Celtic plc: Insider Ownership and the Future of the Club

Celtic plc (LON:CCP), the operator of a professional football club in the United Kingdom, has a significant portion of its shares owned by insiders, with Dermot Desmond and his family holding approximately 56% of the company's equity. This high level of insider ownership can have both positive and negative implications for the company's strategic decision-making and long-term growth prospects.

On the one hand, concentrated ownership can lead to a more focused and aligned decision-making process, as insiders have a substantial stake in the company's success. This can result in better long-term planning and investment strategies. For instance, Dermot Desmond's commitment to pass the club onto his children suggests a long-term vision for the company. However, there are also potential drawbacks to this ownership structure.

One concern is the lack of diversity in perspectives, which can lead to less critical thinking and fewer new ideas being considered. This could result in the company becoming stagnant or missing out on opportunities for growth and innovation. Additionally, the smaller the group of people at the top, the less accountable they may feel to the broader shareholder base, which could lead to poor decision-making or self-serving actions.

Moreover, the concentrated ownership structure can make the company more vulnerable to external influences. For example, if the Desmond or Lawwell families decide to put the club up for sale due to financial difficulties or other reasons, there is a risk that the company could end up in the hands of an unsuitable buyer, such as an oligarchy or a foreign entity with interests that are not aligned with the club's long-term success.

To mitigate these risks and ensure the company's long-term growth prospects, it is essential to have a diverse and engaged shareholder base. This can be achieved by implementing regulations that give fans a greater say in the company's affairs, such as shadow boards with approval rights for sales and borrowing decisions, and share-purchase rights that allow fans to buy shares first in any event they are put up for sale. These measures can help protect the club's brand, assets, and intellectual property, and ensure that the company remains a community organization rather than a family concern or the property of the directors.

In conclusion, while the current ownership structure of Celtic plc may have some benefits for long-term growth, it also presents potential risks and challenges. To ensure the company's long-term success, it is crucial to implement regulations that give fans a greater say in the company's affairs and promote a more diverse and engaged shareholder base. This will help protect the club's interests and ensure that strategic decisions are made in the best interest of all stakeholders.