better things in the game (I'm not sure of the fees) hard not to argue though that they would be the exception rather than the rule.
As much as I agree that we could be doing better business with our assets I think the answer lies in the perennial question 'do the Scottish leagues have a sufficient technical standard'?
Looking after our own is popular with the support (for good reasons!) but I think Celtic need to be attending to the bigger picture with the rest of the SPL. Suppose 2 Euro league appearances by Scottish teams will be pointed at but I think we;re still to see Celtic (& Scottish teams) complete our bottoming out. Bah!
I think Celtic need fresh focus and a new broom to do so. Hope springs eternal.
Cheers Mark
People still look for excuses, such as work permits, as to why we can't compete with Porto, we got one for Mizuno , maybe because we could sell more jerseys in Japan rather than in South America.
I'd be interested to see a similar article on Copenhagen, another team who dominate their domestic league, and who have done ok in Europe in recent times. Again they don't seem to spend what Celtic spend, just they spend it better.
Great article though, even after a second read !
To adopt this change of philosophy, it will require millions to be invested in scouting, youth and player development. Simple answer - Celtic won't do it.
At the moment they make out we are scouring the world for young talent, and the U19's teams of recent years have indeed had players from all over europe - but they seem to be the second rate players that nobody else wants, none are coming through. - Misun, Cervi, Giordano, Luca Santonicco, Twardzik twins, Atajic, Kurakins, Bjarnasson, Finbogasson. That's about 10 we brought in.
what is the cost of living in Portugal?
It's lower than in Scotland which is part of "rip off Britain".
If it costs, for example, 5k a week to live like a king on Scotland, it would cost much less in Portugal. They can therefore offer lower wages for a similar standard of living.
The point of brazilians etc signing for porto due to ease of settling is a good one but the portuguese climate is also massively different from ours.
There are a good many players would would point blank refuse to move to Celtic on the bases that we'll be playing Aberdeen in December on a wednesday night in the snow......rather than porto who'll be playing benfica in an altogether more pleasant setting.
Not sure about the point made that Celtic should be using our proximity to england to sign better players......any player who is good enough to sign for porto must reasonably also consider himself good enough for at least half the EPL teams.....and based on the weather, why choose celtic?
I think the real reason is the style of football.
You still hear it on the TV - managers saying their players got "in about them". For that read, "got physical".
Many new players say they're surprisde by the speed of the game because they're closed down/tackled very quickly.
The teams who cannot compete with Celtic (and rangers) try to make up for a shortfall in skill, by increasing their workrate and physical play. I don't mean in a dirty sense (well, not all the time anyway) but enough that celtic (and rangers) need to adopt their play to combat the more physical style of poorer opponents.
That then hampers us in europe because it has become the only way we know how to play.
I think that until we change to summer football, play in some warmth, and increase the league to 20 teams to vary the play a bit (it's boring playing some teams as many as 6 or even 7 times a season) we're doomed to be also rans in europe with the odd good result or run thrown in.
if anyone wants to get in touch, my twitter account is @markocooper. to be honest, i don't use it much but it's very useful when putting out articles to get as large a readership as possible...especially because the CU twitter account is followed by thousands-really helpful.
anyway, if anyone sends me a message on there i'd definitely see it within 1 or 2 days.
hail hail, mark
I've just started reading "Moneyball". If you dont know it, its about Billie Beane who reinvented the recruitment policy for the Oakland A's baseball team.
There is a quote in there around the draft, where around 2 of 50 players drafted make it. I had a look at Celtic's recruitment since Martin O'Neill came in in the summer of 2000, and some of the numbers are quite scary.
O'Neill recruited 19 first team players, 9 of whom you would say where successes, 10 if you include Rab Douglas. 9 of those were in his first 2 seasons, of 11 signings. You could argue that only Bellamy was a success of the players he signed after 2002.
Gordon Strachan bought 39, only 13 to 15 of whom I would consider to be a success, that includes Scott Brown and Samaras as successes.
Tony Mowbray bought 12 players, of whom only Ki and the on-loan Robbie Keane would be considered as successful signings.
Neil Lennon brought 13 players in last season, and you could argue that of those only Juarez, Murphy and Ljunberg have been unsuccessful, whilst there may be doubts and differing views around some of the others.
What the stats appear to show is that our most successful signings were our most expensive ones, was never going to be rocket science to work that out. What is concerning though is the lack of value we obtain when we shop at mid-market levels.
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