Interesting

Celtic income ready for an £8m lift
In the financial year ended 30th June 2003 (the Seville year) Celtic earned £11.4m from merchandising, an all time record. Rangers, however, earned £19.2m from merchandising. Time for a re-think I reckon.

Although Celtic did not publish the number of tops sold, possibly because their deal with Umbro does not disclose this information, I am sure that we outsold Rangers by some way. So why the difference in revenue?

In 2002 Rangers took a bold step, which has paid off for them. They opted to break with the traditional deals that football clubs have with a kit provider and manage their own operations. Here is my understanding of how the income streams break down for both clubs:

Celtic receive an annual income from Umbro £2m for the right to produce the clubs merchandise. They receive no additional income from kit sold from any outlets other than through Celtic retail outlets, where I believe they make 42% mark-up. This is why when we all went out and bought tens of thousands of strips for going to Seville, the income figures hardly changed.

Rangers receive no guaranteed income from Diadora, however, I understand that they earn a 63% mark-up on kit they sell through Rangers retail outlets and around 25% from all sales which go through non-Rangers outlets. This means that Rangers sold 429,000 shirts that season and Celtic probably have no idea how many Celtic shirts were sold. Only Manchester Utd sold more in the UK and Rangers were 5th overall in Europe (every other big club contracts out like Celtic).

So why am I boring you with tales of financial success down Govan way? We are 10 months away from the new Celtic deal being active. If the Celtic commercial team are as sharp as I hope they are, they will be looking at the extra £8m income achieved with a weak brand in Govan and aiming much higher. The new Celtic deal will have to be either the same style, i.e. ditch Umbro & go for it with an independent producing the shirts for Celtic to distribute, or will need to put more than £10m per annum into the club, instead of £2m.

Umbro will, of course, know this and be anticipating a tougher negotiation. I have my doubts as to whether or not they will be prepared to put that kind of cash up, though. They are a commercial company, and any 4-year £40m deal would be a risk that they might not fancy. Could be easier money elsewhere. At the same time, I genuinely believe that over the next 4 years Celtic merchandise sales will soar beyond what Rangers are achieving at the moment. The probability that Celtic will sign up with Umbro again does not look high. I get into negotiating situations all the time and find that the starting point establishes mental barriers beyond which the deal will not move. “You want to move from £2m to £10m, no chance”.

At the moment Umbro are getting the big profit from the Celtic deal, next season we want Celtic to be in the position that the kit producers are earning little more than it takes to produce the shirts, which is probably a couple of quid in some Asian factory.

We have turned over around £60m for each of the last 3 years, and the club will prove that it can survive and flourish on this income level. There are a few ways in which our income can increase, though:

Increase ticket prices. Not where I would want the club to go. I know Celtic fans that pay money they cannot afford to see the team.

Progress further in the Champions League. This will happen every now and again & we will all be happy to cough up for match tickets.

Find new and interesting ways to part fan from money. I was intrigued by the “return your old mobile phone to us” ploy last season. I didn’t, as I did not think that this was likely to be a way we were going to buy Ronaldo. I do not have a Celtic credit card either, although I might be persuaded if I knew it would make a difference. What about it Celtic, how much more money would you make if 60,000 fans each took a credit card for themselves & got one other person to do the same? Trust the fans with information & you might be surprised what happens next.

The easiest way to move the income from £60m to £70m is to get a professional negotiator in to deal with this merchandising contract. I have a small worry that we might see a new £4m per annum deal & be told that it is great for the club, being twice the existing deal. When I negotiate with a client I use the line, “I cannot go back to the office with that deal”, if the fans expect a £10m deal, Peter Lawwell might just be able to say “I cannot go back to Glasgow with £6m, the fans will not wear it” (wear it, get it).


i think it's a disgrace we don't get to see the numbers of shirts sold i'd say without bullshiting we would sell twice as many as the huns hope we get this sorted 2 million is * all for the amount of shirts we would sell, last year i bought 8 celtic tops, 3 kits, and track suit, every second person in the republic has a celtic jersey.

 

I agree. This is very disappointing, and I hope Celtic negotiate a MUCH better deal this term

 

Just read on the evening times website that Umbro are negotiating a new deal with us which could be worth up to £20 million, apparently giving MON instant money to deal with in the transfer market.

 

I was daft enough to post that article (posted by Dubsbhoy) on the TC News section.

The original author was Paul67 of some Celtic site. Got a heap of complaints so removed it. Totally my fault though for assuming it was dubs' work without asking.

 

I contacted the guy who wrote it originally and tried to explain the misunderstanding. Hopefully he'll see sense of what happened. In future though, I will be publishing only what I write - hopefully anyone else who writes news for the site will be doing the same.

If I'd known it was by someone else there's no way I would have posted it at all. It deleted now.

 

I got a ton of hate email lol. Let you know what he says, if anything!

 

Always write my own previews and Reports anyway so looks like im ok :icon_mrgr

 

interesting article,well dun 2 the writer&poster. £8m is alot of muny you could probs get 2good players for that these days.definetly something celtic should be taking advantage of if possible.

 

sorry you got a rap on the knuckles for that one mark, i should of put a link/quoted it, i can't even remember where i found it but if you knew me you'd know i'm a lazy * and couldn't sit down to type that.

sorry again in future i'll make sure i state were i'm STEALING my info from.

 

Lol dubs it's allright, mainly my fault for assuming it was your own work anyway.

However, I got an email from the author and he was OK with everything happened following my apology. And I explained what happened to someone else who emailled me on the matter and thankfully everyone is understanding now.