View Full Version : Cork City in Financial Trouble?
Have a look at this- it's not overly clear but it does seem like there's going to have to be readjustment of spending on Leeside. Or it could just be an attemot to drum up support from business.
http://www.eveningecho.ie/pdf/back.pdf
dancinpants
27/10/2006, 3:31 AM
Seems to be alot of "IF this and IF that..." going on there. TBH it reads more like self-promotion on that guys part than anything else really.
"avid Chelseas fan" = "I'm a Chelseas supporter" :rolleyes:
Ronnie
27/10/2006, 8:40 AM
Same old story I'm afraid. The cyclical nature of success, the poor crowds and the overvalued players by the clubs. Only about 3 or 4 of the 21 clubs, at some point over the last 5 years have not been in trouble. Is there any player in this league that any club can justifably pay over a 100k per annum? Cork have 4 earning over 100k per annum. Even at an average of 3000 per home match it would take about 75% of the total annual gate receipts to pay 4 players. Thats simply unsustainable.
Its a public plea by Lennox to drum up money for the club.
He is finding it increasingly difficult to run the club on his own and would obviously like it if someone else came in and shared that burden.
The way Fenn is touting himself to every club in the country these days, it's a fairly obvious suspicion that Cork are in trouble. Or else Rico just loves marginalising and/or driving out his best players.
20 grand a week! No wonder they are in finanical difficulty. Thats big cash.
And if it is true that 4 players are on over €100,000 then that is just nuts. I don't know how any club can justify paying that out unless they are walking the league every year.
drinkfeckarse
27/10/2006, 12:34 PM
He talks about running the clubs properly but then talks about City having a 20,000 all seater stadium :eek: Has he thought of how much it would cost to run that? Small steps man. Crowds are down this season and no club in Ireland has any need for anything bigger than a 10,000 all seater stadium. He's right about one thing though...it is a vicous circle.
Dodge
27/10/2006, 12:38 PM
Cork are obviously in trouble. They spoke of going back to semi pro weeks ago
drinkfeckarse
27/10/2006, 12:48 PM
I think they would have been ok Dodge IF they had been able to sustain 5,000 crowds. They haven't because they haven't added any players or kept the momentum going and an oportunity for a brand to grow has probably been lost. That's the vicous circle though isn't it, the money isn't there now to add a bit of quality.
Poor Student
27/10/2006, 12:53 PM
In any event it is suicide to run a team that can only be sustained at the level of absolute success. It's hurt Bohs and it's only sustainable at Shels due to the eventual sale of Tolka.
They haven't because they haven't added any players or kept the momentum going and an oportunity for a brand to grow has probably been lost. That's the vicous circle though isn't it, the money isn't there now to add a bit of quality.
The problem seems to be that they were already shelling out serious money just to keep the existing squad in place. And having the biggest crowds in the country also makes you most vulnerable to a drop- as I pointed out yesterday the 700 odd drop in Cork's average crowd probably equates to about 125k over the season- and their expenditure on tax obviously climbed a lot from last year.
Basically it all goes back to overpaying players who aren't worth it IMO.
NY Hoop
27/10/2006, 1:13 PM
Couldnt believe when Lennox started talking about moving them to a stadium on the outskirts of the city.
Hello? Has everyone forgot the bishopstown debacle?:rolleyes:
When the cross is finished it will be a compact 7000 seater stadium. That is adequate. If he wants bars etc buy the horseshoe at the corner or stick a bar in under the new stand at the shed end.
KOH
20k a week is only 1 million a year & Bohs, Shels & Drogs all have larger spending on smaller crowds.
Success means that players look for higher salaries & clus need to keep their best players. I am not knocking After Derrys recent successes it will be interesting to see how much their wage bill increases next year when comes to pay reviews.
I think crowds have been down this year but i expect them to pick up next season with the opening of the new shed stand. I don't know if any other eL club owned & funded by 1 person so Brian Lennox is really just looking for others to come on board to share the burder.
I would be wary of any irish person who describes himself as a Chelsea fan as clearly only discovered football in the last few years.
Schumi
27/10/2006, 1:30 PM
20k a week is only 1 million a year & Bohs, Shels & Drogs all have larger spending on smaller crowds.Yes but Bohs and Shels can't sustain that spending without their property plays and Drogheda are being bankrolled. Cork can't get any money from Turner's Cross and AFAIK Lennox is trying to cut back the money he's putting into the club. I don't think Cork's crowds are enough above Bohs/Shels to cover that spending.
A face
27/10/2006, 2:10 PM
65% is a big factor here lads .... but that'll effect all clubs so that'll even things up a tad ..... and sure thats always good yeah ;)
Thats not coming in until 2008 season, abd the clubs haven't even been told if Directors loans/investment will count towards the total figure yet
There seems to be a lot of confusion over when this is coming in. The FAI document says it comes in in Licensing 07- which I assumed meant it was coming in next year, but could on reflection mean that it comes in with the licensing applications for the 2008 season.
But would they then be looking back at the previous year's accounts- otherwise what's the point- would they just be looking at club budgets?
The Good Son
27/10/2006, 2:35 PM
At a recent fans forum Lennox was talking about the money issues etc., one of the things that came out was that cash was available for players at the start of the season but this has now been put aside for a legal matter. What a lot of people got out of this,(and this matched the rumours that have been circulating) was that sponsorship money for this season hasn't been paid by one of the main sponsors. This sponsor was brought in by a previous manager and seemingly they have wanted out of the contract since he's no longer with the club. They now believe they have valid reason to pull out of the contract and have done so.
Student Mullet
27/10/2006, 2:39 PM
Here's what it says in the document the clubs voted on:
Introduce wage controls - Spending to a maximum of 65% of turnover costs to be monitored and enforced in Club Licensing 07;
My reading of that says there will be wage control next year but I could be wrong.
drinkfeckarse
27/10/2006, 2:44 PM
There seems to be a lot of confusion over when this is coming in. The FAI document says it comes in in Licensing 07- which I assumed meant it was coming in next year, but could on reflection mean that it comes in with the licensing applications for the 2008 season.
Both go hand in hand.
Here's what it says in the document the clubs voted on:
My reading of that says there will be wage control next year but I could be wrong.
Think its the license issued in 2007 (this time of year!) for the 2008 season wages (at least thats what Pats have been told by a certain sport's governing body!)
Student Mullet
27/10/2006, 2:51 PM
Think its the license issued in 2007 (this time of year!) for the 2008 season wages (at least thats what Pats have been told by a certain sport's governing body!)But a document entitled:
The Football Association of Ireland
Club Licensing Manual For FAI National League Season 2007 and UEFA Club Competitions Season 2007/2008Was issued in July 2006. I have a copy of it.
The question now arises- have the FAI read the FAI documentation?
But a document entitled:
Was issued in July 2006. I have a copy of it.
So the license for club season 2008 would be issued in 2007. That makes sense. They'll set the wage limits for 2008, in that release
The question now arises- have the FAI read the FAI documentation?
Don't be ridiculous, of course they haven't. They're too busy finding new, innovative ways of fining people to line their own pockets.
So the 2008 limits will be based on 2007 turnover- that makes sense I guess? In any case it'll be interesting to see how the wage cap is handled. It's a great idea but administering it is going to be very difficult.
So the FAI tell each club that they'll only be allowed to spend 65% of turnover for a given season- what happens if they spend more- do they get points deducted the following season? In the case that a club hits problems like we did this year and gates collapse completely is it really fair to punish a club further if that causes them to stray over the limit? It's going to be very difficult to administer fairly, but if it introduces a bit of sanity into the financial dealings in the league then it'll be well worth it.
passerrby
27/10/2006, 5:27 PM
it looks like after next season ollie will be looking for points he lost to a team who he believes spent over there budget and we will be in the same boat again
BohsFans
29/10/2006, 10:13 PM
20k a week is only 1 million a year & Bohs, Shels & Drogs all have larger spending on smaller crowds.
Success means that players look for higher salaries & clus need to keep their best players. I am not knocking After Derrys recent successes it will be interesting to see how much their wage bill increases next year when comes to pay reviews.
I think crowds have been down this year but i expect them to pick up next season with the opening of the new shed stand. I don't know if any other eL club owned & funded by 1 person so Brian Lennox is really just looking for others to come on board to share the burder.
I would be wary of any irish person who describes himself as a Chelsea fan as clearly only discovered football in the last few years.
No, well we won't anyway.
We'll come in just under 1 million for the year.
LukeO
30/10/2006, 12:53 AM
We'll be more than €1m. Budget for season was €1.1m. Losing Farrelly and Can't will have reduced it, but we were still paying Farrelly wages up until a couple of weeks ago as part of the resignation agreement. Loaning out Cooney and Mr. Invisible will have reduced the budget also, but we've loaned Caffo and Leech as well as signing Paul Devlin for a while so I'd imagine the final figure will still be between €1m - €1.1m.
BohsFans
30/10/2006, 3:23 AM
We'll be more than €1m. Budget for season was €1.1m. Losing Farrelly and Can't will have reduced it, but we were still paying Farrelly wages up until a couple of weeks ago as part of the resignation agreement. Loaning out Cooney and Mr. Invisible will have reduced the budget also, but we've loaned Caffo and Leech as well as signing Paul Devlin for a while so I'd imagine the final figure will still be between €1m - €1.1m.
no, will defo be just under 1 million for the year. -FACT!
no, will defo be just under 1 million for the year. -FACT!
I;ve seen your expenses for the last 2 years listed as 1.4m & 1.3m with loses of 300-400k.
BohsFans
30/10/2006, 9:43 AM
I;ve seen your expenses for the last 2 years listed as 1.4m & 1.3m with loses of 300-400k.
so? Maybe you have, maybe yo haven't. Wage bill and expenses are two completely different figures.
harry crumb
30/10/2006, 10:39 AM
All sounds very amateur to me when I hear Lennox pleading for people to come to the games. Where has all the money gone. Lennox says he budgets for every season that we will have "no success". So how did we end up in this mess?
The loss of the Shed has been a big cause for the drop in attendences.
For me personally, the matchday experience is not the same. You now have to walk all the way round the back of the St. Annes end to get in and heading off for a sneaky pint at half time is too long a walk.:D :D
Also people that used to be in the Shed end and the Corner boys are now scatered all over the place.
Interesting to see if the Shed will be like the old Shed next season.
no, will defo be just under 1 million for the year. -FACT!
I'll believe it when I see it. We spent more than 900k last season and we'd a more expensive squad this season.
The Stars
30/10/2006, 3:59 PM
I heard somewhere that Cork have more full time staff than Cardiff City....anyone hear this?
A face
30/10/2006, 4:13 PM
I heard somewhere that Cork have more full time staff than Cardiff City....anyone hear this?
Yeah, thats true but thats because Cardiff are down to 20 fulltime players, which is unreal for a full time club. City are struggling this year because our squad is so small.
Good Emmet Malone (best eL journalist) article in the IT today. I must say I was quiet depressed reading it.
City spending 80% of turnover on wages which i would think isn't bad by top eL standards.
To get to 2/3 rds of turnover will need to increase revenue or cut costs.
Apparently we have gone from 1.5m budget 3-4 years ago to 2-2.5m budget now. I think this is pure speculation by Malone & cannot see how thats accurate.
Brian Lennox has put in 300-400k of his own cash into the club in 3-4 years since he took 100% control - this seems accurate enough.
I can understand why Brian Lennox may want a helping hand by others as its amazing how ungrateful some sections of supporters can be. Always surprised by some people who been supporting the eL for years thinking there loads of money available. Been following the club for 15 years & he is by a long shot the best Chairman in those years.
Good Emmet Malone (best eL journalist) article in the IT today. I must say I was quiet depressed reading it.
City spending 80% of turnover on wages which i would think isn't bad by top eL standards.
To get to 2/3 rds of turnover will need to increase revenue or cut costs.
Apparently we have gone from 1.5m budget 3-4 years ago to 2-2.5m budget now. I think this is pure speculation by Malone & cannot see how thats accurate.
Brian Lennox has put in 300-400k of his own cash into the club in 3-4 years since he took 100% control - this seems accurate enough.
I can understand why Brian Lennox may want a helping hand by others as its amazing how ungrateful some sections of supporters can be. Always surprised by some people who been supporting the eL for years thinking there loads of money available. Been following the club for 15 years & he is by a long shot the best Chairman in those years.
Totally agree with your last point - LoI fans by and large haven't a clue about the financial reality of running their clubs
bigmac
31/10/2006, 11:15 AM
Here's the IT article for anyone who missed it today.
Cork City can't make numbers add up
Emmet Malone
On Soccer: Such are the economics of the Eircom League. It won't have come as a surprise to many when the demise of Cork City's challenge for a second successful league title coincided with the first rumours of belt tightening down around Turner's Cross.
Still, the warning issued by the club's chairman, Brian Lennox, last week that City could be out of business within 12 months until backers willing to provide substantial investment come forward is a stark reminder of just how fleeting the good times can be in a league where very few budget for the bad times.
Word has it Lennox, having previously been a member of a broader consortium for five years during which time he served as vice-chairman, had put somewhere between €350,000 and €400,000 into the development of the club over the first four years of his term as owner although there is speculation he recouped a portion of that figure after last year's exceptionally good season.
Reaching the Setanta Cup final and performing creditably in Europe again will have boosted the financial position but a run of costly draws in the late summer effectively killed off City's hopes of defending the title.
The upshot, of course, was that crowds and, in turn, income fell, and so, despite still being embroiled in battle to qualify for next season's Uefa Cup, the team has found itself playing in front of less than 3,000 people of late.
Manager Damien Richardson is just one of many people at or near to the club who feels the biggest problem has not been the drop in attendances but rather the failure to adequately develop other aspects of revenue generation.
He remains broadly optimistic that imbalance can be addressed as long as the progress made in recent seasons on the pitch isn't squandered and he is adamant a return to part-time professionalism, as has been suggested might be necessary, would be a disaster.
At present there is a strong, full-time first team set-up with a core of very talented players, as well as developed and successful under-21 and under-18 structures, all of which have strong management teams. All of this, however, has come at a significant price with the cost of running the club having risen from around €1.5 million when Lennox took over to somewhere between €2 and €2.5 million this year.
Some of the detail on the financial side is interesting with Lennox revealing for instance that the club has effectively had to write off some €300,000 it was owed for match sponsorships and advertisingbut, for the most part, it all sounds like standard fare for one of the country's biggest clubs.
What will cause some concern throughout the league, though, is the fact that despite having a lower wage bill than a couple of their rivals, having a more clearly defined catchment area - one that encompasses a population of around 250,000, and probably the largest support of any club in the country - successive owners have proved incapable of making the numbers add up for the club.
But then the situation is not unprecedented. Both Cork Celtic and Cork Hibernians went out of business within short periods of achieving considerable success.
It may be hard at first glance to imagine Cork City going the same way any time soon and impossible to envisage Cork without a presence at the highest level of the Irish game but the reality is that the club, which doesn't own its own ground or, for that matter, very much else, is a rather fragile organisation and Lennox, entirely understandably, has made it clear he can no longer carry the burden of keeping it intact alone.
Matters will not be helped in the short term at least, he feels, by the changes being advocated by the FAI which intends to reduce to two thirds the proportion of revenue a club may spend on wages. Lennox puts Cork City's current figure at something below 80 per cent and that of many other clubs at comfortably over four fifths.
The key problem, he feels, is that the transition period of two years before the new rules are applied is too short to allow clubs to address the problem by raising additional revenue with the result they will instead have to cut wage bills, and thus either the numbers or quality of players they employ.
City have already discovered the cost of letting popular players leave without replacing them and the next few weeks may be critical in deciding whether the squad is further weakened during the coming close season, or the early signs of decline are halted and they seek to bounce back for next season.
Hopeful rumours suggests that the property developer Owen O'Callaghan is about to get involved although so far he has gently played down the speculation.
His pockets would certainly be deep enough to enable the club to challenge for more trophies. However what would be more interesting would be whether somebody from a line of work that has been something of a sure thing for the past couple of decades could actually make a sustainable success of a business where a willingness to lose considerable amounts of money has been widely seen as both necessary and, in the eyes of the supporters at least, hugely desirable.
joeSoap
31/10/2006, 11:37 AM
Bad man-management by Damian Richardson sees Cork currently spending almost €100,000 a year on an investment that gives them no return. If this is how the club is run, then it's hardly surprising that it's in financial ruin.
or alternatively GOOD man management sees Cork not being infected by a player who feels he's above the rest of the squad and immune to taking orders from his manager
joeSoap
31/10/2006, 12:20 PM
Whatever way you want to look at it, he's still costing Cork €100,000 a year. Thats a huge liability on what is an asset that should be making the club money.
If Rico didn't want him, then he should have sold him, loaned him, or teminated his contract. Instead, he can fanny around now and get well paid for it. Bad management by Rico and Lennox.
pineapple stu
31/10/2006, 12:28 PM
So the 2008 limits will be based on 2007 turnover- that makes sense I guess?
It makes no sense. It means promoted teams will have a very low wage budget and won't be able to compete at Premier Division level, but when they get relegated, they'll have a higher budget and will run up a loss in the First Division, which they should canter. It means teams qualifying for the Setanta Cup or for Europe won't get to spend the money until the season after, as well. You can't base the 65% on last year's turnover; it ultimately has to be based on this year's, however that is to be managed.
I suppose one way would be to add in a guesstimate, based on historic figures, of what Setanta qualification is worth and work from there. The alternative is to force clubs to produce a budget which shows wages at 65% of turnover, and monitor this every month for deviations. I think this latter is to an extent done in England?
drinkfeckarse
31/10/2006, 12:29 PM
Disagree, in all reality you would have to pay up the remainder of his contract if they terminated it. Only if both parties agreed could they get away with not paying up and the likelihood of that was pretty slim.
I don't blame the club at all for this as they were unlucky in a way to be bound by the transfer rules/window. I'm sure if it was possible they'd have offloaded him like a shot. How can you say bad management when the player was "apparently" acting like he was too good for the place?
The only bad management would have been if they took no action at all and then let it affect the rest of the teams morale.
"sold him, loaned him, or teminated his contract"
???? to sell or loan him requires someone else willing to take him
to terminate his contract requires at best further financial outlay and at worst an even more costly court action
Very few people know what happened between Rico & George. Brian Lennox backed his manager which is good enough for me. Other people have different opinions but they are no better than my opinion.
City tried to sell & loan him but no serious takers. The only club to offer to loan was Limerick. He cannot be sold until January transfer window. The club are not trying to hold onto him for the sake of it.
Its no different than having one of your best players injured for most of the season but nothing can be done about now.
passerrby
31/10/2006, 4:57 PM
Manager Damien Richardson is just one of many people at or near to the club who feels the biggest problem has not been the drop in attendances but rather the failure to adequately develop other aspects of revenue generation.
sounds like he,s saying its not my fault but give me more money and i will solve it
sounds like he,s saying its not my fault but give me more money and i will solve it
I think he is saying that crowds increase when winning the league. Because you cannot rely on winning the league every season you need to have more off the pitch revenue that is guaranteed no matter what league position you finish.
How many clubs are spending 100%+ of revenue on wages?
Midgit
01/11/2006, 8:54 PM
Seems a bit suspicious to me that the league champs are going bankrupt!
Some very bad planning from the boardroom obviously!!!
Seems a bit suspicious to me that the league champs are going bankrupt!
Some very bad planning from the boardroom obviously!!!
Did you even read the thread? No one said we were going bankrupt.
:rolleyes:
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