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.