Saturday 23 February 2019

Money lies at the root of League’s evils

Niall O’Driscoll: The League has a long way to go. Photo: Sportsfile
Niall O’Driscoll: The League has a long way to go. Photo: Sportsfile

Seán Ryan

Financially, the League of Ireland would not seem to have a lot going for it. Played out in the shadow of the world's biggest league, for prize money that wouldn't prompt a supermodel to get out of bed, some observers consider it a wonder that it is still going strong and about to kick off its 99th season.

Then, when you examine the finances of the League's 20 clubs, among the most surprising revelations is the fact that most are being kept alive by financial injections from benefactors who, in real terms, have little or no chance of reaping a return on their investment.

If it weren't for these acts of philanthropy, the clubs would either have dropped out of the league or would have been forced to adopt amateur status.

From the top, where champions Dundalk are kept alive by US venture capitalists Peak6, to lesser lights like Bray Wanderers, who had to be rescued by insurance businessman Niall O'Driscoll halfway through last season, there are high-profile businessmen propping up their local clubs.

Why do they do it? Because you have to wonder if the league is sustainable in its current guise if the reality for clubs is that they need a benefactor just to keep going.

"The League needs to change," says Philip O'Doherty of Derry City, "because the present model is not going to work much longer. It's way over time that all the chairmen got together. The FAI are making an effort, with the underage teams, but every year there are a couple of clubs in financial difficulty, and rarely a season goes by without clubs having difficulty paying wages."

Niall O'Driscoll agrees: "I've looked at every League of Ireland club and many English clubs too," he says, "and I haven't been able to find a model that's viable. The biggest mistake is that football hasn't realised it's in the entertainment business. The standard of facilities are terrible - you can't bring your wife or girlfriend to most grounds. We are competing with nights out, cinema, festivals and other sports and, as a package, the league has a long way to go."

Despite this gloomy outlook, O'Doherty and O'Driscoll are among a group of people who have put their money into the League of Ireland.

"Derry City went bust twice and both times I helped out, with Paul Diamond," says O'Doherty. "In the mid-'90s we got them up and running again, and again 10 years ago, and I'm sticking with it this time because the club is important to the city of Derry, both sides of the border."

O'Driscoll's had a different reason for his input, saying he wanted "to protect the player pathway for the kids with St Joseph's Boys, who have an underage link-up with Bray".

He adds: "My background is schoolboy football, so for me it wasn't a financial investment, it was a footballing investment. Then I had to put money in to clear the debts, but now the club is debt-free and we start the 2019 season with a view to breaking even. We have brought in budgets, sponsors - Matt Britton carpets, Lifestyle Sports, Campus Oil, and another four or five to be launched. It will cost €500,000 to run the club."

Seamus Heaney has a great line where "once in a lifetime, hope and history rhyme," and it seems the League of Ireland's benefactors share that kind of optimism. O'Driscoll, for instance, is keen to point out that "season tickets are up tenfold. We hope to have 400 sold before we start, as against 20 last year. Our revenue will be about 40 per cent from attendances, with the rest from sponsors and commercial outlets.

"The big thing is engaging with local clubs, and the response has been good. We have to embed ourselves in the community."

O'Doherty has a junior football background, but is better known for his business, E & I Engineering, in which he employs 950 in Burnfoot, Co Donegal, 630 in South Carolina, and 500 in Dubai. He featured in this paper's 'Rich List' last week, but he doesn't talk about trophies when it comes to his achievements as Derry's benefactor. For him, it's about "bringing young players through, and having so many young local players, focusing on a Derry-Donegal base. The time we won the treble in '89 a lot of the senior players were from Derry, and over recent times we have got players across the water - James McClean is probably the best known, and Ronan Curtis last year - and things like that make me feel really good. Our managers, Stephen Kenny and Kenny Shiels, developed those players.

"All our backroom staff are based in Derry, and our budget is the fourth or fifth largest in the League," he notes, adding pointedly: "I don't think the Dundalk and Cork budgets are sustainable from a business point of view."

His ambitions for Derry City are "to win the League in the next five years, and to build up a sustainable, community-based football club. That's the way forward for all clubs, and I would like to think that more players will be going through the League of Ireland than straight to England. It's a well-managed League now, so it's a great training ground for players."

However, operating from a different jurisdiction has some disadvantages. "We have to pay VAT on our gate receipts. We pay Revenue 20 per cent, and that doesn't happen to clubs in the Republic," he points out, while players with all the other League clubs can claim tax back when they retire, a perk that is not available to Derry players, and is regarded as a huge factor in players' choice of club, with Derry losing a lot of players to Dundalk and Finn Harps over the years.

Brexit could throw up more problems for Derry, but O'Doherty has a positive take on that issue. "With the Common Travel Area Agreement since the 1920s, I don't think it will affect us, but it might take a couple of years to settle down. The bigger question is: how is it going to affect England's Premier League?"

O'Driscoll, meanwhile, is mulling over the cost of running four underage teams. "The average cost of an underage team in the National League is between €25,000 and €30,000, totalling €110,000 for the four underage teams, with all voluntary staff, with the FAI contributing between €50,000 and €60,000. The first team costs €200,000.

"Elite football in Ireland will only happen in the League of Ireland now, but the disadvantage is the gap years, which lead to a big drop-off. That's the biggest problem we've had at St Joseph's."

Relegation from the Premier Division he takes in his stride. "There are different pressures in the Premier," he said, "for instance, it's more expensive. But we don't want to be in the First Division for the rest of our lives either. The fundamental aim is to make Bray sustainable and our big achievement is turning out kids who contribute to society."

On the general state of the League, O'Doherty has two issues: "The League needs more support: the prize money is too low. That needs to be sorted out. Also there are too many yellow cards handed out."

As far as O'Driscoll is concerned, "the quality of the football being played in the League is definitely better, but the season is too short."

European success is the key to clubs returning a profit on their season, and with a second-tier Europa League due next year that is a further incentive for clubs to invest if they are to board the gravy train. However, there are no guarantees, as only four of the 20 teams can qualify for Europe.

In addition, there are a lot of other factors which go to make a successful club. Finding the right manager, the right players, building a strong underage sector, decent facilities . . . and they all cost money, a lot of which has to be deflected from the first team.

Success can also be a two-edged sword - yielding trophies at the cost of losing players to better-off clubs either here or abroad. In Shamrock Rovers' case, they lost Graham Burke and Gavin Bazunu to Preston and Manchester City without even winning a trophy, but the fees received provided some compensation. Replacing Burke and Bazunu with players of similar quality is the problem.

It will be interesting to see if Peak6 can come up with a successful business model at Dundalk. "It's early days," O'Doherty advises, "you have to look at how things go over five-six years in business, but they have a fabulous cohort of players there and a backroom staff who have learned a lot from Stephen Kenny."

Ah, yes, Stephen Kenny. Even in his absence on Ireland under 21 duty, the Kenny factor will count for a lot in deciding the destination of 2019's trophies.

The benefactors

Bray Wanderers: Niall O'Driscoll

Derry City: Philip O'Doherty

Dundalk: Peak6

Galway United: The Comer brothers

Limerick: Pat O'Sullivan

Longford Town: Jim Hanley

Shamrock Rovers: Ray Wilson

Shelbourne: Andrew Doyle

St Patrick's Athletic: Garret Kelleher

Waterford: Lee Power

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