For the last few months, since Lawwell re-appeared (but before the confirmation of his return) to take credit for the Ange Postecoglou appointment, which to me is the equivalent of someone crowing over winning a big poker hand on the river card, there has been a steady drumbeat giving him credit for other stuff too.
According to those voices, Celtic wasn’t quiet these past ten years. Instead, we worked behind the scenes at the only organisation that can force real change, and that it was this work which led to the adoption of the new financial fair play policies at UEFA.
Those new rules, called the Financial Sustainability Regulations, severely limit what clubs can spend on transfer and agent fees and football department wages and salaries. That, we’re told, is why the Ibrox club didn’t spend in the summer. It’s why they can’t spend in January. It’s why next summer, without player sales, they are in a real world of hurt.
It’s also why all the talk floating around of “American investors” and other such stuff isn’t going to make the least bit of difference to them. We’re told that the days of directors loans are over.
There is no prospect that a sugar-daddy owner, even if one existed for them, can come in and take control and change their situation in any sort of significant way.
This, we’re told, now settles all outstanding debts.
The club has acted in a way that will make a real difference, one that hurts Ibrox in a way that really matters.
That Lawwell has, in fact, won the 2011 victory after all. Scotland might not have reformed its game, but no matter; we used our influence at UEFA to strike a serious blow against our rivals.
One of the things I try to do is give credit where it’s due, and although I’ve been critical of Lawwell for many years on this stuff I subscribe to the old adage that when the facts change, I change my mind. But he wasn’t the only person on the Celtic board who had some responsibility here.
In fact, a lot of praise should go to Chris McKay instead, a guy who continues to mightily impress me with his handling of things behind the scenes … he, as you’ll be aware, is the club’s chief financial officer, taking away a slab of responsibility from the CEO, a much needed, and much welcomed, change in letting the chief executive get on with other things.
Nicholson himself is no fool; he also played a big part in moving us towards this, as he recognised that UEFA itself might well be the perfect vehicle for finally making things happen. We have undoubtedly done well here, and these changes look like being positive ones. But don’t give Lawwell too much credit, and don’t expect too much too quick.
For openers, these are going to be applied on a light-touch basis for the next three years, and even when breaches are reported, first and second offenses will come with financial rather than sporting penalties. We’re a long way from seeing threats of suspensions from European competition. A club would have to be pretty stupid and badly run to tempt that fate.
Eventually, things will catch up to them, but this club is willing to gamble and they’ve proved it time and time again. They could well decide to roll the dice and pay the fines and try to get spending under control before the more serious punishments kick in.
The real game-changer has been that their directors are no longer willing to fund any overspend. That means that their club are denied the option of running up deficits as long as they are backed by equity. It’s not even clear that there’s much more value to be had in debt-for-equity swaps; their shares are probably not worth it to these guys.
We don’t call it “equity confetti” for nothing. Toilet paper is probably worth more.
I’m not saying that these changes won’t make a difference; you can smell the fear on their forums and you know their directors are seriously concerned about this stuff, and that they’re already on a watch-list shows that there’s little or no tolerance for them inside the European governing body. But they aren’t the cure for every ill.
Scottish football needs its own “financial sustainability” regulations, and it has needed them since 2012. I understand if we tried and failed to get them through; that’s always been at the back of my thinking on this.
Did we genuinely make an effort to push those rules only to meet resistance? That’s not impossible; a lot of clubs – Hearts, Dundee Utd and Aberdeen amongst them – were, at the time, looking for outside investors.
Those clubs all eventually found people willing to come in and spend some money. Yet even they run those clubs in a sensible fashion. Nobody is buying multi-million pound footballers there, and so I still remain unconvinced that they, and others, would have resisted supporting an official framework which codified the policies they follow already.
Still, it’s clear that these new UEFA measures are positive – more positive than I thought they looked at the time. There is a hint of a reason why in these new regulations.
Now directors can’t loan money to clubs without it being converted into shares and this is a massive change, particularly now as their board’s appetite for equity swaps is thoroughly exhausted. If they are to put money in, they can’t get it back out.
It is also clear that not only did Celtic have a role in pushing for these new rules, but that we’re smart enough to be in front of them. If we sell Juranovic for a high transfer fee, that will allow us the latitude to spend more without coming near to tripping the wire. We know what we can do and what we can’t, and we operate well within the limits.
Ibrox got very good at pushing the limits of FFP in its original guise.
It will not be so able to push the limits now. It won’t be anywhere near as good at getting others to bend them either. Perhaps the most aggressive part of these rules are those which cover monitoring; Ibrox will have to provide ever more detail to UEFA about how it intends to stay within those limits.
But there’s better to come. The club has succeeded in making UEFA understand that certain failures of scrutiny here at home played a role in what Ibrox was able to get away with, and so the SFA’s role in scrutinising this stuff appears greatly reduced and that might, in fact, do more good than even FFP regulations written right here at home ever would have.
But the full effects are not going to be clear to us for some time to come … on the surface of it this stuff looks like it will matter a lot. But we’ve been here before, and we’re right to wait and see.
In the end, time will tell and we’ll find out whether UEFA has the stomach for it.
We’ll also find out if those rules are going to impact us in a negative way … don’t rule that out. The reason they are no longer called financial fair play is that UEFA is leery of any suggestion that it’s trying to level the playing field.
When the side which finishes in the middle of the EPL earns more than if we were to win the Champions League there is no such thing and UEFA doesn’t see its own role as changing that, except by giving clubs in their competitions more cash.
But here’s the critical thing;
If we can reach the Champions League Groups more regularly, the additional income from that, from our 10,000 extra seats, better merchandising deal and our vastly greater transfer strategy should give us greater latitude to spend than Ibrox can even dream about.
This is where what I’ve always said about forcing their club to break even being disastrous for them comes into play … it would strip from them any means of competing with us.
It is not impossible that the costs associated with running their club, and the limits on what they can spend, might force them to compromise to the extent where, as I’ve long said, the challenge for them becomes maintaining their second place position.
Things have changed here, but let’s not just jump to conclusions about how much yet. A lot of water will need to flow under the bridge before the full impact of the new rules can be properly explored, but we should be positive without being euphoric.
This has, of course, impacted on one other area; the Resolution 12 campaign.
If you follow the blogs you’ll know that those involved have essentially declared victory, made up with the club over it and are now satisfied that these changes accomplish much of what they set out to do. A debt of honour remains; Lawwell misled people over some of this, and in particular with relation to the Five Way Agreement, but the recent statement from the Foundation does more than just hold out an olive branch.
The Requisitioners believe that had these rules been in place in 2011 the scandal of Ibrox getting that European license would never have happened and I agree that’s true.
The club has also publicly acknowledged their outstanding efforts, and credited their campaign with influencing these UEFA regulations, and that’s also true. The way in which these rules aim to force ever greater transparency from clubs over licensing and takes some of the power for scrutinising this stuff out of the hands of the SFA is a major victory for these guys.
They should be proud of that, and every other aspect of this.
People have been mischaracterising what Resolution 12 is about for years; it was, as one of its foremost activists never tired of repeating, “about justice, not revenge” and the target of it was never Ibrox, as many surmised, but the SFA itself. They key objective was not to punish people but to affect change … and that goal has been accomplished.
The landscape has changed. How much or how little is some way off being clear, but it’s a real change and it will have an effect. The signs are good that it will be a net positive for Celtic and that it will confront Ibrox with ever more difficult circumstances.
The days of that club posting losses year on year without consequences are over, and I am satisfied that it was Celtic, and in particular a small group of shareholders and activists who never gave up, who helped push that process along.
