UEFA deal puts FAI on strong footing
The importance of televsion rights in sport was underlined once again last week as UEFA confirmed plans to press ahead with what's known as centralisation in three years' time.
The headline figure in Ireland was that the new arrangement, which constitutes a massive revamp of how television rights for international football in Europe are sold, would guarantee the Football Association of Ireland €10m a year for the four years from 2014 to 2018.
UEFA, and president Michel Platini, have convinced all 53 football associations under its jurisdiction to sign up to the deal which will see each of them pool televison revenues from European Championship and World Cup qualifiers rather than cut their own individual deals, which has been the practice to now.
Platini described the move as "essential", and he also claimed that it would benefit smaller associations. "I believe in this centralisation project because it is a football project, not a commercial one," he said last week. "It is a project aimed, above all, at protecting and developing national team football. What is more, the knock-on effect will be guaranteed revenue for each association."
The new system is very much a victory for smaller football associations like the FAI who had been pushing for change in the face of considerable resistance from several of the larger countries. It means that they will no longer rely on blue-riband draws for qualifying groups to generate revenue from media rights -- something the FAI could have done with in the current campaign.
The last of the 53 football associations to sign up before UEFA's congress in Paris was the English FA. It had been fearful that it would lose out financially under the proposed new system and, during eleventh hour negotiations with UEFA officials, pushed hard for certain guarantees. It is thought that a pledge of at least €35m a year -- which would exceed their current income -- finally secured their signature.
A big issue for England too centred on the structure of their current deal, in which the FA bundled its international rights with the FA Cup. There were genuine fears that television interest in the troubled domestic competition would not be as keen once it is sold separately and has to stand on its own two feet as a marketable product.
Otherwise, the English FA's troubles are not too dissimilar to the FAI's. Both are encumbered by repayments on loans taken out to build new stadiums. Obviously, there is a vast difference in the cost of Wembley and the Aviva -- €410m versus £800m -- and in the subsequent level of debt, but equally there is an enormous difference too in the earning potential of the two associations.
In the aftermath of last week's announcement, FAI chief executive John Delaney said that UEFA's decision would "rubber stamp" his association's commitment to resolve its stadium debt by 2020. Delaney said: "This deal is worth in the region of €40m for us, in terms of minimum commitments that we'd get from UEFA, and also we keep the rights for our own friendly games."
It is perhaps a little unfortunate that any time finance and the FAI is mentioned these days it is usually followed by speculation on the association's debt for its share of the stadium construction costs. There is an obsession with the FAI's finances, particularly in the media, which has distorted the picture and is probably responsible for putting Delaney on the defensive when it comes to deals like this by relating it to the stadium.
There have been rumours in the last year that the association is in financial trouble and struggling to make its loan repayments. Delaney, no doubt, has heard these rumours too and so when proclaiming last Tuesday's decision as "a good day for us" he will have been conscious of the need to send out a positive message.
Delaney (pictured) has repeatedly said that the FAI and its bankers have a good relationship and although this claim has been publicly questioned, the Sunday Independent understands that this is indeed the case and that they are more than satisfied with the FAI's current repayment schedule and long term plan to clear the debt. The lenders, according to sources, do not have underlying concerns about the FAI's circumstances.
True, the FAI's Plan A to tackle its debts -- the sale of 10-year tickets and corporate boxes -- failed to meet expectations but this decision by UEFA enhances their position. In net terms, it is unlikely to generate significant additional revenue over and above what the FAI will have reasonably hoped to earn from the two qualifying campaigns, but it does, however, bring certainty. And bankers love certainty. The FAI now knows what it can achieve as a minimum from television rights between 2014 and 2018 and in a way that may bring a sense of freedom in allowing it to pursue other revenue and commerical opportunites because the often very real worry of protracted or collapsed television deals has been taken away from them.
And in a financial world of nervous banks and ever-growing uncertainties, it's a good position for the FAI to be in right now.
Sunday Indo Sport