CELTIC BOARD HOARDING CASH DOESN’T MAKE SENSE, UNLESS...
- BY LIAM CARRIGAN
- Aug 7
- 4 min read
It’s not very often in world football that you’ll see a club as financially healthy as Celtic, but with a fanbase as disgruntled and uncertain over the club’s ambition and direction.
A fair bit of division also seems to be setting in amongst the Celtic support. On one hand, you have those who see investment in the team as an urgent and immediate necessity. The combined factors of a revitalized challenge from Rangers, and a seeming stagnation both on and off the park at Celtic, in the eyes of many fans, seem to be courting a disaster on the levels of that last seen in the 2020-21 season.
Then you have the other side. Those who point to the financial excesses that killed Rangers (Requiescat in Pace) in 2012. They believe that fiscal responsibility like that shown by the current Celtic board with their reluctance to invest in significant upgrades either to the playing squad or the stadium is common sense, with a global economy as volatile as the current one.
Regardless of which of these camps you fall into, there are a couple of things I think we can all agree on. Firstly, that we still need to bring in some new players, and secondly, that simply sitting on a pile of cash, only to have it chipped away at by tax obligations year by year, doesn’t make any sense.
With these matters of undeniable fact accepted by most, if not all supporters, the question is: why are the Celtic Board so reluctant to spend at a time when the club has never been wealthier, and has never had as many recurrent income streams as we have now?
Well, there’s a theory going around, and I think its one that warrants a bit more discussion.
Are Big Changes Coming for the Celtic Board?
One reason that a company’s leadership may have for a sudden onset of extreme risk aversion and fiscal conservatism, is the possibility of selling up. After all, why put more money into a project when you will soon no longer be associated with it?
A number of football clubs in Scotland have seen change in recent times. Indeed, the resurrected Rangers, post 2012, have accumulated far more owners than they have trophies over the past 13 years.
We’ve also seen historically big clubs like Hibs, Aberdeen and most recently Hearts receive significant inward investment. The makeup of the Celtic Boardroom, meanwhile has barely changed in 20 years.
In most literature on corporate governance, they’ll tell you that the average life-span for a boardroom executive in any single role should be 5-7 years. In the specific case of sports management, some bring this down to 3-5 years. In any case, regardless of how successful he has been in the role, it’s clear that the likes of Peter Lawwell have been in power for far too long, from a purely business best practice point of view.
Again, the lack of a boardroom refresh (yes, I know Michael Nicholson is a fairly recent addition, but he’s not exactly taking charge of the situation) might possibly speak to waning interest on the part of those who control such appointments. Again, why waste time on something if you’re not there for the long term?
However, the theory that the Celtic Board are hoarding cash specifically to boost the value of their shares before offloading them, doesn’t really make a lot of sense if you look at the bigger picture.
I’m going to get a bit heavy with the business stuff here, apologies, but I think context is important. This is not something I know a lot about, so I had to research extensively to make sure I understand all of this correctly.
An international survey by the Business Development Bank of Canada found that 71% of business owners are reluctant to take risks to grow their business before exiting.
BDC also adds that 52% of these owners are reluctant to grow their business at all in the time leading up to a sale.
However, and this is probably the most important point, whilst this “winding down of business engagement” is often seen in owners looking to sell their company or their stake in a company, it’s actually very counterproductive.
Sure, a cash-rich business will attract interest. However, as The BDC study goes on to explain: “a business that can show healthy cash flow, that’s well-maintained and enjoying sustained growth, is much more attractive.”
In other words, even if, and I stress its very much a speculative “if” at this point, Celtic’s major shareholders are hoarding cash to make the club an attractive investment, doing so at the expense of obvious growth opportunities (Champions League qualification, stadium extension, infrastructure development, etc.) will actually have the opposite effect.
Investors don’t want a company that’s got lots of money now, they want a company that has the potential to make a lot more in the future. Celtic certainly has this, but our inactivity in a number of potential growth areas continues to hold us back.
Now, is Dermot Desmond going to sell up anytime soon?
I honestly don’t know. I have no inside information on this, I’m just trying to find a pattern, any pattern, to the Celtic Board’s current behavior that makes sense.
Building up the bank book for a sale is one possible explanation. However, as I said, and the Economic experts at institutions like BDC will back me up here, doing so at the expense of growth is counterproductive. It’s also indicative of a leadership that has become too comfortable, too set in its ways, and far too risk averse.
As to whether this applies to Celtic or not, time will tell. However, if this isn’t the case, all it would take is one statement from our silent CEO to end such speculation. I won’t hold my breath for that though.
