Looking for Goldilocks

Harry Brady on Money, Wages and the European Sweet Spot

One of the essential elements of the current debate and conflict between fans and the club seems simple and yet sees club and fans seemingly so far apart:

“If Celtic can afford it, why don’t they just spend more?”

The problem is that European football isn’t just about how much money you have, it’s about where you sit on the curve between spending, risk and return. And comparing clubs across leagues is never straightforward.

With regards to spending on players and, specifically wages, Celtic are in search of our own Goldilocks zone. European football isn’t about emptying the cupboards or pretending we’re something we’re not; it’s about finding what’s just right. Not too soft that we get eaten alive, not so reckless that we wake the wrong kind of bear. The trick is knowing exactly how much porridge it takes to survive Europe and when adding another spoonful stops making sense.

In this piece, I want to look at where Celtic sit financially in Europe right now, where the numbers suggest they should be, and where the point is at which spending more stops being sensible and starts becoming reckless.

Apples, oranges… and football finances

Before getting into tables and charts, it’s worth stating something upfront:

Comparing wage bills across Europe is messy.

Different clubs report:

• “Staff costs” (everyone employed by the business)

• “Player wages” only

• Different accounting years

• Different treatments of bonuses, tax and social charges

Celtic are actually a good example of the challenge.

Celtic’s published wage bill

Celtic’s most recent accounts show staff costs of around £75m. That number regularly gets quoted online as “the wage bill”.

But that figure includes:

• First-team players

• Coaching staff

• Academy players

• Medical staff

• Commercial and administrative staff

That’s the entire business. Most football wage comparisons, however, are talking about first-team player salaries only. The commonly cited estimates from salary aggregation sites put Celtic’s first-team wage bill at roughly £25–30m per year. That’s not an audited figure, but it’s the right order of magnitude for comparison with other clubs’ playing squads.

So for the purposes of this article:

• £75m = total Celtic staff costs

• circa £30m = Celtic first-team playing wages

Where Celtic “should” sit in Europe on current wages

Using that circa £30m first-team wage assumption, we can place Celtic roughly in European competitions by spending power, not history or reputation. My idea behind this is stolen from Soccernomics. They created a table of teams finish across all English Leagues in the previous 5 years based on wages and each team’s average finish is almost identical to their position based on average wages during the same period.

Champions League (36-team league phase)

Celtic’s revenue currently puts us on the fringes of qualifying for knock-out stages of Champions League football. In the current format, once every so often we should do what we did last season. But that’s on revenue, what about wages?

Well, on wages we’re further down the table. We plan for worst case and that means, Celtic qualify for the Champions League with Europa/Conference-level wages. Or to paraphrase Brendan - We give the manager a Honda Civic and expect him to drive it like a Farrari

Therefore if Celtic finish in the bottom third of the Champions League table, we are not dramatically underperforming, we are landing almost exactly where the wage curve says they should.

But what about Europa league, how do we compare with our peers there?

Europa League (36-team league phase)

In Europa, Celtic are a mid-tier financial club. That’s why Europa League campaigns should be more competitive - the money gap is narrower.