Teams still over-spending in search for success
THE former Ipswich Town chairman Patrick Cobbold was once asked what constituted a crisis at his club.
"Well, if we ran out of white wine in the boardroom, that would be a crisis," he replied.
Eircom League clubs would love to have that sort of problem but unfortunately their current crisis is much more serious than a few missing bottles of plonk in the boardroom.
Money has always been tight at Eircom League clubs but details were a closely guarded secret. A trawl through documents filed with the Companies Offices yields little information and no trace of a profit and loss account.
Most clubs will tell you that they are just about keeping their heads above water and generally they are being truthful. Nobody invests in the Eircom League to make money.
Now, some clubs are drowning in a sea of debt. The big four Dublin clubs, who have dominated the Eircom League for the past seven seasons, are haemorrhaging along with several other clubs throughout the country.
In simple terms, they've spent more than they have taken in and the prospect of facing four months with little or no income from gate receipts or sponsorship has forced them to take a hard look at their costs.
Fran Gavin, Chief Executive of the Professional Footballers Association of Ireland, has been a busy man over the past few weeks dealing with his members' problems in Dublin and elsewhere.
Some players have seen their pay cheques bounce, others are still chasing monies they are owed and some have been left high and dry after being told that promises of new contracts will not be honoured. Even managers have had difficulties getting their money at the end of the week.
According to the PFAI, players throughout the league are owed sums between €300 and €10,000 and they are currently working to get those debts cleared.
Clubs who agreed to pay players for 52 weeks a year are now trying to negotiate new arrangements whereby players will received reduced wages for the duration of the closed season and will have the balance paid next season when the cash tills begin to ring again.
Around half a million spectators have attended the 400 matches that have been played this season by the 22 Eircom League clubs, which works out at an average of 1,250 per game. Gate receipts only account for between 10 and 30 per cent of most clubs' income, yet that hasn't stopped them pushing the boat out in the search for success or simply to keep their place in the ten-team Premier Division.
The best paid player in the Eircom League is reported to be on an annual salary of €80,000, which works out at over €1,500 per week.
A lot of the full-time professionals are earning between €800 and €1,000 and there is at least one part-timer taking home €1,000 per week with a few others on €600.
There is one First Division player on €900 a week with another year of his contract to run. Other players in that lower division, where only a few hundred usually turn up to watch, are earning €400 to €500 per week.
A representative of an English Division Two side recently admitted that clubs in the Nationwide League were struggling to compete financially with Irish clubs.
"We are offering players £400 per week to play in England and they're heading to Ireland because they can get double that amount," he said.
Shelbourne estimate that it costs them between €1.5m and €2m per annum to run their club. Bohemians are around the €1m mark but manager Stephen Kenny has already been told that his budget will be cut by 30 per cent.
Although Bohs have debts of around €400,000 they are working to reduce them by getting members to advance loans in blocks of €5,000 to the club. Also, players are being released but those remaining have been told their contracts will be honoured.
Today there will be crisis meetings at Shelbourne and Shamrock Rovers as the PFAI bids to thrash out a solution to the financial problems which have beset both clubs.
The situation at Rovers is understood to be particularly grave. The club has a half-finished stadium in Tallaght which they need to complete if they are start maximising their income potential. Despite their massive capital commitments they have tried to keep up in an increasingly competitive Premier Division and their delicate juggling act is coming apart at the seams.
Nine players who were out of contract have been released but they are still owed money and are worried that if they join other clubs they might never recover it.
Ironically, the chairman of the PFAI, Stephen McGuinness, is one of those released Rovers players and he fears for the future.
"This has probably been the most difficult time of my playing career," says McGuinness before highlighting the unspoken worry of everybody within the game.
"What is worrying is that if successful clubs like Shelbourne and Bohemians are experiencing financial difficulties then what hope is there for the rest of the League? It's a time, it seems, for slow steps."
The PFAI have been trying for the past two years to bring in a standard contract between clubs and players and Gavin believes that the FAI and League must also ensure that clubs honour their commitments.
"There is a need for regulation," he says.
Eircom League chairman Brendan Dillon agrees that it might be possible to bring a rule whereby clubs could be deducted points for failing to honour contracts but cautions that it would have to be thought out carefully.
He agrees clubs are in trouble but doesn't wish to get into speculation that some might even go to the wall.
"It is too early to speculate because clubs have got into trouble before and survived but it would be terribly sad if any club did go under.
"But it is a serious issue and undermines the significant progress which has occurred to try and get the League to the next stage."
The UEFA Licence will bring a degree of financial accountability as clubs will not be allowed to gain a licence if they owe money in wages or transfer fees. The PFAI would like to see that rule extended to former employees as well as the introduction of regulations to cover other employment issues, such as the Health and Safety Act and the Payment of Wages Act.
Events of the past week have served as a timely wake-up call to the Eircom League clubs. The solution may be a salary cap whereby clubs can only pay a certain percentage of their income in wages.
Others feel that there is a need to streamline the league by cutting the number of clubs, doing away with relegation and putting everybody into the one division in order to make it a truly national competition once again.
"If Tesco were selling a product in Dublin they would certainly be selling it all over the country," was the salient observation of Longford Town chairman Jim Hanley.
The Eircom League needs to take a long hard look at itself and sort itself out before the bubble bursts.
