Spending on players and a poor performance on the pitch saw Celtic, the Glasgow football club, run up heavy full-year losses. Financier Mr Dermot Desmond is the club's biggest shareholder, with almost 20 per cent.
Turnover for the 12 months to June 30th rose to £38.6 million sterling despite lower attendances at Celtic Park, the club's stadium.
However, transfer spending and a £1.6 million exceptional payment to John Barnes, the club coach, and Kenny Dalglish, the director of football who were both dismissed resulted in pre-tax losses of £5.99 million, compared with profits of £550,000 last time.
Writing off the value of player contracts rose to £7.2 million, from £6.1 million, while wages rose from £14.5 million to £20.2 million.
Despite the sharp rise, wages represented 52 per cent of turnover, close to the 50 per cent level recommended as sustainable by Deloitte & Touche, the accountancy firm.
The club had a disappointing year on the pitch coming second to rivals Rangers in the Scottish league championship but generated increased revenues from merchandising and media activities.
Merchandising rose to £5.7 million (compared to £3.9 million previously), bucking the UK decline in the kit retailing market and helped by new retail outlets in Northern Ireland. Meanwhile, representatives of both Celtic and its rival Rangers met officials from the Netherlands' three biggest clubs PSV Eindhoven, Ajax and Feyenoord in Amsterdam yesterday to discuss joining a new pan-European league that could herald a shake-up in European football.
