Crippling FAI debt hits €51.2m
Senior clubs and grassroots leagues learned yesterday when they received by post the 2014 accounts that the FAI’s debts have risen to €51.2m.
Turnover increased by a mere 4% to €38m despite 2014 being the first year of Uefa’s new centralised television deal, which guarantees the FAI €10m per annum.
Since the FAI’s turnover peaked at €45m in 2011, they’ve not only received this windfall but also a debt writedown of €11.7m in 2013 for switching lenders, €8m for reaching Euro 2012 and the infamous €5m World Cup play-off payment from Fifa — originally a loan pending the outcome of Ireland’s unsuccessful tilt at reaching the 2014 showpiece.
Interest payments on debt incurred to service their €72m portion of the Lansdowne Road redevelopment in 2010 continues, however, to act like an albatross around the FAI’s neck.
Costs alone for “bank and other charges relating principally to borrowings to support the construction of the stadium” amounted to €5.4m over the 12 months, the equivalent of €100,000 per week.
That figure brings the overall outlay on stadium costs — outside of the capital — to €22m over the last four years.
Although 2014 saw the FAI move away from an interest-only arrangement, the €1m they paid off the principle constitutes just 2% of the €44.75m debt inherited by US firm Corporate Capital Trust as part of the switchover from Danske Bank.
FAI chief executive John Delaney refused to provide a definitive answer when asked on three separate occasions by RTÉ radio presenter Hugh Cahill last July whether the interest rate had increased or decreased under the terms of the refinancing.
Still, in an interview with The Sunday Times a fortnight ago, billionaire Denis O’Brien — who pays the majority of O’Neill and Keane’s salary — said that “he (Delaney) may be paying 1 or 2% more than he was with Danske Bank but that is nothing in the scheme of things, when interest rates are so low.”
As well as increasing their bank overdraft by €1.8m to €2.6m, the governing body confirmed that €5m of its debt mountain is owed to Uefa at the end of 2014. Both the FAI and Uefa confirmed three weeks ago that this figure now stands at €8.5m.
The retained surplus for 2013 was €8.3m, primarily due to the debt writedown accrual.
In this year’s column, the figure for retained surplus sunk to €1.45m before development grants to affiliates of €1.09m were paid out, leaving a net surplus of just €360,000. Grants were down by €33,500 on the previous year.
They are not the only payouts getting hit due to the FAI’s financial problems. Prize money for a League of Ireland sector in desperate need of investment has been slashed by 80%.
With at least €8m on the table should Ireland reach France next year, the pressure on O’Neill and Keane has been magnified.
Consecutive 1-1 home draws against qualification rivals Poland and Scotland at home kept Ireland in fourth place and in grave danger of missing out of an expanded 24-nation finals they intensively lobbied to create.
Poor uptake of tickets for Ireland’s five home fixtures in 2014, only one competitive against Gibraltar, didn’t help boost turnover and a lot is riding on that aspect improving this year.
Delaney had cited the much-anticipated friendly against England earlier this month as a game the FAI could sell out “multiple times” but only 43,000 punters turned up at the Aviva Stadium to watch the end of season stalemate.
Given their next qualifier in Dublin is against Georgia on September 7, a Monday night, it is difficult to foresee a full house. In a cover sheet accompanying the accounts, Delaney and FAI President Tony Fitzgerald cautioned members that results by the senior team in their concluding Euro 2016 qualifiers will shape the financial landscape of the association.
“The association does not budget for qualification for major tournaments and we still remain in contention to do so with our games in September and October likely to influence the overall position further for 2015 and 2016,” they said.
