Taking the Positives: FAI Finances Better Than Thought in ‘Challenging Year’

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Saddled with paying for the Aviva Stadium and with the spotlight continuing to focus on its finances, the Football Association of Ireland is in a healthier state than might be perceived, as Sport for Business recently reported.

Much of the media coverage around the announcement of the FAI annual report centred on the fact that a traditional media conference to take questions did not take place and that questions on the accounts were not permitted from the floor of the annual general meeting.

Neither are ideal in an open and transparent world but the figures and the thinking behind them were available to all, as would be required, and there are in fact a number of positives to take from what was in the words of the report ‘a challenging year’.

0007a385-642As is the case with Rugby and the GAA, revenue from the major games makes up a significant proportion of annual income. The FAI only hosted a single home competitive fixture in 2012 and this meant that despite qualifying for the finals of Euro 2012, that there was a decline in turnover from €45.1 million to €39.6 million.

Administration expenses declined by a greater proportion than operating income however which meant a small increase on the operating surplus from €6.0 million in 2011 to €6.2 million last year.

The FAI faces a similar challenge to the IRFU in paying off the debt accrued through the redevelopment of the national Aviva Stadium. Poor performances by the national team in both sports mean less of an appetite for match day ticket sales and more importantly the longer term premium seats.

Ultimately though it is an investment that was not only needed to provide a home for the two national teams, and more, but which enables the two to be in a position to bid for events like the multi city hosting of the Euro 2020 Soccer Championships or the 2023 Rugby World Cup. In neither case would a bid be dependent on additional massive capital investment.

We wrote recently about how Rugby faces the need to borrow against future long term ticket income. Soccer is in a stronger position in that it is part of a bigger international sport with substantially larger cash reserves and international income streams through broadcasting deals.

“FAI CEO John Delaney does not receive a positive press from the Irish media but he does deserve credit for an assiduous attention to making sure that Ireland is favourably looked on by the international soccer authorities.”

The hosting of the 2011 Europa League Final in Dublin was a success in terms of bringing income to the city but more importantly it served to lay down a marker that Ireland, despite being a small member country of UEFA, with a League whose ranking is slipping into the mid 40′s can still punch above its weight.

UEFA has said that it will consider the advance release of moneys due to Ireland as part of the new collective pooling of international broadcast fees and this relieves the short term pressure of financing the debt incurred yesterday for the benefit of tomorrow.

The income which is generated from international soccer events like in Brazil next year, in France in 2016, Russia in 2018 and perhaps in part in Ireland in 2020 makes other sports pale into almost insignificance. It truly is the global sport and the FAI benefits from that through individual payments from specific funds like the hat trick fund at UEFA and others.

This is an income stream, based on the global reach of the sport that Rugby and the GAA do not have access to and the ability to make the most of the opportunities it presents are key to the ongoing financial health of the FAI.

Delaney in his review of the year was mindful to pay respect to the Irish Sports Council funding of €3 million while pointing out that this went towards programmes that expand the reach of sport into local communities and that it represented less than 10% of the Association’s revenues.

460xThe continuation of the late night soccer leagues which have been such a social as well as sporting success were highlighted in the context of programmes that relied in the round on strong sponsorship income, including from alcohol companies. Diageo brand Carlsberg is the official drinks partner of the FAI and it was stated that any prohibition on such sponsorship could put at risk some of the very programmes that are keeping young people off the streets and away from alcohol and drugs.

Airtricity renewed as partners of the domestic league and while budgets have shrunk substantially since the heady days of 2007 and 2008, the League clubs did make an aggregate profit in 2012, an achievement given that 63% of clubs across the top flight leagues in Europe as a whole recorded losses in the same period.

Clubs at grassroots level drew in €6 million or 20% of the money allocated through the Government Sports Capital Grant scheme and the FAI were quick off the mark in terms of seminars and assistance for clubs who had won money and now needed help in completing projects, as well as for those who got less than expected or nothing in how they might improve their process ahead of future rounds.

We have written before about the FAI’s commitment to programmes that reach well beyond the senior team and it is at this level that funding makes a very real difference to communities and societies. That is true across all sport. It is a shame that soccer gets less credit for it’s actions in this area but it would help if the annual review had as many numbers in the financial section as it did in the match results part.

That is an element which the FAI can control and it may pay dividends in the longer term to worry less about about the potential for negative media as to stand proud behind the real achievements and let people make their own minds up.

The figures themselves, allied to the ability to ride the wind of a dominant international sport means that the finances of the FAI are in fact a lot more secure than some might say, and than many other sports as well.

 

Republished with kind permission of Sport for Business

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