A spectacular reversal of fortune
Published 06/01/2013 | 17:00
There is disquiet in Parnells over high spending levels at the club, says Dermot Crowe
FIVE years ago Parnells GAA club acquired €22m in a dream land sale near Dublin Airport and promised to replace it with a modern facility in the heart of its natural catchment area of Coolock. But while an impressive sports and leisure complex opened there last May, it didn't include a proposed €1m sports hall – the money simply ran out. Borrowings or grants may now be needed to see that the club honours its contractual obligations.
The club has also been suffering major losses because of running costs, even before the new complex opened its doors – €3m in accumulated losses over the last four years. The club's level of spending has some members worried about its current and future financial stability.
Half of the 2008 windfall gleaned from the sale of former playing pitches at Collinstown went on the purchase of land at Chanel College, a secondary school in Coolock. The remainder of the €22m was meant to finance state-of-the-art facilities being developed on the new site, including the sports hall and a ball wall that has also not been completed.
The complex, housing a gym, bar and restaurant and function rooms, and three full-size pitches, two of them all-weather, is still impressive. But while planning was secured for the sports hall, and the foundation laid, work has stalled with the club admitting there is no longer sufficient cash available to build it. This could leave the club open to being sued for breach of contract, a concern raised at recent agms.
Annual accounts also show that the cost of running the club is colossal. All of this spending predates the new complex opening last year as the last available accounts are for 2011. An annual expenditure bill of roughly €1.2m equates to a staggering €3,250 a day. Some concerned club members, including a former chairman, have attempted to raise these issues but they are in the minority and the policy of heavy spending has continued.
As a sample, included among the expenses for 2010 were €79,807 on juvenile teams and €87,000 on medical items. Travel and subsistence cost €90,000, with motor expenses an additional €40,000. Coaching cost €79,000 and 'fees/training teams' reached €51,650. The bill for football and hurling equipment came to €152,848. Printing and postage cost €38,641.
Compared to other clubs in Dublin, the costs are literally in a league of their own. One of the biggest clubs in Dublin, for example, comfortably in the top three, reported annual expenditure of €700,000, between playing and administrative costs. Yearly losses in Parnells from 2008 to 2011 averaged around €780,000. Another club on the northside, with almost 60 teams, has annual costs of around €250,000, with many teams largely self-sufficient. Another with similar team numbers reported running costs of around €130,000. One in the west side of the city fielding in the region of 60 teams cost around €360,000 to run last year.
Parnells' new complex, in the club's natural heartland in Coolock, is being promoted in brochures as The Chanel, a leisure and hospitality venue. Since opening, the bar and all-weather facilities are raising much-needed finance to offset costs but some feel the current level of spending is unsustainable.
A report by an auditor at the end of 2010 did not see sufficient funds in place to build the sports hall or a medical centre which was also part of the longer-term development plan. The €1m needed for the sports hall was, the auditor declared, not there. Bearing in mind the €22m windfall and interest that would have accrued, this is a bone of contention with some members although there has been no mutiny at executive level. The auditor also found that explanations and assurances given by club directors were not sufficient for him not to qualify his report.
Turnover for 2010 was €680,000, with gross profit of €378,000 but with an administrative bill of almost €1.2m, the loss for the club over the year was €820,000. A sum of €68,000 was paid to directors, with staff wages accounting for €251,000.
"The accounts for 2011 were more or less the same as 2010," said a concerned member. "The auditor stated in his report to the members in 2010 that in his opinion he didn't believe the club had the resources to fund the building of the hall, which they are contractually obliged to build. He based this opinion on the information he received from the (club) directors. In other words, the information received from the directors did not satisfy him that they would have the money to build the hall, nor the medical centre at a later date."
He said the club's identity was being lost in a massive commercial venture needed to support the spiralling costs. Instead of securing the financial future of the club, he added, its present and future financial stability is at risk owing to the high running costs and contract obligation for the sports hall.
He also has reservations about a playing pitch in the complex that has, according to the complex's official brochure, been "created to FIFA world standards". The facility is regularly used by local soccer clubs in competition with the GAA for players, although it is another form of revenue for the club.
Those disillusioned by the club's financial decisions wonder how Parnells can continue in business when it is losing as much as €820,000 a year. They also ask: how are these over-spends being financed?
In a report for the year ending 2011, club directors appeared resigned to facing debt in order to build the sports hall unless they receive grant assistance. They regret the absence of further GAA grants or lotto assistance to help build the hall. "The club has gone through tremendous change in the past four years following the sale of the lands at Collinstown which of itself brings risk and uncertainties," the report states. "Shortfall in subsidies, ie lotto and GAA grants, have resulted in postponement of construction of sports hall until funding is available either through income generated from club activities or grants or borrowing to ensure completion is in line with contractual and planning obligations.
"While the directors are confident that funding will be secured as outlined above for this purpose or through a combination of deposit interest, VAT reclaim, grants and loans, the risk side of the transaction means that the club which had amassed a sum of €22m from the sale of its lands could reverse this financial situation resulting in the club taking on debt and having no reserves remaining from these funds.
"However, the directors expect that the significant increase in membership achieved in recent years together with the substantial outreach work undertaken in the local schools and community will generate significantly increased revenue in the new development to adequately fund borrowing if required and growth of club activities into the future."
It was also noted that the club was under a Revenue audit for wages and VAT for 2010 and 2011 and this raised "uncertainties over the partial recovery of the VAT element of the building of new development costs".
There are also concerns about the hard commercial emphasis to the new development, noting how its primary name is The Chanel Leisure and Hospitality Venue, with the 'Home of Parnells' given less visual emphasis on the official brochure.
Parnells has earned a reputation for high ambition on the field as well with an All-Ireland club title cited as a goal. But despite a stream of incoming inter-county stars from the country their performances on the field have been underwhelming and their underage investment has been slow to reap rewards.
Among the inter-county players now wearing the green and black who have come from other counties are Conor Mortimer, Colm Begley, Aindreas Doyle, Rory Quinlivan, Johnny Murtagh, MJ Tierney, Andrew Shore and Darren Rooney. Some are employed as coaches. Mortimer is employed as gym manager.
Two thirds of the team that fielded in the last championship outing of 2012 against Ballymun Kickhams were not from the area and the majority of those were from outside Dublin.
Frustrated that his concerns were not being addressed, former club chairman John Byrne wrote to ex-GAA president Christy Cooney in April 2011 for "guidance and support on a very serious issue".
He added that the club had been "overly ambitious in their building of the new clubhouse to the extent that the very future of the club is now at stake".
To illustrate the shift in spending patterns, in 2007 the club cost €340,000 to run, leaving it with losses of around €85,000. In 2008, expenses had climbed to €945,000. Some of those figures would look startling on a county board's annual set of accounts, let alone a club's.
Parnells last won a senior football championship in 1988 and success always comes at a price. The question is: have Parnells set the price too high?
'Expenses have risen but at affordable levels'
On Friday afternoon, the Parnells club made the following statement detailing the club's sporting and community activities, which we are happy to publish in full:
"As a fully registered GAA club with over 3,500 members, Parnell's operates under a range of regulations and guidelines which ensures transparency and probity in all its activities. All club officials and committees are democratically elected by the members and we believe the appropriate forum for dealing with specific issues is for members to contact the relevant official or at the Agm.
"Notwithstanding that, the club would make some general points; over the last four years Parnell's has gone from being a club with extremely limited facilities, to being one of the very best equipped in the country.
"This was achieved through the extremely prudent management of the club's resources and the investment of €21m in a state-of-the-art sports complex and clubhouse in Coolock village.
"The club achieved this new development without any Government or local Authority funding.
Range of club activities:
* A detailed 5 year Strategic Plan was put in place in 2007 to focus on 3 main areas; Juvenile development, Adult's sports development and Club Facilities.
* In 2007 the club fielded 4 adult teams --in 2012 it fielded 11 teams. The number of adult playing members has gone from 100 to over 275
* In 2007 the club fielded 12 juvenile teams and now fields 32 teams. The number of juvenile members has gone from 240 to over 650.
* The club now fields ladies football and camogie teams which it didn't previously.
* As part of that plan and the growth in members the Club has had to greatly expand its coaching staff. Expenses have naturally risen in line with this expansion but at affordable and sustainable levels.
* The Club plans to build a Sports Hall and Hurling Wall in the near future and has applied for a Capital sports grant from the Government.
* Community and promoting our games is the heart of the GAA and Parnells has a proud tradition in both.
* The enhanced catering-function facilities at the Club has enabled it to provide a much improved service to the community. The model we have developed ensures that all profits generated from this activity is ploughed back into supporting coaching and the club's teams
"Parnells provides a focal point for the Artane, Coolock and Kilmore communities but also a warm welcome to new members from outside the community who have moved to the area for work, through marriage or immigration. Whether it is playing, coaching or mentoring all are most welcome to play their part in Parnell's ongoing development and growth. Such members have been welcomed and integrated fully within the Club. They have served the Club, our community and the GAA with distinction. Seán Kelly, a Kerryman who was the GAA President, played with Parnells during his time in Dublin.
"When Parnells won its County and Provincial Titles in the 1980s the Senior Team was managed by Gerry Brady, a Monaghan man, and the team included natives of Monaghan, Galway and Limerick."
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