Bohemian FC Financial update 2015-2017

Background

Bohemian FC are owned by "The Bohemian Football Club CLG" 8751. This is the oldest company in the league with it having been created in 1937 and Bohs have always used this as the trading entity. Bohs are a 100% members owned club and have been since they were formed in 1890. Bohs originally owned Dalymount Park but today they are a tenant in the stadium after they sold it to the council to resolve old debt issues. More on that later.  In the 3 years covered by the accounts Bohs finished 5th, 8th and 5th again. In talking about the recent 3 years I will refer to the previous years as they are important to understand where the club was coming from. While a lot of clubs restarted in the 2000's Bohs did not due to the ownership of Dalymount.

Profit & Loss

The P&L for Bohs over the last 3 years is impressive on first viewing. Per the accounts Bohs made a profit of +€1.7m from 2015 to 2017 however as the table below shows most of this was in 2015 and most was exceptional to do with the sale of Dalymount and the restructure of debt. When you exclude this exceptional income Bohs made a profit of +€79k over the 3 seasons.

At the end of the 2011 season due to the debt Bohs had incurred in "chasing the dream" there was a real fear that Bohs might not come back for the 2012 season. Thankfully Bohs did come back in 2012 and since then Bohs have run at a modest profit. Sadly in the previous 6 season's Bohs lost (€5.2m) and thus built up a lot of debt. In this 6 seasons Bohs had some success with 2 league win and 1 FAI cup win but it came at a very steep cost. The reason for the spending was due to the sale of Dalymount to Liam Carroll in 2006 for €65m https://www.independent.ie/irish-news/bohemians-say-yes-to-the-sale-of-dalymount-park-in-65m-deal-26363606.html Unfortunately due to a couple of issues but mainly the property downturn this deal never closed and Bohs were left with Dalymount but also a big debt due to borrowing on the strength of the sale in the Celtic tiger.

Bohs like most clubs don't give a detailed P&L so I can't comment on the numbers in any detail like the Cork City accounts, but the revenue at Bohs in 2017 was its best since 2012 so the club is moving in the right direction, gates are up 35% in 2018 v 2016 http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/ but still below 4 or 5 other clubs.

As a result of this since 2012 to 2016 Bohs primary focus was staying in the premier division while trying to resolve the debt legacy issues. Per the blog post on the league in general Bohs are no longer one of the big spenders on wages and as a result the league position has slipped back from the 2006 to 2011 era. https://leagueofirelandfinance.blogspot.com/2018/08/2015-2016-premier-division-accounts.html Bohs have no external benefactor, nor any European football in this 3 year period so have just run at breakeven in that time. The real story of the last 3 years relates to the Balance sheet and is covered below.

Balance Sheet

At the end of Nov'14 which is the start of this 3 year period, Bohs had ran up accumulated debts of (€6.2m) and the principle asset they owned was Dalmount Park. Per the submitted accounts the principle debts were a (€4.4m) bank loan and members loans of nearly (€0.8m). This legacy debt, there since the end of 2011 was putting a strain on the club due to the uncertainty as to when the bank would call in its loan.

In the P&L to 2015 you will note above an exceptional income of circa +€1.7m and this relates to the resolution of the debt issues. At the end of Nov'15 Bohs debt was reduced to (€0.4m) but the ground was now sold to the council. https://www.independent.ie/sport/soccer/league-of-ireland/council-strikes-34m-deal-to-buy-dalymount-park-31075591.html Almost all of the net debt was then owed to members who contributed to fund the sale with members being owed circa (€0.35m) of the debt above. The exceptional item comes about in the fact in doing the deal with the banks and creditors, write downs on debt of circa +€1.5m was made by the club. There was also a small profit on the disposal of Dalymount of +€150k due to the carrying value in the books at the end of Nov'14 compared to the disposal price in 2015. 

Given that Bohs made circa +€50k profit over 2016 & 2017 combined the debt position at Bohs has remained fairly similar to the position at the end of 2015. However most of this debt is owed to member rather than 3rd parties which gives Bohs some comfort.

Summary

During the 2015 year Bohs future was sorted thanks to the efforts of the then board, members, the FAI and the local politicians. On top of that the future of Dalymount was resolved with the famous ground set to remain a football stadium and with the council to start work on a new stadium in 2020. In the last 6 years (2012 to 2017) Bohs have run a prudent budget with the club making small profits most of those years, excluding exceptional items & interest that was rolled up and ultimately written off in 2015. Given the losses in the previous 6 years it is no surprise that the club has been run in this manner.

Overall though while not a successful 3 years on the pitch a very successful 3 years off the pitch financially. The challenge for Bohs now is how do they compete with the likes of the clubs that a) have regular European income or b) have a benefactor. Bohs came close in 2017 to a 4th place finish that would have had them in Europe in 2018 but ultimately finished 4 points behind Derry for that spot. This is a challenge that 5/6 clubs in the premier division will have in the coming seasons as the income from Europe increases.

2015-2016 Premier Division Accounts

Overview

This post is more a general post on the financial state of the league based on the 2015 and 2016 season's. 8 of the premier division teams have filed accounts for 2017 but as 4 are still to be lodged I have not focused on that season yet. These are due in over Sept/Oct and I will update the tables accordingly. I included the date when the current trading company commenced for each club, you will note a lot of company's set up in the 2000's after the previous clubs ran out of money. I think however the data below will show that the league is thankfully nowhere in the same position as the 2000's which is great to see. 

The 2015 Season/Financial Year

This season saw Dundalk win the league for the second time in 2 seasons. Overall per the submitted accounts the 12 premier clubs that season made a combined profit of +€1.4m, however I had added back 2 separate types of income to come to what I define as sustainable profit. (see table below) 

 The adjustments to the reported numbers are that 3 clubs have benefactors, this reduced the losses in those clubs by circa (€0.8m) in the season. This type of benefactor is welcome and undoubtedly helps the league, however in the 2000's we had this type of situation and it ended badly for a lot of clubs. The other adjustment is that in 2015 Bohemian FC sold Dalymount Park to the council and resolved old debt issues. This obviously isn't a recurring profit and distorted the P&L in that year.

After the adjustments the combined situation would have been a loss of just over (€1m) with 3 clubs making a profit and the other 9 a loss. 3 clubs account for (€0.93m) of the combined loss with Limerick losing (€410k), Pats (€348k) and Sligo (€170k). In both the cases of Pats and Limerick, the ultimate owner of the club put in significant donations through the P&L in that year which is good as it means that the relevant club is not running up further debt on its balance sheet. In Sligo's case they lost (€170k) in the year but they had made a profit in 2014 of +€207k so they were trying to break back into the top 4 using profits from the previous season.

2015 also shows the importance of the European prize money with the 4 clubs receiving +€1.36m in the year for the games played. As we will see later, European prize money is getting bigger and playing a bigger role in the widening gap between the top and bottom of the table. 

You can see from the payroll figures reported in the audited accounts that there is a very different league going on and a very different playing field. The top 4 clubs spent 61% of the reported payroll in the year, with Dundalk spending the most at just under €1m. Apart from Sligo who invested heavily and only finished 8th, from Bohs (5th) down the gap in terms of resources within the top 4 and the rest of the league is significant, the Euro income allows those clubs to spend more on players and repeat the success. Derry City don't seem obliged to file the cash payroll number hence the absence here.

The 2016 Season/Financial Year

This season saw Dundalk win the league for a third season in a row and also make a big breakthrough in Europe. As a result of Dundalk success the P&L for the 12 teams looks fantastic so I also included a row without Dundalk.

In the season there were again 2 teams with benefactors and I have added back their donations in coming to sustainable profits. The 12 clubs made +€2.2m and excluding Dundalk the other 11 made a loss of (€1m) which is broadly similar to 2015.

3 clubs account for all of the loss in the "sustainable" column with Shamrock Rovers (€661k), St Pats (€324k) and Derry City (€288k) losing a combined (€1.27m) between them in 2016. Again both the Derry and St Pats benefactors covered this loss through donations and didn't increase the clubs debt in the year which like 2015 is very good for the club. Shamrock Rovers at this point did not have a benefactor so they increased their debts and at the end of 2016 had debts of circa (€0.8m) but their circumstances have changed since.

The same 4 clubs as 2015 were in Europe and made circa €8.8m with Dundalk making €7.5m. (I don't believe all this was booked in 2016 so I expect 2017 to be very strong as well) The other 3 clubs made €1.3m which was up on the €0.8m made in 2015 by the clubs as Irish team won more ties this season.

Again you can see the impact of European football on the payroll, the 4 highest payroll clubs in the season were the 4 teams in Europe. Dundalk is obviously impacted by bonuses related to the European run but the 4 teams in Europe paid circa 73% of the payroll in the season. This European funding and thus higher wages has allowed 3 of the 4 teams to stay in Europe for the last 4 seasons 2015 to 2018 with only St Pats dropping out and being replaced by Derry as the benefactor at that club increased his annual donations.

I don't have figures on Wexford Youths as they went bankrupt and were liquidated without ever filing 2016 accounts. I would imagine their payroll etc was low and on that basis you can see the 3 lowest payroll teams finished in the bottom 3. The gap between Cork and Rovers who are paying circa €1m per annum and Longford/Harps etc is immense and this gap will widen with European and Benefactor money.

European Monies

As the P&L's for both 2015 and 2016 show, Europe is a key income source for clubs. As well as the Uefa monies, clubs have at least 1 extra home gate but also travel expenses.

As I mentioned earlier Dundalk, Cork and Rovers have made Europe over the last 4 seasons and both Dundalk and Cork will again qualify in 2019. Winning the league is now worth a minimum of €800k a season with finishing second worth €240k. Any success in Europe will lead to higher amounts again. This money allows the teams in Europe to have a significantly higher playing budget than the teams below which means breaking into the top 3/4 is very hard without a club having the funds to lose. Waterford are an example of this, they lost (€0.3m) in 2017 to get promoted and I imagine they will lose more money in 2018 to try and break into the top 3 and the rewards that come with European football. They have a benefactor in order to enable them to do this which is good for them but most clubs can't do this which leads to the same top of the table each season and those clubs being able to build. This is no different to most leagues nowadays.

Summary

Everything above is based on fact, everything is pulled from the submitted annual accounts. I have tried not to speculate above but will below. Overall the league is broadly in a good place financially. In those years, 3 clubs had benefactors, since then Dundalk have been acquired by Peak 6 who will have resources (if they need to use them), Waterford have been acquired by Lee Power who is investing in that club and Rovers have received a €1.5m loan from Ray Wilson around the youth set up (and they already seem to be benefiting from this). On the flip side money has dried up at Bray Wanderers who now have new owners, the Limerick chairman is looking for investment and the Derry chairman has warned the club needs to be able to run on a sustainable basis in the future. These highlight the risks of needing benefactors to fund the club, eventually they can and do run out of money. 

However as I said the league clubs in most part seem well run, clubs are living within their means and not running up big losses. Where clubs are losing money they have funding in pace for same. However there are now 3 or 4 clubs with the resources both from European monies and benefactors that can pull away from the rest and have been doing so. This has created a tiered league, Dundalk/Cork are now in the 5th season of their 2 team battle and if anything these 2 teams are pulling further away in terms of league points. In the previous 9 seasons we had 7 different champions. Dundalk can go 26 points clear of Waterford who are in 3rd if they win their game in hand, in 2015 they only finished 13 points clear of Rovers in 3rd. And the season is not over.

The challenge for the clubs and the FAI is how do we encourage teams to progress and try and catch the teams above without the overspending that occurred in the 2000's and the problems that caused. Europe does offer a decent return but as both Derry and Pats show even with Europe they are losing money and need the benefactor to cover these losses, really only Dundalk and Cork are using the success to be profitable in their own right. The league this year seemed more set up to help the bigger teams with more resources which seems counter intuitive if we want to close the gap. If Waterford hold on to 3rd, 2 of the top 3 will have both European money and a benefactor next season, that will make it very hard for others to bridge that gap.

* The benefactor donations are calculated from the going concern and related party notes as disclosed in the accounts. Other clubs may have these types of income but they have not been disclosed so I have not speculated.

** The payroll number is as the club have disclosed in the notes to the P&L. I suspect from reading the accounts different clubs treat expenses in different manners but i have reported as per the accounts.

*** Euro prize money is calculated with reference to the Uefa reports. As I said I think while Dundalk earned that amount in the financial year 2016 they didn't book it all. 

**** Sustainable profit to me is when a club has normal trading income, gates, commercial, European money and excludes any artificial donations that while helpful are no way guaranteed into the future.

Cork City FC Financial Update 2015-2017

Background

Cork City are owned by Friends of the Rebel Army Society (FORAS) Limited 5449R and unlike the 6 other clubs to date they are not a limited company. Instead they are what is known as an "Industrial & Provident Society" which is like a co-op. FORAS came into being in 2007 but in affect became the club in 2010 when the previous Cork City club were not granted a licence and FORAS entered division 1. FORAS subsequently purchased the name and history of Cork City FC when the old company went into liquidation. In these 3 years covered by the accounts Cork City finished second in the league twice and won the league in 2017. They also won the FAI cup in both 2017 and 2016 and finished runners up in 2015. Like Dundalk the 3 years in focus have been very successful and profitable for the club. Cork City play their home games at Turners Cross which is owned by the Munster FA.

Profit & Loss

One of the interesting things about the legal structure of Cork City is that they have filed full complete accounts with the CRO rather than the abridged accounts that the other clubs have used. A co-op is not a limited company so they cannot apply for the same restrictions on reporting. As a result the P&L section here will be more detailed than others.

In the last 3 years Cork have been profitable for all of them. They have made circa +€400k in profits over those 3 years with each individual year profitable. Given Cork's success on the pitch this is no surprise but very good to see given Cork City have no exceptional income as such.

Revenue:

The revenue growth at Cork City has been very impressive and I imagine they had the highest income in the league in 2017 given the league and cup win, the 2 games in Europe and the big gates from the success. The table below shows their revenue broken out by key area:

Their increase from 2015 to 2017 is very impressive with gate receipts up over +€450k in the 2 seasons to run at +€1.1m in 2017 and prize money/Uefa solidarity money up +€330k. Given I can't compare this revenue to other clubs it is hard to comment on in detail but given my understanding of various club's revenue the numbers here are very impressive. One club in the premier division that is also a co-op is Sligo Rovers, their income for 2017 was €1.05m which shows the gap in resources between the top and middle. (Sligo finished 9th, 1 point off 7th)

In both 2016 and 2017 Cork had decent European runs with 3 games in 2016 and 2 games in 2017. In 2016 Cork should have received €675k from Uefa for their 3 games in the Europa League and in 2017 they would have received €440k as they only had 2 games. This drop would explain why prize money has declined as winning the league was only worth +€60k more than finishing second in 2016.

The attendances at Cork were well up on 2015 and 2016 as they won the league in 2017 with an increase YOY of 80%. Their average match crowd was up nearly 2,000 heads per game which should give a massive lift to income and as you can see it did. http://www.extratime.ie/articles/20256/25-increase-in-attendances-for-league-of-ireland/

I would guess included in other income in 2017 is any transfer fee received for Sean Maguire, the fee was never disclosed but you can see the big increase in this revenue line in 2017. This won't be repeatable in 2018 but prize money from Europe etc will have gone up.

Overall the revenue story at Cork City is very impressive, they turned good results on the pitch into more people in the ground and improved on their 1 game in Europe in both 2016 & 2017. The 2018 revenue I imagine will again be very strong having banked €820k from their 2 games in Europe along with more domestic prize money and crowds still strong http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/

Costs:

As Cork City made a profit each season, they have successfully managed their costs to their income. That said costs have also gone up a lot from 2015 to 2017. Cork City provide a lot of detail in their accounts on costs but I am not going to cover these in detail as other clubs don't share this data except Sligo. Costs increased from circa (€1.5m) to (€2.5m) an increase of (€1m).

Of this payroll increased by (€335k). Payroll at Cork City has increased from (€745k) in 2015 to (€1.02m) in 2016 to (€1.1m) in 2017. This is payroll for all area's of the club and given the success in 2017 it is not exceptionally high. Other clubs had figures higher than this in other years and won nothing. Associated with the playing side, transfers increased by circa (€90k) from 2015 to 2017.

The costs of hosting home games and the European travel has increased by (€163k) from 2015 to 2017 but given they had bigger crowds and 1 extra game in Europe this again would not be a surprise.

There are no other surprising cost changes, Cork have all the usual costs associated with running a club from Medical, Training, Rent/Rates, underage team costs, player accommodation, etc and some of these have gone up a bit over the 2 years.

Balance Sheet

The balance sheet at Cork City is quiet strong given the P&L performance in the last 3 seasons. The club has accumulated profits of +€498k which highlights they were running at break even mostly up to 2014 and have increased reserves by +€406k in the last 3 years.

Cork had +€295k in the bank at Nov'17 and were owed circa +€500k in current debtors. I would imagine some of this is 2017/18 Europa league monies paid after year end.

Cork had current liabilities of circa (€315k) at Nov'17 most of this being trade creditors and monies due in taxation.

As Cork don't own the ground, they have very little fixed assets with their main fixed assets being €50k of motor vehicles.

Summary

Cork like Dundalk in their recent 3 years show that success and profits can go together. Cork look a well run club with no exceptional income from a benefactor impacting their numbers. They have made over +€0.4m in the last 3 years and I imagine 2018 will be another strong year. They also have a strong balance sheet with cash in the bank to allow to have a bad year and be able to recover. The current Cork owners have learned the lesson of previous owners and are doing a very good job both on and off the pitch.

However both Cork and Dundalk are making their money from winning the league and cup and associated FAI and Uefa prize money. Between them they have won both the league and cup over these years with Pats in 2014 the last team to interrupt their domination. Will this change in 2018? This success has also driven growth in other income, primarily gates. The challenge for other teams is there is only 1 league and 1 cup to win, if you can't win these you don't get the Uefa money or associated bump in gates etc to improve the P&L. This is why apart from Cork and Dundalk other clubs are either losing money through the P&L (Rovers, Waterford) or having these losses covered to some extent by benefactors (Derry/Pats/Limerick), or not challenging and being in the bottom part of the table. 

Waterford FC Financial Update 2017

Background

This will be a very short post as the company that run Waterford FC (Power Grade Ltd 594819) was only incorporated on 14th December 2016 when Lee Power acquired the club following financial difficulties at the old club http://www.the42.ie/lee-power-waterford-united-3081677-Nov2016/. Power is the only shareholder and the accounts to Nov'17 are the only ones filed to date. In that year to November'17 Waterford won the first division by 8 points from Cobh Ramblers. Waterford play their home games at the Waterford RSC which is owned by Waterford City & County council, so like most clubs they don't own their home ground.

Profit & Loss

In 2017 Waterford lost (289k) in winning division 1. This is a little lower than Limerick the previous season, who although on paper made a profit they got exceptional support from their owner and without that they would have lost circa (€400k). As this is the first season for the company there is not much else to discuss regarding the P&L. Its a hefty loss to just get out of the first division and I imagine the loss will be greater in 2018 as even though they have been very strong they have no European money etc yet to reduce the losses. In the going concern note Lee Power has agreed to fund the club for another 12 months so there was no going concern issue as a result.

Balance Sheet

Again the balance sheet of Waterford is very simple as it is only finished 1 year of trading. The company has a deficit of (€289k) in line with its loss for the year. There are really 2 items of note apart from the loss. Firstly in terms of liabilities, the main liability is a director loan from Lee Power where the company owes him (€431k) at Nov'17. This loan in affect covered the losses in the year as explained above and also the company have an intangible asset related to the of the Waterford FC brand etc. This goodwill cost €155k and is being written off over 10 years to at Nov'17 there was an asset of €140k in the balance sheet.

Summary

Waterford, like Limerick the season before them, invested a lot to get out of Division 1 and ran up a big loss in doing so. It is an interesting strategy as unlike England when getting promoted from the championship equals a big pay day, in Ireland getting promoted almost means bigger losses. It will be interesting to see how the story at Waterford develops, obviously 2018 so far has been very positive on the pitch and they may make Europe for 2019. But as Pats/Rovers and Derry showed, even having a round or two in Europe does not guarantee profits. Like other clubs they have a benefactor to fund these losses so again that puts them in a strong position.

Limerick FC Financial Update 2014-2016

Background

Limerick FC to the best I can identify are run by a company called Munster Football Club Ltd (131715) which has been around since May'88. A well established company by league of Ireland standards. The company is actually owned by Galtee Fuels Limited after they bought 400,000 shares in Limerick in 2014. Galtee Fuels has been liquidated in 2018 so I assume these shares have been sold but I won't know that until this company files their 2018 accounts. In reality the club is owned by Pat O'Sullivan who was the owner of Galtee Fuels. The structure at Limerick is slightly different with other companies (Munster football club U'19's and Munster Football club academy Ltd) also being in existence. Like some other clubs, Limerick will be due to file their 2017 accounts soon, so this review is based on 2014-2016. In 2014 they finished 6th in the premier division, in 2015 they finished 11th and were relegated and in 2016 they won the first division to be promoted for the 2017 season. Like a lot of other teams, Limerick don't own their ground and the Markets Field is owned by LEDP https://www.ledp.ie/index.php/projects/the-markets-field/

Profit & Loss

The P&L of Limerick works in a very similar way to that of Derry, on first glance it looks okay, then you look at how much one person is investing to keep it going.

From the annual accounts, the table above shows the position without the significant contributions made by Pat O'Sullivan or his company (Paremek). The 2014 accounts don't have a related party note included but I would suspect that there were contributions in that year as well.

So at a minimum on a underlying trading basis Limerick would have lost over (€1m) and this for a club that finished 6th, were relegated and then promoted from division 1. Like both Derry and Pats it highlights the level of cost required to try and compete and Limerick clearly didn't compete.

All 3 years the club are losing substantial funds with a loss of (€200k) in 2014 which was also their best finish. The payroll bill was circa €396k that year, compared to Dundalk €644k & Rovers €1.2m. In 2015 the payroll bill was cut to €285k but the club still lost circa (€400k) and were relegated. Pat O'Sullivan gave circa €340k in donations that year to fund the club.

Lastly in 2016 Limerick were in the first division, the club won the league but again lost circa (€400k). This year the payroll bill was €347k which for division 1 standards is very high. Again Pat O'Sullivan invested in the and also a company controlled by him gave corporate sponsorship of €315k to help the P&L.

Over the 3 years, in terms of losses generated, Limerick have run up real trading losses of in excess of (€1m) but like Derry & Pats have a benefactor who has funded these losses. As most reading know, this is now coming to an end, O'Sullivan has indicated he cannot continue with this level of funding and Limerick are struggling in the league in 2018. It will be interesting to see what Limerick do post this investment http://www.limerickfc.ie/statement-from-chairman-pat-osullivan & https://www.rte.ie/sport/soccer/2018/0111/932534-500-000-gap-limerick-owner-set-to-sell-club/

Balance Sheet 

Limerick's balance sheet at Nov'16 is quite modest. As they don't own the ground they have little fixed assets.

They have a deficit of only (€167k) in liabilities over assets due to the way the club is being funded. Debt is not building up which is good for the future of the club. The club has circa €124k in current assets and (€308k) in current liabilities. There is no breakdown of these in the notes but you would assume they are normal trading assets/liabilities. The most interesting balance change was when a (€400k) debt to Galtee Fuels Ltd at Nov'13 was converted into equity during 2014 which improved the balance sheet significantly. Pat O'Sullivan owned Galtee Fuels so was probably just tidying up the balance sheet accepting there was little chance of this loan being repaid. 

Summary

Limerick are another club that have had a benefactor over the last few seasons. Adding in 2013 and the €400k I mention above and a commitment in the account for Paremek to provide €350k in 2017, Pat O'Sullivan has easily invested €2m in Limerick over the last few years with very little success to show for it. Like Derry the club is not building up a problem on its balance sheet given the method of investment in the club. 4 out of the 5 clubs I have posted on have run up significant losses over a 3 year period chasing something, at this stage of looking at figures I am not 100% sure what we are all chasing as bar Dundalk no one is close to delivering it. Real losses at 4 clubs over 3 years total circa (€4m) which is an eye opening amount. Thankfully most of these losses are "funded" by someone, the question you would have to ask is what happens if/when this funding dries up as every cycle turns at some point. Also most clubs are losing a similar amount which backs up my thoughts on the sustainability of the league as its not just 1 or 2 with high costs. 

Dundalk FC Financial Update 2014-2016

The Role Model or the Exception that proves the rule?

Background

Dundalk are one of the newer legal entities out there with their latest trading company (Dundalk Town FC Ltd 519313) only formed in October'12 and since then they have had a stellar rise. Dundalk avoided relegation at the end of the 2012 season via a playoff win. At the end of that season they appointed Stephen Kenny as manager and since then they have finished either first or second in the league. At the end of 2012 they were in financial difficulties and were rescued by Paul Brown and Andrew Connolly who owned 50% of the club each until they sold to Peak 6 in 2018. http://www.the42.ie/dundalk-peak6-american-takeover-3805254-Jan2018/ It was a fantastic 5 years for the club and its owners and I will cover the 2014 to 2016 results below. Like some other clubs Dundalk should publish their 2017 accounts soon.

Profit & Loss

For the 3 years 2014 to 2016 Dundalk made accumulated profits of +€3.36m with all 3 years being profitable (2014 €53k, 2015 €116k and 2016 +€3.2m). In each of the 3 seasons Dundalk won the league while being profitable which by Irish standards is quiet an achievement. There is nothing disclosed in the accounts that would indicate there is anything exceptional in terms of income in any of the 3 years in terms of directors donations etc.

In 2014 Dundalk were in the Europe league and were knocked out in round 2 by Hadjuk Split but they would have earned circa €400k for the 2 games in Europe. Also the league winning team and set up at Dundalk came at a modest payroll cost of (€644k). By Irish standards this was a low cost team.

In 2015 Dundalk had qualified for Champions League but were knocked out in round 2 by Bate but made €550k from this one game. Payroll increased this year to (€988k) but again they won the league and qualified for the champions league the following season. 

In 2016 Dundalk made the often dreamed about European breakthrough. Shamrock Rovers had done so in 2011/12 but the prize money 5 years later was worth far more. Rovers made €1.1m from their group stage participation from Uefa versus Dundalk making €3.7m for the same stage 5 years later. Dundalk generated circa €4.3m alone from Europe (€3.7m from the EL group stages) https://www.uefa.com/MultimediaFiles/Download/competitions/General/02/51/12/27/2511227_DOWNLOAD.pdf and €580k from being eliminated in the champions league https://www.uefa.com/uefachampionsleague/news/newsid=2398575.html Obviously on top of the Uefa monies, gates, commercial income etc would also have been given a boost. However given the success the costs also increased with the Dundalk payroll increasing from (€988k) in 2016 to (€2.7m) and increase of (€1.7m) year on year. Obviously this was well worth it given the increase in revenue.

Dundalk had one of their Europa league group stages in early December'16 post their year end so some prize money from Uefa could have been recognised in the 2017 accounts but this is not visible from the accounts.

Obviously the 3 year story at Dundalk is fantastic, even without the bumper 2016 year they were making money and winning the league.

Balance Sheet

The balance sheet of Dundalk is obviously very strong, firstly the company is only 4 years old so does not have any legacy losses or debt and secondly it had the great success in 2016. At Nov'16 Dundalk had accumulated assets of €3.3m. Dundalk had current assets of circa €3.5m which I would assume was largely monies due by Uefa to them. This asset had increased by nearly €3.1m year on year. Secondly Dundalk had €1.2m in the bank up from (€23k) the season beforehand. The joys of success!! Dundalk also spent €400k on the ground and increased their fixed assets accordingly that year.

In terms of liabilities Dundalk owed Corporation tax of (€0.5M) which is probably a first for an Irish club and a welcome bonus to the revenue commissioners,  and also owed (€0.5m) in PAYE/PRSI on what I assumed are accrued bonuses for the Euro run. These 2 liabilities are up (€0.95m) so you can see the taxman was a big winner from the success. The other liability of (€0.8m) is not broken out but I would assumed it mainly bonuses earned not yet paid in line with the big increase in players costs in the year.

Clearly the Dundalk balance sheet at Nov'16 looks great and it was a great 4 seasons for them from 2013 to 2016.

Summary

Clearly unlike the first 3 posts I did this shows that profits and success can go hand in hand. The club seems well run over its 4 years of ownership by the 2 directors but success has obviously had a big impact. In the first 2 years Europe contributed circa €1m to Dundalk and in 2016 it contributed €4.3m and in fairness to Dundalk while costs went up they banked most of the extra income. 

The question we need to ask is can this be replicated and can it be replicated by a few clubs. It costs  lot of money to challenge as the Derry/Pats and Rovers post show and interestingly none of these clubs came even close to challenging Dundalk in that time. In 2017 Dundalk went out of Europe after 1 game and in 2018 they went out after 2 games so prize money will be well down. It will be interesting to see how much of their profits have then eaten in to or have the continued to trade profitability since then.

Time will tell if Dundalk are a model that more clubs can replicate and progress or they are the exception that proves the rule that you can't be successful and profitable. There are 100's of old league of Ireland clubs on the CRO that are now dissolved and bankrupt that shows we can all follow the rule, only Dundalk has been an exception to date. 

Shamrock Rovers FC Financial Update 2014 - 2016

Background

Shamrock Rovers are in affect managed through 2 legal entities, Shamrock Rovers F.C Ltd (245954) (Trading Company) and Shamrock Rovers Members Club CLG (419156) (Holding Company) which came about when the club was rescued by the 400 club. The first company carries out the trade of the football club and was set up in May'96 where as the members club was set up in Apr'06 after the examinership process in 2005. Unlike Derry and St Pats the 2017 accounts are not yet submitted so I have looked at the 3 years to Nov'16 and will update in due course as the 2017 accounts are due to be filed soon. In these 3 years Rovers finished 4th in 2014, 3rd in 2015, 4th in 2016 and for the record also finished 3rd in 2017. At Nov'16 The Trading company was 93.27% owned by the 400 club members, but this will have changed with the injection of cash from Ray Wilson post this date. http://www.extratime.ie/articles/16110/rovers-invest-in-youth-as-route-to-success/

Profit & Loss Account

As I mentioned above you need to consolidate 2 sets of accounts to see the full picture at Rovers but most of the activity goes through the trading company.

As you will note in the 3 years Rovers lost circa (€1.2m). Most of these losses came in 2014 (€0.5m) and 2016 (€0.65m). Unlike Derry & Pats as explained in earlier posts, Rovers had no benefactor in the P&L so the losses came through very visibly in the P&L's in this instance. Rovers finished 5th in 2013 and thus had no European football in 2014 which would have hit their income. In 2015 Rovers won their first round in the Europa league, going out in round 2 and pocketed €410k that year which significantly improved the P&L. In 2016 Rovers were again in Europe, but lost in round 1 and their income reduced to €215k this year. You would expect an improvement in 2017 as again they progressed in Europe through round 1 and pocketed €440k in 2017. Like Pats, Rovers were in Europe 2 of the 3 years, they progressed through 1 round in 1 year and made circa €655k from the Europa League but still lost (€1.2m) over the 3 seasons. Another potential cause of the losses in 2014 and 2016 was that in August of both years the respective managers left. In Aug'14 Trevor Crolly left and in Aug'16 Pat Fenlon left, any compensation for their exits would be in these years but are not disclosed in the submissions.

The period is a year out compared to the St Pats P&L but the story is very similar, in both instances the clubs are losing circa (€1.2m/€1.3m) even after being in Europe 2 of the 3 years. Derry also lost a substantial sum in the last 3 years and I suspect their underlying loss would be higher if I could see the donations to the development committee. 

Balance Sheet

The balance sheet of the holding company is fairly simple, the principle and only asset is its shares of the trading company. The club takes in membership subscriptions which in turn it passes to the trading company to further increase its shareholding. You would not expect much in its balance sheet as a result.

The trading company had a deficit of (€0.8m) at the end of November'16. This was made up of assets of circa +€0.6m and liabilities of circa (€1.4m). The 2 principle assets at November'16 was the investment in the youth facilities at Roadstone and at that point circa +€0.2m had been invested (this will rise to +€0.4m) and another +€0.2m owed to Rovers for their European participation. 

The liabilities are not broken in any detail so their is no breakdown of the (€1.4m). From the going concern note it would appear some of this was owed to Ray Wilson as their is a commitment from a key shareholder to support the club. Again like Pat's if a lot of this debt is owed to 1 shareholder it is a better position to be in that owing lots of people monies.

Summary

I have looked at 3 clubs so far, Rovers, Pats and Derry and the trend across all 3 is very similar. When you strip out loan write off's (Pats) or very big donations (Derry) the underlying financial performance is big losses. Rovers is the clearest example of this as in these 3 years they didn't have any big write offs or donations so everything went through the P&L as normal. Rovers lost slightly less than Pats over the 3 year period but in both instances the losses were over (€1m). There is a clear trend here in terms of the profitability of teams even with European football, the 3 clubs I have covered so far between them have pocked +€1.4m over 3 years and can still run up these losses. I would expect the Rovers 3 year period to Nov'17 to improve as one of the big loss years (2014) will fall out and be replaced with 2017. Rovers now have a benefactor as well to help underwrite these losses and invest in the youth side, a move I strongly agree with as the current model is not working, clubs are running up big losses to chase a pot of money that may not exist.

Depending on how the investment from Ray Wilson is treated, the balance sheet and shareholding will look different in the future. If like the Derry chairman the monies are given as a donation the P&L will look very different too, but if it is given as a loan as reported above the underlying P&L should still be a true reflection of the clubs financial performance. Given the sales of players in 2018 so far, the P&L for this year when available might look very strong.

St Patricks Athletic FC Financial Update 2015-2017

Background

St Patricks Athletic FC are run through a company called Newtonheath Company Limited (189439) which was set up in May'92. This company was created in 1992 as the previous entity running St Pats had gone bankrupt. In July 2007 Newtonheath was purchased by Mancar Limited (403848) and this company is ultimately owned and controlled by Garrett Kelleher. With Liam Buckley managing the club since 2012 and Kelleher owning it since 2007 the club has been very stable over that time as a lot of other clubs have had financial difficulties post the 2008 financial crash. Under Kelleher/Buckley Pats won the league in 2013, the FAI Cup 2014 and the League Cup in 2015 & 2016. 

Profit & Loss Account

On first view of the company P&L it would indicate that St Pats are making a small annual profit. Over the 3 years the total profit was €52k (2017 €9k, 2016 €11k & 2015 €32k). 

However when you read through the accounts you can see that the parent company, Mancar Limited, are writing off some of the debt that Newtonheath owe it each year to in affect balance the books. This has significantly distorted the P&L and when you add this loan forgiveness back you can see that St Pats actually lost (€1.35m) from football activities in the last 3 years. This would compare with circa (€700k) lost by Derry City in the same period although I suspect the Derry figure would be higher again except for the Development Committee monies.

In both 2015 and 2016 Pats were in the Europa League following a 3rd place finish in 2014 and the FAI cup win and a 4th place finish in 2015. In 2016 Pats finished 7th and in 2017 Pats finished 8th in the league. Europa League solidarity payments are vital to the sustainability of any Irish team and in 2015 Pats earned €200k for losing in round 1 and in 2016 Pats earned €440k after losing in round 2. However even with these monies ex the Europa League in both financial years Pats lost in excess of (€300k). You can then see the impact of having no European football in 2017 with the loss close to (€700K) for a full year.

The Pat's P&L is a very good example that even with European football and even winning a round, the model is not sustainable without a large amount of support from a benefactor. The Derry P&L in the previous blog post showed the same.

Balance Sheet

The Newtonheath Ltd balance sheet is one of the more interesting in the league as this company owns the ground it plays in. At the end of Nov'17 Pats had a balance sheet with a deficit of (€3.3m) and accumulated losses to date of (€5.8m).

The principle asset that Pats have on the balance sheet is Richmond Park which is valued at €1.5m. This value is based on historical cost i.e. what it cost plus and investment since. The current value of the site today would depend on its use, as a stadium it would not be worth a lot, especially given the company that owns it is substantially loss making, as a site for other use the land could be worth a lot. In 2007 Jones Lang Lasalle valued the stadium to be worth €33m which led to a court case from a bank that lent to Garrett Kelleher on the strength of this valuation. https://www.independent.ie/irish-news/courts/bank-sues-as-45m-stadium-later-revalued-at-just-1m-29667483.html In today's market depending on what the site was used for who knows.

Pats have current liabilities of (€3.9m) at the end of Nov'17 of which (€3.8m) is owed to its parent company Mancar Limited. Per the accounts, Mancar has agreed not to seek repayment of this loan within the next 12 months and have also agreed to fund the club for the year ahead. This has allowed the auditors to consider the company a going concern. This (€3.8m) debt is after the (€1.4m) debt write off explained earlier which shows at a minimum Mancar has put (5.2m) into the company in the 10 years it has owned it, which is not far off the (€5.8m) of accumulated losses. While Pats debt is very high for a league of Ireland club, it is mostly all owed to its ultimate owner so this is a good scenario to be in. Post the financial crash when a lot of clubs went bust the debts were owed to third parties, this is not the case at Pats.

The other main liability Pats have is a long term liability of (950k) in relation to government grants for the development of Richmond Park. This is a contingent liability and only arises depending on what happens with the site, if it remains a football stadium this will be written off to the P&L over a 15 year basis.

Summary

As with Derry City, St Pats are not a viable club today without the support of Garrett Kelleher. This support has been forthcoming for the last 10 years to the tune of (€5.2m) at a minimum with a commitment from him for this support to continue for at least 12 more months. Pats have had some success in the last 3 years and have received €640k in Europa League Prize money, but even with this money they lost (€1.35m) from ongoing football activities. Even with the investment and losses in 2015-17 Pats have not been able to get back up the table, a 4th, 7th and 8th place finish has been the result in the last 3 years and 2018 won't be much better in terms of league placing. To me this is a good example of a team investing for success/Europe and not being able to get there and running up large losses in doing so. Most clubs cannot afford this model, Pats with Garrett Kelleher can. Also only 4 clubs can benefit from European money and as Pats/Derry have shown even then the monies don't stop the losses. The more clubs that chase Europe and don't get there, the more losses will add up across the league.

Derry City FC Financial Update 2015-2017

The current limited company (NI601341) that runs Derry City FC was incorporated in Nov'09 following the financial troubles of the previous company that owned Derry City, Wellvan Enterprises Ltd. Wellvan was officially would up in the summer of 2017.

Derry City have circa 158 individual shareholders that own the club with ownership ranging from 1 share to 200 shares per the last annual return submitted with 11,043 ordinary shares issued. Most of the shareholders own 50 shares each. In affect its like a members owned club but will different people having slightly more power than others. The club chairman only has 42 of the issued shares.

Over the 3 years to 30th November 2017 Derry City have shown a P&L trading loss of (£25,356). The company made a loss in 2015 of (£5,732) a further loss of (£34,565) in 2016 and lastly a profit in 2017 of +£14,941. No P&L is included in the submission so not possible to understand any trend changes here.

At the end of November'17 the balance sheet is in a relatively healthy position with assets of £162k and liabilities of (£117k) so it has a surplus in the balance sheet. For any league of Ireland club, this is a very good position to be in. Derry have no longer term liabilities and don't owe any of the directors any money, which is relevant to the point below. The main assets of Derry at Nov'17 were cash in bank of £63k and debtors of £80k. The liabilities are not broken down. Derry do not own the Brandywell so the balance sheet is quiet small as you would expect.

However the club is heavily financed by one shareholder and current chairman Phil O'Doherty. Over the 3 years to Nov'17 O'Doherty has donated £593k (2015 £ 65k, 2016 £225k and 2017 £303k) to Derry City which has helped Derry run at a small loss. Also Derry City have donations from the "Derry City FC Development Committee" which don't file accounts which have also donated £271k (2015 £142k, 2016 £113k and 2017 £16k) in the last 3 years to the club. Per the accounts O'Doherty also donates to this committee but how much of this money has come from him is not disclosed but you would imagine from the figures that he is funding the club directly in later years as the monies from the development committee have declined as his donations to the club have gone up. All these monies go through the P&L in some form, either as donations or sponsorship which is very good for Derry as they have no residual debt on these monies as a result.

Derry were not in Europe in the summer of 2015 or 2016 but did enter the Europa league qualifying stages in 2017. In the accounts to Nov'17 they would have had income of €215k that was not included in the previous 2 years but also had the disadvantage of playing all games away from The Brandywell due to a rebuild ongoing. They also qualified in 2018 for the Europa League again which will be worth circa €220k in the Nov'18 accounts.

Overall the accounts would show that Derry City FC as it currently operating is very dependent on the club chairman. He has invested at least £593k over the last 3 financial years to mixed success which shows how hard it is to progress in the league. This ties in with increased ticket prices for this years Europa League game and his warning in the summer  https://www.bbc.com/news/uk-northern-ireland-foyle-west-44735832 about the clubs future financial security. Without his donations the club would be trading at a loss of (£618k) in 2015 to 2017 with only a 3rd and 4th spot to show for this level of losses. Derry will either need to find sustainable revenue streams in the coming years in order to stay at the level they are playing Budget wise or they will have to reduce the playing budget if O'Doherty does indeed want the club to become more sustainable. Missing out of Europe and circa €220k in 2019 would be a big blow to a club like Derry and how they are trading today.

Thanks for reading...

This will be a very short blog on individual clubs within the League of Ireland that I can obtain information on from the companies office. Unlike other leagues where the clubs file detailed accounts, our clubs are only required to file abridged accounts as they are all deemed as small companies (that in itself tells us where we are at). As companies only file annually there won't be a lot of posts but hopefully it will help inform people on the general health of the clubs within the league. I have been doing some research on 6 to 7 clubs from 2015 to 2017 and I will share this data with you by club. If anyone has any other information please feel free to share, this blog is just about trying to inform people on where teams are financially.