Newcastle United and Celtic get financial update as combined £230m payout speaks volumes
Many supporters justifiably can’t stand the word, but Newcastle United and Celtic are two of the biggest ‘brands’ in British football. And their clout pays...
Many supporters justifiably can’t stand the word, but Newcastle United and Celtic are two of the biggest ‘brands’ in British football. And their clout pays off financially.
Both clubs have been frustrated by the financial structures in place in domestic and European football, with Newcastle battling Profit and Sustainability Rules (PSR) and Celtic struggling in UEFA competitions that effectively insulate the ultra-rich from failure.
Domestically, Celtic have dominated the Scottish Premiership for years, winning 12 of the last 13 titles.
But Scotland’s relatively small domestic TV deal has limited their ability to compete with the best in Europe, just as PSR has curtailed the stratospheric ambitions of the Saudi Public Investment Fund (PIF) on Tyneside.
Of late, both club are increasingly looking to commercial income to attempt to increase their revenue and their purchasing power.
Celtic, who recently lost commercial director Adrian Filby to Aston Villa, generated £30m from merchandise alone in the last financial year, while Newcastle made £47m from all commercial streams.
And the latest news from football’s commercial sphere suggests that both clubs’ commercial trajectories are set to continue.
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Celtic and Newcastle poised to join ‘elite’ club
Both Newcastle and Celtic list German sportswear giants Adidas as their kit manufacturer.
Newcastle will earn £200m over the course of their five-year deal with Adidas, while Celtic’s equivalent deal will have been worth £30m by the time it expires at the end of the season.
Adidas are reportedly set to extent their deal at Parkhead, although the financial details of that arrangement are not yet known.
The £230m that Adidas are committed to spending on Newcastle and Celtic is emblematic of their prestige in football and their appeal as commercial partners.
Now, Footy Headlines – who routinely break exclusive stories in the football kit scene – have reported that both Celtic and Newcastle will be welcomed into Adidas’s ‘elite’ stable from next season.
Essentially, this means they will make ‘authentic’ versions of the two teams’ respective kits commercially available, as well as producing an Adidas Originals-branded third kit for each.
The added manufacturing costs that Adidas will taken on as a result again underlines Celtic and Newcastle’s appeal. It will also likely be reflected in the headline figures of their respective kit deals.
New PSR system set to impact Newcastle and Celtic
In the Premier League, Newcastle financial losses are limited to £105m over a rolling three-year period by PSR.
There is no comparable domestic PSR system in Scottish football, but Celtic are subject to UEFA’s equivalent set of spending rules.
This year, UEFA have capped spending on wages, transfers and agent fees at 80 per cent of revenue. That figure will be graded down to 70 per cent from next season.
As a club with ambitions of being regulars in European competition, Newcastle will also be mindful of UEFA’s cap, especially given that the Premier League are set to introduce a similar system from next term.
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