QuoteIndependent.ie
Cash lunacy plunging league into darkness
THIS morning, another Irish club reflects on an implausibly heartbreaking European exit to a force with the type of spending power they can only dream about.
To Drogheda United's eternal credit, they came remarkably close to eliminating Dynamo Kiev, a club that has the wealth to write cheques for €8m and not worry about the consequences.
Enviously, lovers of the domestic game in Ireland who yearn to see one of their own break into the Champions League elite, look at the existence of such superpowers as a fantasy land.
The flip side is that when Kiev and other major powers look at Irish football, they see poverty. Little do they know that in the context of their own environment, Eircom League clubs are also spending fantasy money.
It has been a turbulent year. Seven clubs have reneged on wages. Two Premier Division clubs -- Sligo Rovers and Galway United -- were forced to scale back plans to go fully full-time.
The former need €130,000 before the end of this month to secure their future. The latter chopped their wage bill at the start of July, an embarrassing situation for the FAI after they were promoted to the Premier Division on the basis of a perceived off-the-field stability.
Football in Ireland may not be a fully developed industry, but individuals in the upper echelons command the kind of cash that most professions would look at with disdain when you measure it up against the demand that exists for the product if attendances are anything to go by.
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Over the past fortnight, the Irish Independent has endeavoured to get an accurate picture of the spending being undertaken by the 22 Eircom League sides, either through the clubs or sources close to them.
Naturally, they are not all willing to publicly divulge their expenditure, particularly when it comes to the top sums being taken home by the players with the consistent reason offered that it would breed discontent in dressing-rooms. Some clubs just do not want their business out there at all, meaning that we are left in the world of estimates.
Still, the FAI should be aware of the situation as they receive monthly accounts from each participating club. At the end of the season, they will be able to confirm which clubs have complied to the new Salary Cost Protocol -- where expenditure on wages must not exceed 65pc of turnover.
While the big spenders have ground developers or benefactors with the capabilities to plough in non-refundable loans to ensure they stay within those limits, clubs further down the ladder have already looked to cut costs and move players off their books to escape a sanction that hasn't quite yet been defined. It will be interesting to see how the FAI enforce it. UCD boss Pete Mahon has already asked why those clubs who have failed to meet wage commitments haven't been punished in some form.
To the punter, it is the spending of the big four -- St Patrick's Athletic, Drogheda United, Cork City and Bohemians -- that is of most interest. Each will insist that one of the others is offering more money than they are. Nobody wants to be perceived as the biggest spenders
In addition, they don't want it known how much they are paying managers or players, though it's understood that there's a handful of gaffers on deals in the region of €150,000-200,000 a year when you factor in bonuses written into their contract.
An elite group of players are in that wage bracket as well with more than a half dozen stars around the country with a gross pay in excess of €3,000 per week when their various clauses are taken into consideration.
From outside, these figures are looked upon incredulously and in the league there is a growing acceptance that breaking-point has been reached. Doyens like Mahon and Dermot Keely have spoken out in recent weeks, while Bohemians boss Pat Fenlon has acknowledged that 'ludicrous money' was being bandied about.
Their observations come from the study of those amounts balanced against those of punters coming through the turnstiles.
A total of 722 people were at the Belfield Bowl on Sunday for the Premier Division clash between UCD and St Patrick's Athletic, an afternoon with no other football-related attractions in the capital. Of the 722 who watched, 305 paid the maximum admission fee of €15. Add in the estimated revenue accrued from concession payers and you're looking at a gate worth in the region of €5,000 to the host club.
Given the current rate of wage inflation, it won't be that long before that amount is a player's weekly wage; Joe Gamble recently turned down a €4,000-a-week contract from St Pat's to commit himself to Cork for what is believed to be a fractionally smaller amount.
Sure, the bigger fish are taking in more at the gate than the likes of UCD, but they're spending more too. It's plain to see that an average of 1,800 punters paying in €20 each is nowhere near enough to match a €40,000-a-week wage bill, and that's before you consider other costs. It means the money men behind each club are ploughing in huge amounts to stay above water.
By introducing the Salary Cost Protocol, the FAI argue they are bringing things in the right direction. They say clubs are to blame for their own issues, due to reckless spending, but they are working with them in that regard.
CEO John Delaney reported at the association's AGM that 13 of the 22 clubs recorded a profit in the first six months of this season. A further five have recorded losses of less than €30,000, leaving four clubs with deficits significantly larger than that -- no prizes for guessing who they are.
Of course, the flip side to those stats is that seven clubs have failed to pay their wages at some stage in 2008, and the big guns are not amongst them. Budding professional operations like Galway, Sligo and Finn Harps have over-extended themselves, with no sugar daddies to dig them out of a hole.
Any legitimate form of revenue cannot be refused. Last week, Shelbourne's board addressed an open letter to their fans, defending the decision to fit three friendly matches with Millwall, Leeds and Celtic around their league programme, stating the financial necessity.
"Our average gate receipts every second week don't even cover one week's wages, never mind the additional costs of security, Order of Malta, doctor at matches, ground upkeep, pitch maintenance, training facilities, transport, heat, cost of light etc", said board member Joe Casey.
Shels -- who incidentally provided the most thorough response with their figures, having clearly learned the lessons of the past -- refused to extend their budget in the transfer window, which may yet cost them promotion but they have learned the errors of previous regimes.
Fear
They now look at a Premier Division where clubs are spending to such an extent that many fear they will go the way of Shels, although it must be stressed that the old way of doing things at Tolka Park would not be sustainable today given the checks and balances now commonplace.
Today's title contenders, who acknowledge they are operating at a loss, are broadly supportive of Fintan Drury's vision for an All-Ireland League. They share his belief that a genuine way can be found to attract fans, broadcast deals and sponsorship thus justifying larger budgets.
As far as they are concerned, the FAI is not doing enough to promote the league, and shouldn't be tying sponsorship and TV deals in with commercial packages related to the national team.
"We're not suggesting we have the answer but one thing is for sure, there needs to be a recognition that the game at the moment does not attract sufficient interest," said Drury last week.
"In order to establish a new platform, a credible league, you either determine that you can work through those financial difficulties through whatever length of time it takes, or you believe those problems are so significant that you start again.
"This isn't about fairness. If we want to establish a professional sports franchise, it needs to be about three things; spectator numbers, broadcast deals and sponsorship."
In short, dispense with the smaller fry and concentrate on an elite 10-team league where every game can attract a respectable attendance. Where is the evidence that the interest is out there to sustain that? Fans will point to recent games, like the derby between St Patrick's Athletic and Shamrock Rovers, where a 4,000 crowd got good value for their money. If it was like that every week then domestic football would be a better place.
The reality, though, is that even if an All-Ireland League happens, it won't be for a while so the status quo will remain for another few years. If clubs don't cut back on costs, they will continue to accrue losses and while the FAI say crowds are on the increase, the actual figure is only 3pc up on this time last year.
Slashing player wages is the natural step but those on lucrative contracts will not be disposed to taking pay cuts. So you have the vicious circle. Once one club is willing to pay it, others will follow to avoid losing key men.
Essentially, the price of competition has backed the clubs into a corner. They operate in an economy out of touch with reasonable business practice although it has been suggested that the big four may sit down to negotiate an acceptable wage cap to prevent the situation from escalating.
Football worldwide is not immune from this phenomenon. Europe's greatest powers frequently record massive operating losses, but always have someone there to foot the bill eventually.
Similarly, those bankrolling the league's powers are prepared to deal with deficits for now, though the Arkaga Group behind Cork City have privately indicated their patience will soon run out if the AIL or another way forward is not considered.
cont ...............
Originally Posted by Fintan Cassidy
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