2018 Premier Division Update/Uefa Licensing Report

 

2018 Financial Review

I haven't written any blogs in a while as firstly a lot of clubs don't have to report much data that's worth looking at and secondly there hasn't been a lot of filings. I am looking at 2018 here as all clubs have filed reports and also I am comparing to the annual Uefa report and their last one is 2018. That can be found here.

2018 Uefa Highlights - Revenue

You would assume the headline numbers here are all accurate as based on the annual audited accounts as submitted to the FAI/Uefa. Per the Uefa report the league of Ireland revenue for the 10 teams was €15m. This has us ranked 36th in Europe in terms of the revenue the league brings in. Coincidently our Uefa country ranking in 2018 was 37th which shows we are broadly in line with where we should be in terms of the revenue our league generates.

While we are 36th in revenue you can see there is a big gap to even 30th, 6 places higher where Bulgaria brings in €42m annually, almost 3 times our income. They have a TV deal would circa €3m where we have a TV deal worth nothing. Again our low TV deal is not too uncommon with the nations below us with very few of them having much/any income from TV.

You can also see that transfer income is a very small part of the leagues income with only 6% coming from that source in 2018.

The table below shows the split of revenue by type from the table above. The revenue from Uefa makes broad sense with €1.8m being earned by the 4 clubs in Europe and another €0.5m being given in youth solidarity money.

Gate receipts are 28% of our income making up €4.27m. The 28% is the forth highest % of income out of the 55 leagues in Europe and shows why we are disproportionally hit with getting our league back compared to most leagues.

The sponsorship/commercial number looks very high for our league and this is artificial based on the Uefa definition of same. As you can see as well as "pure" sponsorship the likes of club merchandising income, fundraising etc are classified in this area. Clubs like Sligo who bring in €0.5m a year in fundraising would massively skew this number.

Most of our clubs don't have to publish their revenue but 5 of the 10 clubs in the premier that season have. The top 3 in the league that season accounted for €8m or 54% of the revenue. This would make sense as they accounted for €1.54m of the €1.8m Euro prize money in the year. Also they would have had the biggest gate income due to the success of being in contention for the league and having Euro games. Both Cork and Dundalk would have had 2 euro games at home while Rovers and Derry had 1 each.

Our income has changed massively in the last 4 years per these reports. The €15m in 2018 was down (€4m) on 2017. However its well up on the €11m from 2015. The big step up in income in 2016 would have been driven by Dundalk's Euro run in the 2016/17 season and that may also be impacting the 2017 season depending on how they accounted for it. With 2018 being a more "normal" year in Europe the overall league revenue fell back. This highlights how important Uefa income is to the clubs that make Europe.

2018 Uefa Highlights - Wages

In 2018 per the Uefa report we spent €9m of our income on wages which is 63% of the revenue. Over the 10 clubs that averages at €0.9m a club and based on the club average amount this again places us 36th in that table. Per this report wages in Northern Ireland are circa €4m in a year or €0.3m a club so in affect we are paying 3 times the wage on average. 

There is even less information in club accounts in terms of wages. There used to be more but in recent year (since I started reporting them) clubs have removed these from the disclosures to the CRO :(

But the €9m would be significantly covered by the top 3 teams. Dundalk and Cork do disclose the number and they account for over 1/3 of the wages. Shamrock Rovers last disclosed 2017 numbers when it was €1.2m so even assuming a small increase in 2018 the top 3 clubs would account for over €5m of the annual €9m with the other 7 clubs accounting for €4m. To be honest based on the Cork and Dundalk reported numbers the €9m looks low but that's per Uefa.

For comparison in 2015 per this report we had an annual wage bill of €6m between 12 clubs in the premier at an average of €0.5m. So over 2015 to 2019 wages on average in the league have almost doubled from €0.5m a club to €0.9m a club. Dundalk a good example whose wage bill has gone from €988k in 2015 to €2.1m in 2018.Where as other clubs like Shamrock Rovers whose wage bill was €1.3m in 2015 would not have moved as significantly.

2018 Uefa Highlights - Profitability

Per the report 55% of clubs in the top 20 leagues report a profit, so trading at a profit is possible.

However for the leagues 21 to 55 its a different story. Of the 397 clubs in those leagues the average loss is 28% of revenue. Ireland actually fares well in this comparison with the league losing circa 15%. As they mention in the blue box, all these leagues are much more dependent on benefactors, Uefa income and transfer income which makes it harder to plan and easier to run losses. What is clear is that we are no different to most leagues around us and our losses are smaller which is probably down to not having as many big benefactors here.

Overall our Uefa coefficient position is fairly relative to the money we bring in and the money we spend on wages. If we want to  progress up the rankings we need to increase the revenue the league brings in and then invest some of that in the playing budget. You can see from these report the correlation between the metrics. Obviously like Dundalk getting into group stages we will have the odd exception but for it to be regular we need to improve in the ranking here.

Actual 2018 League of Ireland Financial Performance

Based on the above in terms of how the league of Ireland fares in terms of the leagues etc around us, the table below shows the actual published results for 2018.

Since 2018 3 of the clubs here have had financial problems which shows the risk. Limerick didn't participate in the league in 2020 as again the benefactor had challenges, Cork have well known financial challenges and have been relegated to division 1 and Bray were sold over the course of 2018 when their benefactors eased back on investment. In 2 seasons 30% of the clubs in our top division had serious financial problems which is a warning sign.

Even after getting €1.8m in Uefa prize money we collectively lost (€3m) in a season. That's fine as long as there are people willing to finance the losses, as the 3 clubs above show when that stops the challenges come arise.

Our league is really no different to the other 34 leagues outside the top 20, we face the same financing and funding challenges as they do. Our performances in Europe broadly reflect the money and resources in the league although some think we should be doing a lot better. 

But there is a big gap to get to the top 30 from where we are today. Hopefully clubs and the FAI can come together and build a proper pathway to a sustainable full time league here but there is a lot of work to do to get there from the Uefa report and from our own published figures.