GUST apply for first division licence

[Charlie Darwin]

Well as a Rovers fan, you would say that...

I hope GUST are allowed in the league, and I've no axe to grind with anyone in Galway but in most cases overspending is cheating as a club.

To walk away from that, practically untouched in some cases, clearly isn't fair on clubs who have stuggled to pay their way and suffered on the field.

You use the term holding company like it isn't really a part of the club. The people in charge of running a football club made decisions for the football club, and the football club should be responsible for that. It'd be like not relegating a club because their manager made some awful decision but 'he's only an employee, he's not the club..."

Awful analaogy maybe, but I simply don't agree that the 'holding company' argument stands up

Ha, well strictly speaking the holding company survived under new ownership, but yeah the back-up option would have been to do it this way.

Do you really think they're walking away untouched though? The club is in ruins. People seem to be implying that there's some moral hazard, that clubs will look at Galway's failure and go "we should emulate that exactly!" It's just yet more proof that you can't sustain a football club on ever-expanding bank loans.

So instead of being punished they should be rewarded by getting their debts cleared?

In recent times you have Rovers, Cork, Derry, Drogs and now Galway who will likely get rewarded for not living within their means. Why should other clubs play by the rules?

Why not just fold all clubs at the end of the season, reform with a slight name change buy back history a season later build up debts and then repeat. Surely this would create the sustainable professional league that we all crave

I have a thought experiment for you.

Imagine you borrowed massively to buy a house during the boom (maybe you did, I don't know), but now you've lost your job and the house is worthless. You have two options: lose the house and owe the bank hundreds of thousands, or lose the house and declare bankruptcy. Which one is the reward? Do you think you deserve to be in a debt prison for the rest of your life?

Irish people have such bad attitudes towards failure. The GUST are trying to do a great thing and revive a football club that has made a lot of costly mistakes and has hit rock bottom. It's complete madness to suggest other clubs will look at this and want to follow them into that spiral.

[Dodge]

Do you really think they're walking away untouched though? The club is in ruins. People seem to be implying that there's some moral hazard, that clubs will look at Galway's failure and go "we should emulate that exactly!" It's just yet more proof that you can't sustain a football club on ever-expanding bank loans.

Like I said, I want GUST to get into the league and I hope they can build up

But they will be already ahead of most LOI clubs if they don't have debt to service. If they start next year with a nice sponsorship deal with supermacs, a lovely stadium in Terryland and no/vastly reduced debts to service then they'll be in good shape.

I can see why clubs struggling to repay their own debts would see that as unfair

[Spudulika]

CD, the Irish attitude towards failure is deep rooted and is evident in our bankruptcy laws. We've been conditioned through centuries of being told to keep our heads down to just survive, anyone who's having a go is watched for when they'll go belly up. As Rovers were qualifying for the EL groups there were posts on here that decried it, and just as they played their last game the Indo (admittedly not a beacon for Irishness) rubbished the achievement. How many people are waiting for Rovers to blow up and waste their money to say - see, told you they'd do it. It's not begrudgery, it's not like in Russia where you envy your neighbour so you wreck his house to make it look like yours, it's just not a mix of not wanting to see a neighbour go bust, not wanting to be left behind and also being forced to lift yourself to compete. Abroad the Irish work hard, and at home we work hard, we just are a little mental.

[gufc2000]

Like I said, I want GUST to get into the league and I hope they can build up

But they will be already ahead of most LOI clubs if they don't have debt to service. If they start next year with a nice sponsorship deal with supermacs, a lovely stadium in Terryland and no/vastly reduced debts to service then they'll be in good shape.

I can see why clubs struggling to repay their own debts would see that as unfair

That doesn't add up. It will be a long road back for any potential GUST team. We have very few assets, so the immediate focus will be to put an infrastructure in place. The budget will be considerably less than what a lot of other First Division sides will be operating on.

Much of the debt is bank debt/personally guaranteed loans. The directors personally guaranteed these loans, I don't see why GUST should be responsible for this. GUST will pay for the debt they accrued, its up to the Directors to be responsible for theirs.

[osarusan]

Do you really think they're walking away untouched though? The club is in ruins. People seem to be implying that there's some moral hazard, that clubs will look at Galway's failure and go "we should emulate that exactly!"

They're walking away with much less damage than they would have if any new holding company had to assume the debt (or portion thereof) left behind by the previous holding company if the new entity wants to assume the name and history of the old one.

My problem with this situation is that there isn't enough of a deterrent at the moment. Clubs can overspend, go broke, and re-emerge within a year as a debt-free club, especially if you don't own your ground. Nobody is saying that is a process clubs should aim for, nobody is saying it's not a bad thing, but it's not as painful as it might be.That's not fair on other clubs who are more determined, or just better at, keeping spending reasonable.

I don't think anybody has a problem with what GUST are doing - the problem lies in the ease with which a club can re-emerge debt free after overspending.

[Dodge]

Much of the debt is bank debt/personally guaranteed loans. The directors personally guaranteed these loans, I don't see why GUST should be responsible for this. GUST will pay for the debt they accrued, its up to the Directors to be responsible for theirs.

Well Galway United benefitted from those loans, so Galway United should pay them back.

[gufc2000]

Well Galway United benefitted from those loans, so Galway United should pay them back.

Well that's open to debate, unlike other clubs who went through the mill, the best we got were relegation battles, while the rest got big European nights!

[Charlie Darwin]

Like I said, I want GUST to get into the league and I hope they can build up

But they will be already ahead of most LOI clubs if they don't have debt to service. If they start next year with a nice sponsorship deal with supermacs, a lovely stadium in Terryland and no/vastly reduced debts to service then they'll be in good shape.

I can see why clubs struggling to repay their own debts would see that as unfair

Well that's the rub, and it's understandable, but at the same time I think those clubs know that their own best interests are served by continuing to service their own debts. The same supposed unfair advantage is available to them.

CD, the Irish attitude towards failure is deep rooted and is evident in our bankruptcy laws. We've been conditioned through centuries of being told to keep our heads down to just survive, anyone who's having a go is watched for when they'll go belly up. As Rovers were qualifying for the EL groups there were posts on here that decried it, and just as they played their last game the Indo (admittedly not a beacon for Irishness) rubbished the achievement. How many people are waiting for Rovers to blow up and waste their money to say - see, told you they'd do it. It's not begrudgery, it's not like in Russia where you envy your neighbour so you wreck his house to make it look like yours, it's just not a mix of not wanting to see a neighbour go bust, not wanting to be left behind and also being forced to lift yourself to compete. Abroad the Irish work hard, and at home we work hard, we just are a little mental.

I saw Daniel McDonnell of the same rag had a nice dig at the author of the other article in his wrap-up piece on Rovers' European campaign. Fair play to him, as I'm fairly sure he's a Bohs fan.

They're walking away with much less damage than they would have if any new holding company had to assume the debt (or portion thereof) left behind by the previous holding company if the new entity wants to assume the name and history of the old one.

My problem with this situation is that there isn't enough of a deterrent at the moment. Clubs can overspend, go broke, and re-emerge within a year as a debt-free club, especially if you don't own your ground. Nobody is saying that is a process clubs should aim for, nobody is saying it's not a bad thing, but it's not as painful as it might be.That's not fair on other clubs who are more determined, or just better at, keeping spending reasonable.

I don't think anybody has a problem with what GUST are doing - the problem lies in the ease with which a club can re-emerge debt free after overspending.

Strictly speaking, they are assuming a portion of the debt as they're writing off their own loans to the previous board. And I imagine they will come to some terms with local businesses who are owed money, if the new club is going to continue to deal with them. The Revenue will have to suck it, and the banks, so there is a silver lining

I think it would be a different situation if a club run by a supporters trust went bust and tried to reform in the way GUST are doing - I don't think the FAI would allow that kind of moral hazard as there wouldn't be an effective deterrent in place. For a privately-owned club, though, I think the temptation to overspend and borrow excessively will be there regardless of what rules are in place. People who own football clubs are generally a bit mad.

[Louth4sam]

I have a thought experiment for you.

Imagine you borrowed massively to buy a house during the boom (maybe you did, I don't know), but now you've lost your job and the house is worthless. You have two options: lose the house and owe the bank hundreds of thousands, or lose the house and declare bankruptcy. Which one is the reward? Do you think you deserve to be in a debt prison for the rest of your life?
.

I have a thought experiment for you.

We both go for our dream home. We can both pay the asking price but I outbid you knowing that I am gambling that I can pay for it. You buy what you can afford and get a house that is considerably smaller. Both of us are in debt but I can't afford to pay it back.

Are you really saying that you are fine with me pushing up the price of the house so you end up with a smaller one and then a few months later I decided I can't pay for it? Do I deserve to have benefited from a bigger and nicer house that I couldn't afford but you lived within your means and ended up with a smaller one?

[Louth4sam]

I don't see why GUST should be responsible for this. GUST will pay for the debt they accrued, its up to the Directors to be responsible for theirs.

I would agree with this as long as GUST are setting up a brand new club with absolutely no connection with Galway United and have no intention of having any connection in the future

[Charlie Darwin]

I have a thought experiment for you.

We both go for our dream home. We can both pay the asking price but I outbid you knowing that I am gambling that I can pay for it. You buy what you can afford and get a house that is considerably smaller. Both of us are in debt but I can't afford to pay it back.

Are you really saying that you are fine with me pushing up the price of the house so you end up with a smaller one and then a few months later I decided I can't pay for it? Do I deserve to have benefited from a bigger and nicer house that I couldn't afford but you lived within your means and ended up with a smaller one?

That's exactly how the world works though, on a larger scale. And I have a house to show for it and you're bankrupt, so yes it is fair.

[Louth4sam]

That's exactly how the world works though, on a larger scale. And I have a house to show for it and you're bankrupt, so yes it is fair.

But I'm not bankrupt. I Just change my name and claim I've just been born. I can now go and buy another house whilst you are still in debt and paying legacy house prices. I then buy my old name and life back in a years time.

This does not happen in the real world does it?

[Sean South]

Well that's open to debate, unlike other clubs who went through the mill, the best we got were relegation battles, while the rest got big European nights!

Well boo f**king hoo. That's football. So because your club wasted money and spent stupidly and got no major reward it's all ok to wipe your debts now?

[Sean South]

That's exactly how the world works though, on a larger scale. And I have a house to show for it and you're bankrupt, so yes it is fair.

But would it be fair he got to keep his big house with the debt wiped off and you still pay for yours?

[gufc2000]

Well boo f**king hoo. That's football. So because your club wasted money and spent stupidly and got no major reward it's all ok to wipe your debts now?

It was meant as a tongue in cheek comment, calm down will ya. If ya can't have a small joke now and then, something is seriously wrong.

[Eminence Grise]

My problem with this situation is that there isn't enough of a deterrent at the moment. Clubs can overspend, go broke, and re-emerge within a year as a debt-free club, especially if you don't own your ground. Nobody is saying that is a process clubs should aim for, nobody is saying it's not a bad thing, but it's not as painful as it might be.That's not fair on other clubs who are more determined, or just better at, keeping spending reasonable.

This is the nub of the argument for me.

For the last page or so, this thread is no longer just about any Galway incarnation, but the league in general (or maybe the property market!!). It’s not just too easy for clubs to reappear after a short spell in purgatory – it’s also too easy for directors who were responsible for problems in the first place to walk away. Running a club seems to be Football Manager with Real People for some directors – but you can’t wipe the slate clean by exiting the real version without saving a bad result.

When did anybody here hear of a former club director being restricted by the Director of Corporate Enforcement for running a club into the ground? OK, it won’t have the same effect on a director who is a PAYE employee, but for those who own their own businesses it would be catastrophic. Hit the fly-by-nights and the inept where it hurts them, and you’ll see a different type of leadership at clubs - one that does the job properly because failure will follow them.

Spud made a point about Irish people keeping our heads down to survive, but if a few clubs or supporters trusts put their heads above the parapet we could weed out undesirables from boards. Unfortunately, I sense a bit of ‘there but for the grace of God go I’ about this: nobody’s going to kick up a rumpus if they could be the next to suffer the repercussions.

[Dodge]

I saw Daniel McDonnell of the same rag had a nice dig at the author of the other article in his wrap-up piece on Rovers' European campaign. Fair play to him, as I'm fairly sure he's a Bohs fan.

McDonnell's a Dundalk man, and to be fair, the vast majority of the Irish media were generous in their praise for ROvers great achievments. One columnist in the indo, aside

[citybone]

So instead of being punished they should be rewarded by getting their debts cleared?

In recent times you have Rovers, Cork, Derry, Drogs and now Galway who will likely get rewarded for not living within their means. Why should other clubs play by the rules?

Why not just fold all clubs at the end of the season, reform with a slight name change buy back history a season later build up debts and then repeat. Surely this would create the sustainable professional league that we all crave

Cork and Derry went from European Football to First division as a result of their financial decisions, that is a punishment in my view. I agree its no punishment for Galway, they were in the 1st division anyway.

[Dodge]

Cork and Derry went from European Football to First division as a result of their financial decisions, that is a punishment in my view. I agree its no punishment for Galway, they were in the 1st division anyway.

So the punishment should be based on how decent your team was? That makes no sense?

Also Derry were automatically relegated for contract irregularites. Their financial woes were seperate.

[gufc2000]

Cork and Derry went from European Football to First division as a result of their financial decisions, that is a punishment in my view. I agree its no punishment for Galway, they were in the 1st division anyway.

You make it sound like what ye did was honourable.

Technically ye were relegated that year, because everyone got bunked up one place when ye were discounted.