Sunday 23 July 2017

The real cost of the Aviva Stadium

Republic of Ireland manager Giovanni Trapattoni at the official opening of the new Aviva Stadium last week. BRIAN LAWLESS / SPORTSFILE
Republic of Ireland manager Giovanni Trapattoni at the official opening of the new Aviva Stadium last week. BRIAN LAWLESS / SPORTSFILE

THERE was a time when people wondered if Lansdowne Road would ever be renovated; if Irish football could really live up to its side of the bargain to ensure that, in tandem with their rugby partners, they'd have a home for years to come.

In an ideal world, the FAI would like all the doubters to look at the magnificent new facility in Dublin 4 -- which Giovanni Trapattoni rates as one of the top three stadia in Europe -- and apologise.

They got it done alright. But at what cost? That's the real story in Irish football over the past week, and it's a theme that won't go away.

Never mind the orgasmic tributes to the infrastructure. It's the long-term implications for the game in this country that are the real worry, with the FAI's desperation to atone for the errors in financing their part of the project lying behind the sagas emanating from the proposed visits of Barcelona and Manchester United.

The regeneration of Lansdowne cost a net figure of €411m, with €191m coming from the taxpayer and the rest split between the FAI and IRFU. While the sale of naming rights and whatever reserves they had in the bank contributed, the main source of revenue to provide the rest for the associations was the sale of 10-year premium tickets.

The IRFU sold all of theirs at a flat price immediately, while the FAI deliberated released them as the recession struck and priced them above their rugby counterparts with seats ranging from €12,000 to €32,000 for a decade-long commitment. They borrowed heavily from the banks with a view to recouping the cash in the 'Vantage Club' sales, the management of which they handed over to ticket agent ISG.

It's the inability to shift those tickets - with sales understood to be little over 3,000 of the 10,000 - that has backed the association into a corner from which it is struggling to fight out from. The FAI's unconvincing attempts to recover from the mistake are causing damage in a variety of areas, which are worthy of further examination.

1 ALIENATING THE CLUBS

The FAI have angered Limerick by blocking their friendly with Barcelona and Bohemians by potentially scheduling the Manchester United visit on the same night as a Champions League visit.

League clubs have backed Limerick in seeking the details of the ever-changing clause in an agreement with a third-party company that blocks the FAI from sanctioning a friendly with an attendance in excess of 15,000. The FAI cite the Participation Agreement with the clubs, which ends next year, as the justification for their position, but the clubs are looking into a potential conflict of interest in the association's position and have sought advice from the Competition Authority.

As it happens, all 22 league clubs have to vote by Friday week, May 28, on whether to extend the Participation Agreement beyond next year. Realistically, they know the FAI is the only show in town, so they'll have to continue under the FAI's control. However, the clubs were weak and disorganised when they came under the FAI's umbrella at the end of 2006 -- now they're in a position of strength, and far wiser to the bigger picture. They will have demands that could spell trouble for some figures of authority.

2 ALIENATING THE PUBLIC

While League of Ireland grievances may pass a lot of people by, the public perception of the FAI has been weakened further by the events of the past week. All the floating consumer can see is a situation whereby the association, which is supposed to safeguard the game in this country, has prevented the visit of the most exciting club team in the world.

For the Limerick region, in particular, there is bemusement. The FAI did bring soccer internationals to Thomond last year -- friendly matches with Australia and South Africa -- but they priced them all wrong, failing to fill the stadium in the process. The sport in the area needs a boost at senior level, and Limerick FC want a few quid to develop their natural home at the Markets Field. Their current ground, Jackman Park, is in a shocking condition. And it won't get any better now.

3 AWAY GAMES? NO THANKS, WE'RE IRISH

Such is the need to provide international matches at the new stadium, you can be sure that most friendly dates will be used for home games. Already, we have the Celtic Cup with Scotland, Wales and Northern Ireland to fill the February and May dates next year and, given the need to generate as much cash as possible, the priority will be to find a game to fill the stadium whenever possible.

Never mind using friendly games as preparation for serious encounters. Now, it's all about finding the games that suit monetary needs.

4 WEAK POSITION WITH SPONSORS

The FAI's bargaining position will be weakened by their behaviour over the past seven days. Certainly, the admission that the Limerick decision is all about the money illustrates their plight. Commercial partners, current or potential, will watch on with interest.

Their long association with eircom is coming towards an end, and the FAI need to find a new partner. With no major tournament on the horizon, and the FAI in no position to refuse too many offers, achieving the full value will be a challenge.

It won't help, of course, that existing sponsors who have bought 10-year premium tickets for the stadium are entering a situation where they will sitting side by side with punters who have paid for one game in particular. To avoid the spectre of empty sections of the ground, the FAI have said they will endeavour to fill the 6,500 or so unsold premium seats on a match-by-match basis.

So, we'll have the individual who is paying about €500 a game with the same vantage point as someone who has paid in or around the region of €60. That'll keep them happy.

5 THE LEGACY OF DEBT

This is the big one, unfortunately. This ground is supposed to be the financial engine to drive the FAI's future. Alas, the handling of the premium ticket sales has applied a serious handbrake. They rejected an offer from a third party to buy all 10,000 at the beginning of the project, which would have covered the FAI's borrowing -- the agent would then have taken on the risk.

Instead, the FAI are in choppy waters. They say their commitment to the stadium is in the region of €74m, although the full picture won't really become clear until the 2009 and 2010 accounts are presented. The FAI have met their side of the bargain, in instalments from January 2009 to May 2010, through loans that the premium seats were supposed to cover.

The FAI insist that selling 6,000 tickets by the autumn is their break-even point, but they are nowhere near that after 18 months. Indeed, sales have dropped in certain weeks this year, with cancellations occurring. What's more, those who have bought tickets are generally paying by direct debit, so they've only paid a fraction upfront.

In the meantime, the FAI's interest on their loans is spiralling, and the agent's fee also has to be taken into consideration. The contract with ISG is up in September, and there is no indication yet whether it will be renewed or whether the FAI will take the project on themselves.

At the last FAI Council meeting, the unprecedented course of action was taken where the board was granted the facility for unlimited borrowing. Conservative estimates would indicate the FAI borrowed in excess of €40m to make this dream happen. No wonder they need a few big gigs.

The trickle back in the opposition direction is hardly enough to meet the costs that accompany that size of transaction. Now that's what the next generation can really look forward to.

Irish Independent

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