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Thread: Foot.ie Q&A – Padraig Smith - Answers

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    Post Foot.ie Q&A – Padraig Smith - Answers

    The questions posed for this Q&A Session can be found here.

    Interview with the FAI’s Internal Compliance Officer for 2009.

    Q1 – Mr A: Did all clubs stay within the 65% wage cap for the year 2008? If not can you explain why there were no consequences via licensing?

    During the season four clubs breached the Salary Cost Protocol (SCP) and they each had a transfer embargo imposed upon them. These clubs implemented the necessary changes and brought their percentage back below 65% before the end of the year. All clubs came in under the 65% SCP limit at year end.

    Under Licensing, each club must submit monthly management accounts to the FAI. We then use these management accounts to calculate the club’s projected SCP % during the season. The final figures however are taken directly from the audited financial statements. Each club must submit an SCP reconciliation signed and stamped by their auditors.

    Q2 – Longfordian: Were there any early warning signs of the crises that were to hit Cork, Drogheda and Cobh and if so why wasn’t there more done by the FAI to prevent those clubs getting themselves into serious trouble as there was with Galway for example?.

    The fact that clubs are now required to submit monthly management accounts to the FAI ensures that we can monitor their financial health. We were aware that certain clubs were having difficulties, and transfer embargos were placed on any club found to be in breach of the SCP.

    The FAI can advise clubs on how to resolve financial problems, but the responsibility to run a club in a professional manner rests solely with the directors and management committees of each club. These are the people who have been entrusted with the club, and these are the people who must run the club in a responsible manner.

    While we can advise clubs the FAI cannot and should not run clubs or make decisions on their behalf. From a financial standpoint, football is a business and it would be inappropriate for the FAI to simply prop up clubs in financial difficulty. If the FAI bailed out clubs in financial trouble the same problems would continue to occur year on year. No lessons would be learnt and the clubs and the League as a whole would suffer as a result.

    In the four cases you mentioned we met with each club to examine the full extent of the problem and helped the clubs evaluate what measures could be taken to improve their situation. Some, such as Galway United, choose to reduce their costs during the transfer window, while others failed to take the tough decisions which were necessary. Those clubs suffered the consequences. It must be hoped that all clubs learn the lessons from last season

    Q3 – Seand: If Cork City had a legally binding agreement with Arkaga, which was to the satisfaction of the FAI’s licencing committee, why did Cork City not simply sue Arkaga for breach of contract? If no such legally binding agreement was in place how did Cork City get a Premier licence?

    These letters are a common request during audits where the auditors are including a note or emphasis of matter with regards to Going Concern in the accounts of a company.

    In Cork City’s case, the letter was signed off by the directors of the parent company and copied to the FAI. The decision on legal action is one for Cork City FC to take. We have made clear in public, our deep dissatisfaction with the actions of Arkaga in this case.

    Q4 – Marco: Why did Fran Gavin state on MNS that Galway Utd had broken the 65% salery cap only to release players and then when under sign more players, why wasn’t Galway punished for this even though they were being promoted as a model club for marketing?

    The point i’m trying to make is if the rules were broken then why no punishment… Was it the case that no legislation was in place to deal with this?…

    Galway United did breach the Salary Cost Protocol and the club was punished for doing so. The club had a transfer embargo imposed upon them as soon as their projected SCP % went above 65%.

    We discussed the issue with the club and they examined their financial position and determined that they needed to cut costs to come back under 65% before the end of the year. They agreed deals with players to cut salaries and they also allowed a number of players to leave the club. These moves saw the club significantly reduce their player salary costs. The reductions allowed them to bring in some new players at a lesser cost while remaining within the 65% limit.

    The club has been extremely innovative in how they market themselves to the community, and that is a very positive step for the entire league however this has absolutely nothing to do with the SCP.

    Q5 – Marco: Despite the rules set by participation, why wasn’t their any legislation governing the way clubs managed there business off the field. Because 2 clubs went into administration now are now sitting pretty Premier License, and ONLY now more stronger measures are in place when the damage is done.

    There are rules in place governing how clubs run themselves off the field. Examinership is an option open to any business, regardless of which industry they are in. It is a legal corporate rescue mechanism used by companies in all industries to help them return to financial stability when their debts have become insurmountable. In the last few months Chartbusters, Sasha and the Thomas Read bar group for example have all sought the protection of the courts under examinership.

    From a football perspective, 10 points is the standard deduction given to a club entering examinership (or administration – depending on National Legislation). Darlington have just gone into administration in England and they will be hit with a 10 deduction over the coming weeks. Sturm Graz, Leeds United and Boston United have all suffered the same fate over the past few years. The Club Licensing Committee issued this standard deduction to both Cork City and Drogheda United.

    We cannot stop our clubs from doing something which the law of the land allows them to do. Despite this we are determined to stop clubs seeing examinerships as an easy option. That is why we have introduced the new sanctions, which will see far stiffer penalties for clubs who choose to go down the examinership route.

    In addition to the standard 10 point deduction, from 2009 on a further sanctioned based on the % of debts covered by the club will be levied upon them exiting examinership. A sliding scale penalty will be applied as follows;

    Code:
    Aggregate % Debts Covered 	Additional Point Deduction
    100
    90-99
    80-89
    70-79
    60-69
    50-59
    40-49
    30-39
    20-29
    10-19
    0-9 	0
    3
    6
    9
    12
    15
    18
    21
    24
    27
    30
    This will ensure that clubs who pay less face heavier sanctions. Where a club enters examinership within 70 days (period of protection granted by the court) of the end of the season the additional point deduction will apply to the next season.

    Q6 – Akearins: How can clubs who went into examerniship now recieve a Premier division license for the 2009 season?

    See answer to Q5

    Q7 – forza rovers: why did clubs that went into examerniship cork and drogs receive a Premier division license for the 2009 season?

    See answer to Q5

    Q8 – Akearins: How can clubs with debts in excess of 1million be granted a premier divison license for 2009?

    When discussing debt, it is important to ascertain the type of debt and the club’s ability to repay this debt. Not all debt is bad and debt is just one factor to consider when evaluating the financial viability of clubs.

    If a club has a long term loan (debt) for capital investment, can afford the repayment schedule and the project will lead to tangible benefits to the club in the long term then there are no issues.

    From a risk perspective a company with debts of €2m but assets valued at €20m is less risky than a company with debts of €400k but no assets. Similarly a company with debt of €500k to a single investor who has no desire to see the money repaid is less risky than a company with a €150k overdraft at its limit. A single set rule with regards to debt is not appropriate or wise.
    Last edited by A face; 16/06/2010 at 7:21 AM.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q9 – Akearins: How can the FAI decide what an appropriate budget is for a club ,if a club has sat down and put together the figures they “know” will they will be able budget for? i.e Sligo Rovers budget had to be changed 3 times so what happened that meant we had to reduce our budget after the 1st presentation another 2 times.Was it a case the FAI wanted to see how low we would go.

    Determining an appropriate budget and adhering to this budget is at all times the responsibility of the clubs directors or management committees. This year we took a more active role in the budgetary process due to the serious financial mismanagement exhibited by clubs over the previous number of years. While it is very difficult to determine what an appropriate budget is for any club given the current economic climate they must be prepared based on assumptions which are reasonable. We took a simple approach in reviewing the budgets put forward by the clubs for this season.

    Our budget evaluation initially focused on the actual income for the prior number of years. Obviously any budget that projects income well in excess of what the club actually brought in over the past number of years without any justification causes significant concerns. We look at each individual income stream in detail and determine whether or not the projections are realistic. The clubs costs including set overheads, debt repayments schedules and discretionary spend must then come in at or below these realistic income projections.

    We want all clubs to be in a position to put a strong team on the pitch but we will not allow clubs to put its future in jeopardy to do so. Sadly a significant number of budgets put forward by clubs were inappropriate and had to be returned.

    We do not set budgets for clubs though as ultimately it is the responsibility of each club to manage their own commercial affairs properly.

    Q10 – akearins: How is it that a club that recenty came out of examinership(Drogheda) are allowed a playing budget thats 2k [per week?] less than the team that finished 4th in the league [Sligo]?

    This is completely untrue and raises a number of concerns. Firstly, where a club finishes in the league has little bearing on what is an acceptable budget. While finishing 4th in the League of Ireland does allow you to budget for income from UEFA (Europa League) and Setanta Sports Cup participation, it does not automatically mean you should have a higher budget than the teams who finished below 4th.

    Secondly, as I said above, each club is responsible for their own budget. While we took a more active role in the budgetary process this year we did not ‘allow’ budgets. We refused seven budgets because they were clearly putting the future of that club in immediate danger. Where we had issues with budgets that we saw as being ‘on the edge’ we raised our concerns and informed the club that it was spending at a level that we believed was inappropriate. The final decision, however, remained with the directors and management committees of the clubs.

    Finally, this question highlights the rumour culture which is prevalent in our game. I can confirm that these numbers are way off the mark. Supporters should be careful not to treat every rumour as fact.

    Q11 – Scrufil: The licence in The League of Ireland is based on rules passed down from UEFA. What are the main differences that apply between this licence and a European licence when a team from the League of Ireland plays in European competition and is it true that if the rules applied domestically to League of Ireland teams also applied to all European teams during the 2007/2008 season then Manchester United would not have been allowed to play in the Champion’s League?

    The basic criteria are the same. Our domestic licence is based on the UEFA Club Licensing Manual Version 2.0. From a financial standpoint the SCP is the main difference. We also require clubs to submit monthly management accounts, Letters of Support, Tax Clearance Certificates and all clubs must have a 30 November year end. None of these are required under the UEFA manual.

    Manchester United would have been well under the SCP 65% last year. They had a 2007 SCP of 44% and this included all salaries and not just players. This further highlights how out of control League of Ireland clubs were in terms of salary costs. Clubs such as Manchester United can pay out significant sums on player salary costs because they receive a return on this investment. Their spend on player salaries is based on sound financial models and valuations and this is one of the key areas clubs in Ireland must begin to tackle.

    There was an idea floated in the media that clubs with debt would not be allowed to compete in UEFA competitions and this is where the Manchester United issue emerged. However, UEFA are more inclined toward adopting a SCP model similar to the one we currently operate in the League of Ireland.

    Most industries in the world are experiencing a degree of financial pressure at the moment, and football is no different. UEFA have expressed concern at the financial health of European football and they are looking at various measures to secure the financial safety of the game. Due to that fact, they have expressed considerable interest in the SCP. David Taylor, the General Secretary of UEFA, has requested information from the FAI regarding the SCP. David attended the official launch of the 2009 League of Ireland season and he spoke very favourably of measures introduced by the FAI.

    Q12 – Karl Phillips: How did Drogheda F.C. receive a premier licence this year when:

    Q12 (a) – The club have outstanding debts?


    Please refer to my answer to Q8 on debt.

    Q12 (b) – United Park does not meet the F.A.I. criteria for premier ground regulations , e.g. 1,000 covered seats, toilet facilities.

    Under Criterion INF 1.27 of the club licensing manual, a Premier Division stadium must be equipped with a minimum of 1,500 individual seats, or there must be provision in the Club Infrastructure Development Plan (CIDP) to meet this criterion within an agreed timeframe.

    United Park does not have 1,500 seats, but Drogheda United’s CIDP includes the construction of a new stadium, which would meet this criterion. The new stadium is currently under appeal to An Bord Pleanala and no final decision on the project has been made. Therefore, the club is allowed to continue playing at United Park while the stadium project is ongoing.

    Q12 (c) – Did the F.A.I. assist Drogheda F.C. by providing money to pay players and/or staff wages???

    No. The FAI has not and will not provide financial assistance to clubs to fund their operational costs. Paying wages is an operational cost and I can confirm that we did not provide money to Drogheda United to cover any player or staff wages.

    Q13 – pineapple stu: Derry were given a licence, but within a week, have two clubs taking them to court over outstanding transfer fees. How was this allowed to happen?

    This is untrue. Nobody has taken Derry City to court over outstanding transfer fees. Derry City had no overdue payables to clubs for transfer fees at 30 November 2008. That is the date used for Licensing.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q14 – pineapple stu: How do you respond to suggestions that licencing is a farce?

    Licensing has done more good for the domestic game than any other single change made to the League of Ireland over the past five years. The problem is that, for some, Licensing was meant to be a panacea for all the ills of the game in this country. This was never going to be the case.

    Licensing puts in place basic standards which clubs must strive to achieve to establish themselves as professional clubs and businesses in the football industry. It is easy for people on the outside to focus on the negative and forget the positives.

    Sean Prunty may never play professional football again but he credits licensing with saving his life. Look around the country at the improvements made to the stadiums we watch the games in or the fact that club managers must reach basic standards of competence in coaching. In 2004 only 11 managers had a UEFA ‘A’ or ‘B’ badge now we have 9 Pro Licence managers and another 11 managers who have reached UEFA ‘A’ or ‘B’ level.

    Two years ago all clubs had different financial year ends and they all reported their financial information under completely different reporting frameworks. Now, I can tell clubs exactly where they stand with regards to their actual or budgeted gate receipts or spend on advertising or player salary costs against the League or division or top 4 averages.

    Players know that when they keep the non payment of wages within the Licensing framework the matter will be taken care of.

    So many of the improvements brought about through the Licensing go unnoticed or are unappreciated.

    First aid rooms, ground emergency plans, stadium certificates, child welfare officers, approved youth development programmes and proper public liability insurance are paid little attention by the public but they are all vital to the proper running of a football club. It took the introduction of licensing for clubs to take these matters seriously. Some things cannot be changed overnight but the overriding principle of continued improvement within Licensing is strong and more importantly it is right.

    The Licensing Department have set high standards because they believe, as we all do, that the players, supporters and all those individuals involved in League of Ireland football deserve the best. The integrity and future of the game must be the overriding principle by which we govern the sport. Licensing is there to capture an image of a club at a particular date and to ensure that clubs understand the basic standards by which clubs around the world are judged.

    Our process is independently audited by SGS and by UEFA themselves and it is considered to be one of the best run and professional Licensing processes in European football. The Licensing process has even been challenged in the High Court by Limerick FC and the outcome was an unequivocal stamp of approval for the process. Justice Clarke was very complimentary of the manner in which the FAI implemented the Licensing process. The Licensing Department continues to implement changes on a yearly basis to improve the processes and the various criteria taking into account the opinions of the clubs, the various experts who audit the club submissions and UEFA. While there is no quick fix to any problem the landscape of the League of Ireland would be considerably worse off were it not for the Licensing process.

    Q15 – passerby: do you think licensing and perticurly financials have retained and credibility after this years licensing decisions and when exactly will licensing regulations kick in

    Not only has it retained its credibility, some aspects of our system are so highly regarded that UEFA and other Associations would like to copy our approach. I believe there is a significant expectancy gap between what Licensing is actually meant to do and what the media and general public believes it is meant to do. Licensing paints a picture at a particular point in time. It does not stop clubs from being mismanaged. UEFA Club Licensing was not able to stop Leeds United from imploding or Sturm Graz becoming bankrupt. Clubs must take responsibility for their own actions and for ensuring that they run their business in a sustainable and appropriate manner.

    Q16 – pineapple stu: Why did the FAI note they could [not] assist Cobh financially to get a licence, but then said they were obliged to help Drogheda to get a licence, spending money to improve the ground? The fact that the FAI own United Park doesn’t oblige them to improve it.

    The Board of the FAI decided not to approve the purchase of St Coleman’s Park from Cobh Ramblers however that had no bearing on the decision of the independent Licensing Committee. Cobh Ramblers were refused a Premier Division and First Division license because they failed to submit any financial documentation whatsoever. It is that simple. All other clubs submitted the necessary documentation, as required under the process.

    We have an obligation, as owners and landlords of United Park, to ensure it meets the standards laid down for stadia in this country.

    Q17 – bellavistaman: Why did the fai give Drogheda United funds, only a week after stating to Cobh Ramblers that the FAI could not be seen to help out clubs before the licences came out?)

    Please refer to my answer to Q 12 C and Q 16.

    Q18 – Pcplod: When will Cobh Ramblers be recieving help from the F.A.I and why were we not granted a license when others who did wrong got theirs and do you not see this as having double standards?

    There are no double standards here. Cobh Ramblers did not submit any of the ‘A’ criteria financial documentation and as such they were refused a license. All other clubs submitted the necessary documentation. This isn’t about clubs doing wrong. The criteria which must be adhered to under Club Licensing are in the public domain and clubs either meet the criteria or they do not. Cobh Ramblers did not.

    With regards to assistance, we have met with Cobh Ramblers on a number of occasions going back over 12 months to help the club get a handle on its financial situation. Certain recommendations were made to the club which the club choose not to follow as is their prerogative. We will continue to work with the club to try and help them regain sound financial footing.

    Q19 – Jebus: What steps are being introduced to ensure that the financial problems that hit certain clubs last year aren’t repeated?

    The problems which the clubs faced last year were the result of financial mismanagement going back over a number of years. In much the same way as the banking crisis was not the result of decisions taken in 2009 but due to decisions taken in the prior years, our clubs faced difficulties largely due to decisions taken (or not taken) over many years. Clubs have been stretching themselves to the limit for years now and, in particular, have overspent significantly on players when the return on this investment was simply not sufficient.

    Everyone acknowledges that clubs have spent too much on players in the past number of years. This has led to an accumulation of debt and puts pressure on club’s cash flows. Overspending is the single biggest issue facing the League of Ireland, and so tackling that culture must be where our focus is targeted. The SCP was introduced last year to combat this trend and it has had a positive impact straight away.

    For this season we have introduced new rules to tackle the non-payment of player wages, transfer and loan obligations and clubs requesting players to take pay cuts and deferrals. We will have the power to issue transfer embargos on clubs who have balances outstanding to players or other clubs and to impose interest penalties on unpaid balances to other clubs. The protection of football creditors is and will remain a key tenant of our approach.

    We have also introduced the new sanctions in relation to examinerships which I outlined in my answer to Q5.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q20 – the-blue-harp: are you going to bring in a set punishment for any club that goes into examinership and other financial infractions so that clubs know exactly what the punishment is for each offense. Therefore all clubs will be treated equally and none are above the law?

    Please refer to my answers to Q5 and Q19.

    Q21 – pineapple stu: All clubs received licences last year, and several – Galway, Bray, Harps, Drogheda, Cork and Cobh to name but six – experienced severe financial problems over the season. This year, all clubs bar Cobh have received a licence. How do you see the league’s finances panning out this year?

    And

    Q22 – bellavistaman: How many more clubs do you expect to to disband between now and this time twelve months?

    The finances of the League will take another positive step forward in 2009. Last year was a very tough year from a financial perspective and served as a wake up call for a lot of clubs but I think we need to focus on what was positive about last year and examine how we can drive that forward this year. Overall losses were down by more than 50% from c€7m to under €3.5m. We need to push on now toward break even in 2009.

    Some clubs will still face financial difficulties for a number of reasons. The current economic climate means that every single euro of income will have to be worked for this year. Some clubs have still kept wages at levels we consider inappropriate despite our recommendations during the budgetary process.

    I can see a number of clubs making the decision that they cannot sustain a League of Ireland club after this year. That is not to say that these clubs will go out of business. I can see those clubs being run by management committees and on a voluntary basis reevaluating their position and making a decision similar to that made by Kilkenny City that the requirements and standards required to compete in the League of Ireland are simply too much. Clubs must find the level which is right for them.

    Q23 – pineapple stu: What will happen to clubs who overshoot the budgets set by the FAI this year?

    The FAI did not set any budgets this year. We cannot set a budget for an independent legal entity. We reviewed the budgets and validated the figures, we advised the clubs but the final decision was always up to the clubs. We sent 7 budgets from 3 clubs back because those budgets would quite simply have put the club out of business. The clubs reevaluated and agreed to make some of the changes we recommended.

    Clubs and managers signed off on their budgets and it is their responsibility to meet them.

    Q24 – A face: Will there be any resources being made available to clubs administration teams to assist and equipment them to adhere to club licensing programme. I’m on about something like a task force to come onsite when clubs are in a mess like Cork City and Drogheda United in the 2008 season or a measure similar to that.

    These resources are already available. On the financial side, I work closely with clubs to try and help them implement financial best practice policies and improve their financial reporting framework, including their corporate governance.

    The Club Licensing department works closely with clubs to ensure they understand and meet their Licensing requirements.

    We also hold seminars on all issues facing clubs, from financial workshops to transfer regulations, from facilities development to youth development, customer care, communications and community programmes. These seminars are conducted with the help of experts not only from this country but from the UK and Europe. All of this is done with the single goal of improving the structures and knowledge base within the clubs.

    As soon as a club begins to have financial difficulties I will meet with them and try and determine exactly what is causing the problem and look at what can be done to stop it from escalating. Again we can give advice but we cannot force clubs to make certain decisions.

    It does not take a task force though to tell someone that spending €1.5m-€2m on salary costs in the League of Ireland is going to cause you a financial problem.

    Q25 – Maribor: Given the lack of credibility of licensing amongst supporters (and it appears club) do you feel it will be necessary for a team to experience a serious punishment to establish this credibility?

    Cobh Ramblers have been relegated from senior football. St. Patrick’s Athletic received a €15k fine. Drogheda United and Cork City were hit with ten point deductions. Longford Town and Shamrock Rovers have also been hit by point deductions in recent years, Shelbourne were relegated from the Premier Division and Limerick FC were refused a licence completely. That is a pretty long list of serious punishments. These sanctions are in line and are in some cases more severe than sanctions for similar discretions implemented around Europe.

    Q26 – Akearins: What will the punishment for the clubs to be found paying players wages(or part of in cash) under the table. (Id like to see an imediate expulsion for the remainder of the 2009 season, relegation to Div 1 starting with a 20pt deduction for 2010)

    Any Illegal payment to players is a very serious disciplinary offense and will be treated as such. We have worked hard over the past number of years to wipe this practice out of our game. The players benefit from keeping all payments legal as they can reclaim a portion of the PAYE paid when they retire. We have spoken to the PFAI on this and they will continue to emphasise the importance of keeping all payments above board.

    Q27 – John83: Do you think that the league clubs have bought into the type of financial planning you are helping implement? How difficult is it for a club to undermine your oversight of their finances, e.g. cash payments to players?

    The progressive clubs have bought into what we are trying to achieve. Some of the clubs, in particular those with full time CEO’s and General Managers, are forward thinking and proactive in trying to develop a well run, professional business with football at its core. All clubs face a very difficult challenge in managing the expectations of fans and committees who want instant success on the pitch and implementing the long terms strategic planning which is necessary to ensure the future of the club and help build the foundations on which a consistently strong and successful club can be built.

    Some clubs, in particular those without a full time CEO/GM, are being left behind a little and this is becoming a bigger issue each and every year. League of Ireland football is a multi million Euro business. I do not believe a League of Ireland club with ambitions to build a sustainable professional club can do this with the backing of volunteers alone. It is difficult to comprehend that clubs are willing to spend millions of Euros on player wages each year but won’t spend €70k on a CEO or GM. There are not many companies with turnover of €1m+ a year working without a full time CEO.

    I am happy that we have strong financial regulations in place and that we have moved to adapt our regulations to the new challenges facing us. We are looked upon throughout Europe as being ahead of the game so to speak. David Taylor of UEFA has requested a briefing on the SCP as they look to bring in a similar measure across Europe. We presented the SCP to a number of other Associations at a meeting in Slovenia at the request of UEFA.

    We have introduced the new sanctions for clubs entering examinerships and new rules governing failure to pay players and transfer and loan obligations and we will continue to adapt over the coming years. We have worked hard to eradicate the trend of illegal payments to players and I believe our efforts are working.

    We have also increased the level of information which must be submitted by the clubs to the FAI during the season.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q28 – (brianw82 In the current pre-season, we have seen examples of ‘questionable’ budgets being passed. Many LOI fans fear yet more financial scandals this year. Do you think there is a fundamental change required at the top level of Irish football? As in, do you think there is still too much of a “money in an envelope”, or “old boys’ club” attitude to ever run a truly professional league? Do you think it’s more important that this attitude is replaced, and younger CEOs come in, like Richie Sadlier at Pats?)

    We would definitely like to see more full time CEOs and GMs at clubs. As I mentioned earlier the League of Ireland is a multi million euro business and it must be treated as such. Running a senior football club in the League of Ireland is a full time job and some clubs do not currently have the necessary expertise or the time to run a club at this level in a sustainable manner. We at the FAI will continue to do everything we can to encourage a more professional approach.

    In terms of supporters fearing further financial problems at clubs in 2009, I think supporters have a valuable role to play in ensuring this does not happen. Fans of clubs who are being run recklessly need to speak up and hold their management committees to account. These are your clubs, and you should not let anybody put the future of the club at risk.

    Please also refer to my answer to Q 11 RE budgets.

    Q29 – John83: Have you and the relevent FAI committees had to compromise in terms of compliance, i.e. let some things slide for a year because a club is in too bad a shape to fully comply, but is correcting itself?

    No, the criteria are set, they are in the public domain and the independent Licensing Committee applies them consistently.

    Section 5.3.3 of the manual does allow clubs to request an extension based on third party delays and clubs have availed of this over the years.

    Q30 – Maribor: Do you believe that clubs are inflating off field revenue in order to give a higher level on which to basis their 65% wage cap?

    No, I do not think that this is happening. This was obviously one of the major concerns we had when introducing the SCP but I am happy that it is not happening in our industry. This is substantiated by the fact that contract values are going down. In the current climate if contract values were stable or increasing then you would question the validity of the income levels but contract values are moving as would be expected.

    Q31 – A face: How do you value supporters trusts and what role can they play for LOI clubs?

    Supporters have a really important role to play in League of Ireland clubs, and I would encourage fans to get involved with clubs to help with areas such as promotion, marketing, fundraising etc. We have seen at clubs such as Shamrock Rovers how important the fanbase can be in revitalising clubs.

    For a formal grouping such as a Supporters Trust, there must be a clearly defined role for the trust within the club structure and acceptable communication links between both. When done well they can provide valuable income and communication links between clubs and their fans. Supporters Direct in the UK is a good starting point for fans looking to establish a trust.

    Q32 – John83: What do you find most frustrating about your job?

    There are issues which frustrate me, but I think that is the case with most people in their jobs. We are trying to implement a culture change in the League of Ireland, as our clubs increase their off-field professionalism. That is not an easy task, but I am totally satisfied that it is happening. I am extremely optimistic about the future of the League of Ireland.

    One issue that does frustrate me, however, is reading inaccurate claims about the league. Too many rumours are reported as fact, and too many minor issues are blown out of proportion. Unfortunately, people who should know better, are sometimes too eager to have a dig at our league. That is frustrating for me, just as it is frustrating for everybody, at the FAI and at the clubs, working so hard to bring the league forward.

    Q33 – the-blue-harp have you any suggestions how league of ireland clubs can raise attendances at games and in turn raise their incomes?

    A change in priority at clubs is crucial. It all boils down to what we consider to be the three most crucial areas for clubs to target at present. Youth development, Infrastructural improvements and Community programs. At present some clubs are totally focused on their first team squad and that has to change.

    Simple upgrading of facilities would attract new spectators especially work groups, females and families. Young local players would bring additional local press coverage and local pride to teams while investment in the community creates a bond with new fans which do not fade.

    Turning the game into an event is also important. The local population need to know that their team is playing and that they are going to be entertained before during and after the 90 minutes. This takes communication though and requires a professional approach off the pitch. We have seen clubs release their co funded CPO yet still bring in another player. This highlights misplaced priorities and this attitude must change.

    I am delighted to say though that a number of clubs are changing and at a swift pace. Some clubs are really putting a lot of effort into creating a vibrant and community focused ‘club’ rather than the ‘team’ that clubs focused on in the past.

    Q34 – the-blue-harp do you think the fai should be pushing it more to national newspapers and the media to get the league of ireland priorty in mindset of irish football fans (credit due for mns) more like this needs to be done?

    MNS was without doubt the highlight of 2008 from a commercial perspective. The FAI gave up €4m in TV senior international rights income to ensure that League of Ireland football had a prime time one hour slot on TV and I think that shows the commitment we have to ensuring there is proper coverage of the League. We have brought in The Star as a top tier Official Partner of the League and Newstalk as the Official media partner of the League. We will continue to put the League of Ireland forward as the fantastic product that it is but for this to be effective we need everyone moving in the right direction. Clubs claiming they are going out of business in 3 weeks or claiming that they need a massive cash injection in the next 3 weeks has a considerable negative impact on the credibility of the League. We (the FAI and the clubs) need to continue to accentuate the positives and promote our League.

    Q35 – the-blue-harp do you find, as an fai representative, that RTE are suppourtive or make the Fai’s life unreasonably hard in broadcasting League of Ireland football and would rather spend money on showing Premier League football in England?

    RTE are supportive there is no doubt about that but I am never happy with what we have and I always want more coverage for the League. The premiership in England is a global product though and we have to admit that. That said we need continue doing everything we can to ensure that RTE have to show more League of Ireland football.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q36 – CelticTiger Will the leagues debt of 3.5million be fully cleared this year according to Fran Gavin?

    There is confusion here with regards to Fran’s comments. The League of Ireland clubs lost a combined c€7m in 2007. This year with the help of the SCP the combined losses of the 22 League clubs are less than €3.5m and this is what Fran was alluding to (note that losses and debt are not the same thing) Our aim is to continue this trend which would see the 22 clubs move toward breakeven as a group in 2009. The operational debt of the League clubs can only be aggressively tackled when clubs are at breakeven while implementing a debt reduction strategy. Clubs will continue to have debt and that is acceptable so long as it is controlled capital investment debt which clubs can manage as part of an overall corporate strategy.

    Q37 – CelticTiger Do you think clubs should follow Derry in an opening of a social club?

    Much like Supporters Trust I believe a social club could be a valuable addition to any club provided it is set up and run correctly. I know that Derry city have put a lot of time and effort into ensuring that their social club is run efficiently and that it will provide a home for supporters during the week while improving the clubs financial situation. Any means by which clubs can promote their activities and drive revenues is a positive in my mind.

    Q38 – CelticTiger Are there any other sources of income you would suggest to clubs?

    Please refer to my answer to Q33.

    Q39 – CelticTiger Do you agree with me in saying that the Irish Domestic Professional league should be one of the Fai’s main priorities?

    The League of Ireland is one of the FAI’s main priorities. We would not have taken over the running of the league or committed the resources we have if it was not a priority.

    Q40 – CelticTiger Do you think the package of 5million that the Fai put into the league is enough?,Do you think it could be more?

    That is €5m on top of the €4m the FAI have given back in senior International rights income for MNS. It is a massive investment in the League from a financial point of view. Bear in mind as well that many grassroots clubs disapprove of what they see as excessive amounts being given to the League from senior international revenues. Some of my earlier answers really targeted this question in another way specifically the importance of clubs investing the funds in appropriate areas.

    Q41 – CelticTiger What is your opinion on the current structure of the league?Do you think we should change it?

    The current structure lends itself to a concentration of the top talent in a smaller number of clubs which improves the standard of those teams. This should help those teams continue to improve the playing standard in this country and also allow clubs to enhance their European performances which have been excellent over the past few years. Our aim is to ensure that we have in place a structured football pyramid system which will allow for a clear player pathway through to the top level of football. It is more important however right now to focus on ensuring that clubs are financially stable and that they themselves are appropriately structured. As I said earlier some clubs may decide that they can no longer cope with the requirements of running a senior club in Ireland and as a result a change in the structure may be necessary. We will continue to monitor the structure of the League to ensure at all times that the set up is the most appropriate one for the development of both the player and the League as a whole.

    Q42 – CelticTiger If we were to change it,would you agree with a National League followed by 2 Regional leagues North and South?

    I think there is a lot or merit to this structure and it is a model similar to that used in other Leagues around Europe. Another important aspect to consider is the integration between the underage league and the senior league. Any changes to the structure of the League have to be made with the goal of enhancing the League as a whole and with allowing young players to develop in the best manner possible. The structure has to allow the best young players to play with the best and against the best on a regular basis to aid their development. These players must have a clear pathway to the top level of professional football.

    Q43 – Martinho II consider you are a drogheda utd fan padraig does your role not carry a conflict of interest??


    I think everybody who is passionate about the League supports or supported one team or another at some point in their life. I consider it a privilege to be involved in the League and I would never put my position in jeopardy. My main consideration is at all times the advancement of the League of Ireland and to treat all clubs equally.

    Q44 – Longfordian This thread will go the same way of the Bob Breen one of a couple of years back I’ll bet in that he’ll either be “too busy” to respond or else he won’t answer anything in any way controversial due to “confidentiality”. I realise there’s no question here but I don’t see any other thread discussing it. I’ve already asked the question I’d like answered.

    Hope I’m proving you wrong!
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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    Q45 – bellavistaman Do ye have any plans to help out(not even financial, maybe just ideas on how to raise funds) clubs like Cobh Ramblers and others if they follow suit?

    Please refer to my answers to Q18 and Q33.

    Q46 – bellavistaman And finally, is their anybody in the F.A.I who actually earns their wages??

    UEFA Cup Final (Europa League Final), Emerging Talent Programme, Aviva Stadium, Commercial portfolio trebled in five years, 64 new development officers nationally, MNS, substantial increase in prize money for the league since we took over, 26% this year alone. Need I go on, because I can!

    Q47 – Mr Maroon Do you think the league’s future lies in amateur team such as Wexford Youths and Mervue? In you opinion, are full time clubs financially sustainable in the long term?

    I have complete respect for what these clubs are doing but I firmly believe that a full time professional league is sustainable in this country.

    Q48 – ShnaeGuevara715 If/when do you foresee League of Ireland clubs breaking even or even becoming profitable?)

    Based on 2008 audited financial statements, six clubs made a profit, three of whom did so without financing from investors. A further five clubs lost less than €50k. This season will see the majority of clubs operating at break even or better.

    Q49 – Macy Can you access the Bob Breen list of questions? Any chance you can answer them?

    That was before my time. I wouldn’t be in a position to comment.

    Q50 – Maribor Did you ever work on the Anglo audit when you were in E&Y? :-)

    No, I was in the Industrial and Commercial division and not the Financial Services division J

    Q51 (a) – HarpoJoyce Should fans try to second [guess] the decision of High Court Judges?

    No. Judges hand down the decisions and we must accept those decisions. Clubs are bound by the laws of the land like any other company.

    Q51 (b) – After appeal, should fans try to second guess the decision of Supreme Court judges?

    No.

    Q51 (c) – What advice do you have for football supporters who attempt to predict the outcome of cases involving football clubs in the Civil Courts?

    Focus on the football.

    Q52 – HarpoJoyce What is your opinion of the contradictory responses by some LoI supporters to the outcome of recent examinership decisions? Where the outcome for Shamrock Rovers in 2005 was considered a triumph for the club and the LoI but the outcome in favour of Cork City and Drogheda Utd. was considered a backward step by some fans.

    The contradictory reactions were expected. As with most things involving sport, people’s reactions depend on their perspective and timing. By 2008 supporters had had enough of clubs putting their future in jeopardy through overspending. Most supporters were clearly upset with last years examinership cases because they saw two teams gain a significant competitive advantage by spending vast sums of money on players and then simply writing off significant debt. Last years cases also brought a large amount of negativity onto the whole league and as such the reaction of other clubs supporters was understandable.

    Q53 – John83 What’s the approximate total debt of league clubs at the moment? How does it compare with the total this time last year, accounting separately for debt written off by the examinership processes Cork and Drogheda underwent?

    I cannot realise this information just yet but we have asked all clubs to waive their right to confidentiality with regards to financial matters. This will enable us to produce and publish a comprehensive report on the finances of the League of Ireland. This will include benchmarking our league against competitor leagues round Europe and will include an analysis of year to year movement for all financial categories under which clubs report.

    Q54 – Bald Student – What role had you in overseeing last years league and club finances? How would you rate your own performance and the performance of the FAI as a whole in this area?

    I have already gone into great detail with regards to my own role. Our performance will be best measured at the end of the five years for which we have an agreement to run the League and the progression we have made against the targets we set for that five year period. The financial issues which faced the League of Ireland cannot be solved over night but I am confident that we are going in the right direction.

    Q55 – SMorgan – As part of the Licensing process did anybody from the FAI or the Licensing Committee actual measure the length and width of the United Park pitch to ensure that it conforms to the minimum requirement?

    Yes, all pitches are measured.
    The SFAI are the governing body for grassroots football in Ireland, not the FAI. Its success or the lack of is all down to them.

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