It was once accepted wisdom that banks were a safe place to place one’s hard-earned cash.Both beliefs cannot stand the test of financial reality. There is a delicious irony in Rangers facing strictures from Lloyds Banking Group, a company so successful it had to be bailed out by the taxpayer, that is you and me.
But there is a more intriguing facet to the Rangers’ financial meltdown. Economists queued up yesterday to claim that Celtic would suffer if Rangers went under. Their views are deeply suspect on three grounds.
First, Rangers will not go under. Livingston, for heaven’s sake, survived. The most likely option is that a buyer will be found, almost certainly not at the price that Lloyds want.
Second, Celtic are in a stable financial position with guaranteed streams of income in the short to middle term.
Third, the predictions are being made by economists. As a reliable predictor of future events, economists make the guy who religiously backs trap 3 at the dogs look a model of fiscal propriety. Time, then, for reality.
Rangers will survive in a straitened form. The predictions for Celtic will depend on many factors, but not largely on the financial health of their rivals.
The Old Firm is a historical term that is said to reflect the financial interdependence of the Glasgow clubs. If one club is weak, the punter is told, then the balance is destroyed, ultimately affecting the stronger side.
History, of course, proves otherwise. Rangers and Celtic have enjoyed periods of sustained dominance over each other, yet both have survived.
But there is another dynamic in the 21st century. Increasingly, long-term financial stability for either club lies outside Scotland.
The key to Celtic’s financial future is not any fallout from the collapse of Rangers, but how the club can maintain and then increase revenue. The present woes of Rangers could have some effect on gate money. Attendances could drop because of a perceived lack of competition. But Celtic have other sources of revenue. Participation in the Europa League or the Champions League brings both gate money and television revenue. The deal to televise the SPL will still be paid out. Celtic’s plans to “extend the brand” globally will also bring in revenue.
The main significance of events of the past few weeks is to suggest the term Old Firm might be outmoded. Certainly, both Glasgow clubs collaborate when their interests collide. They have united in trying to persuade other SPL members about, for example, the value of television deals. They have also shared sponsors.
But there is a gulf growing between the sides. The Old Firm have been tagged together in a lazy shorthand. But they are separate clubs. And it is not absurd to suggest they have different futures.
The comments over the Atlantic League, for example, suggest that Rangers were much more enthusiastic over the proposal than Celtic, who see their salvation in moving south of the border. It has been assumed that the Old Firm would come as a “job lot” to any new league. But there is no unbreakable business reason why this should be so.
The problems at Rangers accentuate the differences between the clubs rather than underline any spurious bond. Celtic and Rangers act together when it suits their business purposes. In the changing world of global football, there is no reason why their futures should be interlinked in the long term. In the short term, Celtic may catch a minor cold from the problems at Ibrox. But this prospect does not disturb anyone at the club. Celtic have a solid financial base with a manageable debt and a strong base of support.
The priority in the rooms behind the Brother Walfrid statue is not to come up with a plan to withstand the reverberations from the earthquake of Ibrox. It is to try to construct a business model that works in the long term. There are only two options. The first is that Celtic makes the best of the domestic offerings of the SPL by reducing the wage bill while increasing the standard of player through shrewd recruitment in the transfer market and in youth development.
The second is that a new business model can be constructed on the back of entry into a league that offers a substantially better television deal.
Those are the two paths. Celtic will walk one of them. They do not need to go down either route hand in hand with Rangers, however heretical this may seem to traditionalists.
The most cogent argument is not that Rangers and Celtic need each other. It is that Celtic and Rangers need more than just each other.
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