Friday 17 November 2017

Football chief whose change of tactics turned the game around

FAI chief executive John Delaney's salary may be in the premier league but the soccer boss has overseen a remarkable improvement in the fortunes of the organisation

John Delaney. Illustration by Don Berkeley.
John Delaney. Illustration by Don Berkeley.
Nick Webb

Nick Webb

IT WAS the equivalent of being 3-0 down at half time. When John Delaney was appointed as chief executive of the Football Association of Ireland 10 years ago, it was after yet another boardroom coup. The FAI was a joke. The association had spent the previous decade richocheting from one debacle to another, with ticketing scandals, the Roy Keane Saipan meltdown and some epic shaftings. He was going to have to lead a spectacular comeback.

Ten years on, he's led a quite remarkable turnaround.

He took control after former Baltimore Technologies' chief Fran Rooney left in 2004. Stability was his priority. And making the FAI less unintentionally funny.

"There was a credibility issue," he recalls. Delaney deconstructed each part of the FAI remit, ranging from game development, facilities, training and the national team and set up a strategy to deal with and play "catch up" with each part of the organisation's responsibility. Stability led to a change in fortunes off the pitch.

"We've built our revenues upwards in a way that has given us the ability to transform the organisation," the 46-year-old Waterford man tells me, while we perch on bar stools in the Cellar bar of the Merrion Hotel. Revenues generated by the FAI have more than doubled to €40m from €18m since he took over 10 years ago.

There's been an almost sevenfold increase since 1996 – and that was after Ireland had played at a Euro championships and two world cups.

Television has utterly transformed football. Players now drive Ferraris instead of Toyotas. The Wags are all supermodels. TV rights deals have pumped billions into the game. Delaney was instrumental in bringing a really smart centralised TV concept to Uefa, the European governing body. Uefa now negotiates overall contracts with all the TV companies to show matches and divvies up the money to national organisations like the FAI.

Previously a national organisation could have a bumper year if it played top teams such as England or Germany in qualification groups or an absolute financial carcrash if its group included less sexy teams like Greece or Kazakhstan. It was all about the luck of the draw. The new deal changes this completely.

"It's been brilliant. It delivers €40m to us over four years. It's guaranteed and that gives us real certainty over the finances," he says, sipping his water with a dash of lime.

Last month, the centralised TV deal was renewed from 2018 to 2022. Negotiations are set to start to determine the size of the FAI's slice of the action. "There will be an incremental. It'll be greater than €40m," Delaney adds.

"The old association – if you go back to the mid-Nineties – they'd only just created the principle of making money from TV. They would have only been getting a few hundred thousand a year. Now it's €10m a year. That's big money," says the chartered accountant.

Delaney owned "a logistics business, bakeries and a furniture company" before following his father into the FAI. He worked for free as the organisation's treasurer, coming to the fore as the face of a dysfunctional organisation during the Roy Keane Saipan schmozzle of 2002. He was made CEO just two years later.

But while the FAI has coined it from TV money, it has struggled to make profits from putting bums on seats at home games. "The one part that has been difficult has been gate receipts, to be frank," Delaney admits.

Empty swathes of seats at the Aviva have been commonplace in recent years for some of the less racy fixtures. Rugby, on the other hand, fills the 51,700 capacity stadium.

"The competitive matches have been pretty good in fairness but the friendly matches have been difficult," he says. Attendance figures show that just 15,083 turned up for a game against Northern Ireland, 16,256 for a Greece friendly and 20,100 for a game against Georgia. Hull City would get a better crowd. On the flip side, matches against Germany, Argentina, Russia, Austria and the play-off against Estonia were jammers.

The near-collapse of consumer spending, high unemployment and some really boring fixtures hit numbers. Ticket prices were also out of whack with demand.

The appointment of Martin O'Neill and Roy Keane as a 'dream team' management duo has boosted the profile and the sellability of the team. Relations are good with Keane with hatchets well and truly buried following the Saipan fall-out, Delaney adds.

The FAI has slashed prices. Back in the Noughties, good tickets for big matches could have cost "between €70 to €80," he says. Now it's about a third cheaper. The price of the much discussed 10-year tickets have also tumbled. These tickets were to form much of the FAI's cash pile when it was required to stump up its share of the €411m Aviva stadium. When the economy went brown, those premium ticket sales withered. Trophy 10-year vantage seats – the ones with extra comfy cushions – sold for as much as €32,000 during the boom. That price is down to €4,933 for a 10-year seat. The new Euro-wide League of Nations tournament starting in 2018 will help too.

While Delaney may be watching attendances and TV ratings figures closely, you can bet that the FAI sponsors are doing so too.

"Sponsorship now brings in about €6m per year. It was about €1.5m when I took over," he says. Mobile operator 3 is the biggie, having signed an estimated €2m per year deal when Eircom's agreement came to an end in 2010. Other sponsors include kit manufacturer Umbro, McDonald's, Ford, Airtricity and Nivea.

Delaney believes the secret to making the FAI attractive to sponsors is to "over-deliver and give more". Success on the pitch is a help too.

While keeping Robbie Keane wrapped in cotton wool or bringing on Seamus Coleman and James McCarthy were important, fixing the domestic league was also a pressing issue. League of Ireland clubs were losing a collective €7m when he took over.

Now they are collectively at break-even with a troika-style austerity programme introduced, which sees rigorous financial oversight and a 65 per cent wages to turnover ratio. But Delaney, who invested a couple of hundred thousand euro into Waterford United, is also out batting personally for the clubs.

He helped ink a deal with property magnates Luke and Brian Comer – who have a €600m Irish, UK and German property empire – to sink €100,000 into Galway United.

"It was 15 minutes before kick-off in the match against Sweden in a corporate box, there was a presentation made to the Comers about investing in Galway. That's how it was done. That's what my role brings. It could be Uefa or Fifa one day and then sponsors or grass roots another. Every weekend, I'm booked for something," he says, noting he's just been handing out coaching certificates at Limerick Prison.

The networking and handshaking will come in useful for another massive event on the horizon. Delaney is fronting Ireland's bid to host part of the 2020 European championships in Dublin. Uefa has come up with a natty idea to host matches in different cities across Europe, rather than having one country host the full shebang. It sounds like a brain fart dreamt up by the marketing department of Uefa rather than a practical idea... unless, of course, we win it. Then it'd an utter wow.

"The chances are higher than when the bidding started. There are 19 cities instead of the expected 28, going for 13 places," he said.

Turkey has pulled out which boosts the chances of England hosting the final: this in turn would bump England out of hosting group games, increasing our chances. It's all very political and geographical. Like the Eurovision without transexual singers. The red letter day is September 19.

"We're not in it to make money, but the city will. The Government has been great in terms of subsidies ," he says. Uefa will chip in around €4m to €5m for each city with another €4m to €5m coming from host countries. "We'd come in at about break-even on it. That's in our proposal."

Having a seriously cool stadium is a major advantage. Although it's one that almost killed the FAI, according to some commentators. The €411m cost of the Aviva stadium was one heck of a bill. How much would it cost now?

"Probably less," he laughs. "But would we have got €190m from the Government? I'd hate to see the IMF here in looking at all the requests for funding and looking at this. It would probably have been 'Go to Croke Park and play all your matches there. Do a deal!"

But for Delaney, the stadium – despite its cost – was a necessity. And the FAI had to stump up.

"We had to find €95m out of a cost of a €411m project. We found it," he says. "We owed about €50m out of a commitment of €95m on a project worth €411m... that's not bad. If the whole country had been like that, then maybe we wouldn't have ended up in the mess we are in."

While the gearing in relation to the overall value of the Aviva is low, the FAI didn't have that much headroom with repayments to NIB on its €50m debt. The latest annual review shows that over €4.8m was spent on "interest and other charges" in 2012. This was out of operating profits of €6.2m. These were thin, thin margins for error.

"We did restructure the debt and it's a very good deal for the association," he says. Delaney adds that he's bound by a mountain of confidentiality agreements. "I'll say one thing, Dermot Desmond and Garrett Kelleher were very helpful in opening doors for us."

Reports have suggested that the FAI managed to secure a €12m write-off on its €50m plus debt when it was refinanced from NIB by private equity giant KKR and Dermot Desmond's QED. The deal has reduced interest payments, drastically improving the financial situation.

"We can be free of debt by 2020," predicts Delaney. "But that's a decision for us." The Aviva stadium naming rights come up for renewal in 2020, a decade after Aviva splashed out an estimated €40m to have its name up in lights. A big block of 10-year tickets also comes up for renewal then as well. Coupled with pre-sales of season tickets, it could give the FAI some real financial firepower.

"There'll be the ability to repay all the debt that is there but the question for the organisation at that stage is, do we use our revenues to clear all the debt or do we reinvest in the game and just have a normal regular mortgage like other organisations such as the English FA?"

Assuming debt markets continue to normalise, refinancing the debt again in a couple of years, should be straightforward, especially with a guaranteed contract revenue stream of about €100m over the next decade.

Despite doubling sales, hiring a management dream team, delivering a modern stadium, refinancing debt, developing a football campus, Delaney tends to get a few elbows from commentators. Whether its losing the shoes in Sopot or getting paid more than Enda Kenny, he seems to attract controversy. Delaney is paid €360,000 per year. Down from €400,000. It is more than the men he marks in other European football bodies.

"My employers pay me a salary and they are happy to pay it. I took a couple of pay cuts and that's fine. I've been offered bigger salaries to move elsewhere and that's known to my board and evidence has been given to them," he says.

Delaney says that he was offered "a seven-figure salary" in a non-sporting job in the UK and another big job in sport. His contract is up at the end of 2015. At that stage, the FAI will have made up the deficit and be heading for extra time with some confidence.

'The Giants Stadium was amazing'

If I weren't doing what I do, I would be ... "running a business"

The last meal I really enjoyed was ... "at Marco Pierre White's. They do a great steak."

My favourite websites are ... "Sky Sports."

The best gift I've given recently was ... "either tickets to matches or signed jerseys"

My favourite team is ... "I've two – Manchester United and Waterford United."

My favourite match ever was ... "I was in Stuttgart in 1988 when Ireland beat England 1-0 in the European Championships. And the game at the Giants Stadium [when Ireland beat Italy in the 1994 World Cup] was amazing."

An unforgettable place I've travelled to in the last year is ... "Kerry and the West of Ireland."

And my worst travel experience was ... "I spent two days just getting back from Melbourne when the Icelandic volcano erupted."

The books on my bedside table are ... "There's a couple of them – 'Mandela: Long Walk to Freedom', 'Citizen Quinn', and the Alex Ferguson and Harry Redknapp autobiographies too."

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