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Thread: Cash injection for Cork City

  1. #41
    First Team Nah Nah Nah Nah's Avatar
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    This is crazy. Where was all the money wasted? (Well apart from on the duds ye took off us with a couple of notable exceptions)

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    Reserves Breifne's Avatar
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    Quote Originally Posted by Mr A View Post
    That's frightening. How did it go so wrong so quickly?!?
    A perfect example of how chasing the European dream isnít a viable course of action for League clubs without deep pockets, benefactors or actually reaching a group stage.

    But then I suppose there was no warning signs that it might be a bad idea, itís not like it has happened before in the last decade or two, unless you count Cork, Drogheda, Derry, Shelbourne, Limerick FC, Limerick 37, Limerick City, Shamrock Rovers, Bray, Sporting Fingal, Dublin City, Dundalk, Waterford, Athlone, Bohs, Kildare County or a few other clubs who went under or were very close to it with serious financial issues.

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  4. #43
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    To summarise - we had a very difficult year last year. We budgeted for much larger crowds than we eventually got. I can tell you that when the budget was proposed the AGM was full of very angry people last year but the budget was eventually passed. Then on top of that there was the VAT issues that were in the papers in October/November.

    We looked at restructuring debt and agreeing a repayment schedule with the revenue. I'm not going to get into detail, it would be wrong for me to share specifics, but the mood at Revnue and Banks changed over the winter. Its reasonable to assume the situation with the FAI (Shane Ross saying the FAI could go away), and Limerick folding had a knock on effect. It also seems that the licensing was far more strict than in previous years surrounding non football/revenue debts.

    We weren't the only club who were denied a license originally. I think there were 5 in total? I don't know what the situations were for each of those clubs, or even who they were, but our problem is we don't have the ability to put in a significant amount of money at short notice. We were able to come to an agreement on a significant portion of the total debt but Revenue and FAI turned around and said you need to clear it all, and you need to clear it all today. Thats how we got so close to disappearing entirely. If Pats for example were in our situation, they have a wealthy owner who can plug the gap, same for Dundalk, Waterford and others. For the likes of us, and Sligo, being asked to produce six figure sums at short notice is virtually impossible. We should have been more cautious in the first place and not allowed ourselves to get into this position.

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  6. #44
    Seasoned Pro Nesta99's Avatar
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    I think what is a surprise to people is that it got so close to Cork folding and there being very little coverage on it until the last ditch fix. It was also speculated pretty early last season, even by fans of other clubs who werent privy to much info, that if Cork have budgeted for a tilt at the title, European qualification, and crowds hitting 4k regularly, the league psoition was going to have them badly stretched. It was a forseeable situation from the utside looking in
    Some remedial action happened when JC was sacked and Cork were trying to offload the bigger earners but could more have been done? Surely an EGM was called about the potentiall precarious finances also or were the BoM scrambling to sort things out. The revenue debt may have been unexpectedly called in but that debt was there 18 months before a 3 figure sum was demanded. If a payment plan had been put in place say a year earlier, the Revenue couldnt have rolled up demanding a lump sum suddenly. It seems plausible that the Revenue got ansty 'cause of the length of time that the tax bill was outstanding and then compounded by the circumstances at the FAI and even Limerick. Either way the BoM seemed to be asleep at the wheell!

  7. #45
    The Cheeto God Real ale Madrid's Avatar
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    The rumor is - and this was not mentioned at the meeting - there were 5 other PREMIER DIVISION LOI clubs who found themselves in exactly the same position as us last week. ( i.e. had initial problems securing a licence) But we are the only one that it has been made public so far. ( Just to clarify - I have no proof of this.- this is just a rumour )

    Edit - sorry mentioned by El-P above also.
    Last edited by Real ale Madrid; 24/02/2020 at 11:52 AM.
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    i heard that too but i think some of the issues were just sloppiness or omissions rather than major issues.
    In the past they would have been ignored

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    The Cheeto God Real ale Madrid's Avatar
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    Quote Originally Posted by sbgawa View Post
    i heard that too but i think some of the issues were just sloppiness or omissions rather than major issues.
    In the past they would have been ignored
    I heard otherwise and it was down to more fundamental issues regarding ability to service debt. Safe to say that there has been a sea change with how the licencing rules are now being enforced.
    Last edited by Real ale Madrid; 24/02/2020 at 12:05 PM.
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  11. #48
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    Quote Originally Posted by Nesta99 View Post
    I think what is a surprise to people is that it got so close to Cork folding and there being very little coverage on it until the last ditch fix. It was also speculated pretty early last season, even by fans of other clubs who werent privy to much info, that if Cork have budgeted for a tilt at the title, European qualification, and crowds hitting 4k regularly, the league psoition was going to have them badly stretched. It was a forseeable situation from the utside looking in
    Some remedial action happened when JC was sacked and Cork were trying to offload the bigger earners but could more have been done? Surely an EGM was called about the potentiall precarious finances also or were the BoM scrambling to sort things out. The revenue debt may have been unexpectedly called in but that debt was there 18 months before a 3 figure sum was demanded. If a payment plan had been put in place say a year earlier, the Revenue couldnt have rolled up demanding a lump sum suddenly. It seems plausible that the Revenue got ansty 'cause of the length of time that the tax bill was outstanding and then compounded by the circumstances at the FAI and even Limerick. Either way the BoM seemed to be asleep at the wheell!
    I can assure you that our current BOM have been extremely transparent and worked very hard to get the license in place, and to make sure we were able to play our home game against Shelbourne.

    What you are saying sounds fair in principal, but the timing meant it wasn't possible. For example the
    Revenue situation only became apparent in 2019, I don't know exactly when but we didn't know we owed them anything 18 months ago. It wasn't unpaid taxes, we were paying taxes but we were claiming tax back incorrectly. We were one of a number of sporting organisations to make the same mistake. It has never been made clear exactly what we did wrong.

    Without getting into too much detail the club were working with the revenue over the winter and believed they had agreement on a repayment schedule. It was only in the last week or so leading up to the license date that revenue made it clear that a repayment scheme would not be agreed to. This allowed very little time to solve the issue, and an EGM would not have solved anything. It would have taken time away from the board that they needed to solve the problems.

    The BOM were not asleep at the wheel, they have been fighting fires pretty much constantly since last summer at least. The club is currently financial stable thanks to our current board, but now we have to ask questions about what we do going forward.

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  13. #49
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    I would give major Kudos to whomever did the deal with Preston.
    Given how close to the precipice you were you did well to get a decent few bob off Preston before they smelt blood

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    International Prospect Martinho II's Avatar
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    If Jonathan O Brien wasnt a TD do the Cork City fans think that the financial scenario would have still happened?
    Daire Doyles red and black army

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    Seasoned Pro Nesta99's Avatar
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    Undoubtedly the current BoM earned their beans by getting things sorted. I thought there was something in an article that suggeted the issue with the Revenue dated back 18 months, I cant find it now but in fairness maybe it meant that the issue dated over 18 months and not the the club knew for 18 months if that makes sense. It's understandable that the details of finances are kept inhouse so a full picture cant really be given. It really was a perfect storm with the drop off in income and a large unexpected bill arrives in the post.

    I certainly didnt intend to sound like I was being critical if it came across like that. It's a much an interest in how things got so close and without the usual treks to court and media coverage. Someone usually leaks the info along the line. In terms of an EGM I was thinking more about the financial implications of the fall off in league performance when the original 2019 budget was set for a league challange. EP mentioned the large group of dissenting voices at the AGM when the budget was passed, the people that wanted a more conservative budget would be far more in line with the whole ethos of Foras and their concern was warrented!. It is one of the biggest issues with fan owned club models where sometimes fans are too close to the club and are overly positive when making financial decisions. If CCFC sought a tax rebate and got it then the revenue messed up too, the issue should a been identified a lot sooner and some wriggle room given.

    Dundalk FC Co-op did something similar when members were asked what level of budget should be set eg a budget that could get us promoted; this was passed without seriously looking at income and almost broke the club in the end and sent us in to a protracted tailspin. It was as if money would magically appear to cover costs. With this in mind I'd have thought that last May/June when things were going south for CCFC that a revised budget should have been put to the membership. Obviously its not easy to get rid of contracted players and staff but maybe an attempt to cut wages or a deferral of X% OF payment should have been at least proposed if it wasnt.

    I always wonder why the revenue push a business in to folding as surely it is better to play ball and get paid over a period of time instead of causing liquidation meaning no full repayment and a whole load of creditors out of pocket also. They werent to know that PNE would be so amenable so it was a stroke of luck for the taxman (and club) that there was value to add-ons in the end.
    Last edited by Nesta99; 24/02/2020 at 2:01 PM.

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    Quote Originally Posted by Martinho II View Post
    If Jonathan O Brien wasnt a TD do the Cork City fans think that the financial scenario would have still happened?
    Thats such an irrelevant question. We've had several different boards over the years. He was on the original board but he was just one of several members. Hes just the most high profile.

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  18. #53
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    Quote Originally Posted by Nesta99 View Post
    Undoubtedly the current BoM earned their beans by getting things sorted. I thought there was something in an article that suggeted the issue with the Revenue dated back 18 months, I cant find it now but in fairness maybe it meant that the issue dated over 18 months and not the the club knew for 18 months if that makes sense.
    There was effectively a misunderstanding on VAT. It came to light in 2019 but dated back to VAT paid/claimed back in previous years.

    EP mentioned the large group of dissenting voices at the AGM when the budget was passed, the people that wanted a more conservative budget would be far more in line with the whole ethos of Foras and their concern was warrented!. It is one of the biggest issues with fan owned club models where sometimes fans are too close to the club and are overly positive when making financial decisions. If CCFC sought a tax rebate and got it then the revenue messed up too, the issue should a been identified a lot sooner and some wriggle room given.
    Over the past few years we were chasing the dream, titles, Europe etc. We took our eyes off the ball, but we trusted that the board at the time were on top of things. In hindsight we should have been asking tougher questions. While many thought the budget was too ambitious in 2019 the timing of the AGM/budget means even if the membership rejected it there wasn't much we could do to reduce it (AGM is in March).

    Dundalk FC Co-op did something similar when members were asked what level of budget should be set eg a budget that could get us promoted; this was passed without seriously looking at income and almost broke the club in the end and sent us in to a protracted tailspin. It was as if money would magically appear to cover costs. With this in mind I'd have thought that last May/June when things were going south for CCFC that a revised budget should have been put to the membership. Obviously its not easy to get rid of contracted players and staff but maybe an attempt to cut wages or a deferral of X% OF payment should have been at least proposed if it wasnt.
    Our board did cut the budget mid season. Look at the starting XI/squad at the start and end of the season.
    I always wonder why the revenue push a business in to folding as surely it is better to play ball and get paid over a period of time instead of causing liquidation meaning no full repayment and a whole load of creditors out of pocket also. They werent to know that PNE would be so amenable so it was a stroke of luck for the taxman (and club) that there was value to add-ons in the end.
    I agree with this, but I guess the fact is they knew we were up against a deadline and knew we would blink first - though they pushed too hard and we would have gone bust if not for the input from Preston.
    Maybe they wanted to put out a statement and say they won't deal with LOI clubs like this anymore.

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  20. #54
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    It seems to me that the current BoM at Cork have done an excellent job, but there are serious questions about how previous boards operated. John Caulfield is far from blameless in the series of events that have taken the club close to folding

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    "Those delegates agreed with the club that they would pay €199,000 for both players' clauses - a price believe to believed to be well below what City may have reasonably expected to receive in current market conditions.

    Having secured the money for Browne and Maguire's contractual obligations, Cork then re-approached the FAI to renew their Premier Division licence, with two hours to go. The approach was refused due to concerns over their outstanding bank debts and the club re-approached Ridsdale who upped Preston's offer for the two players.

    The new offer included €450,000 for the terms regarding Browne and Maguire, as well as €150,000 for first refusal on a takeover of Cork City."

    https://www.offtheball.com/soccer/co...-update-972571

    I'm trying to get my head around this. Preston upped their initial offer, as Cork were going to go to the wall. However, if the club went to the wall the clauses would have been worthless. Upping the offer only makes sense to me if Preston already consider Cork as being their club. Am I missing something?

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    Quote Originally Posted by White Horse View Post
    "Those delegates agreed with the club that they would pay €199,000 for both players' clauses - a price believe to believed to be well below what City may have reasonably expected to receive in current market conditions.

    Having secured the money for Browne and Maguire's contractual obligations, Cork then re-approached the FAI to renew their Premier Division licence, with two hours to go. The approach was refused due to concerns over their outstanding bank debts and the club re-approached Ridsdale who upped Preston's offer for the two players.

    The new offer included €450,000 for the terms regarding Browne and Maguire, as well as €150,000 for first refusal on a takeover of Cork City."

    https://www.offtheball.com/soccer/co...-update-972571

    I'm trying to get my head around this. Preston upped their initial offer, as Cork were going to go to the wall. However, if the club went to the wall the clauses would have been worthless. Upping the offer only makes sense to me if Preston already consider Cork as being their club. Am I missing something?
    That article has addtional detail from within the room, but its incomplete. You should separate Preston and their owner Trevor Hemmings. Mr. Hemmings apparently spent a lot of his childhood in Cork, and owns Trabolgan as well as a Stud in Kanturk. He was trying to save the club.

    On top of that - the clauses would not be worthless if the club went bankrupt. They would be assets used to pay debts in liquidation. Should Browne (more likely) or Maguire be sold on in the future Preston would need to pay the agreed percentage to however owns the rights to those clauses. There was an ongoing court case relating to the Kevin Long (I think, could be another player to be honest) clause sold by CCIFL (by Tom Coughlan) several years after CCIFL went out of business.

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  25. #57
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    Quote Originally Posted by Martinho II View Post
    If Jonathan O Brien wasnt a TD do the Cork City fans think that the financial scenario would have still happened?
    Some would say JOB wasn't a TD when he was a TD!

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    I wonder is Marty trying to suggest that perhaps JOB was a little too vocal in his criticism of the FAI, JD and the board and it came back to bite Cork in the arse !! but that is just a guess. I am sure Marty can clarify ...

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    Seasoned Pro Nesta99's Avatar
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    2 hours!? Wow! Would the FAI have really pushed Cork out considering the major hassle and bad publicity. If they can grant a licence based on plans for necessary stadium criteria surely they could have granted a licence based on restructured debt managment. Might have meant relegation and tearing up contracts to go amatuer etc. It's still hard to get the head around how close it got and how it wasnt all the talk of sports media. It is a real stroke if luck that there was essentially a willing benefactor.

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    International Prospect Martinho II's Avatar
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    Quote Originally Posted by ltfc_2004 View Post
    I wonder is Marty trying to suggest that perhaps JOB was a little too vocal in his criticism of the FAI, JD and the board and it came back to bite Cork in the arse !! but that is just a guess. I am sure Marty can clarify ...
    Spot on ltfc_2004 JOB was extremely critical of the FAI runnings. He probably meant well but had no idea of what was going to happen.
    Daire Doyles red and black army

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