FAI playing for huge stakes in more ways than onea gainst Estonia
Published 08/11/2011 | 05:00
LAST Christmas was bleak in Abbotstown. FAI staff were reeling from job cuts that sent a dozen colleagues packing and pay cuts that hit everybody else. And there was no guarantee that the pain would end there.
The official line was that the association needed to run a tight ship, but there was apprehension and uncertainty about the scale of the choppy waters ahead. Morale hit rock bottom.
Consider all that and you can appreciate why the outcome of Ireland's Euro 2012 play-off against Estonia will have a significant impact on life at FAI headquarters. The €8m boost that qualification would provide would remove the prospect of another depressing winter.
If the team fails to make the finals, the immediate spotlight will fall on the €1.7m-a-year manager and the €400,000-a-year chief executive. The reality, though, is that the subsequent austerity measures would be more likely to have a deep impact on the rank and file, and a knock-on effect for the sport as a whole.
Discussion around big Irish football matches lends itself to hyperbole, but it is no exaggeration to stress that a seismic eight days lie ahead.
Let's put the figures into context.
John Delaney has responded to questions about the FAI's €50m-plus bank debt by pointing out that the centralisation of TV rights for a period of four years from 2014 onwards will bring in €10m a year to the association.
But it's important to point out that it's not an extra €10m into the coffers; instead, it's a fixed amount rather than the current arrangement, which is variable. The net profit the FAI will make from UEFA's decision to centralise TV rights money will become apparent only over time.
It's straightforward enough, however, when it comes to Euro 2012. Victory over the unseeded Estonians will bring an unexpected €8m into the FAI coffers. Sure, bonuses to players and management could run into seven figures, but the FAI have commercial arrangements which will increase in value if the team qualifies for the finals of a major tournament.
Add in the impact it would have on the TV rights and crowds for warm-up friendlies, and you're back in €8m profit territory. And the rewards for good performance at the finals are substantial, although it's probably best to tempt just one layer of fate for now.
The timing couldn't be any better. Cash flow is the key term here. A striking element of the FAI's failed strategy to sell 10-year premium-level tickets was the eagerness to get money in the bank as soon as possible. Substantial discounts were offered to customers who paid up front. Thousands of euro were written off for a short-term boost.
That's business, of course, and front-loading of payment is not uncommon. But the initial launch of the 'Vantage Club' tickets stressed that it would provide a consistent source of revenue over the decade. A different picture emerged.
Furthermore, it was optimistically predicted that the 939 existing 10-year ticket holders -- who are sitting in the best seats in the house for a quarter of the price, as they bought their packages in 2004 -- would pay the new rate from 2014 onwards.
Alas, a large number of that contingent hail from the decimated financial sector, and things are hardly getting better for them.
Still, the FAI report that premium tickets for the second leg of the Estonian game have flown off the shelves, with existing customers given the right to buy additional seats for colleagues.
It illustrates the impact that a successful team can have, and a positive run-in to 2014 could help minimise the deficit on renewal projections.
In the past 12 months, the focus has shifted to flagging general admission sales, with three rafts of price reductions and newly constructed season tickets rolled out in an attempt to halt a steady decline.
A recent remarkably detailed Sunday newspaper article went into the mechanics of the relationship between the FAI and its lenders, National Irish Bank, and the significance of ticket sales.
Part of the security for substantial bank borrowings is NIB's charge on the association's assets, which includes proceeds from ticket sales. Around home games, the FAI triggers a mechanism known as a deed of partial release that allows them a degree of freedom; they have also been engaged in 'forward hedging' -- which basically refers to raising cash on anticipated future sales.
The article revealed that the most recent 'partial release' agreement was on March 28, and related to the home leg of the play-off in addition to friendlies next February and May.
Considering that Ireland only booked a play-off place last month, it would suggest that the FAI either had a big friendly lined up as a Plan B or got very lucky.
As much as leading Abbotstown figures are keen to present a 'nothing to see here, folks' image, it is far from an ideal existence. At this summer's AGM in Clare, senior officials privately acknowledged that failure to make Euro 2012 could have grave implications.
The public's appetite for friendlies has been stretched to the limits by a plethora of dull days at the new Lansdowne Road, so a 10-month wait until the next meaningful senior international would scream trouble.
Certainly, it would spell the end for manager Giovanni Trapattoni and, even if Denis O'Brien chipped in again, the next man would have to be paid less.
Three and a half years of Trapattoni and his support staff have cost in the region of the reward for making next summer, so it would make little financial sense to offer a comparable deal without that injection.
League of Ireland clubs will wonder nervously about the impact on the already strangled levels of their prize money.
Never mind the considerably reduced €100,000 for the winners (a 60pc reduction on 2008 levels), the real blow is the meagre reward of €5,000 (an 87.5pc reduction on 2010) for teams at the other end of the Premier Division table.
In some cases, that would barely cover a list of fines over the course of a campaign.
In the bigger picture, the FAI have undoubtedly made progressive steps in recent times, such as the appointment of Wim Koevermans as a high performance director.
However, last November's cull impacted heavily on the technical department. When Packie Bonner's €250,000 contract wasn't renewed, Koevermans' importance grew.
Other senior figures have drifted away in the past 12 months. Leon Best last week explained that he called Pat Costello, who liaised with players in his role as head of the international department, to ask about his exclusion from Trapattoni's plans, only to learn that Costello no longer worked for the association.
Human resources director Stephen Driver has assumed a portion of those duties. And he's not the only key member of staff to effectively be doing more than one job.
They are testing times, born from mistakes of the past that were exacerbated -- and not caused -- by the recession.
It's a stretch to suggest that scaling the Estonia hurdle will solve all the problems but, at the very least, it would make for a happier Christmas.