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New stadium worry as cash-strapped FAI reveal €16m losses

THE FAI’S financial problems have cast serious doubts over its ability to meet its commitments to the new Aviva Stadium at Lansdowne Road, following revelations that the governing body has only €1.6m in cash in the bank, down from €21.2m in the previous year.

The FAI’s 2008 accounts were lodged with the Companies Office last week and show losses of €16m last year, which has led to speculation the Association will have to borrow to fund its commitment – an estimated €74 million – for the new stadium.

The accounts do not specify the terms of when this financial commitment has to be paid, or what penalties will be incurred if any of the payment obligations are not met.

FAI chief executive John Delaney has expressed confidence that the association will sell 60% of its 10-year tickets – costing between €12,000 and €32,000 each – by the time the stadium opens in August next year, but with the slowdown in the economy sales have been slow.

In contrast, the IRFU launched their ticket scheme a year earlier than the FAI – before the recession took hold – and sold 10,000 of their individual 10-year tickets at €15,000 each very quickly; rugby’s governing body also sold the largest corporate box on a five-year lease for €850,000.

The drain on the FAI’s cash in 2008 was principally as a result of incurring operating losses of €11m and exceptional, though unspecified, costs of €5.2m, while the other factor in the FAI’s worsening cash position is the deterioration in working capital. Unpaid debts due to the FAI have increased by €3m.

Last month, at the FAI’s Annual General Meeting in Monaghan, John Delaney insisted that sales of 10-year tickets at the grassroots level were going very well but he refused to confirm how many tickets had actually been sold. He added that borrowing to cover commitments to a new stadium was normal practice.