WITH the recent anniversaries of managerial arrivals such as Ronny Deila and Ange Postecoglou having been sources of retrospection, this week’s column is dedicated to offering up one way to think about team performance levels through a financial lens. How much bang for their buck did managers get out of the wages spent on their squads domestically?
The following table shows each season starting with Martin O’Neill’s first all the way up through 2021 using actual data, with this past season’s a guestimate, as fiscal 2022 will not conclude for Celtic until the end of this month, with public disclosures likely to arrive in late summer or early autumn.
With some season-to-season variation, we can see the expected general trend higher in the club’s spending on wages - inflation!
Next up is the same data, but with the addition of using the 2001 season as a baseline and adjusting the wage bill level using the UK’s Retail Prices Inflation (RPI) index over the period.
This comparison offers a general view of the annual spending level on wages relative to a gauge of broader price levels within the UK. I plugged in the 2021 wage bill again for 2022 and used 7% for the RPI for illustrative purposes, but the actual figures will be different.
In addition, the annual inflation data is calculated on a calendar year basis, whereas Celtic’s fiscal years end each June 30th, so this exercise can be considered to try and assess broader trends rather having exacting precision. It does offer some context as to the relative wage bills each manager had each season, and highlights when certain managers enjoyed higher and lower relative ‘backing.’ It also shows how sharply spending often jumped in seasons following relative success in European competitions, as well as the significant increase in Europe-related broadcast fees relative to broader inflation levels starting around 2017.
The next step in building out the information within this exercise is to add a way to assess performance. Publicly available metrics like Expected Goals (xG) or Expected Points (xPts) did not exist dating back that far, so I have included points and goal difference for each season as broad performance proxies.
The idea with these inputs is to try and calculate an inflation-adjusted ‘return on investment’ for points and goal difference. First, let us look at points:
From an inflation-adjusted pounds spent per point perspective, we can see that Ronny Deila’s first season stands out as the ‘cheapest cost,’ while seasons late in multiple managers’ tenures dominate the opposite, with Rodgers’ last full season the most expensive.
Ideally, we would have something like xPts to conduct this sort of historical exercise, but goal difference is a decent historical metric which is readily available.
Of course, this exercise does not account for vitally important variables such as the relative strength of the league in any given season. For example, the 2013 to 2019 period involved domestic campaigns in which no opponents were close to Celtic’s wage bill.
We can also see the relative downsizing in spending following the global financial crisis and Rangers’ liquidation, as the last season of Neil Lennon’s first tenure and both of Deila’s dropped below the inflation-adjusted wage shown beginning in the second graphic above.
With Ange Postecoglou facing a significant transition period and a re-emergent Rangers in his first year, the ’return’ on the wages spent ranks well compared to those of the past 20-plus seasons. Now that Champions League-related revenue has been secured, we can hope that the upcoming season creates a holy grail of sorts; increased investment that generates high returns.
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