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AIMprospector

TOPpick

TOPpick: Could £70m Celtic FC become a £1bn football club?

Once a giant of European football, Celtic is priced below much less substantial English clubs. If they could escape the Scottish Premier League, shares in Celtic plc would rocket. While in the past, the suggestion of Celtic leaving the Scottish Premier League for England has been dismissed as soon as it is suggested, I envisage a scenario whereby it could just happen. Celtic FC are Britain’s first ever European Champions. They are the opponent of choice for many of the world’s top clubs in friendly fixtures. Their stadium is the second largest club ground in the UK behind Manchester United’s Old Trafford. Celtic has a heritage and support that exceeds even the likes of Chelsea and Manchester City. Yet the market rating of the shares suggests that the club is worth not even half the asking price for Premier League strugglers Aston Villa.

that would result in a 1,300% increase in Celtic’s valuation At first sight, that seems bonkers. However, the disparity in television revenues and financial rewards between top flight football in England versus Scotland is so vast that under the status quo, the market is probably right. Yet, there is the tantalising possibility

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Celtic Football Club has an illustrious history image: NYC2TLV, Wikimedia Commons

that if there were to be a shake-up in the structure of the British game, Celtic would swiftly move to a valuation closer to Arsenal Football Club’s. At today’s market prices, that would result in a 1,300% increase in Celtic’s valuation. Any readers scoffing at this possibility need to ask themselves just how the English Premier League and UEFA Champions League came to be in their current form. Fed up of providing nearly all of the entertainment but receiving no more television money than fourth tier flops, the Premier League was formed when English football’s (then) big five threatened to break away and form their own competition. This led to an exclusive TV deal for England’s top flight clubs. International club football has also undergone signficant change. Previously a straight two-leg cup competition, the European Cup was converted to a league system. This guaranteed a

number of games (thus revenues) for the participants. However, the runnersup and also-rans knew that they had a similar level of box office appeal as their domestic league champions. To head-off any attempt at reconstituting the European game, UEFA expanded the Champions League further to include some of the most successful teams from the big leagues.

five Welsh teams are allowed to play in the English system, so why not Celtic? If Division One can break away from the Football League, the European Cup can become the Champions League and the Champions League can include teams that have failed to win anything, could Celtic join the Premier League? Five Welsh teams are allowed to play in the the English system, so why not Celtic?

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June 2014 AIM Prospector  
June 2014 AIM Prospector  

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