The 2000's - When most LOI clubs partied
I don't think there is much new news here for fans of the league in the 2000's, however when you add it all up it makes particularly grim reading. The 2000's was the time when many league of Ireland clubs moved into the full time professional era, unfortunately it was all built on sand and came crashing down across the league.
The table below shows how teams fared in terms of success with a certain level of consistency across the decade. Bohemian FC and Shelbourne FC won 4 leagues each with Cork City, Drogheda Utd and Shamrock Rovers each winning 1.
Derry City and Longford Town were both successful in the cup competitions as Bohs/Shels while successful in the league didn't win much in the cups.
However while all this success was going on the picture behind the scene was not as nice for the clubs.
The Cost of Success
The table below shows the losses these 7 clubs ran up over the 2000's. Per the published accounts or examiner/liquidator reports the clubs lost at least (€28.4m) and if you read a bit more they lost (€35.7m) over the decade from on the pitch activities. Some of these companies just stopped trading and didn't file completed accounts to their date of cessation but I would be happy with the data from various company disclosures.
I was surprised at the scale of these losses, remember there are other clubs that also went bankrupt in this period that are not counted here as I focused on the clubs that were really "living the dream" and what happened to these clubs. The figures seem large but I will explain where these losses and debts went as such.
Bohemian FC
At the start of the 2000's Bohs had a P&L reserve of close to zero, in affect 65 years of trading at break even. Bohs had run into difficulties before but had managed to work their way out of these issues. Bohs have won the league 11 times but 4 of these occurred in this decade which highlights how successful it was on the pitch.
However off the pitch Bohs lost (€4.4m) and this was after banking circa +€3.4m in proceeds from the sale of Dalymount to Liam Carroll. When you exclude these proceeds the success on the pitch cost circa (€7.8m). The professional era started well at Bohs with the club winning the league in 2001 under Roddy Collins and actually making a profit off the pitch due to the Kaiserslauten game and German TV rights. However from 2001 onwards financially it was all downhill.
Bohs were left with debts of circa (€5m) at the end of Nov'10, mainly loans secured on the sale of the ground which was now gone due to the property boom ending. Ultimately Bohs repaid (€3.5m) of a loan of (€4.5m) with the sale of Dalymount park to the council.
Ultimately to fund the success over the decade Bohs sold Dalymount for +€3.5m, had deposits of another +€3.4m for a failed sale and the bank wrote off +€1m of the loan.
* Club accounts from 2001 to 2010 on the CRO company number 8751
St Patricks Athletic FC
St Pats started the decade like Bohs with a fairly break even situation for the years they had been trading. From 2001 to 2006 before the club was sold to Garrett Kelleher the club had ran up losses of circa (€2.6m). By the end of 2010 these losses had risen to (€5.7m) meaning Pats lost (€3.1m) between 2007 and 2010.
However when you read the accounts, it is noted that St Pats also had debt forgiveness to its parent company of (€3.9m) in those 4 years. At the end of Nov'10 the company owned its parent company circa (€3.7m) even after the (€3.9m) write off. In reality over the decade the club lost circa (€9.6m) on the pitch. The club still owns the stadium unlike most of the clubs covered here which still remains its principle asset.
The Pats figures seem very high, but equally the accounts are very clear and the notes very detailed. Of all the figures this one stumped me the most but as I said, the info is there for anyone to read.
* Club accounts from 2001 to 2010 on the CRO company number 189439
Shamrock Rovers FC
Rovers started the decade working on getting the Tallaght Stadium built which they were going to own at this point on a long lease. I can't remember all the issues back then but the lease was owned by Mulden International and the trading company of Rovers was Branvard Limited.
Rovers actually went bang prior to some of the really big losses in the late 2000's. In April'05 they applied for Examinership to try and reduce some of the accumulated debts and allow the club to keep trading. Per the examiner the club had run up debts of circa (€3.6m) and of these they repaid circa +€0.6m. Its hard to work out just when Rovers ran up all these debts but per their accounts at May'00 they like Bohs/Pats had traded close to break even, by Nov'03 they had lost (€1.7m) and they didn't file 2004 accounts. The next accounts filed were in 2005 post the examinership and at this stage the debt was greatly reduced. Rovers were relegated in 2005 as out of the examinership process issues arose with their submitted accounts but were promoted again after the 2006 season.
Not surprisingly while other clubs were running up big debts in the late 2000's Rover broadly traded at break even after coming through the examinership process.
* Club accounts from 2001 to 2010 on the CRO company number 245954 & Court Order of 02/08/05 exiting Examinership
Drogheda United FC
The company that ran Drogheda United was called Hinge Trading Limited and was only set up in 1997. So at the start of the decade this entity had not ran up much accumulated losses, very similar to the other clubs. In 2003 this company was taken over by another company called Drogheda United Football Club (O2) limited.
Between 2005 and 2007 (3 seasons) Hinge Trading limited lost circa (€4.5m) which culminated in them winning the league in 2007. However even with this league win the problems were clear, the club went into examinership by Oct'08.
The court accepted examinership document is available to read but the quality is very bad to make out all the losses and the agreement.
Ultimately it would appear that most of the losses that Hinge Trading ran up were covered by the directors of the parent company buying new shares in that company to fund these losses. However in 2008 this stopped and Hinge Trading had debts itself of (€0.7m) which it ran up over 2008 which led to Hinge Trading going into Examinership.
Drogheda were deducted 10 points for the examinership but stayed in the premier division. Ultimately a new members owned club was created in 2011 as a holding company to own the club together with a new trading company to run the club, similar to the Shamrock Rovers structure. Both the previous 2 entities that ran the club in the 2000's were voluntarily struck off the CRO in 2013.
* Club accounts from 2001 to 2010 on the CRO company number 266933/366788 & Court Order of 30/01/09 exiting Examinership
Shelbourne FC
Shelbourne FC probably started the move to professional football in the late 90's early 2000's whose model was then followed by other clubs. Shels traded under a company called Accolade limited since the mid 80's. In 1993 the company changed its rules in order to avoid company filings by in affect stating that the owners could not bank any profits and any surpluses would go to the FAI. A little known rule but Shels employed it.
As a result there are no annual accounts to review apart from the 2014 accounts which were submitted and in affect closed the company down. The company was liquidated in May 2018. Shels last won the league in 2006 but were immediately relegated at the end of that season for financial problems. Accolade would appear to be replaced by a new company in 2007 called Shelbourne FC limited but they also don't file full accounts. Shels have only had 2 seasons back in the premier division since 2006 in 2012/2013.
Where the (€6.2m) loss comes from in the 2000's is that this is the accumulated losses when the company completed accounts. Assuming like most clubs that coming into the decade the club was circa zero on this line it would give a (€6.2m) loss over the decade and really over the 6 years to 2006.
How this was funded is harder to explain, the easiest bit is like Bohs, Shels banked circa +€3.1m for deposits on the sale of Tolka Park. These deposits were written off in the accounts as that deal fell through with the property bubble ending. Accolade at wind up also had other creditors of circa €1.5m that were written off as part of the wind up. Its a shame there are not more details available here but the (€6.2m) accumulated losses is a fact as such.
* Club accounts 2014 on the CRO company number 106863
Derry City FC
Derry City traded under the UK company Wellvan Enterprises. While they didn't win a league in the 2000's they contended a few times and won both the FAI & League cup a few times. Derry finished 4th in the 2009 season but were relegated after than season to division 1 after financial difficulties. Wellvan ceased trading at the end of the 2009 season and was replaced by Derry City Football Club Limited in 2010. Derry were promoted after only 1 season in the first division.
The last annual accounts the company filed before their trouble was Nov'07 and at that stage accumulated losses stood at a modest (£166k) which would be nothing to worry about. No accounts were ever filled for 2008 or 2009 as the company appointed an administrator in Nov'09.
Per the administrators report of Nov'11 & Nov'12 there were (£1.5m) of unsecured creditors and this is where I calculate the losses the business was running up to Nov'09. As a result of these debts the company choose a voluntary liquidation as the administrator had no chance to save the company or repay the debts.
* Club accounts 2001 to 2007 on the CRO company number NI028477 and administrator report Nov'11/12
Cork City FC
Cork City were one of the more complicated clubs to look at as they had 3 companies involved in running the club, Vendra Investments to 2002, Cork City Investment Ltd 2003 to 2009 and FORAS for 2010. Cork City actually look well run up to 2006 with accumulated losses of circa (€250k). At the end of 2006 Brian Lennox sold the club to Arkaga and was then later sold again to Tom Coughlan.
The company never filed accounts for 2008 or 2009 and ultimately a new company FORAS set up. When Cork City were relegated in 2009, FORAS entered the league in the first division in 2010, winning promotion in 2011 after 2 seasons in the first division.
In 2007 when the last published accounts were published Cork City lost circa (€0.7m) for the year and circa (€0.9m) since 2002. The club owed Arkaga circa (€1m) in the balance sheet at that date.
I only estimated losses of another (€0.6m) in 2008 and 2009 to come to the (€1.5m) figure and that is based on media reports at the time. To be honest, I think based on 2007 and the hike in losses across the board in all clubs it could have been a lot higher in 2008/09.
* Club accounts to 2007 on the CRO company number 366256
Summary
This is a very long post and I appreciate it if you are still reading here. I wanted to explain the facts as detailed as possible to give the reader confidence on the figures as a loss of (€35.7m) across 7 clubs seems massive. The real losses in the league would be higher, probably over (€40m) an example being Sporting Fingal who only played 3 seasons and in the first 2 of those needed (€1.25m) from Gerry Gannon, they went bang at the end of year 3 and never filed those accounts. Dundalk had a few entities from a co-op and another limited company running the club in the 2000's, each change required when financial difficulties arose. For Longford who were successful in the early 2000's I can't actually find the legal entity that ran the club then but a new one was set up in 2007.
What did all these losses get us apart from some success for some clubs and some UEFA ranking points. Very little. Bohs lost Dalymount, Shels lost Tolka, Rovers lost owning Tallaght. Cork/Derry/Drogheda/Rovers went through examinerships to try and save the clubs, some succeeded, some clubs had to start again (that's another debate). Numerous clubs across the country had regular financial problems, all of which became apparent towards the end of the decade.
Thankfully per my other posts the league is a lot better run today in financial terms, also with the youth leagues etc money is going into develop players for the future and not just the first team. The key lesson for clubs now is not to over extend themselves to chase teams ahead like most of us did in the 2000's. That's hard when fans want success etc but hopefully enough of us have learnt the lessons for it not to happen again on this scale.
No comments:
Post a Comment