Great podcast and amazing insight to our performance in player trading relative to other European clubs.
One thought that springs to mind, and what is current missing from the analysis, is factoring in the cash investment made into youth development and player development over the same period. This can skew the statistics, because Celtic may have a much lower profit margin, but may also be be investing much less into development over the same period.
Although hard to quantify , a ratio of profit from.player trading over costs to run youth development over the same period may give another insight into how successful we are at our own player development.
AZ is an interesting example. Although they have modern analytics and a great setup for youth development, I think they also profit from being close to Ajax, and feed off of their success. Ie taking "rejects" and feeding from their youth projets
I must confess I wasn't expecting to enjoy the show so much without Alan on the panel! Excellent analysis James.
An interesting aspect for me was the abysmal performance of The Rangers. I knew they were a basket but seriously😂 A big frustration for me is how many Celtic fans think we are a well run club under the current ownership purely because we haven't gone bankrupt and have a big cash pile. A cash pile that would get you fired or taken over in most companies.
I think the vast majority of Scottish football fans and media think Celtic have a successful player trading model and I see where they get that from now, as they are only comparing us to that mob south of the river. It is very illuminating to see us compared to our peers. You don't even count Ajax as a peer because they are so far ahead of us. If our board had any self awareness at all they would be embarrassed to be in the same room as the Ajax directors in Como this week, as they tuck into their nice Italian food and wine, but I think we all know the answer to that.
I like the Board to Supporter ratio, which actually attempts to put some numbers on a comment I have seen a few times on KDS this week where people are questioning the huge increase in ST cost over the last 20 years while our transfers stay in the £2-3m bracket and much lower than the individual amounts clubs like Brugge and Feyenoord pay. We may see some larger transfers later in the summer after we have finished our pre-season, but that is also unforgiveable in a season with a CL qualifier.
Great pod and thanks for doing this analysis James. I might have missed this but how are some of the best performing clubs in these metrics protecting their young players from being poached just as they can make a first team impact for the club like Doak was? The narrative of us being good at player trading has been Scottish media driven. You hear it all the time even coming from relatively sensible pundits on the likes of BBC Sportsound
Better run clubs relative to development generally play their teenagers/20-21 year olds material minutes and/or play them in B teams in 2nd tiers (usually).
Scotland structure is moronic in this regard, as the lack of sanctioned B teams within the pyramid is a big problem, IMO.
Given this issue, Celtic should have invested years ago in a sophisticated infrastructure to place young players in suitable loans, IMO.
Mmm..I understand that player trading is very important..but surely the overall profitability of a club is THE key to understanding finances and ability to improve the squad?..Also think using the fan base statistic is unnecessary as the only outcome was CFC coming out poorly.
Keep up the good work ,thoroughly enjoyable and thought provoking. HH
Profitability can be driven by many factors, both those management controls and those they do not. The primary factor that Celtic management controls which has driven profitability is the decision to operate the cost structure as if the club will play in the Europa League.
As a result, seasons in the champions league result in "excess profits" relative to the baseline budgeting. The one twist on this is that since Rodgers' first season in 2016-2017, they upscaled spending so that operating profits would be negative in a EL season but only enough that would likely be covered by net player trading gains.
That is what happened in EL seasons under BR, Lennon, and then Ange - sell player(s) to reports overall profits (fiscal 2021 Covid exception).
Player trading have been used as a fall back to cushion marginally more aggressive operating baseline budgeting - not a strategic part of revenue growth. All in my opinion.
Lastly, the big factors they did not control were Rangers' successes in EL that drove the country coefficient to enable direct CL qualification for 3 seasons straight, Riley McCree rejecting Ange/Celtic in favor of Middlesboro and leading to O'Riley being signed, and the Saudis spending like lunatics on players for a summer, including Jota. Add all those non-controlled factors up and they are likely worth most of the excess cash reserves.
I would be interested to know how many players we have to churn to get to that "profit" figure. I would guess we go through a higher volume of players than many of our peers.
My thinking it is a quality issue with regards to buying vs a need to increase volume of transactions. Talent identification and how it fits with the style of play has been a major deficiency, IMO. Combination of many wasteful signing at relatively modest fees (but taking up years of wage bill room) and then some higher priced signings that were similar but far more costly - Ajeti, Barkas, Idah, Trusty, Lagerbielke, Nawrocki, Engles - £40+ million there over last 5 seasons.
As Schmeichel, Maeda, and O'Riley indicate, better to spend less on quality fit than a lot on lesser fit. Nygren and Inamura are along those lines, IMO.
Your comment strikes at the heart of the juxtaposition of benchmarking only domestically amongst poorly run clubs with far lower financial resources vs a reasonable peer group from across EU.
Fantastic analysis, James and Laura! Helps to overturn the lazy narrative re: the board and their transfer and commercial ‘successes’. Would they ever be capable of doing an analysis like this or are they, per Desmond, most ‘instinctive’ with their assessments (or just have the wrong competitors as benchmarks)?
The markets famously rely on 'confidence' (with my VERY thin understanding of it, finance is bonkers), Scottish football has famously not inspired much of that in decades. Aberdeen has success in what? The 1980s?
This hurts our profit margins BIGTIME!
It's mad that Celtic can identify VVD and Frimpong and get pennies on the pound when selling him so you can see how confidence become a self-fulfilling prophecy of upwards or downwards spiraling 'confidence'.
I'd be interested to see these benchmarks if you substituted the Sunderland and Southampton to top teams in the big 5 transfer fees for the one we got selling to the Sunderlands and Southamptons, how it affected our league table positions in those graphics.
I just hope we have the vision at the board level to turn this tanker around. HH
On player trading v Red Star, Olypiacos, Salzburg et al, youth players are 100% profit, Celtic are at a disadvantage when our best young players can be Doaked down south so easily.. not wanting to be an apologist for the club..?
EDIT - listen to the full video before firing the comment off..
Great podcast and amazing insight to our performance in player trading relative to other European clubs.
One thought that springs to mind, and what is current missing from the analysis, is factoring in the cash investment made into youth development and player development over the same period. This can skew the statistics, because Celtic may have a much lower profit margin, but may also be be investing much less into development over the same period.
Although hard to quantify , a ratio of profit from.player trading over costs to run youth development over the same period may give another insight into how successful we are at our own player development.
AZ is an interesting example. Although they have modern analytics and a great setup for youth development, I think they also profit from being close to Ajax, and feed off of their success. Ie taking "rejects" and feeding from their youth projets
Hello Graham- unfortunately limited on that sort of analysis due to lack of transparency and disparities in reporting across countries/leagues/clubs.
I agree that ROI-like benchmarking of youth development would be very helpful.
I must confess I wasn't expecting to enjoy the show so much without Alan on the panel! Excellent analysis James.
An interesting aspect for me was the abysmal performance of The Rangers. I knew they were a basket but seriously😂 A big frustration for me is how many Celtic fans think we are a well run club under the current ownership purely because we haven't gone bankrupt and have a big cash pile. A cash pile that would get you fired or taken over in most companies.
I think the vast majority of Scottish football fans and media think Celtic have a successful player trading model and I see where they get that from now, as they are only comparing us to that mob south of the river. It is very illuminating to see us compared to our peers. You don't even count Ajax as a peer because they are so far ahead of us. If our board had any self awareness at all they would be embarrassed to be in the same room as the Ajax directors in Como this week, as they tuck into their nice Italian food and wine, but I think we all know the answer to that.
I like the Board to Supporter ratio, which actually attempts to put some numbers on a comment I have seen a few times on KDS this week where people are questioning the huge increase in ST cost over the last 20 years while our transfers stay in the £2-3m bracket and much lower than the individual amounts clubs like Brugge and Feyenoord pay. We may see some larger transfers later in the summer after we have finished our pre-season, but that is also unforgiveable in a season with a CL qualifier.
Great pod and thanks for doing this analysis James. I might have missed this but how are some of the best performing clubs in these metrics protecting their young players from being poached just as they can make a first team impact for the club like Doak was? The narrative of us being good at player trading has been Scottish media driven. You hear it all the time even coming from relatively sensible pundits on the likes of BBC Sportsound
Better run clubs relative to development generally play their teenagers/20-21 year olds material minutes and/or play them in B teams in 2nd tiers (usually).
Scotland structure is moronic in this regard, as the lack of sanctioned B teams within the pyramid is a big problem, IMO.
Given this issue, Celtic should have invested years ago in a sophisticated infrastructure to place young players in suitable loans, IMO.
Mmm..I understand that player trading is very important..but surely the overall profitability of a club is THE key to understanding finances and ability to improve the squad?..Also think using the fan base statistic is unnecessary as the only outcome was CFC coming out poorly.
Keep up the good work ,thoroughly enjoyable and thought provoking. HH
Profitability can be driven by many factors, both those management controls and those they do not. The primary factor that Celtic management controls which has driven profitability is the decision to operate the cost structure as if the club will play in the Europa League.
As a result, seasons in the champions league result in "excess profits" relative to the baseline budgeting. The one twist on this is that since Rodgers' first season in 2016-2017, they upscaled spending so that operating profits would be negative in a EL season but only enough that would likely be covered by net player trading gains.
That is what happened in EL seasons under BR, Lennon, and then Ange - sell player(s) to reports overall profits (fiscal 2021 Covid exception).
Player trading have been used as a fall back to cushion marginally more aggressive operating baseline budgeting - not a strategic part of revenue growth. All in my opinion.
Lastly, the big factors they did not control were Rangers' successes in EL that drove the country coefficient to enable direct CL qualification for 3 seasons straight, Riley McCree rejecting Ange/Celtic in favor of Middlesboro and leading to O'Riley being signed, and the Saudis spending like lunatics on players for a summer, including Jota. Add all those non-controlled factors up and they are likely worth most of the excess cash reserves.
Great analysis James. Another pointer as to why we have been so poor in Europe. Same comment from me. Will never change until DD moves on. Thanks.
I would be interested to know how many players we have to churn to get to that "profit" figure. I would guess we go through a higher volume of players than many of our peers.
My thinking it is a quality issue with regards to buying vs a need to increase volume of transactions. Talent identification and how it fits with the style of play has been a major deficiency, IMO. Combination of many wasteful signing at relatively modest fees (but taking up years of wage bill room) and then some higher priced signings that were similar but far more costly - Ajeti, Barkas, Idah, Trusty, Lagerbielke, Nawrocki, Engles - £40+ million there over last 5 seasons.
As Schmeichel, Maeda, and O'Riley indicate, better to spend less on quality fit than a lot on lesser fit. Nygren and Inamura are along those lines, IMO.
It's a wonder celtic are such a successful club,since we are shite at everything we do.
Your comment strikes at the heart of the juxtaposition of benchmarking only domestically amongst poorly run clubs with far lower financial resources vs a reasonable peer group from across EU.
Fantastic analysis, James and Laura! Helps to overturn the lazy narrative re: the board and their transfer and commercial ‘successes’. Would they ever be capable of doing an analysis like this or are they, per Desmond, most ‘instinctive’ with their assessments (or just have the wrong competitors as benchmarks)?
The markets famously rely on 'confidence' (with my VERY thin understanding of it, finance is bonkers), Scottish football has famously not inspired much of that in decades. Aberdeen has success in what? The 1980s?
This hurts our profit margins BIGTIME!
It's mad that Celtic can identify VVD and Frimpong and get pennies on the pound when selling him so you can see how confidence become a self-fulfilling prophecy of upwards or downwards spiraling 'confidence'.
I'd be interested to see these benchmarks if you substituted the Sunderland and Southampton to top teams in the big 5 transfer fees for the one we got selling to the Sunderlands and Southamptons, how it affected our league table positions in those graphics.
I just hope we have the vision at the board level to turn this tanker around. HH
This should be sent to the club. I do think the very notion that they are objectively not good at player trading would blow their minds
On player trading v Red Star, Olypiacos, Salzburg et al, youth players are 100% profit, Celtic are at a disadvantage when our best young players can be Doaked down south so easily.. not wanting to be an apologist for the club..?
EDIT - listen to the full video before firing the comment off..