Irish soccer chief tries to pull off a sales miracle at stadium of dreams
Any man with this ability to sell such expensive luxuries in these extraordinary times should be put in charge of raising new capital for the banks and then much more besides.
Delaney was in very positive mood in an interview he gave to Irish Examiner football correspondent Liam Mackey, published last Saturday. He said the FAI’s agents had managed to sell more than 1,000 tickets in the first two months and that this was in line with projections as to how quickly those tickets would be sold.
Most of the seats purchased are the most expensive ones, he insisted. The first match for which people are buying their tickets will take place in August 2010 against opposition unspecified, but “booked” and “big” according to Delaney.
The claimed ticket sales are an extraordinary achievement for all sorts of reasons, assuming of course the money has been banked or that firm, binding contracts have been signed between the buyers and seller. It has to be assumed that expressions of interest or letters of intent are not being regarded as done deals.
Whereas rugby fans know what they’ll get each year, soccer fans are dependent on getting a good draw in the World Cup or European Championship qualifiers.
While a match against England, for example, might be an attractive proposition, spending hundreds of euro to see Andorra play Ireland is hardly value for money.
Which brings us neatly to the price: these tickets are the most expensive ever to be sold in Ireland for events against unknown opposition. The Irish Rugby Football Union (IRFU) finished its sale earlier this year and sold all 10,000 of its 10-year tickets at what seemed the hefty price of €15,000 each.
Rugby tends to be more popular with the corporate set and the sale of groups of tickets to businesses must have been a large revenue generator. The tickets were sold prior to the real impact of the credit crunch becoming obvious, although there have been rumours that some purchasers might like to get their money back, if that was possible, or that they would sell onto others if allowed.
That brings us to the second reason as to why Delaney’s early apparent successes are so remarkable. Who has money to spend on things such as 10-year sports tickets now? Delaney has conceded that some organisations are expressing interest in a smaller number of tickets than they would want normally and are promising to top up their orders at a later date. But he is being optimistic if he thinks companies who say they’ll take only four or six now will be able to take 20 instead next year.
For example, if he is waiting on the banks he can forget about it. They may be spouting all sorts of guff about not needing any new capital but the reality is that a Government-sponsored rebuilding of the banking sector is about to get under way. Dishing out tickets to executives and favoured guests is not going to be allowed under a new regime, other than those already bought (which will be for the corporate boxes and premium-level seats at Croke Park for the GAA and any purchased rugby tickets). The majority of property developers, who would have been the first port of call, are no longer in a position to splash the cash.
Fortunately, Delaney has given himself two years from last September to achieve his goal (and coincidentally this period mirrors the duration of the Government’s guarantees on bank deposits and liabilities). Things could take a turn for the better towards the end of that period and he could find a sudden interest in the tickets. But already it seems the aspirations are being revised downwards.
Delaney told Mackey that while his agents are looking to achieve 80% sales, he will be comfortable if they achieve 60% of the objective. Because of the price at which the tickets have been pitched, this may be just enough to give the FAI the money it needs to finance its part of the Lansdowne Road redevelopment. But that’s probably only if it achieves those sales at the quoted prices, and not at heavy discounts. With the prices of houses, cars, shares and all other assets tumbling, it is hard to see how he can avoid this.
It is hard to blame Delaney for trying to remain positive. He is a salesman pushing an expensive product and he has to make people and companies believe they are buying something that’s highly desirable.
But the FAI’s efforts must be a worry to the IRFU and the Government. The IRFU has banked its money and the Government has committed €191m. The FAI says its financing for its portion of the project is fully in place, which suggests it has received its loans from the banks and has made its contribution to the construction costs. However, what if it fails to raise the money required from ticket sales to repay or reduce those loans? There is little doubt but that the Lansdowne Road project will be completed, even though it is a highly expensive one. Too much work has been done for it to stop now. But there could be problems after it is completed. One key to the entire thing has been the efforts to sell “naming rights” for about €60m spread over 10 years. Arsenal, for example, named their new stadium at Ashburton Grove as the Emirates Stadium, after the airline that paid for that right. But it would not have been able to do so had it remained at Highbury because that is the name everyone would have continued to call the ground.
It will be hard to persuade customers at Lansdowne Road to call it anything else, especially by a corporate name. If no one comes in to buy those rights, then the money will have to be borrowed, acting as a drain on future match income.
THE new ground will be expensive to finance on an annual basis and both of the sporting organisations who will own it will need the ground to do more than cover its financing and operating costs.
They are dependent on it generating big operating surpluses that can be invested in the development of the games. The IRFU has a big professional structure that cannot be fully funded out of income generated by the clubs. The FAI also has a big need for cash but if the financing costs become prohibitive — because debts are not paid down through ticket sales — then it could have problems.
Already the project is costing substantially more than originally stated, but this appears to be for deliberate strategic reasons — involving the introduction of more facilities for commercial reasons — than any loss of control. However, a €365m project may now cost €100m more. All the indications are that it will be a wonderful stadium. But sport in Ireland is moving into a difficult new era and ticket prices may have to drop if people are to be persuaded to go to matches in all sports. Corporate sponsorships may be completed at lower prices than they have fetched in recent years. TV broadcasters, suffering a drop in advertising income, will want to pay less for coverage rights. Tough times lie ahead for the sports we rely on to give us pleasure during these dark days.
The Last Word with Matt Cooper is broadcast on 100-102 Today FM, Monday to Friday, 4.30pm to 7pm.
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