• Chris King

Financial Reality Check for Scottish Football


At a glance

  • For the financial year ending 2018 the Scottish Professional Football League (SPFL) generated revenues of £37.2 million, up 7% from the year before, while the English Premier League generated £3.18 billion in revenue

  • Celtic’s turnover, £101.6 million, was more than the other 11 Scottish Premiership clubs put together and almost 3 times higher than the SPFL league revenues

  • In the 2017/18 season the lowest earning EPL team (West Bromwich Albion) earned £23 million more in revenue than the highest earning SPFL team (Celtic) and £92 million more than the second highest earning team (Rangers)


Current state of the SPFL

For the financial year ending 2018, the Scottish Professional Football League (SPFL) generated revenues of £37.2 million, up 7% from the year before. As seen in Figure 1, the SPFL has managed to annually increase revenues since 2012, while the increase in that 7 year span was only £15.9 million, overall it is a 74% increase. The league’s revenues will undoubtedly continue to increase as a new improved 5-year £150 million broadcasting contract with Sky Sports has recently been finalised, showing 48 Premiership matches per season, and up to 6 play-off matches. This is a substantial improvement on the previous deals struck in 2009 for £65 million and in 2012 for £80 million, aiding the growth of the league and the sport in Scotland.


Figure 1: SPFL Revenues 2008-2018

While the trends in revenue for the SPFL look positive, the profit / loss for the same time period tells a drastically different story. From 2008 to 2018, the league made a loss in each financial year after tax. Even though the losses are small and have not been greater than £100k in any of the last ten years, the inability to carry forward a profit from one financial year into the next, has impacted the league’s ability to invest in future growth.


Figure 2: SPFL Profit / Loss 2008-2018

Analysing the revenue of the teams taking part in the Scottish Premiership from 2014-2018 allows for a more complete understanding of the Scottish football landscape. The following analysis is only approximate as St. Johnstone, Dundee, Motherwell (pre-2017), Inverness Caledonian Thistle and Hamilton Academical do not publish full company accounts due to claiming small company status in accordance with the Companies Act 2006. Based on the available data it can be estimated that their turnover is less than £10.2 million as that is the threshold for which full accounts must be published.

The first observation that can be made from Figure 3, below, is the disparity in revenue between Celtic and the rest of the Scottish Premiership. In 2014 Celtic’s revenue was 36% greater than the rest of the other Premiership teams combined. It is worth noting that Rangers were out of the Scottish Premier League during this season, thus skewing the cumulative revenue of the other clubs. When comparing the revenue in the Scottish Premiership in 2018 with 2014, thereby taking Rangers out of the equation, Celtic’s revenue has jumped to 76% higher than the combined revenues of the Scottish Premiership clubs outside the Old Firm.


Figure 3: Scottish Premiership Club Revenue 2014-18

Once the revenues of Rangers and Celtic have been removed, as seen in Figure 4, it is easier to see how little growth in revenues are for the rest of the SPFL clubs from 2014-2018. Besides the Old Firm, only Hearts and Aberdeen have been able to generate more than £10 million of revenue in a single season.


Figure 4: Scottish Premiership Club Revenue 2014-1018 (without Old Firm)

Figure 5 highlights the drastically different picture that the profit / loss data tells compared to the corresponding revenue data in Figures 4 and 5. As Celtic generates far and away the largest revenue, it should not be surprising that they also are the most profitable. Celtic’s profitability stands in stark contrast to the financial losses with which Rangers has operated since their return to the Scottish Premiership in the 2016-17. The losses of Rangers are almost the exact inverse of Celtics profits since 2017, with both clubs profiting / losing £20-£22 million in total, respectively, during that time period.


Figure 5: Scottish Premiership Club Profit / Loss 2014-2018

With the exception of Dundee United and Aberdeen in 2015, the rest of the SPFL have experienced relatively static profit / loss, with most clubs operating within a £2 million profit / loss window each year. While Aberdeen have operated with the highest revenue outside of the Old Firm from 2014 – 2018, with yearly revenue over £10 million, they ended 4 out of those 5 years with a financial loss. Hearts, on the other hand, were able to both generate the second highest revenue for a non-Old Firm club and end the year with a profit for 3 out of the 5 years from 2014-2018.


Figure 6: Scottish Premiership Club Profit / Loss 2014-2018 (without Old Firm)

How the SPFL stacks up against the EPL

It’s no secret that the English Premier League (EPL) is the most financially viable and “premier” football league in the world. With a revenue of £3.18 billion for the financial year ending 2018, the EPL has continued to widen the revenue gap with the SPFL. Responsible for running the Scottish Premiership, Championship, and Leagues One and Two, the SPFL’s revenue in 2018 was only 1.2% of the EPL’s revenue. Figure 7 illustrates that the difference between the SPFL and EPL revenues rose from £929.7 million in 2008 to £3.1 billion in 2018. The large increases in EPL revenue from 2013-2014 and from 2016-2017 coincide with new broadcasting deals of £3 billion and £5 billion respectively. This demonstrates the large contribution that broadcasting deals have had to the widening of the revenue gap between the SPFL and EPL.


Figure 7: SPFL vs EPL revenue 2008-2018

In November of 2018, the EPL finalised a £4.5 billion broadcast deal with Sky for 128 games and BT for 32 games for 3 seasons, 2019-22. Sky will be paying £9.3 million per game throughout the life of the contract which is £1.5 million less per game than the previous deal. However, the deal is not yet complete as there are still broadcasting rights for 40 matches still to be sold. Even if the remaining 40 games are sold at the same price per game as what Sky paid, the total deal will be worth £5.6 billion, which is a 9% increase on the previous deal. For perspective, the EPL’s broadcasting deals rose by 70% in both 2014 and 2017. This substantial decrease in broadcast deal growth seems to indicate an end to the growth of EPL broadcasting deals seen in the last decade. But while the EPL’s contracts might not be growing at the same rate, the SPFL’s current £150 million broadcasting deal still leaves a lot of room for improvement between the two leagues.


What the future holds for the SPFL

To increase the revenues for both the league and its members clubs, the SPFL must focus on increasing the revenue from tv broadcasting deals, both domestically and internationally. With the rise of Netflix, Google, Amazon, and iTunes there are now competitors to traditional television providers. Amazon has already signalled its intentions in expanding into live sports coverage with its 5 year deals for UK coverage of both the ATP World tour, worth £50 million, and the US Open, worth £40 million. A deal that incorporates streaming services offers the SPFL the opportunity to increase not only the numbers of games broadcast, but the overall revenue generated. This will serve to potentially increase the exposure and the revenue generated by all SPFL clubs, as well as to decrease the revenue gap between Celtic, the Old Firm, and the rest of Scottish Premiership clubs.

The SPFL should also prioritise not only their own end-of-year profitability, but also the profitability of clubs. Which can be achieved not only by increasing revenue from improved tv broadcasting deals, but also through the introduction of salary restrictions. Often referred to as a ‘salary cap’, these wage restrictions are a foreign concept to many sports leagues in Europe but have been commonplace in sports leagues in the US for decades. These salary caps represent a fixed wage ceiling that all teams must spend under during that season. Salary caps are aimed at making the league more competitive and providing more teams the opportunity to win the league. While this would most likely still allow wealthy clubs such as Rangers and Celtic to spend far more wages than the rest of the league, it would serve to increase the profitability of SPFL’s member clubs by ensuring their wages don’t result in a financial loss. A SPFL wage ceiling could take the form of a percentage of last year’s revenue, a certain multiplication factor of last year’s profits, or an amount that can’t be spent above. Usually the largest cost for any club are player wages, and while some clubs keep player wages to a manageable proportion of revenue, there are clubs in the Scottish Premiership that have wage costs equal to more than 70% of revenue. For many of these clubs, lower wages could lead to an end-of-year profit rather than a loss, or a reduced end-of-year loss at the very least. While a salary cap would have to be bespoke to the SPFL’s current situation, there are other football leagues such as the MLS, Australian A-League, the English Rugby Premiership and French Rugby Top 14 league that use a salary cap increasing profitability and competition. This proves that salary restrictions are viable with both promotion and relegation structures and in a European cultural context.



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