Galway in financial turmoil

[A face]

Galway in financial turmoil

The future of Galway United was thrown into doubt yesterday when the club announced that its players have agreed to defer a week's wages in order to steer the club through severe financial difficulties. The Tribesmen's CEO Nick Leeson met with manager Sean Connor and his players yesterday morning and agreed the wage deferral, while the club has dropped their price to €10 for their next home Airtricity League clash against Bray Wanderers next Monday.

"Gates have been far worse than anticipated this season and if we continue as we are, the future of the club would be put at risk," warned Leeson. "The players agreed unanimously to the deferral and remain extremely positive about the club's chances in the Airtricity League and FAI Cup. I applaud them one and all for this decision.


Read more at www.independent.ie (http://www.independent.ie/sport/soccer/galway-in-financial-turmoil-2241268.html)

[Roo69]

Shocking how they could over estimate on their gates so badly. When will clubs start to learn?

[Mr A]

Any serious issue like this, even if it's only involving a single club, should be in the LOI forum in my opinion.

Anyway, not surprised to hear this at all. At the start of the year there was a lot of speculation that GUFC would go amateur this season so it was very surprising when Connor was appointed and some very decent players signed.

But then, if they had gone amateur crowds would have probably been even worse again and the debts may well have seen problems even earlier than they have come up.

It's a horrible time for any LOI club with debt problems- perhaps GUFC should consider the 'phoenix' route taken by Derry and others.

[gufc2000]

Shocking how they could over estimate on their gates so badly. When will clubs start to learn?
The club never over estimated gates this year, how could they given that crowds were well down last year. The problem stems from 2007 and 2008

[pineapple stu]

Gates have been far worse than anticipated this season
Sounds very much like overestimating gates to me. (Not that previous madness wasn't a factor either)

[gufc2000]

Well the club didn't expect crowds of 700-800, but unfortunately thats whats happened

[pineapple stu]

So you're saying they did overestimate gates this year?

[gufc2000]

So you're saying they did overestimate gates this year?
Not badly like mentioned above, not in the way I quoted.

The worst thing is, is that we could now lose O'Donnell, Sheppard, Flood and Conneely.

[Patrick Dunne]

Yes. We are down approx €5,000 per match (200 - 300 people spending €15 - €20).

Net €50,000, equivalent of ten weeks wages.

[total hoofball]

IIRC before the season started Galway were in this similar position before some local businessman came in to top up their budget for the season

Sounds to me they are leaking their troubles as an ultimate doomsday scenario in order to get another cash injection to make for their latest budgetory screw up

Any club with Nick ****in Leeson as their CEO deserves what they get

[outspoken]

I really hope Galway will be ok a great club and it would be a massive blow for the entire league to lose them

[Dundalkjames]

Wheres SC and his glamour friendlies now?

[WoodquayBoy]

In reply to Dundalkjames, we have Liverpool in the first week of August for a start

[peadar1987]

Oh for feck sake!

[gufc2000]

Wheres SC and his glamour friendlies now?
We had Hull over last Feburary and Liverpool are coming over in August. Given that we have 36 league matches to play, its hard to play friendlies every other week

[sligo23]

In reply to Dundalkjames, we have Liverpool in the first week of August for a start
He said 'glamour friendlies'

[dong]

Why is this hidden away in the Galway section?
We had pages and pages about Cork and Derry on the main LoI Premier and First Division forum, so what exactly is different here?
Tough times for Galway but if their crowds are down so much it's hardly surprising they could not sustain paying wages. The attendances in Terryland were hardly great to begin with.
At least the licensing rules are working well anyways.:o

[Riddickcule]

Owned.

[gufct]

Our budget would be one of the smallest in the league and that was based on gates of Approximately 1,100 which is hardly wildly overestimating our gates.We are just back after a 2 week break where we had no income and may well have only 1 home game against Bray on Monday between now and the end of July with both Rovers and Dundalk involved in Europe. It was the moderators that put the post in here but I think there are a lot more than GUFC facing down the barrell this season.

We hopefully will survive but in what guise is another thing because the apathy in Galway towards LOI football has increased significantly in the last 3 years.

[gufct]

http://www.extratime.ie/newsdesk/articles/3789/

[Roo69]

The club never over estimated gates this year, how could they given that crowds were well down last year. The problem stems from 2007 and 2008

Don't get me wrong, i hope Galway get through this, BUT, a budget was put in place at the start of the season, everything would have been taken into account and a decision was made based on that. The club over estimated hence why there is a problem now.

It was quite clear that clubs would not be bringing in nearly as much money as they did last season or the season previous. Galway might have reduced their budget but simply by not enough, this is the fault of the man in charge - Nick Gleeson. Your cloth was not cut to size.

I know we have taken a lot of stick this season for our preformances on the pitch but the plain reason is that we have one of the smallest budgets in both divisions, we saw the massive problem facing us and took action. Not enough clubs do that.

[GUFCghost]

We need to reach some deal with Murvue,Salthill and the Galway League.I don't know what we did to **** them off but we did.

[gufc2000]

Don't get me wrong, i hope Galway get through this, BUT, a budget was put in place at the start of the season, everything would have been taken into account and a decision was made based on that. The club over estimated hence why there is a problem now.

It was quite clear that clubs would not be bringing in nearly as much money as they did last season or the season previous. Galway might have reduced their budget but simply by not enough, this is the fault of the man in charge - Nick Gleeson. Your cloth was not cut to size.

I know we have taken a lot of stick this season for our preformances on the pitch but the plain reason is that we have one of the smallest budgets in both divisions, we saw the massive problem facing us and took action. Not enough clubs do that.
I understand your point, but our budget is very small. I don't know ye're budget but ours couldn't be that far ahead

[dong]

From the ET article, I think that this is a very valid point:

"On a separate issue, questions too must be asked of the administrators who organise the fixture lists at the beginning of the season. With only two clubs competing from outside the Leinster area, surely it would have taken not a lot of common sense to realise that, after a mid-season break where a club which is known to have financial difficulties and has had no home fixture (or income) for four weeks, a more attractive proposition than Bray Wanderers (no disrespect intended but they are no crowd pullers on a Monday night) could have been scheduled."

[pineapple stu]

How would they have known when the fixtures were drawn up that Galway would be in financial truoble come mid-season?

Should clubs who can't manage their finances properly be given preferential treatment?

And also, say the Bray game was 100 people down on what they could expect for, say, Dundalk. E1k doesn't sound like it'll magically fix all Galway's woes, especially as it's not E1k extra, just basically an advance.

[dong]

How would they have known when the fixtures were drawn up that Galway would be in financial truoble come mid-season?

Should clubs who can't manage their finances properly be given preferential treatment?

And also, say the Bray game was 100 people down on what they could expect for, say, Dundalk. E1k doesn't sound like it'll magically fix all Galway's woes, especially as it's not E1k extra, just basically an advance.

I'm just thinking of the principal of the thing. Clubs like Galway and Sligo could have been given some consideration with the amount of extra travelling expenses involved this year which is a substantial figure I would imagine. Not preferential treatment, just a bit of forethought (albeit a slightly different issue!).
Absolutely doesn't excuse GUFC not budgeting properly and the example you give is valid.

[Roo69]

I understand your point, but our budget is very small. I don't know ye're budget but ours couldn't be that far ahead

Our budget last season was roughly 5k per week, it was more than halved for this season.

[Dodge]

Well Sligo got the league leaders at home for their first game so how baised do you think they should be?

(and remember when the fixtures were drawn up that'd have been Galway v Cork, who are always one of the better draws/supported teams)

On the list of contributing factors to Galways current problems, the fixture lists wouldn't rank ion the top 50 I'd imagine.


Good luck to them, as I've a lot of time for any of the Glawy fans I know but given how pious Leeson and some board members have been in the past, I could understand anyone thinking they get wghat they deserve.

Shame the people there don't realise the greta facilities they now have

[Patrick Dunne]

Am trying my best with the "attack the post, not the poster" on this thread !

Uniteds budgets is the 8th lowest in the PD this year, our weekly wage bill of €3,500 is relatively small. Two League of Ireland "stars" would have pocketed the same combined two seasons ago.

We reasonably enough expected a 1,000+ average crowd this season, instead it has been 700-800.

[culloty82]

Reading the Extratime piece, even if Mervue and Salthill haven't taken away crowds, has it been more difficult for you to build up the squad numbers you need to compete with the rest of the Premier. It's always a hard blow to hear of clubs in trouble, but especially in areas like the West, where you need a strong club to promote soccer in the region.

[Mr A]

From those figures - say 700 a game and therefore €7000ish per home game would more or less cover wages. So I guess it's the debt carried into this season that's killing you.

Harps are in the exact same position, although it hasn't come to a head yet and hopefully we can keep the heads above water.

[John83]

From the ET article, I think that this is a very valid point:

"On a separate issue, questions too must be asked of the administrators who organise the fixture lists at the beginning of the season. With only two clubs competing from outside the Leinster area, surely it would have taken not a lot of common sense to realise that, after a mid-season break where a club which is known to have financial difficulties and has had no home fixture (or income) for four weeks, a more attractive proposition than Bray Wanderers (no disrespect intended but they are no crowd pullers on a Monday night) could have been scheduled."
Tweaking the cashflow won't balance the books. Not even close. That's a total red herring.


From those figures - say 700 a game and therefore €7000ish per home game would more or less cover wages. So I guess it's the debt carried into this season that's killing you.

Harps are in the exact same position, although it hasn't come to a head yet and hopefully we can keep the heads above water.
Remember that you only have a home game once a fortnight, so that basically just covers wages. Clubs' other expenses can be an appreciable percentage of that too, particularly clubs with small wage bills.

[Mr A]

True yeah, I know I was being simplistic but the essential idea was that once the wages are covered by gates you should hopefully be able to cover the rest from other incomes.

[corbyeire]

proves you can never rely on crowds - we had a 1st division battle that saw 3500 turn out for dundalk - then the next season kept it above 2000 on average, then last year play better than we ever did with the taximan or jeff we were in midtable and the crowds dwindled. we won more games at home than the 2 previous seasons!!!

for whatever reason that downward attendance continued into this season - it appears to have nothing to do with the football exploits as a whole - its a combination of recession, apathy, confict with local junior football and over extending ourselves in the 07/08 period

[pineapple stu]

From those figures - say 700 a game and therefore €7000ish per home game would more or less cover wages. So I guess it's the debt carried into this season that's killing you.
I think post 9 sums it up the best. Leaking that amount of money, coupled with a large debt to start with, will almost certainly result fairly quickly in the exact position Galway are in now.

What's really disappointing is that this is almost par for the course for Galway in the last couple of years. It's like learning from mistakes is beyond them. All of which must really frustrate the regular fans and drive away the occasional fans.

[gufcfan]

Shocking how they could over estimate on their gates so badly. When will clubs start to learn?
Galway United or the FAI couldn't have been reasonably expected to predict the collapse in attendances that has occurred. How can you tut-tut about a club budgeting for attendances to stay more or less the same? I'd guess that the revenue from punters paying at the gate every week is down a third from last year.


...so it was very surprising when Connor was appointed and some very decent players signed.
We are still on a very small budget. It isn't as if we went on a mad spending spree. Money is tight for most. At the time, it seemed reasonable to assume that we wouldn't see much of a rise or drop in attendances either way and our budget was formed on that assumption.



It's a horrible time for any LOI club with debt problems- perhaps GUFC should consider the 'phoenix' route taken by Derry and others.
Absolutely not. Disgraceful. As if there wasn't enough people in Galway delighted to hear we are in trouble.


Sounds very much like overestimating gates to me. (Not that previous madness wasn't a factor either)
Previous madness was a factor of course, but as I've said, it was a shock to all of us how much the attendances fell.


IIRC before the season started Galway were in this similar position before some local businessman came in to top up their budget for the season

Sounds to me they are leaking their troubles as an ultimate doomsday scenario in order to get another cash injection to make for their latest budgetory screw up

Any club with Nick ****in Leeson as their CEO deserves what they get
If it wasn't for Nick Leeson putting in his own money into the club, it would have gone tits up long before now.

As for the budget being topped-up, it was more a case of keeping the club afloat than throwing money at players.

[micls]

At the time, it seemed reasonable to assume that we wouldn't see much of a rise or drop in attendances either way and our budget was formed on that assumption.

.

With the economy the way it is, the amount of people losing their jobs every month, unemployed, getting paycuts etc I thought every club would have expected their gates to fall tbh. The hardcore will still try to find the money but bringing friends, kids etc was bound to drop especially if the prices remained the same.

Now whether that's the only factor is obviously debatable but it's certainly a factor that should have been forseeable.

[John83]

With the economy the way it is, the amount of people losing their jobs every month, unemployed, getting paycuts etc I thought every club would have expected their gates to fall tbh. The hardcore will still try to find the money but bringing friends, kids etc was bound to drop especially if the prices remained the same.

Now whether that's the only factor is obviously debatable but it's certainly a factor that should have been forseeable.
That analysis is trite. Of the ten Premier division clubs, only Bray, Bohs and Galway have significant drops from last year so far, and UCD's are in line with previous Premier seasons in spite of a ridiculous number of Tuesday games. Bray's figures are understandable given their circumstances and were likely anticipated.

[Sean South]

Galway seem to be a sinking ship, who would have thought (http://www.forzarovers.net/apps/photos/photo?photoid=81127431) :p

[micls]

That analysis is trite. Of the ten Premier division clubs, only Bray, Bohs and Galway have significant drops from last year so far, and UCD's are in line with previous Premier seasons in spite of a ridiculous number of Tuesday games. Bray's figures are understandable given their circumstances and were likely anticipated.

How many have dropped overall (I noticed you used significant). Could there be other factors i.e. UCD, Pats Dundalk all doing better than expected and holding top spot at some stage? You say UCd's are in line with other premier seasons but UCD are playing a lot better football and having better results than their more recent seasons. On form alone would you not expect an increase?Id imagine it would be different if they hadnt performed as well.I'd also be surprised if most clubs attendances didnt average out as lower than they currently are by the end of the season with the summer lull taken into account. I'd be surprised if there are more than a few clubs over both leagues with higher averages than last year, due to numerous factors.

Im not trying to claim the economy is the only reason for a drop in crowds, but it would certainly be a reason to budget for a drop in crowds, because if you combine the economy with a few disappointing results, then you'l find people will find better things to do with the 15euro they're finding tough to come by. or the extra few tickets for the kids.

Sales in everything is down, why would the league be any different? Why wouldn't you budget for them to be down? Even if you are lucky enough to avoid them dropping for other reasons?

[John83]

How many have dropped overall (I noticed you used significant).
If someone drops from 2000 to 1985, counting it as a fall will make a statistician cry because the error in the estimates dwarfs the drop. The raw data is here (http://foot.ie/threads/132489-2010-attendances?p=1371606&viewfull=1#post1371606).


Could there be other factors i.e. UCD, Pats Dundalk all doing better than expected and holding top spot at some stage?Very difficult to quantify, but the overall league average is down 2.6%, which again is too small to really be considered significant. (The Premier average is not that useful as UCD and Fingal have replaced Cork and Derry.) If those few examples were being propped up by form, then the teams doing less well would have crashing attendances, and the league average would have fallen dramatically.


You say UCd's are in line with other premier seasons but UCD are playing a lot better football and having better results than their more recent seasons. On form alone would you not expect an increase?Id imagine it would be different if they hadnt performed as well.Our crowds are very sensitive to away fans, and so not as much to form. There's also the staggering number of Tuesday home games we've had to play. I really don't think success has that much to do with it.


I'd also be surprised if most clubs attendances didnt average out as lower than they currently are by the end of the season with the summer lull taken into account. I'd be surprised if there are more than a few clubs over both leagues with higher averages than last year, due to numerous factors.There usually is a bit. Last year's decline from here was 9%. Galway's attendances are down about 20% on last year so far.


Im not trying to claim the economy is the only reason for a drop in crowds, but it would certainly be a reason to budget for a drop in crowds, because if you combine the economy with a few disappointing results, then you'l find people will find better things to do with the 15euro they're finding tough to come by. or the extra few tickets for the kids.

Sales in everything is down, why would the league be any different? Why wouldn't you budget for them to be down? Even if you are lucky enough to avoid them dropping for other reasons? I mostly agree, but how much of a drop should you budget for? Galway, if the fan who said they budgeted for no fall is correct (and that's a big if), probably got it a bit wrong, but it's unreasonable to expect them to have expected a 20% drop. If they were debt free, they might be able to absorb this, but they're not, and their budget has to be in ruins.

[micls]

I mostly agree, but how much of a drop should you budget for? Galway, if the fan who said they budgeted for no fall is correct (and that's a big if), probably got it a bit wrong, but it's unreasonable to expect them to have expected a 20% drop. If they were debt free, they might be able to absorb this, but they're not, and their budget has to be in ruins.

Maybe it's cautiousness based on the state we've been in in recent years, but my first thought would always budget low to be in a position to cover yourself should something like this happen, or something like what happened to Derry(sponsor pulled out).

Like in any other business you need to have some sort of cushion for the unexpected that can go wrong. LOI clubs seem to completely ignore this for the most part, budget for exactly what they expect and then base expenditure on spending most of that, with little thought into how they would deal with hitting a blip or debts they have.

With the debts they came into the year, based on things going wrong before, I would have expected them to expect that things could go wrong again. And build something into their budget for this(maybe they have and are just unlucky that something went wrong their too). The trend was already there, as a Galway fan pointed out earlier, they played some fantastic football last season and their crowds kept falling.

But the attitude of spending what we expect will come in if nothing goes wrong and then being surprised when something does is killing a lot of clubs, especially when they already have debts.

[gufcfan]

I mostly agree, but how much of a drop should you budget for? Galway, if the fan who said they budgeted for no fall is correct (and that's a big if), probably got it a bit wrong, but it's unreasonable to expect them to have expected a 20% drop. If they were debt free, they might be able to absorb this, but they're not, and their budget has to be in ruins.
Fair point, although I thought that the crowds we had last year would have been made up of mostly core support.

The drop we've seen since has really surprised me and I'm not known for optimism.

[total hoofball]

If it wasn't for Nick Leeson putting in his own money into the club, it would have gone tits up long before now.

As for the budget being topped-up, it was more a case of keeping the club afloat than throwing money at players.

O RLY?

http://foot.ie/threads/130400-Sean-Connor-new-manager-of-gufc?p=1304761&viewfull=1#post1304761

and then Galway went onto sign the likes of Thomas Heary, Stephen O'Donnell and Bobby Ryan.

[total hoofball]

Hmmm this topic of this thread is somewhat familiar


Financial crisis threatens United's long term future

June 12, 2009 - 9:53am Leeson highlights serious troubles ahead of FAI Cup opener


GALWAY United CEO Nick Leeson has this week highlighted the perilous financial state of the club as they prepare for tomorrow night’s Ford FAI Cup clash with Finn Harps in Ballybofey (kick-off 8 pm).
On the same day it was announced that Cristiano Ronaldo is set to move from Manchester United to Real Madrid for a mind-boggling fee of €94 million, Leeson confirmed yesterday that United took just €5,000 in gate receipts from their last two games, well short of the minimum €12,500 a week – €50,000 a month – required to cover the cost of running the club.
It is not just United who are struggling financially – a petition was lodged in the High Court last month seeking to wind up Cork City; Derry City have lost two of their sponsors; while Sligo Rovers were ‘outed’ as tax defaulters by Revenue this week, with an outstanding bill of €55,000 owed to the taxman.
While the city basked in the success of the Volvo Ocean Race stopover, hosting some of its biggest ever crowds, Galway United were attracting some of their lowest in recent times, a situaiton which has to be a threat to its very existence.
“It is unbelievably tough at the moment. We took only €2,500 on the gate for the game against Derry recently, a game which is usually a banker for between €12,000 and €13,000. We need that kind of money every week to cover ourselves, but we took only €5,000 in the month.

http://www.galwaynews.ie/7802-financial-crisis-threatens-united039s-long-term-future

Leeson is really just like Brian Cowen, soon he'll be saying 'nobody saw it coming', 'unprecedented', 'it's not our fault', 'Lehman Brothers'.

[gufct]

Our Budget is less than €4,000 a week so how people can lash us over that is laughable.We may have 1 home game in 7 weeks as after Bray our next home games are against Rovers and Dundalk who could both be involved in Europa ties which means the fixtures may be postponed leaving us with no cashflow.

[Dodge]

Our Budget is less than €4,000 a week so how people can lash us over that is laughable..

make it 2.5k a week and save yourself 60k

[gael353]

In reply to Dundalkjames, we have Liverpool in the first week of August for a start


its liverpool legends i think, and the company who are bringing them have a less then clean record down this way

[Olander]

its liverpool legends i think
Yawn.

No its not.

[Dodge]

Its a LIverpool XI

So its still not glamour, is it..