FAI renews target to clear debt by 2020
Accounts for year-end released to delegates yesterday showed the fruits of Ireland’s revival during the Euro 2016 qualification campaign as visits by Poland, Scotland, Germany, Georgia, and Bosnia-Herzegovina during the calendar year helped bolster turnover by €8m.
Although sponsorship streams were surprisingly down during a qualification year, the overall income of €46m resulted in a surplus of €5.8m before an increased grant allocation of €2m was distributed.
Success brings with it added expectancy, too, so it shouldn’t be a shock to see the FAI’s staff costs rising steeply during 2015, although the destination of the cake slices remain unclear.
Wages and salaries shot up by a third to €11.4m, with the association insistent the extra €2.6m was attributable to “exceptional” costs.
“The exceptional costs associated with Euro 2016 qualification were accrued and accounted for in total staff costs,” explained FAI chief executive John Delaney and President Tony Fitzgerald in a note accompanying the accounts.
“Countering these costs relating to Euro 2016, revenues also increased due to the awarding of the prize fund from Uefa, between qualification and participation.”
Delaney’s controversial salary of €360,000 was untouched and Siptu last week made public their intention to seek assistance from the Workplace Relations Commission (WRC) in pursuing their claim for a restoration of the pay-cuts suffered by grassroots development officers in recent years.
Whether or not managerial duo Martin O’Neill and Roy Keane, or the players, were paid some of the outlay remains to be seen, as the FAI last night didn’t reply to queries regarding the additional cost. Perhaps delegates attending the AGM on June 30 in Clonmel, Co Tipperary will quiz the top table on the matter.
Attacking their long-standing debt mountain, however, remains the association’s biggest financial challenge and they made scant headway over 12 months in 2015.
Instead of the €51.3m owing at the end of 2014, the overall net debt a year later was €50.4m.
Carrying that volume of liability naturally impairs the ability of the association to reduce its cost base, evidenced by the fact another €5.2m spiralled into the black hole of interest payments.
That sums brings the total output associated with borrowing costs to a staggering €27m since the FAI financial ailments commenced in 2010 amid their failed premium ticketing scheme.
As debts soared above €60m in the early part of the noughties, any talk of financial crisis was retorted with the vow of clearing the pile by 2020.
That promise began to waver around the time of the first writedown in 2011, arising from Danske Bank selling the loan book to a US-based institution, Corporate Capital Trust (CCT), with the FAI adamant they could extend the deadline to facilitate further investment in the game instead.
The 2020 pledge is seemingly back on the table over the past 12 months, giving the FAI three-and-a-half years to clear the remaining €40m in loans while meeting the interest payment commitments throughout.
On that front, some solace can be taken from the terms of the latest financial rearrangement, announced on the eve of the Euros, which include a lower interest rate burden.
Still, it would seem commercial buoyancy is essential for the objective to be reached, considering the more testing route O’Neill’s side face to qualify for the Russia-hosted World Cup in 2018.
Retaining the afterglow of the Euros remains a priority to keep the cash generating through ticket revenue and, as O’Neill claims, it is vital for Ireland not to kill their prospects “before the competition starts” by suffering a couple of defeats on the road in Belgrade and Vienna before 2016 is out.
In deep contrast to last year’s star line-up, which included the much-anticipated friendly against England, only one competitive game is scheduled for Lansdowne Road in 2016, and that’s against Georgia as winter creeps in during October.
O’Neill has delivered results on the road over the past year and it appears another run is required for the momentum, both on and off the field, to linger that little bit longer.
