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*connectedthinking
The 18th annualnancial review o
Scottish ootball*Season 2005/06
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Table o contents
An introduction by David Glen 1
Part one 3Prot and loss
Part two 15
Balance sheet
Part three 21Cash fow
Part our 25Club 5 year overview
Part ve 33Post balance sheet events
Appendix one 35The season that was 2005/2006
Appendix two 39What Chairmen and Chie Executives thought
Appendix three 43Signicant transer activity
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An introductionby David Glen
Welcome to the 18th annual nancial review o the Scottishootball premier league, covering the season 2005/06.
The road to nancial stability continues
Despite collectively producing a loss or the year o 9 million,
it is clear that the premier league clubs are continuing tomake strides towards nancial stability. The loss o 1m
recorded last year was ater taking account o exceptional
gains o 19m arising rom the write-o o debt. There has
thereore been a clear improvement in the underlying nancial
perormance o the league.
O particular note is the act that o the 12 clubs, 6 have
reported a prot or the year which is a signicant turnaround
rom the days when substantial losses were being reported
across all the clubs. Falkirk, Hibs, Inverness, Kilmarnock,
Motherwell and Rangers are all to be congratulated or having
achieved this.
The total wage bill has remained stable at 93m although
9 o the clubs are now showing a wage to turnover ratio o
less than 60% and o them, 6 are less than 50%. Only Hearts
signicantly buck the trend with their wage bill more than
doubling to 10m, representing a ratio o 97%.
Net debt has allen yet again, this year by 23m, and now
sits at 94m. The principal reductions arose at Celtic ( 11m,
as a result o a share issue) and Rangers ( 17m, as a result
o the injection o unds rom the JJB licensing arrangement).
Again, the one club to buck the trend was Hearts,
where the net debt rose by nearly 7m to 28m (although thismay now be alleviated somewhat by the sale o Craig Gordon
to Sunderland).
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The road remains rocky
Whilst comort can be taken rom these gures, the nancial situation in Scottish
ootball remains ragile and we are not going to see a return to the ree spending
days that marked the early part o this decade.
Take Rangers as a case in point. In the 2005/06 season their turnover drove beyondthe 60m mark, the business generated an operating prot o 4.4m and the net
debt was reduced to under 6m thanks to a successul run in the Champions
League and the JJB licensing arrangement.
Move orward just 12 months to season 2006/07, the nancial results or which
have just been published, and an operating loss o 5.1m arose whilst net increased
to 16.5m. What a dierence a season makes, and principally as a consequence o
no Champions League participation.
Similar issues will arise at other clubs, albeit on a dierent scale, but the above
situation demonstrates the direct impact that success (or lack o it) on the park can
have on a clubs nancial situation the urther the progress that is made in cupcompetitions, the higher up the league you can climb, the more income you are
going to generate.
Given the uncertainty o success, a nancial balancing act has got to be achieved
o establishing a cost base or the club that is low enough to sustain ailure but also
high enough to attain success.
5 year overview
I have included a new section this year which plots or each club the key nancialmeasures o Turnover, Wages, Prot Beore Tax and Debt over the past 5 years,which I think makes or interesting reading.
David Glen
August 2007
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premier leagueclubs arecontinuing to make
strides towardsnancial stability
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Part oneProt and loss
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Prot and lossOverview
The SPL generated a loss o 9.4m in season 2005/06. In the prior year, a loss o1.3m was generated, however this was infated by debt write-os totalling 19mas a result o various clubs exiting administration proceedings.
The SPL Clubs Combined Proft and Loss Account 2006 2005 Movement
mill mill %
Turnover 172 168 3%
Wages (93) (94) -1%
Other operating expenses (78) (76) 2%
Operating loss beore player registrations 1 (3) -128%
Amortisation o player registrations (8) (14) -39%
Impairment on player registrations (0) (1) -71%
Net gain/(loss) on player registrations 4 8 -53%
Operating loss (4) (10) -58%
Exceptional debt write-os 2 19 -89%
Net interest cost (7) (9) -25%
(Loss) beore and ater tax (9) 1 -633%
Source: Statutory Accounts
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The nancial results o the SPL clubs have been obtained rom their StatutoryAccounts or the year ended 2006.
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The key nancial highlights o season 2005/06are as ollows:
Turnover increased by 3% to 172m (2005: 168m). The Old Firm had mixedresults with Celtics turnover alling by 8%, while Rangers broke through the60m turnover barrier. Further success was noted at Hearts and Hibernianwhose combined turnover increased by 3.3m
Total wages decreased by 1% to 93m (2005: 94m).
Amortisation cost o player registrations decreased by 6m to 8m, with 6.9mo this cost assigned to the Old Firm (2005: 13m).
The gain on sale o player registrations related to both Hearts and Hibernianover the sales o Rudi Skacel and Garry OConnor respectively. The prioryear gain was attributed to Rangers and arose rom the sale o Jean-AlainBoumsong to Newcastle.
The exceptional debt write-o o 2m related to the write-o o parent companydebt at Hearts. The prior year balances included an accounting gain o 15m
at Rangers and a 3.5m debt write-o at Dunermline.
Total net interest costs reduced by 2m to 7m, which is largely attributed tothe all in debt levels at Rangers.
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-70000
-60000
-50000
-40000
-30000
-20000
-10000
0
10000
Historic Profit/(Loss) Analysis 000s
Old firm profits/(losses) Other profits/(losses) Total SPL profits/(losses)
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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Aberdeen
Despite their second successive nish in the top hal o theSPL since the split was introduced, Aberdeens turnover ellby 6% to 6.8m (2005: 7.2m). This was largely due to a allin average attendance gures across the season and no homecup draws, which aected broadcasting and ticketing income.
Celtic
Following on rom last season, Celtics turnover ell onceagain by 8% to 57.4m (2005: 62.2m). Despite winningthe SPL and the CIS Cup, Celtics ailure to progress into theGroup Stages o the Champions League or the UEFA Cup,ater crashing out o the third round qualiers to ArtmediaBratislava, signicantly impacted turnover.
Falkirk
In their rst season in the SPL, Falkirks turnover increased by1.3m to 3.3m due to the additional revenue generated rombroadcasting and ticket sales.
Dundee United
Dundee Uniteds turnover decreased by 1.2m to 4.2m asno additional revenue was generated rom domestic Cupcompetitions as they were knocked out in the early rounds.In the prior year, Dundee United reached the semi-nal o theCIS Cup and the nal o the Scottish Cup.
Dunermline
Dunermlines turnover reduced or the third consecutiveyear to 2.9m. The Pars nished the season once again in11th spot in the SPL and exited both Cup competitions inthe early rounds thus oering little scope to generateadditional revenue.
Hearts
Despite the lack o European ootball in the current year,Hearts increased revenue by 1.9m to 10.3m in 2006.This can be attributed to improved domestic perormances,nishing 2nd in the SPL and winning the Scottish Cup. This isthe rst time the club has broken through the 10m revenue
barrier and with guaranteed European ootball next year, thislevel should be maintained.
Prot and lossTurnover
Turnover By Club 2006 2005 2006 2005
000 000 Increase Increase
Aberdeen 6,772 7,178 -6% 1%
Celtic 57,411 62,168 -8% -10%
Falkirk 3,303 2,008 64% 41%
Dundee United 4,151 5,374 -23% 41%
Dunermline Athletic 2,905 3,285 -12% -21%
Heart o Midlothian 10,277 8,428 22% 18%
Hibernian 8,706 7,225 20% 24%
Inverness CT 2,742 2,742 0% 106%
Kilmarnock 7,395 6,137 20% 0%
Livingston 3,487 3,953 -12% 8%
Motherwell 3,622 4,043 -10% 36%
Rangers 61,165 55,134 11% -3%
Total 171,936 167,675 3% 21%
Source: Statutory Accounts
Average 14,328 13,973 6% 21%Average exl/Old Firm 5,336 5,037 1% 21%
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The total turnover o the SPL increased by 3% to 171.9m in season 2005/06 (2005: 167.7m). Over hal o all clubsexperienced an increase in turnover during the season, as a result o improved European or domestic runs.
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Hibernian
Hibernians turnover increased by20% in the year to 8.7m, due to acombination o higher attendances,participation in the rst round o theUEFA Cup and a good run in the
Scottish Cup through to the semi-nal.
Inverness Caledonian Thistle
As Inverness Caledonian Thistle ledabbreviated accounts in the currentyear, no inormation in regard toturnover was available.
Kilmarnock
Improved SPL perormances helpedincrease turnover at Kilmarnock by
1.3m to 7.4m ater nishing 5th in theSPL, compared to a bottom hal nish inthe prior year (2005: 6.1m).
Livingston
Livingstons turnover decreased to3.5m in the season, rom 4m in theprior year. The club was relegated atthe end o the season ater posting arecord low points tally o 18.
Motherwell
Motherwells turnover decreasedby 10% to 3.6m as a result o theailure to match the run in the CIS Cupexhibited in the prior year. The clubonce again nished in the bottom hal o
the SPL.
Rangers
The progression through to the lastsixteen o the UEFA Champions Leagueincreased Rangers turnover by 6m to61.2m. In addition, this was the rstyear o impact o the JJB licensing dealentered into in March 2006. JJB paid aninitial consideration o 18m to Rangersin June, with a guaranteed minimumannual royalty o 3m in each year o
the license which will last or 10 years.Additional payments may also be madeto the club i certain turnover thresholdsare achieved. O the initial considerationreceived, 3.5m has been recognised inthe current year.
Prot and lossTurnover
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Prot and lossAttendance level
The SPL attracted higher crowdsduring the 2005/6 season with averageattendance gures up by 5% rom the2004/05 season. The total averageattendance or the season was 193,995compared to 185,026 in the prior year.Both Hearts and Hibernian experienced
a signicant increase in attendancelevels rising by 37% and 17%respectively, largely as a result o betteron eld perormances.
The biggest crowd o the season was atCeltic Park on 15 October 2005, wherea crowd o 60,100 watched Heartsbattle out a 2-2 draw. The smallestcrowd was 2,278 at Almondvale on the29th April 2006 were Livingston took onInverness Caledonian Thistle and werebeaten 1-0.
Stadium utilisation also increasedduring the year but a third o SPLstadiums remain hal empty. Note thatutilisation gures are based on averageattendance/stadium capacity.
Average Attendance
by Club
Average
Attendance
2006
Average
Attendance
2005
Utilisation
2005/06
Utilisation
2004/05
Aberdeen 12,727 13,576 57% 63%
Celtic 58,149 57,958 96% 96%
Falkirk 5,515 3,935 69% 49%
Dundee United 8,197 8,210 58% 58%
Dunermline 6,260 6,192 50% 52%
Heart o Midlothian 16,767 12,219 93% 69%
Hibernian 13,816 11,830 79% 68%
Inverness CT 5,061 4,067 67% 56%
Kilmarnock 7,070 5,930 39% 33%
Livingston 4,938 5,157 49% 52%
Motherwell 6,250 6,960 45% 51%
Rangers 49,245 48,992 98% 97%
Totals 193,995 185,026 73% 71%
Source: Scotprem.com
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Aberdeen
Total wage costs at Aberdeen decreased by 7% to 4.3m
which has resulted in an improvement in their wage to
turnover ratio. The turnover balance used in the computation
o this ratio has been altered to take into account the eects
o the merchandising deal which Aberdeen operates with Just
Sports Pro Club Ltd.
Celtic
Celtic shaved nearly 5m o wage costs during the year
reducing rom 37.4m to 32.5m. This was due to a change in
the ootball management team as the ONeill era ended with
Gordon Strachan taking the reins. Celtic continue to have the
highest wage bill in the SPL, but given the level o turnover
generated by the club, the wage to turnover ratio remains
manageable at 57%.
Falkirk
As a new entrant to the SPL, Falkirk has one o the lowest
wage bills in the league, however this has increased by 21%
rom the prior year to 1.7m. The rise in turnover has negated
this eect as the wage to turnover ratio has reduced rom
68% to 50%.
Dundee United
Due to the disposal o higher earning players at Dundee
United, wage costs decreased to 2.8m, a signicant
reduction o 0.7m. Despite the improvement in wage costs,
the wage to turnover ratio increased in the year to 68%, due
to the all in turnover.
Prot and lossEmployee costs
Wages to Turnover Ratio Total Wages Total Turnover Wages/Turnover Ratio
2006 2005 Movement 2006 2005 2006 2005
000 000 % 000 000 % %
Aberdeen 4,312 4,636 -7% 7,320 7,678 59% 60%
Celtic 32,490 37,394 -13% 57,411 62,168 57% 60%
Falkirk 1,651 1,365 21% 3,303 2,008 50% 68%
Dundee United 2,825 3,492 -19% 4,151 5,374 68% 65%
Dunermline Athletic 1,708 2,569 -34% 2,905 3,285 59% 78%
Heart o Midlothian 10,013 4,541 121% 10,277 8,428 97% 54%
Hibernian 3,678 3,326 11% 8,706 7,225 42% 46%
Inverness Caledonian Thistle 1,310 1,310 0% 2,742 2,742 48% 48%
Kilmarnock 3,329 3,512 -5% 7,395 6,137 45% 57%
Livingston 1,230 2,270 -46% 3,487 3,953 35% 57%
Motherwell 2,449 2,404 2% 3,622 4,043 68% 59%
Rangers 27,989 27,303 3% 61,165 55,134 46% 50%
Total 92,984 94,122 -1% 172,484 169,348 54% 56%
Source: Statutory Accounts
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Dunermline
Due to urther reductions in wage costs,
Dunermlines wage to turnover ratio
reduced rom 78% to 59%. Given the
reduction in turnover this year, the Pars
have done well to shave o a urther0.9m rom costs, which has brought
their wage to turnover ratio in line with
the industry recommended level.
Hearts
Hearts wage costs more than doubled
this year rom 4.5m to 10m due to
additions made to the playing squad
during the January transer window
and an improvement in terms oered
to existing players. As a result othe signicant increase in costs, the
wage to turnover ratio has increased
substantially rom 54% to 97%. Hearts
now have the highest wage to turnover
ratio in the SPL and without European
progression and continued unding by
Mr Romanov, this is not sustainable.
Hibernian
Despite an 11% increase in wage costs,
Hibernian continues to operate with
the lowest wage to turnover ratio inthe SPL. The 20% increase in turnover
in the year has more than covered
the increase in costs, as the wage to
turnover ratio reduced rom 46% to
42% in the year.
Inverness Caledonian Thistle
As Inverness Caledonian Thistle led
abbreviated accounts in the current year
no inormation in regard to wage costs
was available.
Kilmarnock
Kilmarnock reduced wages by 5% in
the year to 3.3m and combined with
the 20% increase in turnover, their
wage to turnover ratio improved rom
57% to 45%.
Livingston
The signicant decrease in wage costs
at Livingston has reduced their wage toturnover ratio to 35% rom 57% in the
prior year.
Motherwell
Motherwells wage to turnover ratio was
adversely aected in the year due to
the combination o a 10% decrease in
turnover and a 2% increase in wages.
The current year ratio o 68% is up rom
59% in the prior year.
Rangers
Rangers wage costs remained relatively
stable at 28m (2005:27.3m). Due to
the increase in turnover during the year,
the wage to turnover ratio improved
rom 50% in the prior year to 46%.
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Player registration ees
The costs associated with the amortisation o player transer ees has reducedduring the year to 8m (2005:14m).
Celtics amortisation charge decreased by 2m to 5m as a result o contractextensions to existing players, oset by charges in respect o new players signed
during the season. The total investment in player registration ees was 8m, withthe most notable additions o Zurawsk (2m), Nakamura (2.5m) and Virgo (1.5m).Rangers amortisation charge also decreased rom 5.6m to 1.8m, and 3.9mworth o additions were made in the year, largely made up 1m spent on Rodriguez
rom Monaco and 1.5m on Filip Sebo rom Austria Vienna.
Hearts charge or the year more than tripled to 0.7m due to the signicant transeractivity in the year.
The gain on the sale o player transers ell to 4m rom 8m in the prior year. Thisis made up o small gains recognised by several clubs and a 1m gain recognisedat Hearts due to the sale o Rudi Skacel to Southampton or 1.2m and a 1.5mgain at Hibernian, largely due to the sale o Garry OConnor to Lokomotiv Moscow.
The prior year gain was incurred almost entirely at Rangers on the departure oJean-Alain Boumsong to Newcastle.
Exceptional items
The 2m exceptional item relates to the orgiveness o loan stock held by Hearts toUAB Ukio Banko Investicine Grupe. The stock was previously issued to SMG buttranserred to UAB during the year. The prior year exceptional relates to a 15mgain incurred by Rangers on the release o negative goodwill and a 3.5m loanwrite-o by Wood Investment (Scotland) Ltd by Dunermline.
Prot and lossPlayer registration eesExceptional items
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Prot and lossProt/loss beore tax
Net (loss)/proft beore tax by club
000 2006 2005 Movement
Aberdeen (1,500) (987) 52%
Celtic (4,222) (8,706) -52%
Falkirk 479 (527) -191%
Dundee United (786) (1,177) -33%
Dunermline Athletic (359) 1,885 -119%
Heart o Midlothian (5,282) (2,728) 94%
Hibernian 2,222 65 3318%
Inverness Caledonian Thistle 219 (102) -315%
Kilmarnock 127 (1,300) -110%
Livingston (468) (413) 13%
Motherwell 123 303 -59%
Rangers 92 12,410 -99%
Total (9,355) (1,277) 633%
Source: Statutory Accounts
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The SPL generated a loss ater tax o 9.4m, with the maincontributors to the loss being Celtic and Hearts. Hal o theSPL clubs generated a net prot in the year.
Aberdeen
Due to the 6% all in turnover and relatively stable operatingcosts, Aberdeens operating losses increased year-on-year.The total loss or the nancial year was 1.5m, which wasup 0.5m rom the prior year and included a urther 0.1m ointerest charges or additional debt amortisation costs.
Celtic
For the second successive season, Celtic generated anoperating prot despite a reduction in turnover. Total lossor the year was 4.2m, down by 4.5m rom the prior year.The all is due to a reduction o 2.2m in the amortisationcharge or player registration ees and reduction o 2.4m intermination ees or player contracts. Interest payable alsoreduced rom 2.3m to 1.8m due to reduction in overalldebt levels.
Falkirk
The eects o promotion to the SPL o Falkirk have resultedin a signicant improvement in their nancial results as a losso 0.5m in the prior year has been replaced by a 0.5m protin the current year. The 64% rise in turnover has dwared aslight increase in costs resulting in an overall prot.
Dundee United
Dundee United continued to reduce their overall loss despitea reduction in turnover in the year. Costs o sales have
decreased by 0.9m largely due to a all in wage costs, andnancial results have beneted rom a 0.4m gain on thedisposal o xed assets compared to a 0.2m loss in the priorperiod. Total loss was 0.8m compared to 1.2m last year.
Dunermline
Dunermline generated a loss o 0.4m in the year comparedto a 1.9m prot in the prior year. The prior years resultshowever were boosted by a 3.3m write back o debt. On alike-or-like basis, operating costs have decreased by 1.4m,largely due to a reduction in wage costs and urther savingsmade on interest costs.
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Hearts
Hearts generated a loss o 5.3m in the current year; anincrease o 2.6m rom the prior year. Despite generatingadditional revenue in the year, a gain on sale o playerregistration o 1m and a write-back o debt o 2m, thesignicant increase in wage costs negated this impact and an
overall loss was recognised.
Hibernian
Hibernian continued to produce a good set o nancial guresand recognised an overall prot or the second year running.The results or the year were beneted by a 1.5m gain on thesale o player registrations and a 20% increase in revenue,resulting in a prot o 2.2m or the nancial year.
Inverness Caledonian Thistle
In their second season in the SPL, Inverness Caledonian
Thistle generated a prot o 0.2m in comparison to a 0.1mloss generated in the prior period.
Kilmarnock
Kilmarnock generated a prot o 0.1m in the current year, therst positive nancial results since 1999. The prot is largelydriven by the increase in turnover generated in the year ascosts have slightly decreased by 0.2m.
Livingston
In the rst year ater exiting administration, Livingston posteda loss o 0.5m. Excluded rom the analysis above is a 4.8mgain recognised in the prior year due to the various debtwrite-os as result o the CVA proceedings. Despite reducingwage costs by over 1m, the decrease in turnover has caused
the net loss to increase slightly year on year.
Motherwell
For the third consecutive year Motherwell generated a prot,which was down by more than hal rom the prior year, o0.1m. The reduction in prot is due to the combined eectso reduced turnover and an increase in costs. Further, theclub received one-o income o 0.4m in relation to the leasepremium relating to the lease o a site or the use o mobilephone communications.
Rangers
Rangers generated a modest prot o 0.1m due tothe combined eects o increased turnover and loweramortisation and interest costs. Included in the annualresults was a loss o 3.8m in relation to the discontinuedretail operations, however this was oset by the 3.5mincome recognised on the JJB license agreement. The prioryear prot was aected by the 15m exceptional release onegative goodwill and 8m gain on player transers, neither owhich were repeated in the current year.
Prot and lossProt/loss beore tax
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Part twoBalance sheet
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Balance sheetOverview
The SPL Clubs Combined Balance Sheet Total Total Movement
2006 2005
000 000 %
FIXED ASSETS
Investments 2,869 2,873 0%
Intangible Assets 19,828 12,969 53%
Tangible Assets 249,894 249,244 0%
TOTAL FIXED ASSETS 272,591 265,086 3%
CURRENT ASSETS
Stocks 3,028 4,994 -39%
Debtors 21,192 16,924 25%
Cash at bank and in hand 31,209 8,316 275%
TOTAL CURRENT ASSETS 55,429 30,234 83%
Creditors: due with one year. (110,436) (89,300) 24%
Net current assets (55,007) (59,066) -7%
TOTAL ASSETS LESS CURRENT LIABILITIES 217,584 206,020 6%
Creditors: due > 1year. (129,818) (125,362) 4%
NET ASSETS 87,766 80,658 9%
Capital and reserves
Called up share capital 45,832 45,004 2%
Share premium account 148,115 132,392 12%
Rangers Bond 7,736 8,512 -9%
Revaluation reserve 87,362 87,551 0%
Capital redemption reserve 1,739 1,068 63%
Other reserves 30,827 30,829 0%
Prot and loss account (233,845) (224,698) 4%
TOTAL 87,766 80,658 9%
The total net assets o the SPL at theend o the 2005/06 season was 87.8m,up by 9% rom the prior year (2005:80.7m). The current year increase isprincipally due to the 15m equity issueby Celtic in December.
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Balance sheetNet debt
Analysis o combined SPL Net debt 2006 000 2005 000 Movement %2006%
o total debt
2005
% o total debt
Cash at bank and in hand 31,210 8,316 275%
Bank Overdrat (17,911) (18,004) -1%
Net cash/(overdrat) 13,299 (9,688) -237% -14% 8%
Borrowings due within one year (12,512) (3,259) 284% 13% 3%
Borrowings due in more than one year (89,480) (98,364) -9% 95% 84%
Amounts owed under hire purchase (5,110) (5,398) -5% 5% 5%
Net debt (93,803) (116,709) -20% 100% 100%
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Key balance sheet highlights are noted as ollows:
Intangible assets increased by 6.9m in the year dueto additional player investment by Celtic, Rangersand Hearts.
Cash at bank increased by 23m to 31m, with Rangers
contributing 23m to the total SPL cash ater receivingan upront cash payment on the JJB sponsorshipdeal. Over hal o the SPL clubs now operate withnet cash positions.
Eight clubs in the SPL improved their net asset position inthe year, with the most signicant increase noted at Celticas a result o the resh issue o equity.
Net debt decreased by 20% to 93.8m (2005:116.7m).The Old Firm contributed to the majority o this decreasewith Celtic reducing net debt levels by 10.1m andRangers by 17.3m. Hearts, Aberdeen and Livingston
experienced an increase in net debt levels, with Heartsnet debt rising by 6.9m, Aberdeens by 1.5m andLivingstons by 0.5m.
Net Assets/
Liabilities per Club
2006
000s
2005
000sMovement %
Aberdeen (235) 740 -132%
Celtic 22,097 11,728 88%
Falkirk 3,324 2,804 19%
Dundee United (4,003) (3,730) 7%
Dunermline Athletic (8,215) (9,026) -9%
Heart o Midlothian (11,959) (6,677) 79%
Hibernian 4,758 2,369 101%
Inverness CT 862 418 106%
Kilmarnock 2,595 2,467 5%
Livingston (918) (452) 103%
Motherwell 1,305 1,178 11%
Rangers 78,155 78,839 -1%
Total 87,766 80,658 9%
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Balance sheetNet debt
Source o Borrowings
000 Borrowings due < 1 year Borrowings due > 1 year
Club External Connected External Connected
HP/
Finance
Leases
Total
Borrowing
Cash
balanceNet Debt
Aberdeen - - (5,068) (300) (92) (5,460) (5,416) (10,876)
Celtic (901) (164) (15,814) - - (16,879) 2,914 (13,965)
Falkirk 0 - - - - - 926 926
Dundee United - (828) (6,000) (34) - (6,862) (772) (7,634)
Dunermline Athletic - - (1,000) (3,649) (3) (4,652) (3,151) (7,803)
Heart o Midlothian (9,868) (14,609) (1,155) - (25,632) (2,773) (28,405)
Hibernian (593) (80) (6,587) (1,360) (41) (8,661) 1,827 (6,834)
Inverness Caledonian Thistle - - - (20) - (20) 199 179
Kilmarnock (78) - (8,741) - (88) (8,907) (3,537) (12,444)
Livingston - - - (631) (180) (811) 135 (676)
Motherwell - - - (1,239) (11) (1,250) 862 (388)
Rangers - - (23,273) - (4,695) (27,968) 22,085 (5,883)
Total (1,572) (10,940) (81,092) (8,388) (5,110) (107,102) 13,299 (93,803)
2006% 2% 12% 86% 9% 5% - -14% 100%
2005% 1% 2% 75% 9% 5% - 8% 100%
Source: Statutory Accounts
-100,000
-50,000
0
50,000
100,000
150,000
200,000
1997 1998 2000 2002 2004 20061999 2001 2003 2005
Net debt 000s
Total SPL profits/losses
Historic debt vs. loss
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The all in net debt during season 2005/06 has continuedthe trend o recent years as clubs take additional measuresto reduce their debt burden and experience the benetso improved operating results. The current year has beenimpacted by the JJB deal at Rangers, the Celtic equity issueand the impact o the Romanov era at Hearts.
Aberdeen
Aberdeens net debt increased by 16% to 10.9m in the year(2005: 9.4m). As in prior years, the increase is due to theadditional usage o overdrat acilities rather than new loans
being drawn down. Post period end the club has securedurther banking arrangements with the Bank o Scotlandinvolving the sale and leaseback o Pittodrie stadium.
Celtic
As a result o the share issue in December, which wasunderwritten by Dermot Desmond, Celtic raised unds o15m which has contributed to the 44% all in net debt in theyear to 14.0m (2005: 24.9m). Further, due to the applicationo FRS 25, unds previously classied as equity are nowpresented as debt. This has had the eect o increasing debtby 4.7m in the current year and 5.4m in the prior year.
Falkirk
Falkirk are the only club in the SPL to have a positive cashposition with no debt. Funds were raised in the year via asmall share issue and the increase in turnover due to SPLstatus has covered costs incurred in the year.
Dundee United
Net debt levels at Dundee United increased by 0.2m to7.6m due to the additional usage o bank overdrat acilitiesand urther director loans (2005: 7.4m). The majority o the
debt (6m) is held with the Bank o Scotland, to which EddieThompson acts as personal guarantor.
Dunermline
Dunermline reduced its net debt by 2% to 7.8m. Thereduction is due to the repayment o 0.4m o connectedparty debt as the usage o bank overdrat acilities hasincreased by 0.2m to 3.1m.
Debt Movement by Club 2006 Net Debt 000 2005 Net Debt 000 Movement 000 Movement %
Aberdeen (10,876) (9,374) (1,502) 16%
Celtic (13,965) (24,891) 10,926 -44%
Falkirk 926 546 380 70%
Dundee United (7,634) (7,354) (280) 4%
Dunermline Athletic (7,803) (7,933) 130 -2%
Heart o Midlothian (28,405) (21,526) (6,879) 32%
Hibernian (6,834) (9,295) 2,461 -26%
Inverness Caledonian Thistle 179 134 45 34%
Kilmarnock (12,444) (13,025) 581 -4%
Livingston (676) (208) (468) 225%
Motherwell (388) (635) 247 -39%
Rangers (5,883) (23,148) 17,265 -75%
Total (93,803) (116,709) 22,906 -20%
Average per Club (7,817) (9,726) 1,909 -20%
Average per Club (excl Old Firm) (7,396) (6,529) (496) 8%
Balance sheetNet debt
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Hearts
Bucking the trend o previous years,Hearts were one o only two SPL clubsto increase their net debt in the yeardue to additional unding received romtheir parent company, UAB Ukio Banko
Investicine Grupe and the additionalusage o bank overdrat acilities.Net debt was 28.4m, up by 6.9mrom the prior year (2005:21.5m).In addition, 2m o loan stock debt waswritten o by the parent company whichwas previously held by SMG.
Hibernian
Hibernians net debt is 6.8m, down by26% rom the prior year (2005: 9.3m).The reduction is due to improved
operating results contributing to thepositive cash position at the year-end.The main component o the remainingdebt is unchanged rom the prior yearand includes a 6.5m stadium mortgageand 1.4m o connected parentcompany debt.
Inverness Caledonian Thistle
As in prior years, Inverness CaledonianThistle continues to operate with a netcash position as they hold only 20k odebt which is in the orm o an interest-ree loan; there is no bank debt.
Kilmarnock
Kilmarnocks net debt decreased by0.6m to 12.4m in the year, primarilydue to the improvement in the clubsgross cash position (2005: 13m).The mixture o debt continues to relateto both bank overdrats and loans.
Livingston
Due to the increase in operatinglosses during the year Livingstonsnet debt increased by 0.5m to 0.7m(2005: 0.2m). The debt is held withconnected parties and nance lease
creditors; there is no bank debt.
Motherwell
Motherwells net debt reduced in theyear to 0.4m (2005: 0.6m). As theclub does not have an overdrat, thereduction in debt is due to improvedoperating results and the decrease inloans due to John Boyle; there is nobank debt.
Rangers
As a result o the 18m JJB dealupront payment, Rangers net debthas reduced signicantly rom 23.1mto 5.9m. Gross borrowings remainrelatively unchanged at 28m, which islargely made up o a 22m bank loanand 5m o nance lease creditors.
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Part threeCash fow 2006
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For the second successive year, the SPL generated a netcash infow o unds, which is down by 16.5m rom the prioryear to 8.2m. This is largely as a result o reduction in levelso nance raised in the period oset by increased spendingon capital investments.
Cash generated rom operating activities has increased by
17.2m to 27.1m. Rangers increased their cash infow by22m to 24.7m due to improved operating activities andunds received rom the JJB deal while Hearts increasedtheir cash outfow by 4.6m to 5.2m due to increasedoperating losses.
As a result o the signicant reduction in Rangers debt levels,the cash outfow rom servicing o nance has reducedby 2.3m to 6.2m. All other clubs outfow remainedrelatively stable.
Due to the additional investment made in player registrationsduring the year, cash outfow rom capital expenditure
increased by 8.6m to 14.2m. The main contributors tothis outfow were Celtic 6.9m (2005:4.5m), Rangers 5.8m(2005: 0.9m) and Hearts 2.5m (2005: 0.3m).
The management o liquid resources o 15m (2005: nil)is derived solely rom Rangers and represents the undsreceived rom the JJB deal transerred to a short-termdeposit account.
Due to the act that no cashfow statement was presentedin their statutory accounts, the ollowing clubs havebeen omitted rom the analysis Dunermline, InvernessCaledonian Thistle and Livingston.
Cash fowOverview
Combined SPL
Cash Flow
2006
000
2005
000
Movement
%
Net Cashfow rom
Operating Activities27,140 9,949 173%
ROI and Servicing
o Finance (6,231) (8,512) -27%
Capital Expenditure &
Financial Investment(14,220) (5,610) 153%
Taxation 272 51 433%
Acquisitions (221) 0 100%
Management o
liquid resources(15,000) 0 100%
Cash outfowbeore Financing
(8,260) (4,122) 100%
Financing 16,410 28,801 -43%
Net Cash
Infow/(Outfow)8,150 24,679 -67%
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Place chart here.
Cash fowNew nance raised
Cash fow rom nancing activitieshas decreased by 12.4m to 16.4min the year. The prior year was infatedby the unds raised via the RangersRights Issue.
In the current year, Celtic raised 14.6m
via a share issue with smaller issuesat Falkirk and Dundee United. Furtherdetails on the debt raised in the periodare contained within the Balance Sheetsection o the report.
New Finance Raised2006
000
2005
000
Movement
%
Net Proceeds rom Share Issue 15,116 51,004 -70%
Debts 12,189 7,756 57%
Infow rom new nance 27,305 58,760 -54%
Repayment o Debt (10,493) (29,583) -65%
Capital Element o nance lease (402) (376) 7%
Outfow rom nance (10,895) (29,959) -64%
Net cashfow rom nancing 16,410 28,801 -43%
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Cash fowCash fow rom player transers
No balances in respect o movement in players transers were disclosed or Falkirk,Kilmarnock and Motherwell in their cash fow statement.
The main infuence in recent years on the net transer ees o the SPL has beenthe clubs ability to raise unds in player sales, as signicant spending in the
transer market by Scottish clubs remains scarce. In the past 5 years, Rangershas generated almost 40m in player sales including the sale o Tore Andre Flo andJean-Alain Boumsong. Hibernian beneted in the current year due to the sale oGarry OConnor to Lokomotiv Moscow.
Analysis o cash movement rom player transers
2006 2005
000 Outfow Infow Net Outfow Infow Net
Aberdeen (242) 35 (207) (315) 30 (285)
Celtic (4,477) 643 (3,834) (2,891) 350 (2,541)
Dundee United (397) 463 66 (414) 0 (414)
Heart o Midlothian (1,517) (113) (1,630) (116) 110 (6)
Hibernian (230) 1,555 1,325 0 79 79
Rangers (4,017) 1,527 (2,490) (7,077) 10,183 3,106
Totals (10,880) 4,110 (6,770) (10,813) 10,752 (61)
Source: Statutory Accounts
The net cash outfow rom player transers has increased in the year to 6.8m (2005:0.1m). The level o cash outfow has remained relatively stable year-on-year whilethe cash infow has reduced signicantly rom 10.8m to 4.1m.
In the prior year, Rangers was the main contributor to the cash infow due to thesale o Jean-Alain Boumsong to Newcastle. In the current year, the infow o 4m issplit between various clubs, most notably Hibernian and Rangers.
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-30000
-25000
-20000
-15000
-10000
-5000
0
50001997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Net Transer Fees 1997-2006
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Part ourClub ve year overview
This section provides a snapshot o the key nancial numbers o turnover, prot/(loss) beore tax, wages and net debt over the past 5 years or each SPL club.
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Over the past ve years, Aberdeens debt levels have doubled rom 4.5m to10.1m due to the recurring losses made by the club. Losses peaked at 2.5min 2001/02 and due to the tight control over costs by management these havereduced by 0.9m and now sit at 1.5m. Although wage costs have reduced by1m over the period, turnover has also declined by 0.8m and is now at its lowestlevel o 6.7m.
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-4000
-2000
0
2000
4000
6000
8000
0000
2000
Aberdeen
Celtics nancial perormance over the past ve years has largely been driven bysuccess in European competitions, culminating in the appearance in the UEFA Cupnal in 2002/03. Turnover rose to a peak in season 2003/04 o 69m and since thenhas tailed o as the Parkhead side have ailed to progress urther in Europe.
The turnover generated via European competitions has supported a signicantwage bill, which peaked at 41m in season 2003/04, however this has sincereduced by 8m.
Celtic have raised approx 37m rom share issues in recent times which hasallowed debt levels to remain relatively manageable, peaking at 20m in 2004/05.
Celtic
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
000s
000s
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Dundee United
Dundee United have reduced their total loss by 1.5m over the past ve yearsas a result o revenue growth, particularly in 2004/05 when the club experiencedsuccessul runs in domestic cup competitions. Wage costs have remained relativelystable over the period, although they have allen by 0.7m in the current year.
Debt levels have increased by 3.7m peaking at 7.6m in the current year. Although
the rate o growth in debt has reduced in recent years due to a reduction in losses,the cost o servicing such debt is c0.5m per annum which is not sustainable.
Dunermline Athletic
Dunermline has one o the most signicant reductions in debt levels in the SPLwhich has allen by 7m rom its peak in 2001/02 o 14.8m. The reduction islargely due to the various debt write-os by third parties which has also impactedthe prot and loss results.
Wage costs have decreased by 2.5m over the past 5 years, ater creeping up to4.6m in 2002/03. However, turnover has reduced by 1.2m in recent years and iscurrently at its lowest level in the past 5 years.
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-3,000
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-6,000
-3,000
0
3,000
6,000
9,000
12,000
15,000
000s
000s
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Falkirks promotion to the SPL in season 2005/06 has helped to produce the mostsuccessul set o nancial results in the past 5 years. Although wage costs are attheir highest level, the signicant increase in turnover more than compensates orthis, resulting in an overall prot. The peak in nancial results in 2002/03 was dueto one-o investment income received as a result o Falkirk selling Brockville Parkto set up a joint venture with Falkirk Council to establish a community
owned stadium.
Falkirk
The nancial eects o the take-over o Hearts by Vladimir Romanov was revealedin the 2005/06 nancial results. The most signicant impact was the considerableincrease in wages. Over the past ve years, wages have remained c5m. Howeverthey have more than doubled in the current year to 10.1m. Hearts debt levelshave risen consistently rom 14.8m in 2001/02 to 28.5m in 2005/06, with a 6.9mincrease noted in the current year. Ater a slight improvement in 2002/03, losseshave continued to grow over the past ew years rising to a high o 5.2m in thecurrent year. Turnover has increased steadily rom a low o 6.1m to 10.3m in thecurrent year.
Heart o Midlothian
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-10,000
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
2001/2 2002/3 2003/4 2004/5 2005/6
Cash
Turnover
Wages
PBT
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
000s
000s
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Hibernian
Over the past 5 years, Hibernian have reduced their wage costs by 2m which hashelped to move the club into a protable position in 2005/06. Further, turnover hasincreased due to improved on-eld perormances and has risen by 2.9m in the last2 years. Debt levels have allen since the peak o 14.5m in 2002/03 ater the writeo o connected party debt. The club also beneted in the current year rom gainson player transers.
Inverness Caledonian Thistle
Promotion to the SPL in season 2004/05 has had the most signicant impacton Inverness Caledonian Thistles results as turnover has more than doubled to2.7m as a result. Wage costs have also risen over the years but remain one o thesmallest wage bills in the SPL. The club has operated in recent years with no netdebt as management runs the club on a prudent basis.
As the club led abbreviated accounts in 2005/06, no current year details onturnover or wages was available.
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-3,000
0
3,000
6,000
9,000
12,000
15,000
2001/2 2002/3 2003/4 2004/5Debt
Turnover
Wages
PBT
-500
0
500
1,000
1,500
2,000
2,500
3,000
000s
000s
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Losses have reduced gradually over 5 years at Kilmarnock as a result o increasesin turnover and reduction in wages. Turnover has increased by nearly 4m overthe past 5 years and currently peaks at 7.4m due to improved SPL perormances.Wage costs have decreased by 1m in recent years. As a result, a small prot wasgenerated in 2005/06 or the rst time in 5 years. Debt levels however, remain high,and peaked at 13m in 2004/05, although they ell by 0.6m in the current year.
Kilmarnock
Livingston was placed into administration in February 2004 ater the club wasunable to und spiralling debt levels ater years o recurring loses. The club exitedover a year later and debt o 4.8m was written o as a result. Wage costs havealso been dramatically reduced given the clubs relegation rom the SPL in 2006.The decrease in costs is well timed as turnover will drop as a result o the demotionand wages are generally lower in the rst division.
Livingston
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-5000
-4000
-3000
-2000
-1000
0
1000
2000
3000
4000
5000
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-2,500
-1,500
-500
500
1,500
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
0,500
1,500
2,500
3,500
000s
000s
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Motherwell
Motherwell was the rst club in the SPL to be placed into administration aterdebt levels peaked at 9m in 2002/03. As a result o the process, debt levelsell by c8m as club owner John Boyle wrote o the majority o the liability. Postadministration results show steady wages and turnover, which in turn has kept debtlevels below 1m.
Rangers
Rangers underwent the most signicant nancial restructuring o all the SPL clubshaving reduced net debt levels by 68m in recent years. In 2003/04, Rangersnet debt was 73.9m. However the combination o a 52m rights issue and 18mupront payment rom the JJB licensing agreement deal has resulted in a current net
debt level o 5.9m.
Both turnover and wages have also moved in the right direction, with the Ibrox sidebreaking through the 60m turnover barrier in 2005/06 and shaving nearly 10m otheir wage bill in recent years.
The prot generated in 2004/05 was due to the release o negative goodwill and nottrading related. The prot and loss account has been positively impacted by theincrease in turnover and reduction in wages and urther improvements in results areexpected as the cost o servicing debt is reduced.
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
2001/2 2002/3 2003/4 2004/5 2005/6
Debt
Turnover
Wages
PBT
40,000
30,000
20,000
10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
000s
000s
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Part vePost balancesheet events
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Celtic
Unaudited interim results released by Celtic or the period to end31 December 2006 highlight:
Turnover increased by 41.6% over the corresponding period
a year ago to 48.8mProt beore tax increased to 17.9m rom a loss o 0.9m in the correspondingperiod a year ago, ater taking account o gains on player transersNet debt increased rom 13.9m at 30 June 2006 to 15mat 31 December 2006
Celtics participation as Scotlands sole representative in the UEFA ChampionsLeague has had an encouraging eect on their interim results based on the sameperiod last year. Playing three more home games resulted in an increase o 9mrom ticket sales and increased income rom multimedia o 7.9m.
The 2006/2007 season saw manager Gordon Strachan embark on his secondseason at the helm o the Scottish Champions, walking away with the league title
and the Scottish Cup. In addition to this, Celtic emulated Rangers eat o lastseason by qualiying or the last 16 o the UEFA Champions League, which shouldimprove their nancial position even urther this year.
Rangers
Full year results released by Rangers or the period ending 30 June 2007 highlightthe ollowing:
Turnover rom continuing operations decreased by 4% to 41.8mLoss ater tax was 6.3mNet debt at the year-end stood at 16.5m
Rangers endured a disappointing domestic season, which ultimately lead to thereplacement o the management team at Ibrox. Paul Le Guen let the club makingway or Walter Smiths return, nine years ater his departure.
A decrease in turnover and a reported loss was testament to not being involvedin the UEFA Champions League or the 2006/2007 season. Season ticket sales,sponsorship, media and hospitality income, however, have all shown growth on thesame period last year.
The clubs business partnership with Las Vegas Sands was curtailed inJanuary 2007, ater the Governments decision to award the rst regional casino
license to Manchester.
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Appendix oneThe season thatwas 2005/2006
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League Winners
Bank o Scotland Scottish Premier League
Winners Celtic
Runners-up Hearts
For the rst time since the 1994/95 season, the Old Firmsmonopoly o the the top 2 spots in the SPL was broken,with Celtic winning their rst title under new managerGordon Strachan. Ater some early setbacks in their leaguecampaign, Celtic won a crucial Neerday tie against Hearts atTynecastle and never looked back. It was let to Rangers andHearts to battle it out or second place, with Hearts comingout on top and clinching a valuable place in the secondqualiying round o the Champions League.
At the other end o the table, Livingston accumulated a recordlow points tally o 18, and were duly relegated with St Mirren
taking their place rom the SFL.
Tennents Scottish Cup Winner
Winners Hearts
Runners-up Gretna
Ater a airytale run to the nal, becoming the rst team everrom the third tier o Scottish ootball to reach the
nal, Gretna were pipped at the post by Hearts, winningtheir rst Scottish Cup since 1998. Hearts took the leadlate in the rst hal through Rudi Skacel. However, Gretnaequalised in 75 minutes taking the game to extra time.Neither team could break the deadlock during the extraperiod, taking the game to penalties. Hearts converted allour o their penalty attempts and while Gretna netted the rsttwo, consecutive misses ensured the Cup would be travelling
back to Tynecastle.
CIS Insurance Cup Winner
Winners Celtic
Runners-up Dunermline
On a day where Celtic remembered their late hero JimmyJinky Johnstone, Dunermline tried to orget the 8 1hammering they received at the hands o Celtic earlier onin the season. The nal scoreline was ar lower than theirencounter earlier in the season, but Celtic still ran outcomortable victors with goals rom Zurawski, Maloneyand Dublin. The 3 0 win gave Gordon Strachan his rst
silverware as manager o Celtic.
European Qualication
Champions League Celtic, Hearts
UEFA Cup Rangers
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Scottish Football Writers AssociationPlayer o the Year 2006:
Craig Gordon (Hearts)
Scottish Football Writers Association
Young Player o the Year 2006:
Steven Naismith (Kilmarnock)
Scottish Proessional Footballers AssociationPlayer o the Year 2006:
Shaun Maloney (Celtic)
Scottish Proessional Football AssociationYoung Player o the Year 2006:
Shaun Maloney (Celtic)
Top Goal Scorer
Kris Boyd (Kilmarnock/Rangers) 32 goals
European Competitions
Gordon Strachan suered almost the worst imaginablestart to his managerial career at Celtic, losing 5 0 awayto Artmedia Bratislava in the rst game o their ChampionsLeague qualiying tie. Celtic battled well in the return leg, buttheir 4 0 victory was not enough to see them through to the
nancially lucrative group stages o the Champions League.
On the other hand, Rangers managed to dispose oAnorthosis Famagusta by 4 goals to 1 on aggregate to make itthrough to the group stages. Ironically, they came up againstCeltics conquerors, Artmedia Bratislava alongside Europeanheavyweights Inter Milan and FC Porto. Rangers got o toa fying start with a crucial 3 2 victory at home to Porto.Their hero came in the unlikely orm o Sotirios Kyrgiakoswho clinched the game with a last minute header. This wouldprove to be Rangers only win in the group stages. However,consecutive draws against Bratislava, Porto and nally InterMilan at Ibrox proved enough to see Rangers make history as
the rst Scottish team to qualiy rom the group stages o theChampions League.
Rangers aced Villarreal in their rst taste o the nal 16. Therst leg o the tie ended 2 2 at Ibrox, setting up a tensereturn tie in Spain. Despite taking the early lead throughPeter Lovenkrands, a heartbreaking equaliser rom RodoloArruabarrena gave Villarreal the victory on away goals.
Dundee United and Hibernian were the two other clubsrepresenting Scotland in European competition. DundeeUnited aced Finnish side MyPa in the second qualiyinground o the UEFA Cup. United drew the opening game0 0 away rom home, and a 2 2 draw a ortnight latermeant that their European hopes or the season also endedon the away goals rule. Hibs came up against Ukrainian sideFC DniPro in the rst round o the UEFA Cup. A nil-nil draw athome proved to be very costly, as they went on to lose5 1 in Ukraine with Derek Riordan scoring what proved to bemerely a consolation goal.
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Changes in Management
Following a terric unbeaten start to the season GeorgeBurley was startlingly sacked in October as Hearts manager.His replacement came in early November in the orm o ormerChelsea coach Graham Rix. His tenure, however, was alsoshort lived and ater our months in the job, Valdas Ivanauakas
was appointed as interim Head Coach to replace Rix.
Gordon Chisolm was dismissed as manager o Dundee Unitedin early January and 3 days later, Inverness Caledonian Thistlemanager Craig Brewster was appointed as his successor. InFebruary, Livingston manager Paul Lambert resigned atera poor run o results let the club six points adrit at thebottom o the table. Shortly aterwards, ormer Hearts andLivingston player John Robertson was hired as Livingstonsnew manager.
Pressure was mounting on Rangers boss Alex McLeishthroughout the season, and despite Chairman David Murray
giving his manager a public vote o condence in November,it was announced in early February that McLeish would leavethe Ibrox club at the end o the current season. Speculationmounted as to his replacement and, in early March, Murrayannounced that ormer Olympic Lyonnais manager Paul LeGuen would succeed McLeish on a 3 year contact.
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Appendix twoWhat theChairmen and
Chie Executivesthought
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Aberdeen: Stewart Milne, Chairman
Following on rom this agreement to drive orward on thecommunity stadium, the Club put in place banking acilitieswhich, it is hoped, will see the Club through the coming
crucial period up to March 2011.
Celtic: Brian Quinn, Chairman
The successul 15m share issue in December 2005 rebuiltthe balance sheet, reducing bank debt at year end rom19.3m to 9.1m and almost doubling net assets. We alsoincreased investment in the acquisition o players rom 2.3mto 8.8m.
salary packages or ootballers are probablyunprecedentedly high, not just or those o the highest calibre,but also or many outside the elite category. The main driverseems to be the substantially larger sums available to FAPremier League clubs rom the recently agreed televisioncontract. Many clubs are spending money now that will notbe available or another year, creating echoes o the last boom
and bust in ootball.
Dunermline Athletic: Jim Yorkston, Chairman
The year under review was one in which severe measureswere taken to control cash and reduce losses.
Cost control measures implemented have includedreductions both in players wages and in ootball managementsalaries. Following an operational review, a redundancy
programme was eected to reduce total sta numbers.
Rangers: David Murray, Chairman
In March we announced a ten-year licence agreement withJJB Sports plc worth a minimum o 48.0m to the Club. Thisgure will increase by way o additional royalty payments
i certain sales thresholds are exceeded. Early indicationsin this respect are positive. This deal, coupled with theextended run in Europe helped us achieve an operatingprot o 4.4m.
Exceptional items include a 1.0m gain on sale o playersand a 3.8m loss on the termination o our retail activities,
principally consisting o termination and redundancy costs.
Dundee United: Edward Thompson, Director
Despite the clubs wage bill being reduced during the yearby 667,313, payroll costs as a percentage o turnover inthe year were 68.1% (2005: 65%). The company has beenstriving to decrease the wage bill in the year by disposing ohigh earning players, however this has been impacted by the
act that turnover has decreased.
Kilmarnock: Michael Johnston, Chairman
The last nancial year proved to be something o a rollercoaster with signicant gains due to ootballing successon the pitch and in the transer market being tempered bybelow budget perormances by the hotel and the sports bar.Success on the pitch also came at a cost with signicantbonus payments being incurred, as well as increased police
and stewarding charges
Hearts: Roman Romanov, Chairman
Financial highlights or the period include Heart o MidlothianFC (Hearts) breaking through the 10 million revenue levelor the rst time. The 10,277,000 income represents a22% increase o over 1.8 million (2005: 8,428,000) on the
previous year.
A urther nancial benet or Hearts was the orgiveness o2 million o debt by UAB Ukio Banko Investicine Grupes(UBIG), a company controlled by Vladimir Romanov.
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National Team
The national side once again ailed to qualiy or the WorldCup, eventually nishing third in their group. However,the team went on to show considerable improvement withjust two deeats in nine matches, compared to our deeatsrom nine in the prior season. At the end o the season,
Scotland lited silverware in the orm o the Kirin Cup witha convincing 5 -1 win over Bulgaria, and a scoreless drawagainst hosts Japan.
Friendlies
August 2005 Austria 2 2 Scotland
November 2005 USA 1 1 Scotland
March 2006 Scotland 1 3 Switzerland
World Cup Qualiers
September 2005 Scotland 1 1 Italy
September 2005 Norway 1 2 Scotland
October 2005 Scotland 0 1 Belarus
October 2005 Slovenia 0 3 Scotland
Kirin Cup
May 2006 Bulgaria 1 5 Scotland
May 2006 Japan 0 0 Scotland
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Appendix threeSignicanttranser activity
Player Date From To
Maciej Zurawski Jul-05 Wisla Krakow Celtic 2,000,000 Adam Virgo Jul-05 Brighton Celtic 1,500,000Shunsuke Nakamura Jul-05 Reggina Celtic 2,500,000Julien Rodriguez Aug-05 Monaco Rangers 1,000,000
Kris Boyd Jan-06 Kilmarnock Rangers UndisclosedMirsad Beslija Jan-06 Racing Genk Hearts 850,000Wes Hoolahan Jan-06 Shelbourne Livingston 100,000Garry OConnor Mar-06 Hibernian Lokomotiv Moscow 1,600,000
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