Scottish football finances

Those of you who follow me on Twitter will know I'm a bit geeky about the financial side of Scottish football. That's partly because it is a simple way of judging who is over- and under-achieving, as well as being a pretty good indicator of which clubs are well-run and which aren't.

Moreover I increasingly worry that it is only a matter of time until another Scottish football club ends up in an administration event. Very few are self-sustaining. As I previously blogged it feels like most Championship clubs are getting by on donations and goodwill. Meanwhile the clubs at the lower end of the top flight are rather dependent themselves on a combination of overachieving (higher league positions and cup runs) and selling players. In fact, even Celtic and Rangers, despite having budgets that dwarf the rest, face their own challenges.

For comparison though, only three Scottish clubs - Celtic, Rangers and Aberdeen - have turnovers higher than the bottom end of the English Championship. Celtic's turnover is lower than that of all 12 Premier League clubs who have published figures for last season. Rangers' wage bill would put them in the bottom half of the Championship, and Aberdeen's is lower than all Championship clubs.

That's what Scottish football is up against.

So let's look at all the info we have on Scotland's top clubs...

(This is the point where I should really shout out to Kieran Maguire, whose analysis of football club accounts is invaluable reading when it comes to this)

ABERDEEN
TURNOVER: £15.4m (2016/17 - £15.3m)
LOSSES: £800k (2016/17 - profit of £500k)

Did Aberdeen really spend £1.3m on new players last season? Apparently so. Hopefully they'll be better value than Paul Bernard and Robbie Winters were. Despite posting a loss for 2017/18 the Dons seem to be in a perfectly decent position due to a turnover that is the third highest in Scotland. The question is how to increase income further - cup runs this season may help - and also how much prudence will be required in the coming years as the club (subject to about the gazillionth appeal by opponents) build a new stadium at Kingsford with the aim of moving there as soon as 2021.


CELTIC
TURNOVER: £101.6m (2016/17 - £90.6m)
PROFIT: £17.3m (2016/17 - £6.9m)

Celtic's status as an enormous fish in a small pond domestically, but as a relative tiddler in the continental ocean (oof, you've pushed that metaphor far enough - Ed) presents them with unique challenges. For a start, making the Champions League is worth a huge amount of money; missing out leaves a large hole in their finances...as seen in their interim results from the first 6 months of this season where turnover dropped by £20m compared to the same period of the previous year.

This gap in the past has been easily filled by selling a player (see: Fraser Forster, Virgil Van Dijk, Moussa Dembele). The quandary is whether to save money for those years where they miss out on the Champions' League, or to invest it to increase their chances of getting through qualifying.

From a domestic point of view however there is no comparison. Their turnover is roughly equal to the other 11 Premiership clubs put together.


DUNDEE
TURNOVER: £4.6m (2016/17 - £3.9m)
LOSSES: £425k (2016/17 - £350k)

Dundee are in their sixth season since being taken over by FPS, their American backers led by John Nelms and Tim Keyes. The first five years have resulted in combined losses of £2.3m...despite about £1.3m from selling Kane Hemmings, Greg Stewart and Jack Hendry. Their wage bill is more than 70% of turnover, which is far from ideal.

This season is likely to follow that trend following the sacking of Neil McCann and a plethora of new signings for successor Jim McIntyre. Obviously there would be a huge problem if FPS stepped away, though there are no signs of them doing so even if the club are relegated this season. The bigger concern is if the stalled plans for a new stadium come to nothing, because that seems to be the key to the business plan going forward.


HAMILTON ACCIES
TURNOVER: unreported
RETAINED EARNINGS: £502k (2016/17 - £968k)

Accies don't report turnover, which only tells us that it is less than £6.5m. In reality it will be much smaller than that, the lowest in the top flight by a pretty significant margin. This was a dreadful year financially for Hamilton because of the Vishing scam in 2017 which cost the club £700,000. Even though they sold Greg Docherty and Mikey Devlin they have now ended up with £450,000 of bank debt that they didn't have before. Things should be better this year though with them still in the top flight and having sold Lewis Ferguson.


HEARTS
TURNOVER: £12.1m (2016/17 - £11.3m)
PROFIT: £1.8m (2016/17 - £2.3m)

Interpreting Hearts' situation is tricky given they got £2m donated towards the new stand and another £1m donated towards player costs. The previous year's profits came after £2.5m of donations. And they got another £3.25m of donations in the first quarter of 2018/19! Now the new stand is completed it'll be interesting to see where turnover is at going forward. Still, it's a far cry from the Romanov days...


HIBERNIAN
TURNOVER: £9.5m (2016/17 - £7.6m)
PROFIT: £214k (2016/17 - losses of £263k)

On returning to the top flight, Hibs posted the fifth highest turnover in Scotland and finished an excellent fourth in the league. It's interesting to note they spent £500,000 in transfer fees for players during 2017/18. . Given the club's wages/turnover ratio is a solid 56%, things have come a long way since seven figure losses during the 2013/14 relegation season and the subsequent campaign. The sale of John McGinn will make this year's filings look quite decent.


KILMARNOCK
TURNOVER: £5.1m (2016/17 - £5.1m)
LOSSES: £180k (2016/17 - profit of £960k)

Killie's increased success on the pitch came at an increased cost as the wage bill went up by nearly £1m; some of that may be to do with the dismissal of Lee McCulloch. (Of note, this increase came after several years of costcutting. Wages and income are still lower than five years ago) It's curious that turnover was static despite finishing three places higher in the league. The increased optimism - and crowds - at Rugby Park this season should make this season's figures more impressive.


MOTHERWELL
TURNOVER: £6.8m (2016/17 - £4.2m)
PROFIT: £1.7m (2016/17 - losses of £181k)

Two cup finals, you say? Decent fees for Ben Heneghan and Louis Moult, you say? It all added up to a bumper year for Motherwell. Staff costs were the sixth highest, but a wage/turnover ratio of 57% is sustainable enough. That said, this campaign's turnover is bound to dip because of a lack of cup income - Motherwell's gate receipts had more than doubled last year - though the sale of Cedric Kipre will cover some of that. And luckily the £1.7m of ongoing interest-free loans show no signs of being called in.


PARTICK THISTLE
TURNOVER: £4.5m (2016/17 - £4.1m)
PROFIT: £343k (2016/17 - £97k)

Thistle had broken even for years, and last year managed a nice wee profit on the back of larger gates - they played Celtic and Rangers twice at home despite finishing bottom six. Relegation is an expensive business though and they were quick to wield the axe and cut costs - so much so that the outcome is that they are now in danger of dropping to League One, which would be catastrophic. But if they stay up they should be in reasonable nick going forward though this year's results are likely to be impacted further by the need to dismiss manager Alan Archibald.


RANGERS
TURNOVER: £32.7m (2016/17 - £29.2m)
LOSSES: £14.3m (2016/17 - £6.7m)

*Opens can of worms* Rangers, on the face of it, remain a financial basketcase. An optimist would say that now the whole Takeover Panel thing is out of the way and there appears to be a settled management team things should finally improve. And the interim results for the first 6 months of 2018/19 showed a healthy profit.

The flipside is that said profit was almightily dependent on European qualification, and at the same time last year they claimed they had broken even up to that point...and finished the year £14m in the red. Add in the estimate in the 2017/18 accounts that they would need a £4.6m cash injection just to get through the year and yet another loan from financial house Close Brothers last week and it seems that things are not rosy yet. But as much as many fans of other clubs are hoping for it, there are no signs of an administration event in the near future.


ROSS COUNTY
TURNOVER: accounts not filed yet (2016/17 - £3.8m)
PROFIT: accounts not filed yet (2016/17 -debt of £1.4m forgiven)

County's situation is unique amongst the clubs on this list, given they have the unconditional support of Global Energy mogul Roy MacGregor, one of Scotland's wealthiest men. With his ongoing input, County don't really need to worry about money.


ST JOHNSTONE
TURNOVER: not reported (2016/17 - £4.9m)
LOSSES: £258k (2016/17 - profit of £49k)

St. Johnstone noted in their annual accounts that their losses pretty much reflected the consequence of missing the top six for the first time in years; These were the poorest financial results since Steve Brown became chairman in 2011, but this can probably be forgiven it was a season of transition for Tommy Wright's side. And, you know, they're not too bad, really - there's still £2m in the bank! The Perth Saints are the model example of what a well-run small club in Scotland can accomplish.


DUNDEE UNITED
TURNOVER: £3.2m (2016/17 - £3.5m)
LOSSES: £219k (2016/17 - £1m)

Thank goodness for the new American owners. United sold their training ground for £1m and made £1.4m from the sell-on clauses of Andy Robertson and Stuart Armstrong and still ran at a loss. That's after losses of £2.5m over the previous two seasons. United would be in a proper help-ma-boab situation had Mark Ogren not completed his takeover.


FALKIRK
TURNOVER: £2.7m (2016/17 - not reported)
PROFIT: £140k (2016/17 - losses of £300k)

Falkirk arrested a run of loss-making seasons partly by closing their youth academy, having reasoned that they couldn't pay for it unless they made £400k of transfer income annually. One suspects the dismissal of Paul Hartley and the fine for tapping up Ray McKinnon will badly affect the balance sheet for 2018/19

INVERNESS CT
TURNOVER: £2m (2016/17 - £3.6m)
LOSSES: £810k (2016/17 - £400k)

Relegation hit Caley Thistle like a sledgehammer. Turnover nearly halved and despite dramatic costcutting and loans from directors totally around £400k they still made a high six-figure loss. Whilst there has been further pennypinching since then and the run to the Scottish Cup semi-finals will be a welcome boost, that's still a heck of a hole to fill.


ST MIRREN
TURNOVER £2.8m (2016/17: £2.4m)
PROFIT £77k (2016/17: £15k)

How much does promotion cost? Well, St. Mirren only made a profit because they sold Stevie Mallan and Lewis Morgan for £700k.


As for the other 2017/18 Championship clubs, Dunfermline made a very small profit but admit to being dependent on £300k of annual donations. Queen of the South made a £200k loss despite having a tiny squad and relying on local businessmen to pay the wages of Stephen Dobbie. Livingston haven't filed their accounts for last season yet, but the previous ones contained a going concern as liabilities were worth £700k more than their assets. Promotion will certainly have helped things though. Dumbarton's accounts were hard to read but it seems like they made a significant loss (correct me if I'm wrong). There wasn't much info to note on Morton's accounts, and Brechin City don't seem to publish any.


Lawrie Spence has ranted and spouted his ill-informed opinions on Narey's Toepoker since September 2007.  He has a life outside this blog.  Honestly.