Monday 24 September 2018

GAA's rising stock

Since commercial activity follows the crowds, that side of the income equation will improve. Photo: Sportsfile
Since commercial activity follows the crowds, that side of the income equation will improve. Photo: Sportsfile
Martin Breheny

Martin Breheny

Just as talking up the opposition is the natural inclination of team managers, expressing caution is embedded in the DNA of financial gurus.

So when Tom Ryan, the GAA finance director, spoke recently of looking forward to 2018 with "considerable confidence", it was inevitable that he would also wave some warning flags.

"The changes in the championship structures in both hurling and football see us heading into slightly uncharted territory (financially).

"I fully expect the competitions to be exciting and the matches to be well attended, but the likely financial impact remains a little unclear. We will certainly plan prudently," he said.

He described the cost of preparing county teams as "foremost among our financial risks".

That was before Colm Keys' probe for this newspaper revealed this week that counties spent a total of €25.26 million - an increase of more than 8pc on 2016 - on teams last year.

It averaged at €790,000, ranging from the bottom two (Leitrim €290,000 and Wicklow €368,000) to the biggest spenders (Cork €1.8m and Dublin €1.6m).

"We should seek to measure ourselves collectively on how those costs are managed and controlled. We should also strive to increase self-sufficiency (among counties). The long-term financial health of our counties depends on it," wrote Ryan in his annual report.

Complacency

He also acknowledged that running clubs has become a major financial struggle.

"Fielding teams and making ends meet is not easy. I expect 2018 will be no different. For as long as that continues to be the case, no matter how healthy affairs at Central Council might appear, there will be no room for financial complacency," he wrote.

Central Council finances just don't appear to be healthy. They are, in fact, exceptionally strong, as proven by the 2017 figures which showed total income of €65.6m, up more than €5m on the previous year.

Almost €4m of the increase came from gate receipts, with the rest derived from commercial activities. Sponsorship dropped by €500,000 but, significantly, media rights increased by €1.3 million.

The media surge arose mainly from the new TV deal, where 2017 was the first in a five-year deal. Presumably, critics of the GAA's link-up with Sky Sports will ignore the increase, rather than acknowledge the reality of the market.

It takes no commercial genius to realise that if Sky weren't involved, the overall take would be considerably smaller. That, in turn, would be reflected in the disbursement of monies across the many areas of activity that Central Council funds.

Essentially, there are four strands to GAA finances, with two doing well and the others having mixed fortunes, depending on size and location.

Central Council accounts are booming; provincial councils are doing well; there are wild fluctuations among county boards, while most clubs are stretched to the limit to fund their activities.

Most of the Central Council and provincial council income filters back to the county boards and clubs, although the latter contend that with county teams costing so much to run, there's little left for them.

They make a good point but the case is weakened by the number of clubs paying managers, which eats into their resources. Still, that horse has long since bolted and won't ever be reined in.

Whether the overall financial model is the most efficient way of running the GAA has long been open to question but it won't change unless there's a fundamental overhaul of administrative structures, something that's not on the agenda, in the short-term at least.

What remains beyond doubt is Central Council's capacity to generate huge income. But then, they have the All-Ireland championships (not including the provincial campaigns) as a herd of cash cows, whose yield continues to rise.

They brought in €34.4m last year, up €4.3m on 2016 and €7.6m on 2015. The 2017 gate receipts were up by 378pc on 2000, when they brought in €9.1m.

Even the recession failed to make any real dent in the gate income, underlining how close to the hearts of the Irish people the summer action is.

Excluding the provincial championships, all of which were well attended too, the 2017 All-Ireland championships attracted a total audience of 977,523, up 191,287 on 2016.

That's an increase of 24pc, while the turnout at the Allianz Leagues was up by 10pc.

Once match day and administration costs were paid, a total of €41m was paid to various units last year, while €1.2m was put into a strategic fund.

The latter is part of a long-term plan to accumulate a pot which can be used for whatever major developments are required at the time.

The Croke Park Stadium continues to be a major driver of Central Council finances, contributing €7.5m to the annual income.

The situation could scarcely be more healthy at Central Council level, with an income stream which is likely to swell next year when the 'Super 8s' replace the All-Ireland football quarter-finals.

That increases the number of games by eight and, since they involve the top counties playing off against each other in a round-robin format in Croke Park and provincial venues, attendances will be high.

On the debit side for Central Council, they will lose the All-Ireland hurling qualifiers, which have been scrapped in favour of round-robin provincial championships. While Croke Park will lose out financially, the Leinster and Munster councils will gain.

The additional football games will more than compensate for Central Council, so it would be a big surprise if gate receipts weren't up again next year, possibly even breaking the €40m mark.

And since commercial activity follows the crowds, that side of the income equation will improve too.

At face value, it's all good news for the GAA. Having beaten the recession, it now appears poised to drive on at even greater pace financially.

They were relatively late arrivals to the commercial table, certainly by comparison with other sporting organisations, but they learned quickly how to play the game.

Obviously, it makes sense to ride the commercial horse as hard as possible, since there are still many areas of GAA life that need support.

Besides, if the GAA were to row back on commercial activity now, it would merely leave more for other sporting organisations.

Since they are all in competition - in one form or another - it would be foolish to the point of negligent not to maximise income opportunities.

We all remember the nonsense spouted by those who wanted to keep Croke Park's gate locked to rugby and soccer while Lansdowne Road was being redeveloped.

Apart from the national imperative of not allowing Ireland's games to be played in Britain, there was the obvious financial gain from opening Croke Park.

And yet, there was considerable opposition to the proposal all the way to the Congress vote in 2005 when 97 of 324 delegates voted to keep Croke Park closed.

By the time the arrangement ended after four seasons, the GAA had taken €36m in rent money from the IRFU and FAI, all of which was put to good use.

Now, eight years later, there are scaremongers who maintain that the GAA has become overly-commercial in other areas, sparking fears of a threat to identity and direction.

Arguments about how club players are losing out in a complicated fixtures programme are conflated with claims that the GAA's drive to maximise income is somehow part of the problem.

Complicated

It's not. The club v county fixtures conundrum has nothing to do with the GAA's commercial dimension. Nonetheless, it has become an easy target for people who seek simple answers to complicated questions.

The truth is that the more finance the GAA can generate, the more it can feed back to its constituent parts. Now issues may arise there - team costs are a prime example - but the solution is not to cut the income flow.

Instead, the ambitions should be to increase it and use the extra finance to promote the games. There isn't a single club or county that wouldn't welcome more revenue so it makes perfect sense to milk every cash cow as dry as possible.

Having come through the recession so well, there's no reason to believe that the GAA won't continue to maintain a strong income flow. That should be seen as a positive development for the entire Association, rather than portrayed as some sort of corporate sell-out.

Irish Independent

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