Thursday 18 January 2018

Department 'feels a little in the dark' about FAI's debt

John Greene

John Greene

There is growing concern in the Department of Transport, Tourism and Sport over the state of the FAI's finances, with one well-placed source stating that the department "feels a little in the dark".

However, the FAI will reassure delegates at its annual general meeting next weekend that it remains on course to have all of its loans fully repaid by 2020 despite a fall in revenue last year.

The latest set of accounts for the Association, for the year ended December 31, 2012, lays bare the full extent of the task facing the FAI in its quest to be debt-free within eight years. The accounts show that its income fell from €16.97m in 2011 to €15.96m and that turnover fell by 12 per cent, from €45.1m to €39.67m.

Over the two years, the FAI made a total of €8.4m in repayments on its Aviva Stadium bank loans, but because these were interest-only payments, it still owes €59m plus interest. An overdraft facility of just over €4m which has been extended to the Association means that at the end of last year its net debt stood at just over €63m.

And now the department, which indirectly helps to fund the FAI's football programme each year via the Irish Sports Council, is expressing a desire to know more about the Association's finances. The source added that the department does not know if there are or are not serious issues, "but we would like to know".

In 2012, the Sports Council advanced almost €3m to the FAI while it also received further grants amounting to almost €950,000 to fund various approved projects from four different Government departments. According to the accounts, these grants were all expended for the purpose for which they were intended.

In March of last year, the Irish Sports Council approved the payment of almost €3m to the FAI but documents released to the Sunday Independent under the Freedom of Information Act show that this was only after chief executive John Treacy told board members that the Council "received confirmation on an annual basis from the FAI's auditors that their accounts were in order and the monies provided by the council were utilised for the purposes given".

The high level of debt and the reduced turnover are certainly a concern for the FAI, but it is likely that when delegates gather in Bray next Saturday for the AGM, the Association will point to the positive elements of last year's figures to back up its belief that it can meet the 2020 target.

The FAI had a small surplus in 2012 of €25,126, and an operating surplus of over €6m, while increased efficiencies and continued cost-cutting measures reduced its outgoings by €5.5m.

The Association also increased its sponsorship revenue notably, up from €7.2m to €8.1m, and it maintained relatively high levels of investment, including by means of development grants, in the domestic game.

"The Association recognises that we are operating in very difficult economic times and faces many challenges in common with all businesses in Ireland," notes the Directors' Report.

"However, the Association has significant committed revenue streams including the new UEFA tv contract which comes into effect in 2014, UEFA Hattrick Programme funding, and long-term commercial contracts.

"These revenues, allied to potential income from the resale of stadium naming rights and premium seats, our strong day-to-day revenues and a good draw for the 2014 World Cup provides a strong foundation for the association.

"The restructuring of the 2016 and 2020 European Championships to include 24 teams also enhances the Association's potential to qualify for more major tournaments."

Equally, however, the directors acknowledge that the FAI is heavily reliant on the success of Giovanni Trapattoni's team "by way of ticket revenue, sponsorship and television revenue".

Irish Independent

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