Derry's turn

[ger121]

Funny how the amount of Derry supporters joined in Schadenfreud Fest on the Bohs thread. Then we get "Oh, but sure we lost our sponsor" as an excuse here. Says it all really.

Btw, I hope Derry City survive and I hope they beat Skonto Riga over the two legs.

I'd be hoping the same. I'd hate to see any club in the league go to the wall as it's just another stick for all the Barstoolers, Media etc to beat us with...

[SeanDrog]

so as long as your excuse is ok you should get a pass like our sponsor has gone bellyup or.. we were told these beans were magic.
it would be mayhem with certain clubs getting a pass while others being screwed

come on - I do not mean excuses but real reasons. Leave Derry aside (as it is suggested that the sponsor is not the sole reason behind their issues) but lets say there is an unforseen event that forces a club over the 65% , they couldnt plan for it and it knocks the daylights out of their budget - should they be relegated - not saying fudge licencing but build into licencing some form of derogation system.

For the sake of illustration:

Sligo have a good budget, keeping everything very tidy and then it rains like hell for a month in Sligo and destroys their pitch, they are forced to play in Galway and this destroys gate receipts and adds greatly to travel costs - this pushes them over the 65% rule - should they be relegated?



To me the current system seems too black and white.

[Dodge]

To me the current system seems too black and white.

No club has been punished so far, so you can't say whether its clear cut or not.

[SeanDrog]

No club has been punished so far, so you can't say whether its clear cut or not.

fair point - I am just assuming given the presentations on this thread (and others) that Derry and Bohs will be relegated if they break the 65% rule. Just on what I am reading the system looks very black and white.

[Ezeikial]

come on - I do not mean excuses but real reasons. Leave Derry aside (as it is suggested that the sponsor is not the sole reason behind their issues) but lets say there is an unforseen event that forces a club over the 65% , they couldnt plan for it and it knocks the daylights out of their budget - should they be relegated - not saying fudge licencing but build into licencing some form of derogation system.

There is no doubt that it is possible for a prudently managed club to experience circumstances completely beyond their control that pushes them over the 65% mark. Can any of the four premier clubs reported to be in difficulty (Bohs, Derry, Cork, Galway) validly claim this?

It is imperative that the FAI implement the existing regulations as they stand at the moment. To do anything else would totally demolish any shred of credibility that remains. If it takes a number of clubs to be relegated to hammer the message home to them and others, then so be it.

If any adjustments (such as an appeal or derogation system) are valid for the future, this should be debated and possibly introduced in the future, and not retrospectively.

[EalingGreen]

come on - I do not mean excuses but real reasons. Leave Derry aside (as it is suggested that the sponsor is not the sole reason behind their issues) but lets say there is an unforseen event that forces a club over the 65% , they couldnt plan for it and it knocks the daylights out of their budget - should they be relegated - not saying fudge licencing but build into licencing some form of derogation system.

For the sake of illustration:

Sligo have a good budget, keeping everything very tidy and then it rains like hell for a month in Sligo and destroys their pitch, they are forced to play in Galway and this destroys gate receipts and adds greatly to travel costs - this pushes them over the 65% rule - should they be relegated?



To me the current system seems too black and white.

You raise an interesting point, SD, but I would make two observations.

1. The "Great Flood of Sligo" you quote is unforeseeable/unavoidable, an "Act of God" if you like. However, none of the problems which have hit LOI clubs come into that category. No harm eg to Derry, but sponsors sometimes go bust; you might as well eg make allowances for Sligo drawing a European opponent which was too obscure to attract a big crowd, but too good to beat.
In any case, if a club were to fall victim to a genuine "disaster", I don't see how anyone else could object, say, to the FAI making an Emergency Loan.
2. If you think about it, by imposing a 65% Cap, you are also effectively implementing a 35% "Contingency" in a club's affairs.
That is, if a club is abiding by the spirit and the letter of the Cap, then this would reflect that they are a prudently run club, sustainable over the medium-to-long term.
In which case, they would be in a position to go to their Bank/Investors/Shareholders/Fans etc and argue for a short-term injection of funds to tide them over what would be a "one-off" problem.
Alternatively, a 35% "Contingency" should allow for Insurance*, something which many other sports clubs etc routinely take out.


* - Then again, considering some clubs don't even appear able to pay the Revenue their dues, I wonder how many are up-to-date with their Insurance premiums?

[pól-dcfc]

You raise an interesting point, SD, but I would make two observations.

1. The "Great Flood of Sligo" you quote is unforeseeable/unavoidable, an "Act of God" if you like. However, none of the problems which have hit LOI clubs come into that category. No harm eg to Derry, but sponsors sometimes go bust; you might as well eg make allowances for Sligo drawing a European opponent which was too obscure to attract a big crowd, but too good to beat.
In any case, if a club were to fall victim to a genuine "disaster", I don't see how anyone else could object, say, to the FAI making an Emergency Loan.

I get what your saying, but does that mean you believe teams should have to budget for the year with the assumption that their sponsor is going to go bust? That's ludicrous.

[Mr A]

No, but there should be enough leeway in the budget to cope with such shocks without threatening the ability to pay wages, especially when entering the season you know that times are very tough economically.

[pól-dcfc]

No, but there should be enough leeway in the budget to cope with such shocks without threatening the ability to pay wages, especially when entering the season you know that times are very tough economically.

Our sponsorship deal with Meteor was huge. What's the point of getting a good deal on sponsorship if the money can't be used? Undoubtedly the Derry board have dropped the ball a bit. Too much spent on trips away and wages. I don't think we are breaking the 65% rule though - there's be no word about an embargo for us.

I can't remember the exact figures involved, but Meteor were due to give us a massive amount of money (was it £1million over 3 years?). We budgeted on the basis of receiving that money.

[SeanDrog]

you cant have a continency fund for everything.

For me if (and I know its an if) Derry break the 65% rule and if (again an if) it is solely down to the sponsor pulling out - the imo they shouldnt be relegated.

[pineapple stu]

Thing is, they have all of this month to release players and get back under 65%, knowing that their sponsor is gone. If they deliberately keep all their players and end up over 65%, having had a good chance to reduce wages, should they be punished?

Also, don't forget the sponsor pulling out hasn't landed Derry in sudden trouble. They were sailing close to the wind last season (transfer fee problems), and the McCourt sale kept them above water.

[EalingGreen]

Our sponsorship deal with Meteor was huge. What's the point of getting a good deal on sponsorship if the money can't be used? Undoubtedly the Derry board have dropped the ball a bit. Too much spent on trips away and wages. I don't think we are breaking the 65% rule though - there's be no word about an embargo for us.

I can't remember the exact figures involved, but Meteor were due to give us a massive amount of money (was it £1million over 3 years?). We budgeted on the basis of receiving that money.

If you are correct about the amount of Meteor's sponsorship, how does that make them any different eg clubs which have been relying on a wealthy benefactor (who could pull out at any time), or the future sale of a ground (which could fall victim to recession or planning restrictions etc)?

In the end, it is foolish to put "all your eggs in one basket", if you have no real way of knowing whether the basket is sound, or if the arse is going to fall out of it some day.

All of which calls to mind an article I read about Liverpool's glory days in the 70's and 80's etc. Admittedly, the sums and complexities involved in the management of a big club's finances were considerably less demanding in those days.
Nonetheless, every season they used to budget to cover their costs solely by 21 home League games, one* home League Cup tie, one** home European tie (when they qualified) and one FA Cup 3rd Round tie, which might be away from home.
Everything else was treated as a "bonus", so that if (when, actually!) they made a profit at the end of the season, they spent virtually all of it on new players for next season (i.e. as a tax write-off).

* - It was 2-leg then
** - It was knockout from Round One in those days

[pineapple stu]

Nonetheless, every season they used to budget to cover their costs solely by 21 home League games, one* home League Cup tie, one** home European tie (when they qualified) and one FA Cup 3rd Round tie, which might be away from home.

Could probably argue all clubs should be forced to budget that way (I know we do).

[Schumi]

Could probably argue all clubs should be forced to budget that way (I know we do).

Only budget to spend gate receipts? I highly doubt it.

[Macy]

Could probably argue all clubs should be forced to budget that way (I know we do).

They certainly should for their match day revenue side anyway, and if the licencing committee that oversaw the budgets allowed them to do it on any other basis they shouldn't be in place.

For me if (and I know its an if) Derry break the 65% rule and if (again an if) it is solely down to the sponsor pulling out - the imo they shouldnt be relegated.

But they're saying that they won't be even able to make the wage bill at all, so if it was solely down to that then the sponsorship would've been over 35% of the forecast turnover (and significantly more judging by the coverage).

[pineapple stu]

Only budget to spend gate receipts? I highly doubt it.

I assume sponsorship, fundraisers, etc, were included. Just re-read the post and it doesn't specify alright.

The only gate receipts we budget for are the games we're guaranteed. The only prize money we budget for is the lowest we can receive. Makes sense.

[Mr A]

I really didn't think the Meteor deal was anything like that big.. how could a small company with only 70 employees provide that level of support? No wonder they went under!

[Schumi]

I assume sponsorship, fundraisers, etc, were included. Just re-read the post and it doesn't specify alright.

The only gate receipts we budget for are the games we're guaranteed. The only prize money we budget for is the lowest we can receive. Makes sense.

That makes sense alright. It's probably too much to hope that most pre-season budget projections were based on that though.

[pól-dcfc]

I really didn't think the Meteor deal was anything like that big.. how could a small company with only 70 employees provide that level of support? No wonder they went under!

I'm not 100% sure on the figures. The £1million is purely from my (admittedly hazy) memory. It may have been less. But I do remember thinking that it was a hell of a lot of money for an LoI club to get in sponsorship.

[Macy]

It's probably too much to hope that most pre-season budget projections were based on that though.

Not when they had to be submitted and scrutinised as part of the Licencing process it's not.