Celtic a clear example of caution killing a football club in long term | OneFootball

Celtic have been knocked out of the Champions League in ignominious fashion in two consecutive seasons; the Scottish champions squandered a four-goal aggregate lead over LASK, losing the tie 5-4 and suffering one of the club’s greatest European humiliations.

While fans may be dissatisfied with on-pitch performances, the club’s finances paint a different picture. The Hoops have posted healthy profits every year following the COVID pandemic, with £33.9m in post-tax profit recorded in the 2024/25 accounts. Revenue that year reached a record £143.6m. The club is widely regarded as one of the most financially sustainable in European football.

Yet Celtic and their recent failings in the Champions League are an illustration of how financial prudence and conservatism can actually be a bad long-term strategy for a football club to pursue.

In European football, the fastest way to grow revenue is for a club to succeed on the pitch. Promotion to the Premier League from the Championship earns a club c. £200m. Merely competing in the league phase of the Champions League is likely to earn a club an additional £20m in revenue, and a club that performs once it is there will earn considerably more.

Norwegian side Bodø/Glimt are the perfect illustration of this phenomenon. Their revenues have grown by roughly 17x since 2017, which is almost entirely a consequence of consistently reaching at least the group stages of European competition. In 2025 alone, European competition accounted for around 60% of everything the club earned.

The inverse is equally true: the fastest way for a club to lose revenue is for performance to falter and for the club to either be relegated or fail to qualify for Europe. Failure to invest in the team therefore carries real financial risk for football clubs.

This is what separates football from most other industries. In an ordinary business, restraining costs often protects the margin where revenue is independent of the spending decision. In football, this is not the case. Revenue is downstream of results. Failure to achieve results on the pitch has real financial consequences.

So, perversely, a football club being financially prudent and seeking to maximise profits at the expense of investing on the pitch is in fact a bad long-term strategy to pursue. Doing so runs the risk of the club’s performance on the pitch faltering, leading to poorer results in key competitions that in turn leads to the club’s biggest revenue source coming under threat. The effect compounds, because the reduced revenue then becomes the argument for further restraint. The club must now protect a smaller income against the same fixed costs, and so it holds back again.

Celtic are the epitome of this paradox. The club has steadily grown its profit line over the last four years, and yet are now facing a second year without the revenues of Champions League football. Given the financial benefit that Champions League football brings to a club like Celtic, it would surely have been a more prudent financial investment to put some of their earnings into the team.

Celtic’s board would likely point to the record amounts being spent on transfers and wages to rebut this claim. The charge for player transfer amortisation on the club’s balance sheet rose by 20% to £13.8m in 2024/25. In that year Celtic recorded a wage bill of just under £75m, a year-on-year increase of 14% and, by the club’s own account, the highest first team wage costs in its history. More money is being spent on the pitch than ever before.

Yet, this record spending has to be viewed in the context of Celtic’s huge cash reserves. At every year end since 2023 the club has held at least £72m of cash, sitting in the bank collecting interest. The gross transfer spend figures are also slightly deceptive. Only Rangers spent more than Celtic in summer 2025 on transfers, with the club outlaying £13m on player acquisitions. This was however largely funded by sales. Adam Idah, Marcos Tilio and others all left Celtic in the summer for a cumulative £23m – meaning Celtic in fact recorded a net income of £13m in the summer 2025 window, by far the largest number in Scotland. Investment was made without touching the pile of cash that Celtic has accrued over the years.

From a return on investment perspective, spending some of these cash reserves on additional players that could have ensured Celtic qualified for the league stage of the Champions League would have been far more lucrative than simply collecting interest payments on that cash. In the year to June 2025, the club earned £3.0m of interest on its deposits, a return of a little under 4%.

None of this is to say the caution has no foundation. The history of Rangers in the first two decades of the 21st century is testament to how catastrophic a lack of financial restraint can be. Nor is the answer simply to spend for its own sake. The argument is narrower than that. It is that a cash balance held flat for years, earning under 4%, in a business where the marginal prize is many times that annual return, is not a prudent strategy.

The club will now have to face the consequences of their restraint. A second year without Champions League football will have serious consequences for the bottom line.

With history having repeated itself this year, and Celtic once again playing in the Europa League, the club will need to assess whether it is willing to reverse its conservative strategy and invest further into the playing squad to boost long-term revenues.