Although many fans understandably find the term offensive, two of the largest “brands” in British football are Newcastle United and Celtic. Their influence also has financial benefits.
The financial systems in place in both domestic and European football have vexed both clubs; Celtic is having difficulty in UEFA competitions that essentially shield the very wealthy from defeat, while Newcastle is facing the Profit and Sustainability Rules (PSR).
At home, Celtic has won 12 of the last 13 Scottish Premiership championships, dominating the competition for years.
However, Scotland’s comparatively modest domestic TV agreement has hindered their capacity to contend with the best in Europe, just as PSR has constrained the Saudi Public Investment Fund’s (PIF) lofty goals on Tyneside.
Both clubs have recently been focussing more on commercial income in an effort to boost their earnings and purchasing power.
Newcastle made £47 million from all commercial streams in the previous fiscal year, while Celtic, who recently lost commercial director Adrian Filby to Aston Villa, only made £30 million from goods.
And it appears that both teams’ commercial trajectories are expected to continue based on the most recent information from the world of football commerce.
Newcastle and Celtic are about to join a “elite” club
Adidas, a major player in German sportswear, is listed as the kit manufacturer for both Celtic and Newcastle.
Over the course of their five-year contract with Adidas, Newcastle will make £200 million, whereas Celtic’s pact will have grown to a value of £30 million by the time it ends at the end of the current campaign.
Adidas and Parkhead are allegedly planning to expand their partnership, however the specific financials of that agreement are still unknown.
Adidas’ pledge to invest £230 million in Newcastle and Celtic is a testament to both their popularity as business partners and their stature in the game of football.
It has now been revealed by Footy Headlines, a site that frequently breaks exclusive stories in the football kit industry, that Adidas’s “elite” stable will include both Celtic and Newcastle starting in the upcoming season.
This basically means that in addition to creating a third kit for each club that is branded with the Adidas Originals logo, they will commercially release “authentic” versions of the respective uniforms for the two teams.
Adidas will incur more production costs as a result, which highlights the attraction of Celtic and Newcastle even more. It’s also probably going to show up in the headline numbers of their individual kit deals.
Newcastle and Celtic will be impacted by the new PSR system.
In the Premier League, PSR caps Newcastle’s financial losses at £105 million for a three-year rolling period.
Although Scottish football does not have a comparable internal PSR system, Celtic is governed by UEFA’s equal set of spending regulations.
UEFA has set a spending cap of 80% of revenue on agent fees, transfers, and wages this year. Starting with the upcoming season, that percentage will be reduced to 70%.
Newcastle will be aware of UEFA’s cap as a team hoping to compete regularly in European play, especially as the Premier League plans to implement a similar system starting in the upcoming season.
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