FAI finances

[Charlie Darwin]

Never!

[Stuttgart88]

There is such thing as a fixed rate loan, and my guess is that the interest is fixed.

[geysir]

Considering this from the article,
'And the huge debt caused the association to fork out bank interest payments in 2012 of €4.8m — the same amount as the previous year.
FAI chief executive John Delaney revealed at last year’s AGM in Letterkenny they were only in a position to meet interest payments — not any principal — on the stadium debt'

the interest is most probably fixed, for this period of time at least.

[Junior]

This really is 'heads in the sand' stuff. How with twindling revenue, and with no other form of revenue to draw on, can the FAI claim they will pay this massive debt off by 2020?

http://www.irishtimes.com/sport/soccer/2020-vision-makes-fai-figures-look-all-the-more-daunting-1.1454757


FAI are just waiting for their share of the new UEFA centralised TV monies to come in, which kicks in with the Euro16 Qualifiers (first game would be Sep14). I've no idea how much that might be but UEFA were suggesting they could get up to a 67% uplift on current TV income levels for the 53 international assocations within UEFA.

Hence why imo the article refers to a €1m capital repayment during 2013 (though I struggle to see how they will manage that along with the 4.8m€ of interest costs!). However the step up in 2014 to a €5m repayment can only be deemed possible on realising a signficant uplift in revenues in that year, i.e. The TV Revenues.

Its a risky strategy imo. As I've said previously who knows what media outlets will be willing to pay for international football tv rights in 2,3,4 years time and whether any real increase in revenues will be realised. The FAI will be reliant on UEFA's commercial negotiations (probably a good thing) who have 52 other bodies and interests/expectations they are representing/managing, many of them with much more clout than the FAI in the corriders outside Platinis's office in Zurich.......

[Alf Honn]

There is such thing as a fixed rate loan, and my guess is that the interest is fixed.

So that's another 5mill lost to Irish football this year again. In any other business heads would roll.

[Stuttgart88]

I'm not sure anyone really foresaw today's low interest rates back in 2006 or whenever it was the deal was struck. It's usually seen in business as sensible to lock-in your funding cost. It's not the FAI's job to speculate on interest rates. If rates had gone up they'd have been wise to lock-in.

I think it's fair to say that Danske Bank is regretting making the loan, so maybe the FAI got a better deal than the bank?

I'm critical of the FAI in other areas but I'm not that critical of the stadium costs. Hindsight has shown the timing to be terrible but they did need a home, the credit crunch and economic collapse wasn't predicted and they appointed IMG to advise on and sell the corporate tickets. Nor was it their fault that Eircom Park wasn't built. I think they should have got a lease in perpetuity from the IRFU though, and not expiring in 50(?) years. It may appear negligible now, but time catches up on everyone!

[Macy]

I've no problem with the fixed interest rate aspect, but there's no pass on size of the loan that's accruing the interest for me.

The life expectancy of the current stadium is hardly 50 years?

[jbyrne]

So that's another 5mill lost to Irish football this year again. In any other business heads would roll.

they were paying a lot of rent to the IRFU before the new stadium was built. if their plan to be debt free by 2020 had worked (realistic when it was drawn up about 10 years ago) it would have been a missive boost to the FAIs finances from 2020 onwards. in fact i think their plan was to be debt free before 2020 but the vantage club ticket sales were dreadful due to the economic downturn.

i dont think anyone can be critical of the FAI for their involvment in the new stadium

[geysir]

I've no problem with the fixed interest rate aspect, but there's no pass on size of the loan that's accruing the interest for me.

The life expectancy of the current stadium is hardly 50 years?
Afaiu, the Irfu and the FAI (equally) share the ownership of the stadium but the IRFU own the land it's sitting on, I could be mistaken.

Considering there are sizeable football grounds all over England, one can argue that building a new Wembley was an extravaganza.
The German national team manage okay by rotating which of the big stadiums around Germany they use. There was nothing in Ireland except an antiquated Lansdowne rd. The FAI have made mistakes for sure but I must read over the old threads to see what type of good advice was being offered in anticipation of all the problems that were surely going to come. :)
Nevertheless, I'd argue for a non- negotiable fixed % of the income accruing from senior internationals to be funnelled back into the game rather than wait and see what crumbs are left over.

[bennocelt]

they were paying a lot of rent to the IRFU before the new stadium was built. if their plan to be debt free by 2020 had worked (realistic when it was drawn up about 10 years ago) it would have been a missive boost to the FAIs finances from 2020 onwards. in fact i think their plan was to be debt free before 2020 but the vantage club ticket sales were dreadful due to the economic downturn.

i dont think anyone can be critical of the FAI for their involvment in the new stadium

No they should be congratulated! :rolleyes:
Seriously, do you work for the failures?

[jbyrne]

No they should be congratulated! :rolleyes:
Seriously, do you work for the failures?

you obviously dont agree so.
what exactly are you critical of and what would you have done better?

[Stuttgart88]

Of all the mistakes the F AI has made, or of all their failings, the stadium decision is nowhere near their worst. They're about as much to blame as any household or business that took out a mortgage in Ireland in 2006. Everyone was duped into thinking we were a prosperous country.

[Charlie Darwin]

The problem isn't really the fact they built a stadium - from a business point of view, the IRFU owns the site and they needed a partner to build the stadium, so the FAI did quite well there. It's not like they went out and spent billions on a site. It could have been a lot worse, but they were presented with a reasonably good deal. Their problem is that people don't want to see the team play, which they have to take part of the responsibility for, and the fact corporate spending is a fraction of what it used to be so matchday income isn't what it might have been.

[bennocelt]

Of all the mistakes the F AI has made, or of all their failings, the stadium decision is nowhere near their worst. They're about as much to blame as any household or business that took out a mortgage in Ireland in 2006. Everyone was duped into thinking we were a prosperous country.

Ha, not everyone, will be looking forward to buying my first house soon - called saving, no mortgage:). Maybe its cause I am not a celtic cub (apologies for the gloat)

FAI spent a lot on a rather small stadium - and in the end football in this country STILL wont have their own football stadium - great:rolleyes:15 million to build the stadium of light in sunderland - 50,000 capacitymany cheapish ones in germany too

[Macy]

Of all the mistakes the F AI has made, or of all their failings, the stadium decision is nowhere near their worst. They're about as much to blame as any household or business that took out a mortgage in Ireland in 2006. Everyone was duped into thinking we were a prosperous country.
And the debacle that was the 10 year tickets sales, and turning down the guaranteed offer?

[Charlie Darwin]

You can't really compare the Aviva to the Stadium of Light in any way - different era, different ground, different location, different costs. The Stadium of Light is a big box on an industrial estate - the Aviva is a world class stadium situated in a heavily-populated area and had to take account of all the costs that involves. They had to pay off the residents, they had to design a stadium that caused as little light interference as possible, they had to pay for all of the public transport disruption the construction cost and they had to pay boom-era construction prices, among many other things. Not to say the project was value for money, but they weren't operation in the same market.

[jbyrne]

And the debacle that was the 10 year tickets sales, and turning down the guaranteed offer?

was there ever a market for 10 year corporate seats even when we were at our most successful?
there was never a corporate market for Ireland V Armenia (etc) on a week night and id blame whatever marketing company was involved for pretending otherwise to the FAI.

even if that guaranteed offer did exist and was taken up on id be pretty sure the subsequent dismal sales would have resulted in the outcome being played out in a courtroom somewhere.

[Alf Honn]

they were paying a lot of rent to the IRFU before the new stadium was built. if their plan to be debt free by 2020 had worked (realistic when it was drawn up about 10 years ago) it would have been a missive boost to the FAIs finances from 2020 onwards. in fact i think their plan was to be debt free before 2020 but the vantage club ticket sales were dreadful due to the economic downturn.

i dont think anyone can be critical of the FAI for their involvment in the new stadium

No1 is disputing their involvement in stadium. As the biggest playing sport in the country, a stadium is essential and would've happened yrs ago with eircom park only for opposition of the present CEO.

The problem is paying d mortgage. Anyone cud see 30 grand tickets wouldn't sell but the Fai refused to change approach. No point blaming advisors, only the Fai.

Now they're still sticking to this 2020 guff when there's no hope of that happening.

Spade. Hole. Dig.

[bennocelt]

You can't really compare the Aviva to the Stadium of Light in any way - different era, different ground, different location, different costs. The Stadium of Light is a big box on an industrial estate - the Aviva is a world class stadium situated in a heavily-populated area and had to take account of all the costs that involves. They had to pay off the residents, they had to design a stadium that caused as little light interference as possible, they had to pay for all of the public transport disruption the construction cost and they had to pay boom-era construction prices, among many other things. Not to say the project was value for money, but they weren't operation in the same market.

So why didnt they build a cheap stadium outside the city then?
The facts are they are heavily in debt and once again football in ireland has no long term home.

[pineapple stu]

What would crowds have been like in a cheap, out-of-city stadium?

No point saving money if it means it loses you even more money.

And football in Ireland has about as long-term a home as its ever had.

[Eminence Grise]

The transport infrastructure doesn't exist to bring upwards of 50,000 extra people out of town at the tail end of rush hour. And the cost of buying a greenfield site the size of a football stadium along the M50 during the boom was insane. Not to mention laying on services - water, sewerage, electricity, roads, paths, lighting etc - that are a given at Landsdowne. Plus, stadia cost money to run when they're not in use: that means hiring it out for other sports and concerts for revenue, but with Landsdowne and Croke Park central and served by the bus and rail network, where would a promoter would prefer to go? And there isn't a market for that many big stadium concerts.

50 years in Landsdowne is a decent long-term option as well. I just hope it's long enough to outlast Delaney!

[bennocelt]

The transport infrastructure doesn't exist to bring upwards of 50,000 extra people out of town at the tail end of rush hour. And the cost of buying a greenfield site the size of a football stadium along the M50 during the boom was insane. Not to mention laying on services - water, sewerage, electricity, roads, paths, lighting etc - that are a given at Landsdowne. Plus, stadia cost money to run when they're not in use: that means hiring it out for other sports and concerts for revenue, but with Landsdowne and Croke Park central and served by the bus and rail network, where would a promoter would prefer to go? And there isn't a market for that many big stadium concerts.

50 years in Landsdowne is a decent long-term option as well. I just hope it's long enough to outlast Delaney!


Thats fair enough:)
Anyway the gah boys dont seem to be doing too badly with their stadium, are they still paying interest/debt on it?

[punkrocket]

...a stadium is essential and would've happened yrs ago with eircom park only for opposition of the present CEO...


I was out of the country during this period, what did he do then?

[geysir]

So why didnt they build a cheap stadium outside the city then?
The facts are they are heavily in debt and once again football in ireland has no long term home.

No long term home? Is there a longer term home of international football anywhere else on the planet?

[bennocelt]

No long term home? Is there a longer term home of international football anywhere else on the planet?

jesus, hilarious stuff - fai = no money = not good for football in ireland. Thats it

[BonnieShels]

No long term home? Is there a longer term home of international football anywhere else on the planet?

Well the IFA had nearly 80 years left on their lease of Windsor...

What's the jazz now there?

[geysir]

Well the IFA had nearly 80 years left on their lease of Windsor...
A 80 year lease contract in itself is not a home, one also needs a structure.


What's the jazz now there?
Rebuilding the structure?

[paul_oshea]

Well the IFA had nearly 80 years left on their lease of Windsor...

What's the jazz now there?

In the UK 80 years is not a long time on a lease, in fact it would be hard to remortgage with that.

Having the long leasehold is just as good pretty much as the freehold, assuming no more external structural changes required of course.

[Junior]

Government appear a little unsure of the FAIs predicament......

http://www.independent.ie/sport/soccer/department-feels-a-little-in-the-dark-about-fais-debt-29418547.html

[Stuttgart88]

And now the department, which indirectly helps to fund the FAI's football programme each year via the Irish Sports Council, is expressing a desire to know more about the Association's finances. The source added that the department does not know if there are or are not serious issues, "but we would like to know".

In March of last year, the Irish Sports Council approved the payment of almost €3m to the FAI but documents released to the Sunday Independent under the Freedom of Information Act show that this was only after chief executive John Treacy told board members that the Council "received confirmation on an annual basis from the FAI's auditors that their accounts were in order and the monies provided by the council were utilised for the purposes given".

This beggars belief. Following several blow-ups of sports national governing bodies here in the UK, and one notable instance when one NGB "found" £10mm in an bank account it had forgotten it had, a government review led to a severe tightening of oversight of NGBs and made sure only those NGBs whose governance and operational standards were fit for purpose continued to get funding, via the UK's equivalent of the ISC.

It appears here that despite public concern and much media speculation about the state of the FAI's finances the government and the ISC have placed no pressure on the FAI to be transparent or applied any scrutiny (over and above basic superficial stuff) to the FAI's governance or financial situation. No wonder the FAI operates the way it does - one of its biggest stakeholders, and certainly its most powerful - doesn't even try to hold it accountable. Instead, once in a blue moon you get clowns like Enda Kenny making twee remarks about a united Ireland football team as being some sort of panacea.

You can almost imagine Delaney's conversations with John Treacy and Leo Varadaker (minister of sport?):

JD: Lads, I think we need about €3mm for a few things.

(puts phone on mute: Milo asks where he got that figure from. Out of my ar$se JD replies. Both hum the bassline to "Money" by Pink Floyd with JD doing the ker-chink sounds)

ISC: That'll be grand. Are you still solvent?

JD: Solvent by a mile, just a little illiquid.

ISC: OK the cheque'll be in the post. Do you promise to spend it on what we're giving it to you for?

JD: Of course John.

Treacy then goes back to his board and gets asked if the FAI gave a transparent account of their finances and whether they explained if the fall in revenues left them vulnerable to their big mortgage commitment on the stadium. Treacy says he forgot to ask.

Banana XXXXing Republic. If the government wants to know they should haul the FAI into Leinster House or wherever they hold meetings and demand full answers. The FAI avails of public money so has no reason not to be compliant with any requests.

Over here the Department of Media Culture and Sport initiated a full Select Committee Enquiry into the state of football governance in England. No stone was left unturned calling for and hearing evidence from a diverse range of informed commentators.

[geysir]

The auditors are independent and they say the grant money goes to where it is intended to go. Unless the auditors are prepared to risk their integrity and more, eg. cook the books and pull a fast one on behalf of the FAI, then it is very likely that the auditors are signing off, satisfied with the required proof that the money has gone to the intended targets.

[Charlie Darwin]

Do we know who the auditors are?

[Stuttgart88]

Geysir is right of course (I was only being frivolous on the topic of money being spent on what it is being allocated for), although that doesn't address the substantial question which is the state of the FAI's finances and how they can cope with their debt burden. Their "we will be clear of debt by 2020" statements remind me of Lance Armstrong's "I have never failed a drug test". It's hard to believe in the absence of any further disclosure. And if it's true, then why not disclose more details?

I also stand by my other main contention which is that government oversight of a public money recipient is dreadful. They are one of the few stakeholders with the power and legitimacy to properly hold the FAI to account but they are either so used to bad governance among themselves or just simply disinterested in Irish football (very likely) that they couldn't be bothered.

[Charlie Darwin]

There seems to be a few in government who are interested in soccer, but that's not the same as having the game's interests at heart. Still, is it a good idea to have the government itself holding sporting bodies to account, or is it better done by an independent panel free of political considerations?

[Stuttgart88]

I don't like governments getting involved in running sporting organisations. Sport is a highly charged and politically sensitive activity and organisations such as FIFA are probably right to insist on national associations being politically independent. That's not at all the same thing as saying that a recipient of public funding shouldn't be held to strict standards of accountability, transparency and operational efficiency.

I reckon (just my hunch) that the government would be well within its rights to ask tough questions of the FAI. In fact I'd frame it the other way around and look to be more actively supportive. Dangle a carrot of more funding in exchange for better governance, enabling the FAI to round up on the various vested interests and factions that hinder progress.

I don't see any reason why the government can't do something similar to what the British did: make any state funding contingent on sound governance and operational efficiency. Ideally theyd go even further and conduct a proper review of football organisation and governance. It might even help the FAI fend off difficult factions, but that actually assumes they would be interested in doing so. Charlie D asks if an independent panel would be a better option. Like who, Genesis (or whoever Alastair Gray is consulting for now?) :)

All the government has to do is conduct a proper consultation, ideally public. At least then the facts will become known. The British have offered recommendations not a dictat, albeit followed by a potential legislative intervention if the recommendations aren't followed! They did so via a cross-party select committee, a standard process here. I don't know what the equivalent is at home.

If a NGB is financially self-sufficient then the government is a less legitimate powerful stakeholder. Is the government not interested or close enough to ask tough questions, or is the FAI financially independent enough to be able to disregard the government?

[Charlie Darwin]

Well I'm not advocating a role for government nor am I saying government can't hold bodies accountable. I'm just saying that politicians (rightly or wrongly) are accountable to local considerations, whereas an independent body theoretically looks at the nation's sporting good as a whole. If the goal of sports funding in this country is to promote participation and the overall physical health of the nation, there's an argument for keeping politicians out of the process entirely.

[peadar1987]

God, could you imagine what the Healy-Rae's would do if they were allowed meddle in sports?!!

[CraftyToePoke]

God, could you imagine what the Healy-Rae's would do if they were allowed meddle in sports?!!

Reinstate 'the ban' probably.

[gastric]

God, could you imagine what the Healy-Rae's would do if they were allowed meddle in sports?!!

At least they would let you could get p*ssed and drive to and home from the game!

[peadar1987]

At least they would let you could get p*ssed and drive to and home from the game!

But only if you were from the country. Jackeens don't have the same drink-driving capability as people from Ballygombeen.

[geysir]

I haven't heard about the the sports grant system being riddled with inefficiencies/corruption or the relevant recipients piddling it into areas other than intended, so I'd have to assume there's an acceptable degree of efficiency in the checks and balances that do exist. The problems I read about are to do with cutbacks.
In the main, the FAI's debt burden arises from infrastructure costs.
That 7.5% interest is high. They claim they can clear the debt in 6 years.
At a rough estimate I'd say that's €10m p/a, with the naming rights income in 2019, taking care of the interest accruing. That off payment level, definitely sounds unrealistic.

[ArdeeBhoy]

No long term home? Is there a longer term home of international football anywhere else on the planet?

Wembley/Hamdump/that ground in Beal-fierste?

But seriously Abbotstown really is the middle of nowhere...

[Junior]

Not sure if this is the best place to post this and it does relate to England Matches not Ireland, however to me, it highlights that UEFA/FIFA may not get it all their own way nor indeed secure the monies that they think international games are worth and the monies the FAI are completely reliant on to have any hope of paying down the debt.

Admittedly this relates to tournament matches rather than qualifiers but its a setback to UEFA/FIFA nonetheless.


BBC
Fifa and Uefa have lost an appeal against a European ruling that the World Cup and Euro Championships must be shown on free-to-air TV in the UK.

In 2011, the European General Court said the UK could keep the events on a list of "protected" events of national sporting interest broadcast for free.

It means the two tournaments cannot be sold exclusively to pay-TV firms.

Fifa and Uefa had appealed, after saying they could not sell the events fairly for their real value.

But the European Court of Justice - Europe's Supreme Court - has now said the original decision in the General Court (formerly Court of First Instance) in 2011 was correct.

The BBC and ITV had already secured the rights to broadcast the football World Cup finals in 2014, and they were guaranteed of being shown free-to-air.

But there had been fears that moves towards a pay-TV model would have been in place in time for the 2018 World Cup in Russia, should Fifa and Uefa have won their case.
http://www.bbc.co.uk/news/business-23288211

[paul_oshea]

John Delaney wont have been including payments based on tournaments we wont qualify surely?! :D

Unless of course he thinks we are guaranteed 2 euro tournaments :D

[Junior]

No I just meant TV money from the qualifing campaigns. FAI are completely reliant on it and my concern is that they think they are going to get this big windfall when perhaps media broadcasters might not be willing to pay more than they currently do (67% uplift according to UEFA) or that the FAI's share would increase by this amount.

Im sure JD has included prize money up to at least Semi Final spots at all comepetitions in his business plan:)

[geysir]

Wembley/Hamdump/that ground in Beal-fierste?

But seriously Abbotstown really is the middle of nowhere...

Wembley is one of the great white elephant wonders of the planet, has a lifeline of 50 years, cost €1.15bn all told, and considering all the whopping problems with construction issues, costs and pitch quality, it made the FAI look positively Germanic in comparison, purring away with an almost seamless (by Irish standards) construction schedule, costing and quality return.

[bennocelt]

Wembley is one of the great white elephant wonders of the planet, has a lifeline of 50 years, cost €1.15bn all told, and considering all the whopping problems with construction issues, costs and pitch quality, it made the FAI look positively Germanic in comparison, purring away with an almost seamless (by Irish standards) construction schedule, costing and quality return.

Dont know - i dont think its that bad of a stadium, and easy enough to get to considering London can get busy! How much rent do the FA pay on it?

[geysir]

Dont know - i dont think its that bad of a stadium, and easy enough to get to considering London can get busy! How much rent do the FA pay on it?
Rent :D
after paying €1.15 bn to 'not look bad' and the transport infrastructure to be easy to get to, not to mention the umpteen pitch changes to facilitate the transition from the worst pitch in the western world to something not bad, you ask how much rent do they pay?
The estate agents must see you coming a mile off.

[Charlie Darwin]

I've read talk that the FA actually saved a couple of hundred million on the construction costs of Wembley because the builder tendered a ridiculously low price and ended up losing money.

[Stuttgart88]

I heard that the fees alone (lawyers, architects, upfront finance fees etc.) for Wembley were higher than the total cost of the competing project in Birmingham.