Celtic and Rangers 2019/20: The Watchman

Innocence is hurting
A world speaks out of tune
Promise calls and promise falls
What are we to do?


No one expects football clubs to have had a good 2019/20 financially due to the impact of Covid-19, but now that the two large Glasgow clubs have published their results, just how badly were they affected by the ravages of the pandemic?

Every business has been impacted by COVID-19, but can Scottish football survive until hopefully successful vaccinations allow a return to ‘normal’ life?

Financial Summary

Celtic Rangers
£’m £’m
Revenue 70.2 59.0
Wages 54.3 43.3
Player amortisation 12.2 7.6
Day to day profit (22.6) (16.3)
Profit before tax 0.1 (17.8)
Wages/Revenue % 77% 73%
Player signings 23.5 11.0
Player sales 19.6 1.1
Net debt/(cash) (12.8) 7.1


In football clubs generate revenue from three main sources, matchday, broadcasting and commercial, the latter of which covers a myriad of activities.

Living in a COVID-19 environment today means that matchday income has been hit severely in 2020/21, but last season clubs were able to play matches before crowds until March.

League football generates solid revenues for both clubs, but progress in Europe makes a huge difference, a capacity advantage of nearly 10,000 should in theory give Celtic more matchday income than their rivals but Rangers’ had nine home matches in the Europa League compared to eight for Celtic.

Equal matchday revenue would probably not have been achieved had COVID-19 not arisen, as Celtic’s capacity advantage would have come into play towards the end of the season but the difference would almost certainly have fallen from £11.3 million the previous season.

No one would expect Scottish clubs to generate more matchday income than English clubs competing in Europe, especially those in the Champions League, but Rangers and Celtic are well ahead of any club other than the ‘Big Six’.

No other country in Europe is as reliant on matchday income as a proportion of the total as Scotland, which is a testament to their devotion, and last season Rangers fans contributed 60% of revenues despite some matches taking place behind closed doors.

Only £21m a year was being made by the SPFL for domestic TV rights, and so qualifying for UEFA competition is critical for Scottish clubs in terms of boosting revenues.

Numbers are not out yet from UEFA in respect of 2019/20, but Rangers did get bonuses of about €7m for getting to the last 16 from their results, and this can be topped up from various pots that apply to the competition.

Having been in the Champions League group stages twice made a huge difference to Celtic at the time but has a legacy impact in the form of UEFA’s ten year coefficient, a form of parachute payment to ensure that larger clubs are not penalised if they fail to get into Europe in a particular year.

Aberdeen have the third highest broadcast income in Scotland but that is only £3.4 million.

Scotland however has a smaller population that England where the broadcast deal is worth about £3.1 billion a season and the lowest team in the division earned £104 million in 2019, although this may be lower in 2020 due to COVID-19.

Getting sponsorship and commercial deals is never easy, but both Celtic and Rangers are big brands and fans in many countries.

Included in commercial income is merchandise/retail sales, some Rangers fans have boycotted this in recent years due to disputes with Mike Ashley’s Sports Direct organisation.

Narrowing the gap between the two clubs is feasible in 2020/21 as Rangers have signed a new deal with Castore, and Celtic’s poor start to the season is likely to impact upon kit sales.

Gathering together the three revenue streams shows that the gap between Celtic and Rangers, which was £69 million as recently as 2018, is now down to £11 million.

Europa League success for Rangers, if they progress from the group stages into the knockout, could result in the gap being eliminated totally but the gap with English clubs will still be large unless either or both clubs make it into the group stages of the Champions League.


Rangers and Celtic unsurprisingly have the highest cost bases in Scottish football, with the emphasis on wages and transfer fees.

Player wages in Scotland are not disclosed for all clubs, but for those clubs that do show details gap between the Rangers, Celtic and the rest is huge.

Until Steven Gerrard arrived the wage gap between the two clubs was never less £20m, and Celtic paid out big bonuses when the team qualified for the group stages of the Champions League.

But in the last two years Celtic’s wage bill has fallen, partly due to the bonus structure and the Rangers board has sanctioned an increase in staff costs to first recruit Gerrard and then commit to his squad changes.

Every player that is signed on a big transfer fee tends to come with a big wage and Rangers wage bill increased by 25% in 2019/20 as the club brought in new players without having big earners being sold.

Scottish wages tend to be reasonable as a proportion of revenue, especially compared to some clubs in England which are as high as 226% but UEFA recommends aiming to keep it below 70%.

Both Celtic and Rangers were above the UEFA red flag in 2019/20 but the inability to generate matchday revenue meant that this should not be a critical issue in the short term.

The other main player related cost is the transfer fee amortisation cost. This is transfer fees spread over the contract life. So, if Ryan Jack signed for £6.4 million on a four-year deal this works out as an annual amortisation cost in the profit and loss account of £1.6 million (£6.4m/4).

Within the last few years, the amortisation costs of both clubs have increased as Rangers investment in transfer fees has resulted in Celtic doing similar. The quality of the recruits is best assessed by fans rather than spreadsheets though.

One employment cost that is purely incurred by Celtic is directors’ pay. This has remained broadly constant in recent years at about £1.5 million a year although there were long term bonuses paid out in 2018/19. The Rangers board has not traditionally been paid for their services.

Profits and Losses

Profits are revenues less costs, and there are a variety of profits that are used by analysts. Operating results from day to day trading resulted in losses for Rangers for each of the last eight years but Celtic’s losses have been higher for the last two.

If non cash costs such as amortisation and depreciation of the stadium/training ground etc. then EBITDA profits/(losses) arise. EBITDA is a cash proxy for profit and ideally should be a positive figure. The fact that it is negative for both Celtic and Rangers is a cause for concern, although again COVID-19 is a contributory factor. The impact of the Champions League is very much highlighted by the high EBITDA profits in 2017 and 2018.

Celtic’s business model in recent years has been based on selling one player a season at a substantial profit and 2019/20 was no exception as Kieran Tierney departed to Arsenal. These profits have helped Celtic to offset the day to day trading losses.

These profits have not been replicated at Ibrox and combined with interest costs on some borrowings Rangers have ended up with better pre-tax figures. Such losses can only be dealt with if there is external funding, either from borrowings or shareholder investment.

Player trading

Rangers have substantially increased player purchases since returning to the Premiership, spending on average £10 million a season, and this has continued in 2020/21 with a further £15 million of spending on the likes of Roofe.

Celtic have at least matched their rivals’ spending but on a net spend level have been more conservative.


Celtic have not borrowed any money in recent years because their player sale model has meant that they have broken even most years. Rangers have borrowed money, mainly from directors, although substantial amounts have been converted into shares. So, although Rangers borrowed more than £23 million during 2019/20 at the end of June 2020 the actual sum outstanding was only £18 million. Celtic have rearranged their overdraft facility with the Co-Op bank and increased the limit to £13 million but had not used any of this at 30 June 2020.

Rangers board of directors have said that they will need potentially another £8.8m for the rest of 2020/21 and £14.4m the following season to continue to trade due to the impact of COVID-19. This puts pressure on the board to deliver this funding but Rangers also now have saleable assets in the squad that could deliver these sums.

Other issues

Rangers have some outstanding legal issues with the likes of Sports Direct and a former employee. According to the accounts there is a potential cost of £3.1 million for the legal fees in relation to the former of these but the final settlement could be higher or lower.


Celtic have had a substantial financial advantage over Rangers and all other football clubs in Scotland for many years. This has been a major factor in their success in winning trophies during that period. That financial advantage has eroded though in the last couple of seasons and perhaps the club has been complacent in terms of player related issues. Rangers are now able to genuinely challenge Celtic and have made a far better start both domestically and in the Europa League. If Rangers qualify for the Champions League group stages, then they are likely to overtake Celtic in terms of revenue generation in a league where finishing second for either team is regarded as failure.

Rangers and Celtic: Never Let Me Down

Reach out and touch faith

Glasgow’s big two teams have  good starts to both domestic and Europa Cup campaigns so far this season and both have just announced their financial results for 2018/19.

Everyone know that the rivalry between the clubs and especially their fans is intense,  but do the accounts give the likes of @BearNecessities1872 and @PopeAndGlory on Twitter more point scoring opportunities against each other?


Revenue for clubs is generated from three sources, matchday, broadcasting and commercial.

Relative to the rest of Scottish football, where many clubs are so small, they are not legally obliged to show income and expenses in their accounts, Celtic and Rangers dominate as would be expected.

All clubs have committed fanbases but this is especially reflected in the big two in ticket sales with Celtic averaging nearly 58,000 every match at home last season and Rangers well over 49,000.

Revenue from matchday is calculated as number of tickets sold per match x average ticket price x number of home matches played.

Due to both clubs nearly selling out every match and fans being resistant to significant ticket price increases matchday revenue growth is only achieved via clubs increasing the number of matches played.

An impressive increase in Rangers matchday income was due to the club reaching the group stage of the Europa League whereas Celtic reached the last 32 of that competition.

Note that the two Glasgow clubs are significantly ahead of the Hearts, who have the third highest matchday income in the Scottish Premiership with just over £5 million.

Due to the level of support from fans that both Glasgow clubs would only be behind the ‘Big Six’ clubs in terms of Premier League matchday income.

Love it or loath it broadcast income is a big discriminator in terms of club earnings.

European cup participation makes a big difference to overall earnings.

Nevertheless, Scottish clubs both benefit and suffer from the complex distribution methods used to distribute money from UEFA.

Not many realise that Because BT pay the largest sum for Champions and Europa League rights in Europe, Scottish and English clubs benefit from this being distributed via what is called the market pool.

Only Scottish clubs relatively poor performance in UEFA competitions in recent years resulted in a low UEFA coefficient (which measures historical success by national teams in the Champions and Europa League) and therefore their share of this pot of money is far lower than that of England, Germany, Italy, Spain etc.

Not that fans will like it but paradoxically Rangers and Celtic both stand to benefit indirectly from all Scottish clubs progressing in Europe as this will increase their UEFA ranking, where being in the top 15 nations could have significant implications in future competitions.

Seeing Celtic’s broadcast income higher than that of Rangers needs further investigation and this was because Celtic made more progress in the domestic cups and in Europe.

Due to another one of UEFA’s pots of cash, which is linked to overall performance over the last decade in Europe, Celtic earned more broadcast revenue.

European participation for Rangers wasn’t the case when they were in the lower leagues of Scottish football for some of the last decade.

Broadcasting income in England is the major driver for the gap between Celtic and Rangers and Premier League clubs, but what is perhaps more alarming for their fans is that they are also behind many teams in the English Championship who are earning parachute payments.

Universally impressive for both clubs is the level of commercial income generated from sponsorship, advertising, kit manufacturing, merchandise and hospitality.

The impact of Steven Gerrard was a driver of Rangers increase in this income stream last season as sponsors are willing to pay more to be associated with such a high-profile individual

Sales from retail activities increased substantially at Ibrox last season but are still not maximising their potential due to an ongoing legal dispute with other parties including Mike Ashley, the Newcastle owner, which has restricted sales and had some fans boycotting products.

In the case of Celtic the club has had the benefit of European competition access including some Champions League participation in recent years to help them improve commercial income.

Numbers from the three revenue sources added together resulted in Celtic generating revenue of over a quarter of a billion pounds more than Rangers over the last six years but both clubs income still dwarfs that of Aberdeen, the club with the next largest income.

Gaps of that size are difficult to eliminate but last year was the narrowest for some time, yet Celtic still had a thirty-million-pound advantage over Rangers and that’s before considering player sales, although a Premiership win and participation in the group stages in the Champions League could change things for Rangers..

Looking at the profit and loss account in more detail showed that Celtic also had ‘other income’ of £8.8 million as compensation from Leicester City for headhunting Brendan Rodgers and his backroom team part way through the season.


Every club’s main costs are in respect of players via wages and transfer fee amortisation.

In the case of the two big Glasgow clubs their wage bills are far in excess of other Scottish clubs and Celtic’s higher income in turn allows them to pay higher wages than Rangers.

Steven Gerrard’s wages plus those of the players he signed resulted in Rangers wage bill increasing by over a third, whereas a lack of Champions League participation meant that Celtic’s wages falling slightly.

Player transfer fee amortisation is the amount paid spread over the length of the contract.

Estimating transfer fees is difficult as so many transfer fees are ‘undisclosed, but if Rangers signed Conor Goldson from Premier League Brighton for about £1.5 million on a four-year deal this would result in an amortisation cost of £375,000 per annum.

Rangers spending on the squad has increased noticeably since they returned to the top division and this is shown by the rise in their amortisation charge.

Success on the field for Celtic has resulted in a far bigger amortisation charge in recent years partly due to winning eight Premiership titles in a row.

Obviously, the income that such success brings domestically and in European competition has then been invested in player signings.

Notes to the accounts reveal that In addition to amortisation, both Rangers and Celtic reported ‘impairment’ costs of £1.6 million and £2 million respectively in relation to players whom they had signed whose poor performances meant their values were reduced.

A lot of fans will point their fingers at the likely individuals who suffered this ignominy but the clubs themselves are tight lipped on the matter.

Looking at Rangers ‘other costs’ these increased by 70% to over £21 million in 2018/19.

Just part of this is due to extra stewarding and policing in respect of Europa League matches at Ibrox but also an alarming £3.6 million increase in legal costs as Rangers disputes with Mike Ashley’s Sports Direct rumbled on throughout the year.

Player Trading

Every club sells as well as buys players and In recent years Celtic have made impressive profits selling one or two high profile players each year.

Selling Moussa Dembele to Lyon for about £20 million generated a big profit as the player cost the club a fraction of that sum from Fulham.

Upping profits for next season for Celtic will be the sale of Kieran Tierney which took place after the accounting year ended and that will contribute £25 million.

Selling player by Rangers has not been such a contribution to the bottom line, although the prolific Alfredo Morelos is likely to command a high price should he leave the club in the next year or so.

Buying into Steven Gerrard’s vision for the club last season meant Rangers outspent Celtic for the first time in many years in terms of player signings.

Profits and Losses

Yearly profits are total income less costs and whilst Celtic’s fell significantly in 2018/19 they were still substantially ahead of Rangers.

Desperate times can arise If a club is losing money, as the only way to survive is to sell off assets or have funding from lenders or shareholders.

Even though Rangers didn’t sell any players for large fees they generated £2 million from share issues and £8 million from loans in 2018/19 to plug the gap from day to day losses, whereas Celtic needed no such funding.


Predictably given their respective finances Celtic and Rangers finished in the top two positions in the Premiership in 2018/19.

Exploiting the financial gap between these two clubs and the rest of the division, means that it will be difficult for other Premiership clubs to make a challenge for the top positions in the league, especially with their relative success to date in the Europa League in 2019/20.

Celtic have a noticeable advantage over Rangers in terms of income generation and profitability, partly due to their ability to buy low and sell high in terms of player trading, and this has allowed them to pay higher wages, which is usually, but not always, reflected on the pitch.

Having this advantage gives Celtic a greater, but not guaranteed, chance of success in terms of trophies.

Even so, Rangers is potentially going to continue to lose money unless a more successful player trading policy and a resolution to ongoing legal disputes is achieved.

Most concerning is that in the accounts are the comments from Rangers auditors highlighting the club’s ability to trade as a going concern.

Only investment by Dave King and other investor plugged the gaps in Rangers finances last season and £16.6 million of shareholder loans were effectively written off by being converted into shares, diluting other shareholdings in the process, and King has been subject to criticism by the Takeover Panel for some of his actions.

Due to Rangers finances being precarious if investors are unable or unwilling to cover the losses indefinitely then Rangers would face substantial cost cutting or what Sir Alex Ferguson would call ‘squeaky bum time’.

Every Rangers fan will be asking themselves, given the clubs recent history, whether or not they are willing to take this risk if it stops Celtic winning ten titles in a row?

Rangers: Phoenix from the ashes or new dawn fades?

Rangers won the Scottish Premier League five times between 2003 and 2011, as well as reaching the final of the UEFA Cup in 2008, which on the face of it was an impressive achievement as the club went toe to toe with a resurgent Celtic during that period.

To compete with Celtic the club was however prepared to take steps that would ultimately lead to the liquidation of the club’s operating company and had to apply for membership of the Scottish Third Division. It would take four years out of the top flight before the club was once again able to face its rivals in a league match.

The high profile recruitment of Steven Gerrard as manager in the summer of 2018 has whetted the appetite of fans and pundits, but is the club a phoenix from the ashes, or are its new foundations made of sand?

During the 1990’s Rangers were the dominant force in Scottish football, the wealth of owner David Murray allowed the club to recruit the likes of Paul Gascoigne, Tore Andre Flo, Brian Laudrup and Mo Johnston, and the club won nine titles in a row. Murray claimed ‘for every five pounds Celtic spend we will spend ten’ and the dynasty seemed unstoppable, but it was built on debt.

Celtic were however improving their finances thanks to the backing of Irish billionaire Dermot Desmond, with managers such as Wim Jansen and Martin O’Neill the battle for supremacy in the Scottish game became more balanced on the field, and the investment in infrastructure at Celtic Park plus more regular progress in UEFA competitions meant that the club’s income was ahead of that of their rivals.

Because Celtic were generating more money in the early 2000’s, it meant they could sign better players to compete with their rivals in terms of recruitment. Rangers were during this period generating large losses as they had a smaller capacity stadium and were generating less matchday income.

The only way to underwrite these losses was to borrow money, which the club did with enthusiasm such that by June 2004 Rangers owed £74 million to financial institutions.

Behind the scenes Rangers were also trying to compete with Celtic by some creative tax activities. This involved the creation of Employee Benefit Trusts (EBTs) where the club paid money into a trust.

The EBT then ‘lent’ money to players who in theory promised to pay it back, but there was no or little effort to ask for that money back from the players, who effectively therefore treated it as regular income.

The advantage to Rangers in taking this approach was that the club did not pay National Insurance contributions on the payments to the players, who also did not pay income tax on these loans from the trusts.

The players were happy because they ended up with the net pay they were seeking, so everyone was a winner…apart from the government.

This policy worked to the extent that Rangers won the Scottish Premier League five times from 2003 to 2011, but critics will argue they were abusing the tax system in the process and those titles were at best tainted and some even go as far as to say those achievements should have been stripped from the club’s list of trophies.

The global financial crash of 2007, created by the financial community who lent money to people and businesses who had no ability to repay the sums advanced, hit Rangers in two ways.

Owner David Murray’s business struggled and so was unable to provide the club with further financial support, and the main external lender, the Bank of Scotland, (now part of Lloyd’s Group) effectively went into public ownership following its own financial meltdown, and there was a far less relaxed approach towards Rangers from the bank’s new senior management as a result.

Furthermore, the UK tax authorities became increasingly unhappy with Rangers’ use of EBTs, which had been originally sanctioned for non-employees, which was not the case in respect of the club and its players. The tax authorities saw the approach taken by the club as extreme tax avoidance and pursued Rangers for a tax bill of up to £49 million.

An increasingly desperate David Murray therefore sold the club to Craig Whyte for just £1. Whyte promised to settle the tax issues and the bank loans but did neither and as more and more creditors were issuing writs for unpaid debts the club appointed administrators in February 2012.

This angered HMRC, who had wanted to appoint their own administrators to investigate Rangers’ affairs. HMRC therefore refused to agree to a deal with the administrators, leading to Rangers operating company going into liquidation, provoking a constitutional crisis in Scottish football.

A new company, Sevco Scotland, was set up and bought Rangers’ assets from the liquidator, although players were allowed to leave the club for free as their contracts were with the old club.

Most SPL clubs voted that SevCo, now called Rangers Football Club Limited, was not allowed to take the place of Rangers in the top flight, and instead the newly formed company was allowed instead to join the Scottish Third Division, giving people in small towns such as Peterhead and Elgin the opportunity to learn about seventeenth century Irish history through the songs sang by Rangers fans when their club visited.

  • Rangers had income of £19 million in 2012/13 in the Scottish Third division, which was more than double than that of the other nine teams in the division combined as the club unsurprisingly won the division and Rangers had similar success in the Scottish Second division the following season.

During this time Rangers was falling further behind Celtic in terms of generating income and signing players, which meant that when Rangers were finally promoted to the SPFL and had their first season there in 2016/17 they generated only a third of Celtic’s revenue.

Rangers have also returned to using debt as a means of funding the club, although as there is great suspicion from banks towards the club, the lending is almost exclusively from directors.

At the last count Rangers owed lenders £21 million in June 2018, although subsequently some of this has been written off as lenders converted the IOU’s from the club, which some consider to be worthless, into shares instead.

The arrival of Steven Gerrard has introduced a feel-good factor to the club, and there were million pound plus signings such as Barisic, Goldson and Murphy, along with loans from Liverpool as Stevie G used his contact book to try and improve the quality of the playing squad.

The club is now competing with their rivals in an SPFL that has greater uncertainty than has been seen for many years. For this to be achieved the board has admitted it will need a further £4.6 million to survive this season and has gone cap in hand to investors for extra funds.

The recent elimination from the Europa Cup will not have helped Rangers’ financial position although reaching the group stages has helped generate greater income than in 2017/8.

In addition largest shareholder Dave King seems to spend more time in court arguing with the likes of Mike Ashley and The Takeover Panel, who believe he should buy out remaining shareholders, than focussing on issues on the pitch.

Whether King has the wealth that he claims to buy the shares from these shareholders is as yet unproven, as are many issues in relation to the club’s activities.

Even if King himself does not have funds there appear to be other backers to underwrite the club’s losses, although this could lead to another power struggle.

Furthermore, there are squabbles and threats of litigation between the administrators, liquidators, former owners, HMRC and former players, which could result in large sums being payable by some of them, but the only guarantee is that the lawyers, as always, will be rich on the pickings between the disputes between these parties. The club however is unlikely to bear these potential costs.

One of Rangers’ fans most popular songs is ‘Follow Follow’, but given the club’s present predicament, perhaps this should be renamed ‘Borrow Borrow’.

Rangers: Automatic for the people


8pm on 31st October is when I’m usually wondering if I can eat all the fun size Mars Bars that haven’t been vacuumed up by local youths dressed in Freddy Kreuger or Gary Neville fright masks trick or treating for Halloween.

Instead my email inbox pinged, and something came through about Rangers. Initially I ignored it, couldn’t be important surely, as after all the first team were playing high flying Kilmarnock at the same time.

At half-time, having prised myself away from the match on TV, it appeared that Rangers had published their annual results, a good time to bury bad news perhaps?

Key figures for 2017/18

Income £32.7m (2017 £29.2m) Up 12%

Wages £24.1m (2017 £17.6m) Up 37%

Recurring loss before player sales £9.9m (2017 £3.9m) Up 153%

Player signings £9.7m (2017 £10.3m)

Player sales £1.7m (2017 £0.8m)


The club, like most others, generates its income from three main sources. Matchday, broadcasting and commercial.

Rangers didn’t produce accounts for 2011 and 2012 due to the club being in liquidation and the accountants not being obliged to submit them to the registrar.

Matchday income was up 6%, the main reasons for this were:

  • An early exit from Europe, although this still added an extra home match to the season’s total.
  • Higher average attendances which rose slightly to 49,173.
  • Season ticket prices rose from an average of £314 to £328.

Matchday income contributed 70% of total revenues for the club. Compared to the English Premier League (EPL), this is a far higher proportion than for any club in that competition. Rangers are also far more reliant than Celtic for matchday income as the latter had the benefit of Champions League participation.

Ranger’s matchday income was the second highest within the SPFL which places it is an awkward position. Too far behind Celtic to compete financially, too far ahead of other clubs in the division to be threatened, once it comes to term with the standard of that division, a state that hasn’t been reached yet based on results. The former duopoly in the domestic game has not quite yet been achieved.

If the club had been part of the English Premier League, Rangers’ matchday income figure would have placed it ninth in that division.

Broadcast income rose by 22%, to £4.4 million. Part of the increase was due to a UEFA pay-out for all clubs, although for Rangers it is just £650,000.

In 2018/19 this will rise significantly as the club has qualified for the group stages of the Europa League.

In 2018/19 the total prize money in the Europa League, whilst sneered at in some quarters for being the poor relation in UEFA compared to the Champions League, is £495 million

The SPFL TV deal is worth just £19 million a season split between 13 teams.

Even so, compared to the Premier League, where the side finishing bottom still earned £100 million in TV money, Rangers are paupers compared to those clubs, but kings compared to most of the rest of the SPL.

Rangers also benefited with the payments being made in Euros, as the poond continued to be weak following the decline in the UK economy following Brexit.

Commercial income was up by a third as the club made money from a successful pre-season tour and greater sponsorship and catering.

In the last six years, Rangers have earned overall £290 million less than Celtic. Most of this money has been spent but it gives Celtic a significant advantage of terms of investment in the playing squad and infrastructure, which can help generate greater income from conferencing and catering.


The main expense for a football club is in relation to players. These consist of two main elements, wages and amortisation. Wages are straightforward enough, amortisation is how the club deals with transfer fees for players bought, by spreading the cost over the contract life. Therefore, when Rangers signed Alfredo Morelos for £900,000 in 2017 on a three-year contract, this works out as an amortisation cost of £300,000 a year for three years. This is subtracted from income when profits are calculated.

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The amortisation charge has increased five-fold in the last two seasons as Rangers have invested in the squad since promotion to the SPFL. The problem they have is that Celtic’s amortisation last season was £8.8 million, highlighting the additional spending power they have.

Wages increased by 37% in 2017/18. This is partially due to the investment in new players, as well as giving new contracts to established players who have performed well in the top tier. The wages bill also probably includes the payoff to Caininha and Murty (Kenny Miller’s will be in next year’s accounts).

The problem Rangers have is that whilst their wages dwarf those of nearly every other club in the division, their fans are only focussed on their local rivals, who paid £250 in wages for every £100 paid out by Rangers.

This gap is likely to drop in 2018/19 as Celtic’s wages are likely to fall as Champions League bonuses will not be paid, and the recruitment of Gerrard and new players will increase Rangers’ costs. Even so there is likely to be a significant difference between the two clubs.

Whilst paying higher sums to players does not guarantee better performance, in the main there is a link between wage totals and final league position. It’s possible but rare for this not to be the case, Leicester City winning the English Premier League in 2016 being an example.

Rangers total wage bill puts it about par with a mid-table Championship club in England, as the club has the 37th biggest total in the UK.

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One group who are not benefitting from the higher wage bill are the directors, for the past three seasons they have not taken payment for their roles at the club.

Because wages increased faster than income, Rangers wage control percentage rose from 60% to 74%. This means for every £100 of income the club paid out £74 in wages, this compares to £58 for Celtic.

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A good target rate for clubs is often claimed to be 60% or lower, which Rangers achieved the previous season but were unable to maintain.

Rangers had an additional cost of £3.3 million for 2017/18 in ‘impairment’ costs. This is where the club has signed players in the past who turned out to be pish a bit rubbish, and so the club wrote down their values. Rangers fans will no doubt have a good ideas as to the identity of these flops.

How much Rangers spent in the year on legal fees is unknown, but the club does have a few ongoing cases.

Profits and losses

Profit is income less costs.

There’s no ‘correct’ profit figure, different vested parties will have different viewpoints, so it’s best to look at a few to get an overall picture.

The first is operating profit. It is total income less all day to day operational costs of running the club.

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Rangers’ made an operating loss of £12 million in 2017/18, as higher wages, amortisation and impairment already mentioned increased player related costs.

The problem with operating loss is that it can be distorted, especially by player disposals. It therefore makes sense to also calculate profit before player sales and other one-off items such as redundancy payments and contract disputes.

This is referred to as EBIT (Earnings Before Interest and Tax). This removes the volatility in relation to selling one player in a single season at a huge gain as has already been seen.

Stripping out these figures reduced Rangers’ losses to £9.9 million. Over the last six years Rangers have sold players at a profit of £2.5 million, a relatively small sum which reflects that they were playing in the lower echelons of Scottish football during this period.

Celtic have made a profit of over £100 million during the same period (including the Dembele sale this summer), reflecting that they’ve been able to buy better players at a young age and sell on at a profit after showcasing them in Europe.

One final profit figure adds on player amortisation and depreciation of the stadium and other long-term assets to the EBIT total. This is called EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation).

This is the nearest figure to a ‘cash’ profit total, used by analysts when they are working out how much cash a business is generating or haemorrhaging each year.

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This loss of £4.2 million is in many respects the most disturbing, as if a club is losing cash from trading then the owners (or a bank) will have to stick their hands into pockets to fund these losses.

English Premier League clubs average an EBITDA profit of £61 million, on the back of the TV deals south of the border.

Player Trading

Ranger’s player trading is big by Scottish standards but still trails their rivals. They can outbid most other Scottish clubs, but with the arrival of Steven Gerrard also seem to be looking to pick off players from England who are perhaps not getting a game and fancy playing in front of nearly 50,000 people for home matches.

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The board have backed managers in the last couple of seasons since promotion, whether that money has been spent well is still uncertain, although as always for every success there is a turkey.

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Since June 30th Rangers have also spent a further £6 million on additional players.


Rangers’ previous financial history means that the club finds it difficult to borrow from banks, and so is dependent upon directors and friendly parties to lend the club money to make up the shortfall from regular operations and player trading.

Over the last six years the board has funded the club by pumping in over £53 million.

At 30 June 2018 the loans element had risen to £21 million.

The net debt (borrowings less cash) total has risen significantly since Rangers promotion to the SPFL. It will have halved following the share issue recently, but has a high chance of returning to an upwards trajectory as the running costs under Steven Gerrard are likely to exceed income, unless relative European success is achieved.

Rangers fans who had hoped that the club had generated over £12 million from a much publicised share issue will be disappointed.

90% of the share issue was used to convert loans to shares, which is swapping one piece of paper for another, rather than generating fresh money for the manager. The club did borrow a further £2million but this will require repaying.

The audit report gives a warning signal about the future.

Rangers need to raise over £7.5 million during the next two seasons to stay afloat. That money could come from (a) loans from owners, (b) a successful run in the Europa Cup, or (c) player sales. The uncertainty makes planning for the future very uncertain.


Rangers are in a tricky situation. Fans have been patient to date but will expect regular silverware at some point. The club is dependent upon a board that is still given to infighting and a lack of unity, apart from when it comes to picking a dispute with outsiders (such as Sports Direct and the Takeover Panel). Chairman Dave King, who seems to have modelled his stewardship of the club using the handbooks of Ken Bates, Mike Ashley & the Oystons at Blackpool, but without the pleasant element of their characters, seems to have a smoke and mirrors approach to the club’s troubles.

How much additional funding is available is uncertain, but unless Rangers repeat their achievement of 2008 in making it to a UEFA cup competition final (a match I attended as live in Manchester, which will stick in the memory for a long time for the sights in the centre of the City at 6am when I went to work), or at least make major progress in the competition, then it would appear that significant further funds will be needed to keep the club trading.

If the owners are willing to continue to provide such funding then all is good, if not then the Gerrard experiment may have a limited shelf life, and the club could be plunged into another financial crisis.

The numbers

Glasgow Rangers 2016/17: Orange Crush


I’ve only ever seen Rangers play once, which was at the 2008 UEFA Cup final. It’s fair to say that there was a discrepancy between the number of people who came to Manchester for the event and those who had tickets. The following morning I was on a breakfast TV show, and had to walk around and over hundreds, if not thousands, of Rangers fans who had decided to sleep al fresco on the streets following the match.

2016/17 saw a return after four years to the Premiership, Joey Barton scrapping with team mates, lawsuits against former directors and Mike Ashley, three managers, fan groups buying shares in the club, fan groups falling out with each other after buying shares in the club and occasionally some football.

Rangers accounts are…err… comprehensive, clocking in at 59 pages. Having said that, there are some excellent disclosures that put other clubs to shame, showing a degree of transparency at times that is a credit to those who prepared the information. The financial statements touch upon the ongoing disputes with enemies both within and external to the club.

The club’s recent history is  a source for fiery debate in Scotland, and the legal status of Rangers International Football Club plc provokes incendiary comments on social media from polarised views on both sides of the divide.

None of the name calling is of any interest to us at the Price of Football, we are non-partisan.  As someone who works in higher education though, it is nice to see so many people from East Glasgow enrolling on night courses on Scottish Insolvency Law in recent years.

Suffice to say a club called Rangers ended up applying to join the Scottish Third Division,  and schools in small towns such as Elgin, Peterhead and Alloa had to introduce seventeenth century Irish history into the curriculum for the impending visit by the club and its fans.

The accounts don’t really answer the question as to how big are Rangers, as the numbers reveal a paradox when comparing to clubs south of the border.


Unlike clubs in the English Premier League, some of whom have 80% of more of their income from broadcasting rights, Rangers are reliant mainly on matchday income as a source of revenue. This is unlikely to change until the club starts not only competing but also progressing in UEFA competitions.

Rangers total income rose by just over 31% in the year to £29.2 million. This is some way behind Celtic’s total (for 2016, they have not yet published their 2017 figures) of £52 million, but way above that of the next largest Scottish club, Aberdeen (£13.4 million). Rangers third place finish in 2016/17 is poor compared to the club’s financial advantage over every SPL club except Celtic.

Compared to England, the income total places Rangers between Wolves and Leeds in the English Championship, but behind small clubs in the Premier League such as Bournemouth and Crystal Palace.

Promotion back to the Scottish Premiership (SPL) in 2016 led to an increase in average attendances at Ibrox from 44,359 to 48,893, of which over 43,000 were in the form of season tickets.

Such attendances drove matchday income to £21.6 million, far in excess of any club in the Championship, and would put the club in the top half of the English Premier League (EPL).

Admittedly Rangers matchday totals includes ‘hospitality’, of which there is probably copious amounts at Ibrox to help the locals give vocal backing to the team.

Broadcasting rights, whilst better in the SPL than the Championship, are still miniscule at £3.6 million compared to the £100 million minimum in the EPL.

‘Other’ income including shirt sponsorship (£1.5m) and commercial income (£0.3m) are also up significantly by 43%. Rangers should benefit in 2017/18 from having greater control over their merchandising in future years, following the resolution of a dispute with Sports Direct. This can be a significant sum for a club with such a committed fan base. Celtic, for example, had merchandise sales of over £12.5 million in 2016.


Rangers have had the second highest wage bill in Scottish football for a number of years. Even when they were playing against the local amateur teams in the third division the wage bill was over £17 million, more than the total of the bottom two Scottish divisions put together.

Wage costs were brought under control slightly in subsequent years, but promotion to the SPL resulted in a 35% increase in total wage costs.

Rangers’ unusual (but welcome) breaking out of player from other wages shows that player wages took up £10.4 million (59%) of total staff costs. This is quite low compared to English clubs, where player wages are usually in the 80-85% of total staff costs range.

This means that player wages as a percentage of total income was only 36% (29% in 2015), and total wages to income 60% (59% in 2016), a figure that would make many English owners jealous (in the Championship wages were 101% of wages in 2016).

Part of the reason for the good wage control was due to highest earner Joey Barton being only paid for a couple of months before getting a free transfer to Ladbrokes, and Kenny Miller was old enough to claim a pension and so wasn’t officially on the payroll.

How the other £7 million wages are distributed at Ibrox is not disclosed. If the club has an in house legal team I’d expect that they have been very busy in recent years and will have been paid accordingly.

In past years the highest paid director at the club has been on a significant sum, especially if viewed solely in the role of running a lower division Scottish football club.

As boardroom regimes have come and gone at Ibrox that particular cost has diminished, and directors have not rewarded themselves for the last couple of seasons. This is in contrast to Celtic, where the directors took home over £1.6 million in 2016.

Rangers did disclose that ‘key management personnel’ costs were £455k for the year. This is presumably the combined costs of Mark Warburton and the Yoda like Pedro ‘The dogs bark and the caravan keeps going’ Caixinha.

Other costs rose by 30% to £12.3 million, this is not fully disclosed, but increased repairs, stewarding, policing and travel for an overseas pre-season tour have contributed.

Rangers invested significantly in the squad in 2016/17 following promotion, with £10.3million being spent according to the accounts. This might cause a few eyebrows to raise amongst Rangers fans, as apart from £1.8 million for Joe Garner from Preston most signings were thought to be for no more than low six figure sums or free transfers. Perhaps Mike Ashley managed to sign himself for the club for £5 million in one of his more creative moves, as the numbers otherwise look very strange.

Alternatively there may have been some payments in relation to previous signings that were conditional on Rangers being promoted to the Scottish Premiership.

Celtic, by means of a benchmark, spent £8.8 million on players in 2015/16.

Equally baffling is the amortisation charge on these transfers of ‘only’ £1.6 million. Amortisation is the cost of the players spread over their contract period, so we would expect this figure to be much higher (£10.3/4 = £2.6 million, plus amortisation of the existing squad)  if players were on an average of a four-year contract.

Rangers showed a cost of £3 million in respect of resolving one of their many disputes. This particular one was with a man who is as unpopular in Newcastle as he is at Ibrox, Mike Ashley. The settlement did however allow Rangers to have greater control in terms of selling and making profits from merchandise sales. Rumours that all you can eat restaurants in Glasgow were celebrating as Ashley severed his ties with the city, as they lost money every time he visited, have yet to be confirmed.


Profits are income less costs. Rangers losses more than doubled in the year to £6.3million (£2.7 million 2016). Excluding the Mike Ashley payoff, the losses are broadly the same as the previous season.

Losing £120,000 a week is substantial, although half of it is a one off cost. For Rangers to turn to profitability they will need to make progress in Europe, as it is not realistic to increase their other income streams, and for that they will need to invest in the playing staff, or get a manager who can manage.

Rangers have claimed that their EBITDA profits (which exclude non-recurring items, depreciation and amortisation, are £110,000. We’ve done our own calculations and arrive at a loss of about £700,000. There’s no agreed definition for this category of loss, it just depends on the assumptions used. What is important is that Rangers losses are looking far lower than a few years ago.


Whilst Rangers do have a fair amount of debt (£14.4m), most of this is in the form of loans from directors and friendly parties. These loans are due for repayment in July and December 2018, and July 2019 It’s not possible to see how such repayments will be made, so we anticipate lenders will roll over the debts to a later date. Alternatively, Rangers might issue shares to investors which are used to pay off the loans.

Rangers have other outstanding legal issues, which may or may not increase the level of indebtedness.


To a certain extent Rangers are boxed in. Celtic have had the benefit of Champions League participation, which, even if they are regularly knocked out in the group stages, gives them a minimum £25 million a year advantage in terms of income, which can be used for player recruitment and wages.

Celtic benefit from the market pool in terms of Champions League distribution, which is where British clubs take more money out as a result of BT Sport paying such a huge sum to broadcast the competition.

The Europa League is a more realistic option for Rangers at present, but it is long haul before it starts to be lucrative for competing teams.

Whilst there is regular talk in the media of both Old Firm clubs playing in England, there’s no realistic chance of this occurring. English teams probably don’t want the competition, and there could also be a breach of UEFA rules.

Rangers therefore need to hope that they can secure investment, from a benefactor, rather than an investor wanting a financial return, to be able to topple Celtic and then have the riches that Champions League membership brings. But the club has seen in recent years promises from some of those at the top turn to dust.

Five Year Financial Summary

Rangers International Football Club plc 2013 2014 2015 2016 2017 Year
£’m £’m £’m £’m £’m Change
Matchday 13.2 12.4 11.6 17.3 21.6 24.9%
Broadcast 0.8 1.0 1.2 2.1 3.6 71.4%
Other 5.1 4.2 3.7 2.8 4.0 42.9%
Total Income 19.1 17.6 16.5 22.2 29.2 31.5%
Operating expenses
Staff costs 17.9 14.4 13.3 13.0 17.6 35.4%
Other costs 13.5 10.8 10.0 9.4 12.3 30.9%
EBITDA (12.3) (7.6) (6.8) (0.2) (0.7)
Player amortisation 1.7 0.9 1.0 0.8 1.6
Depreciation 0.8 1.3 2.1 1.6 1.6
EBIT (14.8) (9.8) (9.9) (2.6) (3.9)
Non-recurring income (costs) 16.2 0.0 0.0 (0.8) (2.5)
Gain on player sales 0.0 0.4 1.2 0.1 (0.4)
Total Costs 17.7 27.0 25.2 25.5 36.0
Operating profit/(loss) 1.4 (9.4) (8.7) (3.3) (6.8)
Net interest paid 0.2 0.1 0.1 0.0 0.0
Profit before tax 1.2 (9.5) (8.8) (3.3) (6.8)
Tax (0.3) (0.2) 0.0 (0.1)
Profit after tax 1.2 (9.2) (8.6) (3.3) (6.7)
£’000 £’000 £’000 £’000 £’000
Highest paid director 716 378 225 0 0
£’m £’m £’m £’m £’m
Total player cost 19.6 14.9 13.1 13.7 19.6
Wages/Income % 94% 82% 81% 59% 60%
Total player cost/income % 103% 85% 79% 62% 67%
Balance Sheet Highlights
Player trading
Player additions 1.6 0.3 0.3 1.7 10.3
Player sales 1.0 0.5 1.3 0.1 0.8
Net player addition/(disposal) 0.6 (0.2) (1.0) 1.6 9.5
Post year end player trading
Net cost (income) 0.0 0.0 0.7 3.0 (0.2)
Cash 11.2 4.6 1.1 3.0 2.8
Borrowings 1.7 2.4 9.2 9.0 14.4
Net debt/(cash) (9.5) (2.2) 8.1 6.0 11.6
Position 3D 1 L1 1 C 3 C 1 P 3