Friday 17 November 2017

From FAI's Vantage point, glass is half full

Irish football may have a home to be proud of, says Dion Fanning, but like many homes that peope are proud of, it is mortgaged

Dion Fanning

On Friday, one FAI employee reflected on the drive within the association to sell Vantage Club tickets. "I don't think anyone expected that the amount of time that has been given over to sales would have to be given over to sales."

As the world changed, the FAI had to change with it. They may have imagined a world in which it would have been easy to reach their break-even point for ticket sales but by the time it came to sell tickets, that world didn't exist anymore.

They still insist they have reached the break-even point of 6,300 sales and "allocations" even if the Irish Independent's story last week pointed to a desperation to cover the shortfall.

Whatever the truth, it is certainly not the case that the Vantage Club sales have paid the FAI's cost towards building the Aviva Stadium. Loans have been taken out over the past 12 months, some of which will not be revealed until the publication of next year's accounts. At the end of 2009, they had bank and other loans of €46m.

Privately the FAI also wonder about the time that has been given over to the coverage of their ticket sales. There is a paranoia within the association which doesn't mean there isn't an agenda. The FAI has always been there to kick around and now with a sparkling stadium and a mountain of debt, some within the FAI think there is more incentive to kick them around than ever before.

The world the FAI live in is the world most of us live in, only more so. They are burdened with debt but they insist things will get better. They have a plan, but most people have a plan. The FAI, like most people, is on Plan B.

When they first launched their Vantage Club scheme in 2008, it was in an Ireland on the cusp of change.

It quickly became clear that their original sales plans wouldn't work and it is understood the FAI and chief executive John Delaney became more involved as they reworked the plan.

The original ideas were changed. Tickets became available on direct debits payable over 10 years rather than payable upfront. Immediately the FAI knew they would need to take on debt.

The FAI insist that at no stage did ISG offer them €75m to take over the operation and the risk. "If they had done that, we'd have bitten their fucking hand off," an FAI source said last week.

When the reworked plan was reported as a relaunch and taken as an indication that the FAI were struggling, the FAI's bitterness grew. As a trained accountant, Delaney considers this to be his bailiwick. He has criticised sports journalists in the past for their lack of knowledge of financial matters and now he has to answer to them. Or not answer to them.

The demands from some for a full breakdown of the FAI Vantage Club sales will never be met, according to sources. "No company would reveal those details which include details of sponsorship agreements," an FAI source said on Friday.

Next week, they are expected to launch a new sponsorship arrangement which is believed to guarantee a seven-figure sum every year.

There is good news if the media would report it, the FAI say. There is bad news too if the media would just ignore it. Only one thing is certain: the continued uncertainty.

How the sales of Vantage Club will progress remains to be seen. The FAI have gone outside to secure purchasers from the corporate class (who, it turns out, weren't so solid) and with that comes more uncertainty.

The FAI are not the only sporting organisation pushing tickets hard. Last week, the IRFU had to alter their ticketing packages for the autumn series. Initially, they were charging €340 for a four-match bundle, including matches against Samoa and Argentina. Now they have been cut to two-match packages at €150 and €190.

In the heady times, there were many prepared to be entertained corporately at sporting days out. But when things got bad, it turned out that there was a lot they weren't prepared to pay to see. Rugby games against Samoa and football matches against Armenia probably top the list.

There were many excellent aspects to Daniel McDonnell's story in the Irish Independent last week but one of the best, in its own way, was very trivial: 939 10-year ticket-holders in the old Lansdowne Road were given their choice of seats at premium level in the new Aviva Stadium; 186 didn't take the best seats even though there was no extra cost. It again provides an evidence of the sparkling minds of the corporate class.

The FAI needed the corporate class to embrace football. Instead they had to change direction and hope Delaney's "football family" could help.

The FAI insist that they will meet their obligations as they always have with this project. They have taken on substantial borrowings to do so but they rightly point out that stadiums are always built with mortgages. They have to make sure they can make the payments.

They insist that their repayments will leave them debt-free by 2020 and that their projections are based on conservative models. There is no need for the Irish team to qualify for a major tournament to make the payments although, "it would make a big difference".

In 2009, the FAI made a €4m profit, but 2009 was an exceptional year with home games against Italy and France. This too is an exceptional year but only because Ireland are in a bleak group financially, even if Giovanni Trapattoni is bullish about qualification, something that would transform the football landscape and the financial landscape.

These are financial realities. Things are tough, everybody's struggling, it doesn't necessarily make it news. But the FAI have taken out massive loans to meet their contribution to the stadium. They have met their obligation towards the stadium -- a stadium that was built with a contribution from the taxpayer of €191m -- and will meet their obligations to the banks.

They have had to do so with loans as the sales and "allocations" are now spread over a 10-year period rather than upfront as the FAI first envisaged. Their financial well-being depends on these commitments being solid or a transformation in the senior side's fortunes.

The FAI's finances and Delaney's fortunes are linked. Delaney has always had a belief in his own ability. This is not misplaced. But the decision to charge almost three times as much as the GAA does for some of their premium tickets is also characteristic of a certain hubris. Delaney knows he is better than most of the men who have run the FAI before him. Time will tell if he is as smart as he thinks he is.

Even in good times, it would surely be asked why any organisation would want to spend more than €3,000 a year on a ticket to watch the Irish international side play three competitive matches in 12 months. There is the FAI Cup final too, a showpiece for domestic football that takes place on a gloomy winter's day.

Next year, Ireland will play Armenia, Slovakia and Macedonia at home. There could be a play-off as well if Trapattoni's side continue their good form but there is not much to excite at those prices. The most glamorous game at the Aviva next year will be the Europa League final. But the Vantage Club membership won't cover that and the Aviva won't be called by its sponsor's name. It will be known as the Dublin Arena because of UEFA regulations and its relationship with its sponsors. The FAI says only the top tier of premium tickets are that expensive; 50 per cent of their tickets are cheaper than those on offer from the IRFU and the GAA. They see this as value for money.

Ultimately, though, there is a sense that the FAI is no longer going to defend itself. They believe they only have to answer to two groups: its grassroots members and its banks. Their relationship with the banks has been described as "watertight" by one source, something that has been confirmed by independent sources outside the association. The fact they can have that relationship with the banks during the recession is seen as testament to their achievement.

More than anything, the bank's confidence has encouraged the FAI to believe they can endure the recession and meet their obligations. Delaney also has the backing of the fabled "grassroots". In Armenia, Irish supporters lined up to have their picture taken with Delaney when they met him in a late-night bar. He has spent time with supporters' groups across the country and in England. In return they have developed a loyalty to the chief executive.

Delaney inspires loyalty and demands it. He has transformed the association and, on many levels, it works better than ever before. There are times when the loyalty borders on politburo parody. "John Delaney accepts request from FAI Board to renew contract for a five-year term" was the headline on the FAI press release when he extended his contract earlier this year.

The FAI say they don't care what is written about them but their sensitivity suggests otherwise. Delaney has taken the decision to take on hostile coverage in the press. He felt the FAI were kicked around too easily and now they're not going to be kicked around anymore.

The media made it personal, Delaney felt, and he responded. This has made the media more reluctant to take them on and has antagonised many journalists. Delaney won't care once those within the association remain loyal and the banks continue to back them.

Irish football has a home it can be proud of for the first time in 90 years. It is mortgaged, like many homes that people are proud of. There is no doubt it is going to be a struggle but perhaps the most newsworthy thing would be if the FAI were insisting there was no struggle. There are those who look at Delaney's achievements and praise him as a miracle worker. Time will tell if Irish football should believe in miracles.

Sunday Independent

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