Thursday 20 September 2018

Latest strife raises licensing questions

Karl Sheppard celebrates after scoring for Cork City at Turner’s Cross. Photo by Eóin Noonan/Sportsfile
Karl Sheppard celebrates after scoring for Cork City at Turner’s Cross. Photo by Eóin Noonan/Sportsfile
Daniel McDonnell

Daniel McDonnell

In February, on the eve of the new Airtricity League season, the competition director Fran Gavin was asked about the licensing process.

Specifically, he was asked if any red flags had been raised in the course of a winter which ended with green lights.

"Well I'm not involved in the licensing process," he stressed, "It's done by Bracey Daniels in the licensing department and Rea Walsh in legal and finance. They deal with the clubs on it, they present the licence and I deal with the results of that.

"It is a tough process, a lot is demanded of the clubs. It has been smoother this year than for a long time."

The exchange was followed by a request for details of who actually sat on the independent licensing committee which gives clubs the ok to compete in the league.

Ultimately, the FAI said they were not in a position to give the names out because the individuals offer assistance on a voluntary basis.

"I'm not sure of the exact number but there's about 12 on it," Gavin said. "They're made up of accountants, auditors, solicitors, barristers, so there's quite a lot of expertise there."

Unfortunately, the strife at Limerick has raised fresh questions about the policing of financial matters.

In pre-season, Bray and Athlone were the main talking points after their turbulent performance in 2017.

Bray remain a source of concern, with gates pitifully small, although they have honoured all commitments to date.

The Sunday Business Post reported last week that property developers Greg Kavanagh and Johnny Ronan had denied committing to investing in the club in 2018.

Under licensing, if an applicant exhibits 'warning signs' from previous performance then they need to provide a Financial Letter of Support which 'details the premise on which it considers itself capable of continuing as a going concern.'

There's also a section on Future Financial Information that deals with projected budgets, cash flow and 'explanatory notes including assumptions and risks and comparison of budget to actual figures.'

This information must 'be based on assumptions that are not unreasonable.' When a club hits the rocks, questions have to be asked about what sort of figures they put forward in terms of attendances and other income. Contracts with sponsors are not requested and there is an element of trust involved in the process.

In the case of Limerick, it is known that Pat O'Sullivan has been keeping the club afloat in recent years. He has spoken openly about the need for fresh investment to help keep the show on the road.

Mistakes have been made at the club. Attendances have fallen, and fans have raised complaints about the ticket pricing structure with an €18 entry fee to games if supporters haven't bought online in advance. The rent on Markets Field is also high.

There is a belief around the league that licensing has broadly been a good thing in terms of firmly laying out the criteria to compete at senior level.

Enforcement is another matter entirely, though. Even a cursory glance at the manual under infrastructure - which refers to FAI's stadium categories - finds examples of derogations. Every working journalist knows the grounds which do not even have working internet, which is a basic criteria.

Finance is the most important area, though, and when a club gets into difficulty just over four months into a season, then it does shine a light back on the approval process.

Accounts

Clubs have to provide monthly management accounts that should highlight how ongoing performance compares to budgetary estimates which allowed the licence to be approved. This means that it should not be a surprise if strife occurs.

Two months into the season, Limerick saw off competition to sign free agent Conor Clifford. Clearly, the situation has deteriorated since then, but one would like to think the authorities saw it coming.

In January, there were murmurs that a First Division club had been sounded out informally by FAI officials to see if they would be interested in stepping up to the Premier Division at short notice if an existing top flight member had a problem.

It's believed that Limerick - and not Bray - were the source of worry. The story went away and with the rest of their wages expected to clear today, the Shannonsiders will say all payments are up to date.

But the panic created by the players' meeting before last Friday's game with Bohemians sit uncomfortably.

The FAI top brass can always distance themselves from the big decisions in licensing. But every new crisis undermines faith in the process.

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