Spinning plates and balancing books

Is the Scottish Premier League in the grip of a financial crisis? The image of the SPL has been steadily declining this year amongst news of falling profits, sponsorship losses and police investigations into the clubs themselves. Rangers and Celtic have never given the league a harmonious reputation, but since April of this year the Old Firm battles have seen more headlines than ever relating to negative fan behaviour and a conflict looking no closer to dying down. This, combined with the loss of Clydesdale Bank’s title sponsorship and clubs such as Aberdeen and Hearts releasing worrying financial figures, has given the long-acclaimed league an aura of demise.

As reported last week in The Journal, Hearts have been having a hard time of late. Owner Vladimir Romanov is keen to sell the club, and has this week valued it at £50 million. Arrears for the club are calculated to be £25-£35 million, and November has seen players go unpaid for the second month in a row. Plans for a new stadium have been stalled, and with the club looking economically unhealthy, worries are growing at Tynecastle over the quest to find a new owner.

Aberdeen is another club in the red. They this week announced financial trading losses of £589,000. This figure came after the deduction of former manager Mark McGhee’s termination package. However, Aberdeen is still to receive a compensation payment from the transfer of Chris Maguire to Derby County.

With the clubs themselves in financial difficulties, questions may arise over the progression of the SPL over the next few seasons. Hearts barely being able to pay their current players makes their chances of affording to buy more in the January transfer window unlikely, something which, if carrying through the whole SPL, could mean profit losses across the board. 

A more immediate problem for the SPL is the recent news that Clydesdale Bank has pulled out of title sponsorship. The end of the partnership will be the close of the 2012-2013 season. Chief Executive of the SPL, Neil Doncaster, has remained positive and has said: “The Scottish Premier League has consistently demonstrated that it provides terrific value to its sponsors. I am sure that success will be important in the work we now undertake.”

News that will surely lift the hearts of those trying to secure a new sponsor is the recent deal made with Sky Sports and ESPN for TV rights. Running from the start of the 2012-2013 season, the new five-year arrangement has been estimated to net top clubs up to £80 million.

The contract is quite an improvement on the current £65 million deal. Doncaster has said: “At the end of the day, the stability, the increased money and working with reputable live broadcasters puts us in the best possible position.” The SPL has 18 months to find a new title sponsor, and this show of confidence may make the search an easier one. 

A worrying backdrop to the financial crises is the Old Firm battle. Rangers were fined £70,000 and their fans banned from an away game for ‘discriminatory behaviour’ against PSV Eindhoven in April. And this month sees familiar stories as rivals Celtic undergo an enquiry for pro-IRA chants and ‘singing of sectarian songs.’ Four Dunfermline fans were arrested on 23rd November after racist chanting against Celtic fans in their SPL clash at Celtic Park.

Not a great advertisement to any potential investors, Celtic, Rangers and the rest of the SPL will surely be trying to get their houses in order, for the good of the league itself.