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Celtic chief MacDonald calls it a day
Scotland on Sunday 03/09/2000
By Graham Spiers
ALLAN MACDONALD, the Celtic chief executive, is to resign from the club. It is thought MacDonald has already intimated to the Celtic board that he is leaving, though an official date for his departure isn't yet known. Information gleaned from within Celtic Park by Scotland on Sunday suggests the club is planning to make the announcement next week.
MacDonald's resignation is sure to plunge Celtic into a period of further uncertainty. Following the departure in May of the club's plc chairman, Frank O'Callaghan, it means Celtic have lost their two key executives within the space of four months. Celtic have already hired an English-based head-hunting firm to find MacDonald's replacement.
MacDonald, who was in Dublin last night and unavailable for comment, is thought to have decided to vacate his position three months ago. He became instrumental, not to say embroiled, in the business of chasing both Guus Hiddink and Martin O'Neill for Celtic's new coach, and one source suggests that MacDonald decided to go the moment he secured O'Neill's appointment. It is believed he first told Celtic of his decision in early June.
At a Celtic board meeting convened in London last week, MacDonald apparently resisted a request to change his mind. The board were also due to meet tomorrow, after which the announcement might have been made. The club will certainly wish to clarify the position before the Celtic agm on September 18.
MacDonald took up the role in May 1998, and his initial appointments of Kenny Dalglish and John Barnes ended in disaster. His appointment of O'Neill, some feel, redeemed his reputation and has restored Celtic. MacDonald has taken an annual salary of £ 200,000 from Celtic, though this pales beside the £ 1.5m remuneration which was his salary in his last year with British Aerospace.
At an apparently exciting time in Celtic's fortunes, the reasons for MacDonald's departure appear to be varied. He has certainly complained privately to friends that the grinding plc machinery of Celtic is a millstone when it comes to running the club. The procedure of sifting through the mountainous detail and background of Guus Hiddink and O'Neill, and reporting to the board with laborious frequency, became an unwieldy process which MacDonald is said to have detested.
MacDonald is also thought to have provoked tensions at board-room level in his desire to take Celtic in a new fiscal direction. Infamously, his "spend in order to prosper" policy, which first came to light with the expensive renewal of Henrik Larsson's contract, is not one which met with the easy approval of the board. Another source which this newspaper contacted yesterday said that MacDonald "has been thought of as leading a rebellion within the boardroom". More significantly, the figure of Dermot Desmond, Celtic's most prominent investor and shareholder, is also a factor. MacDonald and Desmond are said to get on well, but the urbane Irishman has exhibited a sudden upturn in interest in what is going on at Celtic Park. At a time when Celtic require fresh investment to provide ballast against their debts, it is possible that MacDonald has decided to leave and give Desmond his head.
During Fergus McCann's reign at Celtic, the Irishman was happily said to be an absentee investor. Two things, though, are thought to have stimulated Desmond's interest around Parkhead.
Following the Barnes and Dalglish fiasco, Desmond is said to have spoken more bullishly of his desire to be involved with the club. He has also told the board of his need to protect his investment by being a key player in the O'Neill appointment. MacDonald had already had two meetings with O'Neill before Desmond also arranged to meet him at the Dorchester Hotel in London – the first sign that Desmond wanted to be a more hands-on player.
Secondly, Desmond has become more important to Celtic's fortunes since MacDonald has driven the club towards a more high-risk investment strategy. MacDonald, it is believed, pointed out to the board recently that Rangers, in spending £ 80m on new players in the past decade, had spent over twice the amount of Celtic in the same period. A heavier investment in players, MacDonald argued, was essential.
In order to fund this, Celtic are currently looking for a £40m cash injection from a fresh institutional investor – if possible from the multi-media and communications sector. Desmond, with accumulated private wealth worth in excess of £ 100m, is said instead to want to loan the money to Celtic. MacDonald is thought to have reservations about this, but has acknowledged that Desmond is the key to Celtic's future. "There is no difference, so far as I can see, between Desmond and MacDonald in terms of a strategy," one source said yesterday. "They do, though, differ over which policy is best to implement it."
There were conflicting signals last night about when MacDonald might stand down. One source told SoS he would go immediately, but this would seem unlikely. More probably, MacDonald will stay until after the annual meeting, or even remain in place until the end of the financial year. It is also possible, according to another credible source that he will remain in a consultancy role with Celtic in order to drive through his plan to take the Old Firm into a new European League.
There will inevitably be some who see MacDonald as a man now falling on his sword. His appointment of Barnes and Dalglish was costly, amounting to over £ 1m in compensation for Celtic. This was a tributary of the £ 6m overall loss which the club recorded in their last financial year. The woeful signing of the Brazilian, Rafael, who is almost certain to be off-loaded, might also prove to be a £ 5m write-off.
Last night neither MacDonald nor Brian Quinn, the Celtic plc chairman, was available for comment.
High-flier MacDonald spreads Celtic wings
Scotland on Sunday 03/09/2000
By GRAHAM SPIERS
THERE was a stony silence from Celtic yesterday over the impending resignation of Allan MacDonald, the chief-executive. This wasn't surprising from a club being revived on the field but now facing its second boardroom departure in a heady summer. MacDonald's going is a symptom of complex times at Parkhead, where groin strains and knee knocks being suffered by Paul Lambert are nothing compared to the desperate quest to secure more financial investment.
MacDonald is getting out although it will be surprising if much of this fazes him. He is the father of five children, the owner of four homes, and for 20 years in the aviation industry his remit occasionally required him to handle the dreadful aftermath of aircraft tragedy. On a salary of £ 1.5m before he left British Aerospace, his £ 200,000 pocket-money with Celtic will not be sorely missed. The demeanour of this man suggests a passion for Celtic but an appetite for plenty other aspects of life as well.
MacDonald may remain with Celtic in a working capacity until the end of the season. He will also look back on his 30 months with the club and savour the task which he successfully achieved of convincing the board that it must spend and spend again. To puritans this has been an ugly summer of outlandish transfer fees – £ 35m for Luis Figo in Spain, £ 22m for Gabriel Batistuta in Italy – but the moral seems to be one about surviving by investing. Celtic don't have to look to the Latin countries for lessons in ludicrous arithmetic but the club will have to be braver with its wallet if it is to match its stated ambitions.
In his fiscal policy at Ibrox, David Murray has often been called reckless and sometimes foolish, but Murray has never been guilty of being timorous or insular. It is a philosophy which has increasingly attracted the respect of MacDonald. In succeeding Fergus McCann as the Celtic purser, MacDonald has increasingly provoked the ire of McCann in America with his brash approach to the club's balance-sheet. Mistakes have certainly been made but a culture has been transformed. MacDonald, for instance, has taken Celtic to £ 15m in debt. McCann, from a distance, has raged at this. MacDonald's response has been to state that he wishes to increase that borrowing further.
The question now facing Celtic, though, is where will fresh capital come from? Two current issues dog the club in their attempt to clarify this. The first is the current threat from the European Union which might outlaw transfer-fees, a ruling which, if passed, will render the purchase of new players an expensive folly. The second trend is the now obvious reluctance of major investment houses to be seen gloriously ploughing their money into football clubs – a reluctance triggered by the sight of this cash going straight to the players with no obvious return.
Rangers, in trying to buy Ronald de Boer and John Hartson for a total of £ 10m last week, are obviously still living for the present. Celtic, without the immediate pressure of Champions League success, can afford to be more circumspect. Parkhead, though, will continue to pine for largesse to come swilling from somewhere. And it is here that the figure of Dermot Desmond looms ever large.
This Irish entrepreneur is probably the richest man currently involved in British football. To the custodians of Celtic, by the grace of God, he was also born to be bedevillled by an emotional pull towards the cause of football in Glasgow's east end. Measuring wealth in these situations is always dangerously loose but Desmond's access to money has rarely proved teething. Right now, enticingly for Celtic, he seems of a mind to put forward fresh wedges.
MacDonald and Desmond, according to this newspaper's sources, are two men who get along. They also share a view, stated openly by MacDonald, that Celtic need to swallow the image of being an investment-happy club, at least in terms of sizeable wages it will offer to players. The £ 23,000-a-week deal provided to Henrik Larsson is one example of this culture. Brian Quinn, a former deputy-governor of the Bank of England who sits on the Celtic board, might cavil at such sums but the sight of Larsson rousing 60,000 at Celtic Park should ease these fears. Celtic are a big club whose battalions of sponsors at the turnstyles should help allay any doubts about their social and economic strength.
Desmond, however, appears to have a grander plan. While MacDonald sees Celtic's future as being in partnership with one of many multi-media communications companies on the scene, Desmond's wish is for the club to keep its equity intact for the present. If need be, Desmond argues seductively, that can be done upon the cushion of his own personal wealth. Like a house soaring in value, Desmond has the means by which to keep Celtic afloat, until such time as the club can cash in on its burgeoning value. This is a gorgeous carrot from a man who apparently has plenty to dangle.
Barring any change of mind, Dermot Desmond is about to become a more forceful figure in the Celtic drama. MacDonald, for his part, is happy and willing to let this happen. More than four months ago, when MacDonald was up to his eyes chasing a new manager, he said to me: "There is going to be a sudden upturn in Dermot's interests in Celtic, and if it is good for this club, no-one or nothing should discourage it." Celtic, as MacDonald has urged before, should carefully cultivate this help.
In a sense the arrival of Martin O'Neill at Parkhead should fit this scenario perfectly. Amid a tabloid frenzy of speculation it was thought that O'Neill would buy in bulk. Instead, prior to this week, the new coach had bought just two players all summer, judiciously eyeing up the market available and not blinking, as with Chris Sutton, when a hefty sum had to be downloaded. O'Neill, it is MacDonald's wish, should be careful in the market. Celtic, it is also MacDonald's wish, should back him luxuriously when he bids.
It seems that MacDonald is adamant, from every public utterance he has made, that Celtic under O'Neill should be playing in a new league within three years.
The out-going chief-executive might be around to consult Celtic on the matter. The elusive Irishman, Dermot Desmond, might also be around to finance the removal vans.