CELTIC AND RANGERS: JUST HOW BIG IS THE GAP AND COULD A TAKEOVER CLOSE IT?
- BY LIAM CARRIGAN
- May 7
- 5 min read
I’ve had some interesting dialogue with fellow Celtic fans over the past week or so, regarding our would-be rivals.
There seem to be two emerging schools of thought around this whole takeover business, at least as far as people without any emotional connection to Rangers are concerned.
Celtic and Rangers Will Remain Poles Apart, Whether the Takeover Happens or Not
The first idea, is that what the media are saying is true a takeover is imminent as is massive investment at Rangers so Celtic need to prepare accordingly. I don’t think this is the case, and you’ll see why in due course.
Then there’s what I think is the more likely scenario: the longer this drags on, the less likely a takeover becomes.
Remember none of the proposed investors in Rangers give a damn about “history, traditions or staunchness”. They like those wee bits a green paper with dead American Presidents on them. That’s all they care about.
The longer Rangers drag this out, the more the fans disgrace themselves and the more obstinate the current board insist on being in disposing of their shares, the more inclined the Americans are to walk away.
What really leaves me scratching my head here is why anyone who is money-minded would look at something like Rangers as a worthy investment.
It’s a consistent loss-making business, and has been since its creation in 2012.
Now vulture capitalist types, like Andrew Cavenagh love to take distressed assets, which is what Rangers are, and turn them into a profit-making enterprise before quickly reselling it onto someone more gullible.
However, in this case, I don’t see how you can do that. It’s not just the 17-point gap in the league that separates Celtic from Rangers. The financial gulf is massive.
Here are the most recent figures for some perspective. Remember these only go up to last year. Depending on which report you trust, Rangers current debt sits somewhere between 26.1 million pounds at the low end, and 27.8 million at the high end.
Additionally, the club posted an annual loss of 17 million last year, and there’s nothing to suggest that will magically turn around this year. Indeed, the debt figure is likely to be higher.
Meanwhile, over at Celtic Park, our latest figures show that we brought in 124.6 million and our operating costs were 105.4 million, leaving a pre-tax profit of 17.8 million.
These figures will be higher next year, as that doesn’t factor in all of this season’s UEFA Champions League money, the increased revenue from the recent rise in ticket prices, or any residuals from either the new deal penned with Adidas.
Nor does it include the cut Celtic will get from new kit sales, when the new home shirt releases later this month.
As it stands Celtic have additional cash reserves of 65.4 million as of December 2024. Again, expect this figure to jump later this year when the full accounts for the current season come into view.
Rangers cash reserves are currently unknown. However, speculation suggests they have less than 5 million pounds in operating capital, and most of that comes from equity in the form of share issues.
Share issues are a useful vehicle to raise short term funding, especially when you have a credit rating as dismal as Rangers have. However, in the medium to long-term, the more shares a company creates, the less value those shares have.
So, for as long as this circle of share issue after share issue continues, it’s the law of diminishing returns. Very soon, that well will run dry for Rangers, if it hasn’t already.
So, in purely monetary terms, the gap between Celtic and Rangers at the moment is more than 100 million pounds. It doesn’t matter who their next owner is, there is no legal way to close that gap immediately.
There are two main rules in UEFA’s financial fair play regulations that immediately block any notions Rangers fans might have of a sugar daddy magically producing the 9-figure sum needed just to regain parity with Celtic financially.
Firstly, clubs must at least break even over a three-year period. Rangers have some wiggle room here but not much. They turned a small profit of 300,000 pounds in season 2022-23, which means they are only looking at two consecutive years of losses so far.
However, any new owner would have to plug that financial gap immediately before they even think about buying any players. Depending on what this year’s figures show, that’s likely to be at least 20 million.
Then there is the issue of squad investment limits. Teams can only spend 70% of their net income on players wages and transfer fees.
Rangers total net income (before we factoring in the fact they lost more than 17 million overall) was 88.3 million pounds.
So, even in an absolute best case scenario, where they bring in a new owner rich, or stupid enough to clear all the clubs existing debts before a blow is struck, the most they could spend in total on player transfers and wages for the entire squad is 61.8 million.
Celtic spent just under 20 million this season on wages. Incoming transfers were significant, but thanks to selling Matt O’Reilly and a few others we turned a profit of 2.6 million on transfers.
Celtic’s last annual income figure (up to August last year) was 124.6 million pounds. So, hypothetically, if we decided to throw caution to the wind and flex our full financial muscle, we could invest 87.22 million into the playing squad.
In other words, we currently spend less than a quarter of what we could if we really wanted to.
However, doing so in the long term is financially ruinous. So, whatever Rangers do, takeover or no takeover, Celtic can and will better it in every conceivable way.
Celtic are simply a bigger club, we have a bigger stadium and we make more money. Therefore, we will always be able to spend more than Rangers. No amount of investment can change that.
The only thing that could change that is a significant growth in their revenue streams. I don’t see how that could happen. Rangers are a toxic brand, with very limited marketability outside of the UK.
So, could a takeover happen?
Yes it could.
Will it be anything like the total fantasy currently being sold to Rangers supporters via the Daily Record?
No. It can’t and it won’t.
Indeed, if Leeds United are anything to go by, then austerity is coming at Rangers, and that is not something their support will be able to handle.
I personally still doubt this takeover will go through, but if it does, then it might be even funnier for Celtic fans to watch what happens next, as fantasy meets reality.
