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Richard Curran: 'FAI needs to disclose full details of taxpayer-funded bailout deal'


Sports Minister Shane Ross, centre, Minister of State Brendan Griffin, left, and interim FAI boss Gary Owens reveal Government support for an FAI rescue package. Photo: Colin Keegan, Collins Dublin

Sports Minister Shane Ross, centre, Minister of State Brendan Griffin, left, and interim FAI boss Gary Owens reveal Government support for an FAI rescue package. Photo: Colin Keegan, Collins Dublin

Colin Keegan

Sports Minister Shane Ross, centre, Minister of State Brendan Griffin, left, and interim FAI boss Gary Owens reveal Government support for an FAI rescue package. Photo: Colin Keegan, Collins Dublin

So much for the new transparency around the FAI. Sports Minister Shane Ross announced details of the new financial package to save the football organisation from insolvency, denying that it constituted a "bailout".

There was transparency around how much the taxpayer will be putting in to keep the FAI afloat, but very little else about the financial contribution/financial pain other stakeholders are going to face - namely Uefa and Bank of Ireland.

None of the new regime at FAI was stepping up to disclose exactly what was going into this financial package, other than the details around the Exchequer contribution. Uefa was believed to have lent the struggling FAI around €10m. What is the status of that debt now? No answer.

Bank of Ireland jumped into backing FAI in 2016 when a chunk of its previous old debts had been written down by around €10m through a deal brokered by a company linked to Dermot Desmond.

This debt write-down gave a genuine and badly needed lifeline to the association and Bank of Ireland may have felt it was on solid ground as it lent the FAI around €30m.

Under the terms of this new deal, the Exchequer is restoring funding, doubling funding which supports grass roots football and providing a €7.5m interest-free loan to the FAI to help it pay its licence fee and continue to use the Aviva Stadium.

That loan is "highly conditional", according to Ross, but the conditions have not been disclosed. It is repayable in 2024. It is hard to see how the FAI will generate the kind of surplus required to repay that debt in such a timeframe.

It could borrow it from elsewhere, or more likely negotiate an extension to that loan when the time comes.

As for Bank of Ireland, it was owed around €30m coming into these talks and had a belt-and-braces charge over all FAI assets. The problem was the belt and braces weren't holding up very much.

It had a charge over all FAI assets, excluding the Aviva Stadium. Net assets at FAI were actually negligible at the end of last year, so its charge over assets wasn't worth an awful lot. Bank of Ireland has clearly taken some pain by way of a restructuring or writedown of some of that money. But along the way, it has secured a mortgage over, at least part of, the Aviva Stadium assets.

The Aviva Stadium company is a joint venture between the IRFU and the FAI. Accounts for New Stadium DAC show that it made a loss of €3.3m in 2018, up from €3.1m the previous year. Despite the retained losses on the balance sheet of €32m, it paid a dividend of €2m.

However, the Exchequer put in nearly €200m to build the stadium. That money does not have to be paid back but the State, through the minister, holds a charge over the assets of the stadium.

This meant neither the FAI or IRFU could run off and borrow money using the stadium as security unless the State gave its backing. Now, Bank of Ireland has negotiated some kind of mortgage as part of this new deal.

It seems logical that it would look for some kind of security before restructuring loans to a financial basket case organisation.

However, the lack of detail and disclosure around the deal negotiated by Bank of Ireland and Uefa is not in keeping with the spirit of transparency espoused by the new organisation.

Bank of Ireland cannot say because of client confidentiality, but the borrower (FAI) surely can.

It is impossible to assess the quality of the deal negotiated on behalf of the State by the Minister for Sport without knowing what financial pain the other stakeholders are taking.

The financial package is being presented as a new dawn for the FAI. And hopefully it will be.

It has a new board, senior board members with excellent pedigree and a structure that now allows for proper scrutiny from independent directors.

These should all put the new FAI on a better long-term footing. But before everybody moves on to this bright future, surely as taxpayers we all have a right to know the precise details of the deal that has been negotiated with our money?

Ultimately, some of this financial detail will emerge in the 2020 annual report, likely to be published in the summer of 2021.

Ross will be long gone as Sports Minister by then. But at least the Boys in Green will be able to tog out.

Larne is new Brexit battleground

As half of Britain partied, well sort of, to celebrate Brexit, the dark clouds of uncertainty have not gone away.

There may have been a few hangovers in the homes of Brexit stalwarts yesterday morning. Issues are looming now that will take a bit more than some Solpadeine to fix.

Not least of these is the border down the Irish Sea. Under the terms of the withdrawal agreement, an international treaty signed by the UK, Northern Ireland will have a unique status within the EU single market, in a move which will require declarations and checks on goods entering it from Britain.

However, if the goods are to remain in Northern Ireland, fewer checks will be required than if they are going south to the Republic.

The border with the south will remain totally open. Prime minister Boris Johnson is in denial about there being any checks at all. DUP agriculture minister Edwin Poots has said he has no plans to put any infrastructure in place for goods coming into Northern Ireland from Britain.

Chief EU negotiator Michel Barnier has said there must be checks to maintain the integrity of the single market.

What if the British government or Stormont says it will put up some kind of half-baked minimal checking system or even none at all? What can the EU do about it?

The terms of the withdrawal deal aren't necessarily part of the future trading relationship. The EU can complain and kick up a fuss that the border into Northern Ireland has been left open.

This could create a distribution merry-go-round for goods leaving Britain en route to France or the Netherlands.

They simply go to Larne, down to Dublin and off to continental EU markets without duties, tariffs or even checks.

EU countries will be powerless to enforce the integrity of the single market in such a scenario. They could give out about it, but can't exactly threaten to throw the UK out of the club.

Of course, there would be international arbitration mechanisms to deal with this scenario and complaints from EU countries, but they would take years to resolve and what chance is there of enforcing the outcome?

If the Irish border conundrum had not been solved, we were looking at the possibility of agreeing to border checks, but actually not living up to our commitments by hardly ever having anyone at the checkpoints. Thankfully, that kind of Irish solution to an Irish problem has now been avoided.

Could Northern Ireland do the same? London won't care and may even egg them on. The Irish Government could come under pressure from France, Germany or Brussels to do something about it. We could quote the withdrawal agreement back to them and say, it isn't our problem to fix.

Three years of having the Irish border at the centre of the Brexit project have ended. The battleground looks set to shift to Larne, Belfast and other ports of entry to the North. But it will be a lot longer than a three-year game of cat and mouse.

Sunday Indo Business