tag:blogger.com,1999:blog-63527547605771606552024-03-14T00:38:18.206+00:00League of Ireland Financial PerformanceAn update on the financial performance of clubs in the league based on readily available public data.chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-6352754760577160655.post-56608742598621935292021-07-03T17:44:00.000+01:002021-07-03T17:44:22.207+01:00Creating a Sustainable League of Ireland<p style="text-align: center;"><b><u><span style="font-size: large;">How to create a sustainable League of Ireland?</span></u></b></p><p><span style="font-size: medium;"><b><u><br /></u></b></span></p><p><b><u><span style="font-size: large;">What do I mean by sustainable?</span></u></b></p><p><span style="font-size: medium;">I am never seen anyone put on paper a plan to improve the league and make it sustainable. Nothing from the FAI or the clubs, personally I think the clubs need to drive it more as it's more key to us than anyone. So here is my personal opinion on where we are and where we could go with state help for a short term of time and using that help in the right areas.</span></p><p><span style="font-size: medium;">When I talk about a sustainable model, I mean that clubs have enough income from football sources to pay their bills and make long term plans for 3 to 5 years with some level of certainty. Benefactors investing is great and should be welcome but as a league our top division should be full time professional offering jobs to 400 to 500 people from sustainable income. If we cannot do this from gates, commercial, grants, transfers, prize money etc then we will continue to have a league that implodes from time to time when benefactor money runs out. The 2000's was a great example of that when we had a lot of full time clubs, none of which were sustainable.</span></p><p><b><u><span style="font-size: large;">Background</span></u></b></p><p><span style="font-size: medium;">This September is the 100th anniversary of the formation of the league and due to the short season in the 2000's we are now in the 101st season. Over the 100 years we have not yet managed to build a sustainable professional league in this country. We have had periods of professionalism which have all ended with the clubs involved going bankrupt, going out of business or dropping to lower leagues. </span></p><p><span style="font-size: medium;">Going back to the 1940's Cork United/Athletic won 7 of the 11 leagues between 1940 and 1951. They eventually folded due to running out of money so while they were very successful in the short term they didn't survive to enjoy that success.</span></p><p><span style="font-size: medium;">The next period of continued domination was Waterford from 1965 to 1973 where they won 6 out of 8 leagues. Thankfully Waterford still exist having had many owners since but have rarely come close again and have struggled with debts at various times since.</span></p><p><span style="font-size: medium;">After that came Shamrock Rovers of 1983 to 1987 who were probably the most dominant team of any era winning 4 leagues and 3 cups having signed some of the best LOI players from other teams. However like the 2 clubs above that model wasn't financially sustainable and ultimately their home ground was sold and they spent 2 decades on the move until they arrived in Tallaght.</span></p><p><span style="font-size: medium;">In the 2000's Shelbourne and Bohemian FC had their most successful periods. Shels won 5 leagues between 1999 and 2006 while Bohs won 4 leagues between 2000 and 2010. What happened then? Shels have largely been a division 1 side since and lost Tolka Park after selling it to developers to fund said wins and Bohs lost Dalymount after selling it to developers to fund said wins. DCC ultimately bought both grounds and as for their future, time will tell.</span></p><p><span style="font-size: medium;">Since then the dominant team has been Dundalk who have won 5 titles between 2014 and 2020. What was different about them was between 2014 and 2017 they had this dominance while not losing money, however since then they have lost a lot of money trying to sustain their position. Their immediate rivals in this era were Cork City and Shamrock Rovers, who while both had some success on the pitch, have lost a lot of money trying to keep up with Dundalk. Ultimately Cork have been relegated and looked to sell themselves but thankfully they don't appear to have a significant debt overhang.</span></p><p><b><u><span style="font-size: large;">League of Ireland - Current Reality</span></u></b></p><p><span style="font-size: medium;">Today I would say there are 2 full time professional sides in the country, Shamrock Rovers and Dundalk FC. Neither of these can afford this model from the money they bring in from football activities. There are then a lots of semi professional sides who pay 40/43 weeks and in that time are professional and then there are clubs that pay 40/43 weeks but the players also have day jobs. So a mixed bag of a league.</span></p><p><span style="font-size: medium;">Over the period 2014 to 2020 there were 3 teams generally in the top 3 of the league and winning cup finals and were full time. They were Dundalk, Cork City and Shamrock Rovers. By being at the top these teams have secured the European money which compounds their financial advantage. But even that advantage hasn't stopped cubs running up losses and Cork City having serious issues.</span></p><p><span style="font-size: medium;">Dundalk won 5 leagues and 3 cups,</span></p><p><span style="font-size: medium;">Cork won 1 league and 2 cups,</span></p><p><span style="font-size: medium;">Shamrock Rovers won 1 league and 1 cup with St Pats winning the other FAI cup back in 2014.</span></p><p><span style="font-size: medium;"></span></p><p><span style="font-size: medium;">The table below shows the P&L's of these 3 clubs over that period;</span></p><p><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPd3kLavd1nOoJxroi6WHgAZHrcWO5LWmo0AGcI3Xk-nHZQOUFW4eMgb4GV16DbEz_fpyxqWXJ1bxhoRj1hAhzAzLEZKyXa-CaGlg-MVAps_Ip8sx6WhswuOC35uLlDVW6j3-tJScvgf0/" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img alt="" data-original-height="208" data-original-width="707" height="188" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPd3kLavd1nOoJxroi6WHgAZHrcWO5LWmo0AGcI3Xk-nHZQOUFW4eMgb4GV16DbEz_fpyxqWXJ1bxhoRj1hAhzAzLEZKyXa-CaGlg-MVAps_Ip8sx6WhswuOC35uLlDVW6j3-tJScvgf0/w640-h188/image.png" width="640" /></a></p><div class="separator" style="clear: both;"><span style="font-size: medium;">Dundalk were making money in 2014 to 2017 while winning trophies. This was helped by the 2016 Euro run but even without this run the club was well run on and off the pitch. Since Peak 6 bought the club, the success has continued but the losses have increased significantly. 2020 was another good euro run but those profits were eaten up by Covid losses and a big wage bill. Dundalk as it stands today would be a heavily loss making club on an annual basis unless it reached the Euro group stages. <b><u>And that is fine as long as their owner will prop up the losses, the challenge arises when the owner can't/won't.</u></b></span></div><div class="separator" style="clear: both;"><span style="font-size: medium;"><br /></span></div><div class="separator" style="clear: both;"><span style="font-size: medium;">Cork City looked like the a good model as a fully owned members club. They were successful on the pitch and made money every year bar a small loss in 2018. They haven't filed 2019 or 2020 accounts yet so hard to know when/where things went wrong, but were relegated at the end of 2020 and its reported they had built up debts etc. They did look to sell themselves to Trevor Hemmings but that has gone quiet. <b><u>As a fully owned members club a couple of bad years with no cash reserves and a drop in income can lead to problems.</u></b></span></div><div class="separator" style="clear: both;"><span style="font-size: medium;"><br /></span></div><div class="separator" style="clear: both;"><span style="font-size: medium;">Shamrock Rovers are the current league champions. Over the last 7 years they have accumulated football losses of circa <span style="color: red;">(€3.7m)</span> (probably more when they file their 2020 academy accounts). They have funded these losses by a €2m investment from Ray Wilson and a further €2m investment from Dermot Desmond. In return they have sold 50% of their club to these investors. <b><u>Like Dundalk running these losses is fine as long as someone will invest to cover them, the challenge arises again when said investment runs out.</u></b> </span></div><p></p><p><span style="font-size: medium;">While the Rovers losses look big they are not unusual, plenty of other clubs have run up losses backed by investors in this period, St Pats (€3.5m losses over 7 years funded by benefactor), Derry (stg £1.2m losses over 6 years funded by benefactor), Waterford (€1.2m losses over just 3 years) and Limerick (€2.2m losses over 5 years funded by benefactor) would be 4 of note. So its the norm as such to run up losses in the league. In 2 of these clubs these investors after a few years of losses have run out of money or cut their losses voluntarily which highlights the risk of being dependent on this type of model. </span></p><p><span style="font-size: medium;"><b><u><i>Clubs running losses like any business running a loss is fine if you have a path to profitability. No club here has ever developed that path and as a result we don't have a club like Juve/Bayern/Celtic etc winning 7/8/9 titles in a row as clubs run out of money before they can do that.</i></u></b></span></p><p><b><u><span style="font-size: large;">Future Financing of the League of Ireland</span></u></b></p><div><span style="font-size: large;">Step forward the Irish state. The Irish state currently funds lots of sports in Ireland at all levels but gives close to zero to League of Ireland football (<i><b>does it give anything ?</b></i>). From the well known horse racing support (€65m per annum) and greyhound support (€20m per annum) to Sport Ireland funding various elite programs across the country lots of sports are financially supported. GAA players get circa €3.7m in state support. </span><span style="font-size: medium;">The state should support everything I mentioned above and give even more support given the benefits of sports in terms of viewing and participation.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;"><b><u><i>The League of Ireland is no different in needing financial support. Based on how little support we have gotten from the state over 20/30 years we are in an even worse position than most of the sports that are funded. </i></u></b></span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;"><b><u>Requirement</u></b></span></div><div><span style="font-size: large;"><br /></span></div><div><span style="font-size: large;">To help football develop proper systems here we need circa €17.5m of investment per annum for 10 years, so</span><span style="font-size: large;"> </span><b style="font-size: large;"><u>€175m</u></b><span style="font-size: large;"> </span><span style="font-size: large;">(that's probably not even thinking big :)). </span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Of this circa <b><u>€7.5m</u></b> per annum should go into facilities that can be used by the league of Ireland clubs but also the local communities in which they are in. This €75m investment over the decade will step change the facilities that clubs use. (pitches, gyms, meeting rooms etc). The UK government gave stg£31m a year to clubs after the Taylor report in the 1990's to help clubs modernise stadiums through the football trust. Even these massive clubs needed state help to improve facilities and we are no different.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Secondly circa <b><u>€6m</u></b> per annum should go to running the academy model. It sounds a lot but it is circa €300k per club per annum. (There should be a tiering and matching funds principle here I think) This will allow clubs to hire coaches, invest in education schemes etc and really be able to put the hours required into training what we want to be elite athletes. </span><span style="font-size: large;">Based on the clubs above there are circa 2,000 kids at various age groups playing in the league of Ireland. Even more at these same clubs with teams below U14's. Most of our future Irish internationals will come through this pathway at some stage especially as more players are currently staying here until 18.</span></div><div><span style="font-size: large;"><br /></span></div><div><span style="font-size: medium;">Lastly the remaining <b><u>€4m</u></b> per annum should be spent in prize money/grants in the league. We need a professional league here, we need a pathway for these players to be able to make careers here after U19. Having a bigger prize pot or grant pot will allow clubs to not run such losses and allow them to increase the playing budget sustainably. This should be split where the league winners don't get as big a share in lieu of the European money and allows a competitive league, however the top teams would still get the bigger amounts. (Obviously you can still have clubs going too far but more guaranteed money gives a safety net to players).</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;"><b><u>How its paid back to the state</u></b></span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">The €175m over 10 years sounds a lot but in reality a lot of this is paid or would be paid by football itself. So <b><u>€17.5m</u></b> a year would be the cost over 10 years.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Firstly at present the league contributes circa €4/5m per annum in PAYE and VAT to the state. I can only go on various annual accounts filed but I don't believe I will be far off. If we can grow the number of players and coaches etc being paid this money will go higher to say €7m per annum. So in various taxes we would be contributing anything from <b><u>€50m to €70m</u></b> to the state over the 10 years, in affect the state are giving us this back for a defined period to build a product where in the future they can get the €7m with a far lower contribution.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: large;">In terms of the capital expenditure, the state will recoup VAT on the projects as well as PAYE etc on the people working on building the facilities. I can't exactly quantify either but the state will get up to 1/3 of this money back each year in taxes. So another</span><span style="font-size: large;"> </span><b style="font-size: large;"><u>€25m</u></b><span style="font-size: large;"> </span><span style="font-size: large;">of the funding is covered here.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">So of the €175m given by the state the net cost to the state over the decade would be less than 1/2 of that cost. And a</span><span style="font-size: large;">fter the 10 years, the funding would be scaled back, however the PAYE etc would continue to be paid. What the state funding allows the clubs to do is build a proper league with a real pathway for players to make a living here, contribute to the state coffers and allow thousands of young players to be play football here. If the FAI/clubs do their jobs right with this investment the state will recoup multiples of the investment in the years after.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: large;"><b><u>Reduced State Investment</u></b></span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">How does the league sustain itself after we reduce the state investment?</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Well from the work done over the previous 10 years, clubs now should have a higher base income. The capital money can be reduced as a lot of capital projects will be done and the prize money/grants can be reduced as football income will have grown. Clubs will probably need academy support in the future in terms of high performance like all sports here are helped.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Our sustainable income should grow for the following reasons:</span></div><div><ul style="text-align: left;"><li><span style="font-size: medium;">Better facilities should allow clubs to grow their gates with the right marketing by clubs. There is clear data to show the attendances grow in new modern venues.</span></li><li><span style="font-size: medium;">Likewise commercial income should grow as a more professional league in better venues with more coverage will allow clubs to attract more sponsors.</span></li><li><span style="font-size: medium;">Transfer income should also grow with a proper academy model. By investing in this area, clubs can pay coaches, retain kids on proper contracts and when selling drive higher fees like many mid tier/smaller leagues.</span></li><li><span style="font-size: medium;">European money should grow (and some should be split in a pot). At present we start this year ranked 46th out of 55 nations in Europe. We have 1 seeded team and 3 non seeds in Europe. At a minimum we will bring in €1.55m or so if we lose all ties (hopefully more). By having a professional funded league here we can improve the overall and individual teams coefficients and generate more income from this source.</span></li></ul><span style="font-size: medium;">So while we would lose the €4m state prize money/grant money the income growth from the above sources would more than replace this to keep thing sustainable.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">The FAI and financial management are key here. We need a proper structure to ensure this money isn't wasted, money for facilities, for the academy etc go to where it should go. Also clubs are living within their means and can survive post the state help. Otherwise its a wasted 10 years where some players make a load of cash, some clubs win some trophies and we have nothing to show at the end, the 2000's anyone?</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;"><b><u>Long Term Benefits (financial & non financial)</u></b></span></div><div><br /></div><div><span style="font-size: medium;">People with more football knowledge have decided the national league underage pathway is the best so I am sticking with that model. If we got the state support (and remember a chunk of that is the state just giving money we give to it back for a while) we could build a proper football industry here (BTW I hate that term) The only reason there is a horse racing or greyhound industry here is state support so football is no different. In 10 years time we could have;</span></div><div><ul style="text-align: left;"><li><span style="font-size: medium;">A league with decent facilities for fans and players. A league with a bigger support base than today.</span></li><li><span style="font-size: medium;">Training facilities and education link ups to keep young players here until 19/20 and move when they get good opportunities and clubs are rewarded.</span></li><li><span style="font-size: medium;">A league that has moved up the European coefficient rankings which shows the improvement in the league and gives more credibility to football here. A team in 1 European group stage competition every year would be a realistic aim.</span></li><li><span style="font-size: medium;">Safe secure jobs for 400/500 people on a full time basis. They wouldn't be millionaires at the end but kids coming through the youth set ups could see a future where they earn €30/40/50/60k per annum here and it not blowing up after 12 months into a 3 year deal.</span></li><li><span style="font-size: medium;">The national side will be improved at all age groups. Players getting more coaching hours from paid coaches can't but help our coaches and players improve.</span></li><li><span style="font-size: medium;">Lastly if we used the opportunity right, a league set up to grow in the years ahead. A full time league, progressing in Europe being played in good facilities will be a much easier product to sell to fans, sponsors and in todays age most importantly TV.</span></li></ul><span style="font-size: medium;">There is probably loads wrong here, I don't have access to FAI numbers or detailed club numbers but I think my figures are broadly right. It sounds a lot of money but in the scheme of things its not for the state and the benefits significant . To make anything like this work it would need the clubs and FAI to work together, not to benefit 1 or 2 clubs, but to improve the overall league. That's what the premier league did at the start, its what the NFL, NBA etc do today. They all know that for league to be successful its only as good as its weakest part and for it to grow we all need to be successful/competitive.</span></div><div><span style="font-size: medium;"><br /></span></div><div><span style="font-size: medium;">Personally I think with some vision and ambition we could step change football here that in the long term would really change things for the better. There would be some hard decisions on the way, but that's for a different debate.</span></div><div><span style="font-size: medium;"><br /></span></div><div style="text-align: center;"><span style="font-size: medium;"><b><u>End</u></b></span></div>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-45156399660793781522020-12-28T14:47:00.000+00:002020-12-28T14:47:00.306+00:002018 Premier Division Update/Uefa Licensing Report<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiarQs8F1Q1XExd8NjP7lA0PweJsZYMwl3rOxirrjssyrPBhyphenhyphenCzk0G-lkB_G6lZ7hW3URNiqowxGT2D1kyGQ8HZxNUqvZwjXuKuHxIf2GS_yGzRsYS8ljV-tY6fde5XZ9Aj0XSuYyhr7WA/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="138" data-original-width="228" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiarQs8F1Q1XExd8NjP7lA0PweJsZYMwl3rOxirrjssyrPBhyphenhyphenCzk0G-lkB_G6lZ7hW3URNiqowxGT2D1kyGQ8HZxNUqvZwjXuKuHxIf2GS_yGzRsYS8ljV-tY6fde5XZ9Aj0XSuYyhr7WA/" width="320" /></a></div><br /><p></p><h1 style="text-align: center;"><b><u>2018 Financial Review</u></b></h1><div>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 <span style="color: red;"><a href="https://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Clublicensing/02/64/06/95/2640695_DOWNLOAD.pdf">here.</a></span></div><div><br /></div><h1 style="text-align: center;"><b><u>2018 Uefa Highlights - Revenue</u></b></h1><div>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 <b><u>€15m</u></b>. 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.</div><div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcZ9-eScmAOcB_5fRR3JOd0j4Rta3mY4PnprIHvlgEQ4-PGCfT7pIjxK8YOpQVUybEdMqAyEvlgavLkBBIWDUpOLGrWeCqW5e4tR8zeulcAtIcNFsMBuyyncc4giJZ440PTnP6p4C0pP0/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="346" data-original-width="954" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcZ9-eScmAOcB_5fRR3JOd0j4Rta3mY4PnprIHvlgEQ4-PGCfT7pIjxK8YOpQVUybEdMqAyEvlgavLkBBIWDUpOLGrWeCqW5e4tR8zeulcAtIcNFsMBuyyncc4giJZ440PTnP6p4C0pP0/s16000/image.png" /></a></div><br /></div><div>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.</div><div><br /></div><div>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.</div><div><br /></div><div>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.</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9g36fuTbQEtC_LVMyLoGdOF0oM1Hzb1NnP6LvtmNYNo0Dl3ls-7pI7s5ks-ujcfU-C3H_y1YUl5UuHwpH1KxNNjg04CnO-SR9yFN1AkypyZXIT1IjWJEq-Ej2cjJEMO4gPL3IjzuHlbw/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="147" data-original-width="320" height="184" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9g36fuTbQEtC_LVMyLoGdOF0oM1Hzb1NnP6LvtmNYNo0Dl3ls-7pI7s5ks-ujcfU-C3H_y1YUl5UuHwpH1KxNNjg04CnO-SR9yFN1AkypyZXIT1IjWJEq-Ej2cjJEMO4gPL3IjzuHlbw/w400-h184/image.png" width="400" /></a></div><br />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.</div><div><br /></div><div>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.</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRk-6Ti8dB0DrZHJMG2d5spqJz2Z9KOGvVRGWmBb1VIG3oKGcvHNPXlnPr4Eq0DejYGXj5486oNJQfmuXEmR0RFyMoHrk9oWlKa8Nzv2DhC3kEMrP21BLEtM-xKCpdLuogw6T6KfqohHk/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="158" data-original-width="388" height="163" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRk-6Ti8dB0DrZHJMG2d5spqJz2Z9KOGvVRGWmBb1VIG3oKGcvHNPXlnPr4Eq0DejYGXj5486oNJQfmuXEmR0RFyMoHrk9oWlKa8Nzv2DhC3kEMrP21BLEtM-xKCpdLuogw6T6KfqohHk/w400-h163/image.png" width="400" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: left;">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.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFfu2o0KERQU7veLXtvQknqDs-8VWDlbcwRgesXHBmUNThk5a4dvwZtxFIoKI2yJ7N9urAH5ydyJjzJDKj2XfM_xap32RbHTNPTcQvHM15KgAxsJ33T5dDwTaNV_kNmDr4qAktYm4ao1I/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="264" data-original-width="267" height="395" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFfu2o0KERQU7veLXtvQknqDs-8VWDlbcwRgesXHBmUNThk5a4dvwZtxFIoKI2yJ7N9urAH5ydyJjzJDKj2XfM_xap32RbHTNPTcQvHM15KgAxsJ33T5dDwTaNV_kNmDr4qAktYm4ao1I/w400-h395/image.png" width="400" /></a></div><br />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.</div><div class="separator" style="clear: both; text-align: left;"><br /></div><div class="separator" style="clear: both; text-align: left;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4zAWcmhcL4rFhu-WO1WFxxkqRAWo_4uJhPwnNserfbH45vTdPTIH9NcUqbBX5eEGWJEu_zZZ-Z5dp5nwJtFAb1lztWS4IRNWF9K70JwRcF7AyLss2p3mNm8YB09pGwHcJ32VuFrcmDyQ/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="84" data-original-width="321" height="105" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4zAWcmhcL4rFhu-WO1WFxxkqRAWo_4uJhPwnNserfbH45vTdPTIH9NcUqbBX5eEGWJEu_zZZ-Z5dp5nwJtFAb1lztWS4IRNWF9K70JwRcF7AyLss2p3mNm8YB09pGwHcJ32VuFrcmDyQ/w400-h105/image.png" width="400" /></a></div><br /><br /></div><div class="separator" style="clear: both; text-align: left;"><h1 style="text-align: center;"><b><u>2018 Uefa Highlights - Wages</u></b></h1><div>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. </div><div><h1 style="text-align: center;"><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrYKsfIcQCRvCTdvQJ8s6Ll2BWmaWQXA9lb1JmaPSAm2Dyk-8-PIFndtv_GmMSCEp26nYUVD2flyb41ThKUmnQm4aQzsp2oqoC5xijRq67m9g3f584lvyueZqGzzwaPIrciVuLoDtKLWQ/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="482" data-original-width="939" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrYKsfIcQCRvCTdvQJ8s6Ll2BWmaWQXA9lb1JmaPSAm2Dyk-8-PIFndtv_GmMSCEp26nYUVD2flyb41ThKUmnQm4aQzsp2oqoC5xijRq67m9g3f584lvyueZqGzzwaPIrciVuLoDtKLWQ/s16000/image.png" /></a></div></h1></div></div><div>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 :(</div><div><br /></div><div>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.</div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIl1ZkmbqZ5LO4DOMbzlE_dSs3jr1BLiaxQavCMJyjkkr1YbKklMX2zR4tvNtFiQBFJNhjdaIvoZPVUoDyLVlWmDKaLSZ9ewwvq9i2PzOI2Xz4UHWP9vbEis60D4P4qgVp_WRiMo1A9qc/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="264" data-original-width="257" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIl1ZkmbqZ5LO4DOMbzlE_dSs3jr1BLiaxQavCMJyjkkr1YbKklMX2zR4tvNtFiQBFJNhjdaIvoZPVUoDyLVlWmDKaLSZ9ewwvq9i2PzOI2Xz4UHWP9vbEis60D4P4qgVp_WRiMo1A9qc/w390-h400/image.png" width="390" /></a></div><div><br /></div>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.<br /><br /></div><div><h1 style="text-align: center;"><b><u>2018 Uefa Highlights - Profitability</u></b></h1></div><div>Per the report 55% of clubs in the top 20 leagues report a profit, so trading at a profit is possible.</div><div><br /></div><div>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.</div><div><b><u><br /></u></b></div><div><b><u><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRvv4UO9-KNxf5I8k84NuXzFr2b2oIpdma4DX9eSVg_pEqV2wXcZfl7yOoL_75yheVcwn7q9g5_PF6KgQtZH-epp5HNKAxlrnns-VGW5FM-_qPBBs9zhpLUvzqDkVfgs7BhR77u5lBstw/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="490" data-original-width="943" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRvv4UO9-KNxf5I8k84NuXzFr2b2oIpdma4DX9eSVg_pEqV2wXcZfl7yOoL_75yheVcwn7q9g5_PF6KgQtZH-epp5HNKAxlrnns-VGW5FM-_qPBBs9zhpLUvzqDkVfgs7BhR77u5lBstw/s16000/image.png" /></a></div><br /></u></b></div><div>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.</div><div><br /></div><h1 style="text-align: center;"><b><u>Actual 2018 League of Ireland Financial Performance</u></b></h1><div><br /></div><div>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.</div><div><br /></div><div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8vBBRFsyXAGwobhvNdAY_-1kexarO85A0DkvpM7ncq5x5kQLBCbg7R1cT4uD9WPmwAmgxEl_M4LjPeao5290V7nzGyf46rsXv_scCV00i1CB-McTul_QJ2IZ8d2AL7TD0z_pPs8SryR4/" style="margin-left: 1em; margin-right: 1em;"><img alt="" data-original-height="324" data-original-width="467" height="444" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8vBBRFsyXAGwobhvNdAY_-1kexarO85A0DkvpM7ncq5x5kQLBCbg7R1cT4uD9WPmwAmgxEl_M4LjPeao5290V7nzGyf46rsXv_scCV00i1CB-McTul_QJ2IZ8d2AL7TD0z_pPs8SryR4/w640-h444/image.png" width="640" /></a></div><br />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.</div><div><br /></div><div>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.</div><div><br /></div><div>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. </div><div><br /></div><div>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.</div><div><b><u><br /></u></b></div>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-83648482546840664402018-12-02T15:06:00.002+00:002018-12-02T15:06:58.204+00:002017 Premier Division Summary<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUiAoW8szcmXbi7-3qjCxQAkORB117sraBh0iTHf3oEUsOlgU-AwukQISPMCgSpV3H-MaGK22VKrRoyXt1tal6t1z0NbUVtS2AU_74h4QXVj442A24Ad4RYVayDxB9LgJEtKuIOgmvdSQ/s1600/League_of_Ireland_logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="316" data-original-width="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUiAoW8szcmXbi7-3qjCxQAkORB117sraBh0iTHf3oEUsOlgU-AwukQISPMCgSpV3H-MaGK22VKrRoyXt1tal6t1z0NbUVtS2AU_74h4QXVj442A24Ad4RYVayDxB9LgJEtKuIOgmvdSQ/s1600/League_of_Ireland_logo.png" /></a></div>
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<b><u><span style="font-size: large;">Overview</span></u></b></div>
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<span style="font-size: large;">The 2017 season finished with Cork City winning the league and cup double with Dundalk winning the league cup as a very small consolation for not retaining the title. The league was reduced from 12 teams to 10 teams at the end of the season so 3 teams were relegated, highlighted in green below.</span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
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<span style="font-size: large;">All clubs have now filed accounts for the year ended November'17. Per the submitted numbers the 12 teams lost a combined <span style="color: red;"><b><u>(€789k)</u></b></span> between them with 5 clubs making a profit and 7 clubs making a loss. Cork City made the biggest recorded profit with +€237k and the other 4 profitable clubs recorded small surpluses.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIAuqZQl5FQU_XyNzCS2TdDxDrlRgSEy99JIMffTOah70tHvw73Awy7NN8nsxac6vEWRCjBG4wfRJUUqXhI87YbCTf8KB0GPIPYmdA7JoKWikVvAsOhg2skidLYg50_wBSvewngut1ZbY/s1600/2017+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="420" data-original-width="938" height="284" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIAuqZQl5FQU_XyNzCS2TdDxDrlRgSEy99JIMffTOah70tHvw73Awy7NN8nsxac6vEWRCjBG4wfRJUUqXhI87YbCTf8KB0GPIPYmdA7JoKWikVvAsOhg2skidLYg50_wBSvewngut1ZbY/s640/2017+P%2526L.PNG" width="640" /></a></div>
<span style="font-size: x-small;">* As Shamrock Rovers now have 2 entities for their football activities that are intertwined I have included both trading companies above. Up to 2017 all activities went through one entity.</span><br />
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<span style="font-size: large;">However 2 of the 3 teams that recorded small surpluses, Derry City and St Pats had exceptional monies put through their P&L by theirs owners/shareholders. The third team that received this type of income was Limerick FC. Between these 3 teams circa €1.7m was put these clubs P&L's and without these monies these 3 clubs would have made substantial losses from real football activities.</span><br />
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<span style="font-size: large;">Of the <span style="color: red;"><b><u>(€789k)</u></b></span> combined losses circa <b><u><span style="color: red;">(€643k)</span></u></b> of these losses were incurred by the 2 Shamrock Rovers entities. Unlike some clubs Rovers are not putting exceptional monies through the P&L and instead are funding the losses with a loan in the balance sheet. Rovers are also investing heavily in the underage set up which again comes through in their assets.</span><br />
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<span style="font-size: large;">When you strip out the exceptional monies, the 12 clubs lost a combined <b><u><span style="color: red;">(€2.5m)</span></u></b> in the year. This is what I would define as the "real" losses the league are incurring on a day to day trading basis. 3 clubs Limerick FC, St Pats and Shamrock Rovers make up circa <b><u><span style="color: red;">(€2.1m)</span></u></b> of the losses and Derry City account for the remaining <b><u><span style="color: red;">(€0.3m)</span></u></b> of the losses. The remaining 8 clubs combined make small surpluses or deficits.</span><br />
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<span style="font-size: large;"><b><u>Balance Sheet Position @ 30/11/17</u></b></span></div>
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<span style="font-size: large;">One of the best measures of the sustainability of the league is to look at the balance sheets of the clubs. How clubs are funding losses etc would show up clearly here. Below is a table of the 12 sides at Nov'17.</span><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4eJkChgW4eiatODleuEx8-UrU5TZyynj7sx44AB6gKMeDWHoK09ZsgeGisBN112LROqMjDYHwXUahkd645XkODdLTGD0PwBWQEUWop5SRJsLn6p3i-jE0GgLljOvUwQOqEgHmfA42Ttw/s1600/2017+Balance+Sheet.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" data-original-height="373" data-original-width="734" height="324" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4eJkChgW4eiatODleuEx8-UrU5TZyynj7sx44AB6gKMeDWHoK09ZsgeGisBN112LROqMjDYHwXUahkd645XkODdLTGD0PwBWQEUWop5SRJsLn6p3i-jE0GgLljOvUwQOqEgHmfA42Ttw/s640/2017+Balance+Sheet.PNG" width="640" /></a><br />
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<span style="font-size: large;">On a combined basis the clubs don't have much fixed assets which stems from the fact that most clubs don't own their grounds. In total there is circa <b><u>+€4.6m</u></b> of assets here which included Oriel Park, Richmond Park, the work Rovers have done at Roadstone, and development work at both Sligo and Harps.</span><br />
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<span style="font-size: large;">In total the club have negative current liabilities of circa <span style="color: red; font-weight: bold; text-decoration-line: underline;">(€3.3m)</span><span style="color: red;"> </span>and this is inflated by the very strong position Dundalk FC were in. Excluding Dundalk their is circa <b><u><span style="color: red;">(€5.7m)</span></u></b> of current liabilities. Most of these relate to 2 clubs, St Pats <b><u><span style="color: red;">(€3.9m)</span></u></b> and Shamrock Rovers <b><u><span style="color: red;">(€0.9m)</span></u></b> and the good thing about these monies due is that they are mainly due to owners/shareholders. It does indicate the losses these clubs have incurred and they are lucky they have people that can fund said losses. Most of the remaining clubs have small deficits but nothing that can't be managed.</span><br />
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<span style="font-size: large;">In terms of long term liabilities there are debts of circa <b><u><span style="color: red;">(€3.5m)</span></u></b> due but this figure is a little misleading. 3 clubs make up most of this liability but circa <b><u><span style="color: red;">(€1.5m)</span></u></b> of this in relation to St Pats and Finn Harps relates to government grants for stadium works that are being written off over a long time and would only be repayable in the event of the stadium being sold. The <b><u><span style="color: red;">(€0.2m)</span></u></b> in relation to Sligo also relates to Government grants.</span><br />
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<span style="font-size: large;">The only real long term liability relates to Shamrock Rovers who do owe their 50% owner these funds back. These are long term in nature and like the current liabilities above they are lucky that they owe this money to internal parties.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><b><u><br /></u></b></span>
<span style="font-size: large;">Overall from the balance sheets of the clubs all 12 clubs are fine from a going concern basis. St Pats and Shamrock Rovers do have large deficits but these are owned internally so no risk of these being called in any time soon that would risk the club. </span><br />
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<span style="font-size: large;">From a P&L point of view its clear that the league is still very dependent on "benefactor" monies and Euro money. The clubs lost circa <b><u><span style="color: red;">(€0.8m)</span></u></b> in the league with circa <b><u>+€1.7m</u></b> from benefactors and another <b><u>+€1.7m</u></b> from European prize money. As has been shown with Limerick in 2018 this benefactor money can dry up and Derry City in 2019 won't have the Euro prize money. These sudden changes will impact clubs budgets.</span><br />
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<span style="font-size: large;">Clubs like Shamrock Rovers and Derry City have been in Europe over the last few year and have still run up losses which shows how hard it is to run a sustainable club even with that source of income. In 2018 Waterford FC have taken the Derry City position and it will be interesting to see their losses in 2018 as they lost <b><u><span style="color: red;">(€0.3m)</span></u></b> in 2017 getting out of division 1. Again Waterford FC have a benefactor underwriting these losses with loans.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-53811311538003493172018-11-05T19:14:00.002+00:002018-11-05T19:14:48.204+00:00Dundalk FC - Domination to Continue...<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcL5pip38fDEeHgecGfO3dMDYl5RfWQH3d3gVWTNTIMQsH9tWBI-VXOOgSi2o_5ZITWJSPcmQRAmFnXMJAJgRbLqwtlfkjNum2aj_OSixNo0FJKgWc-DVbwww5V1xiGqou6hXd8il1mRg/s1600/Dundalk_F.C._crest.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhcL5pip38fDEeHgecGfO3dMDYl5RfWQH3d3gVWTNTIMQsH9tWBI-VXOOgSi2o_5ZITWJSPcmQRAmFnXMJAJgRbLqwtlfkjNum2aj_OSixNo0FJKgWc-DVbwww5V1xiGqou6hXd8il1mRg/s1600/Dundalk_F.C._crest.png" /></a></div>
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<span style="font-size: large;">Dundalk FC over the last 6 seasons are probably the most dominant team since I started regularly attending games in the late 80's as a teenager. Continual success and built on very solid foundations which means that the success may well continue for years to come. Its hard to begrudge them this success given they earned it on the pitch over these 6 years.</span></div>
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<span style="font-size: large;"><b><u>New Owners (2012)</u></b></span></div>
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<span style="font-size: large;">The current trading company that run Dundalk FC was set up in Oct'12 and the new owners Paul Brown and Andrew Connolly paid €77k to acquire the club name from Gerry Matthews. On the 21st November 2012 these new owners made probably their best decision when they appointed Stephen Kenny as manager. The club had finished second last in 2012 and only avoided relegation with a playoff win versus Waterford. In Kennys first year they finished second to St Pats with a very new team and since then have won 4 titles.</span></div>
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<span style="font-size: large;"><b><u>Results /Numbers</u></b></span></div>
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<span style="font-size: large;">The table below shows some of the key metrics at Dundalk FC over the last 6 seasons. Unlike some clubs success in previous decades Dundalk's success is built on solid foundations with the club making big profits and having large cash reserves. Dundalk have won <b>4 leagues</b>, <b>2 FAI cups</b> and <b>2 league cups</b>, also finishing runners up twice in the league and twice the cup.</span></div>
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<span style="font-size: large;">The table below highlights the profitability of the club, since the new owners acquired it the club has been well run making only a small loss in their first year. Over the 5 years to November'17 the club made accumulated profits of <b><u>€3.3m</u></b> and had circa <b><u>€2.5m</u></b> in the bank at Nov'17.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHvUGBNFhVAH8SlEEgjIo3Up2G7OFL0oUemjhNZ99jRUNaq89__o3dOX2gxZ9Fd-ZO6E5X9Wxmmfs4R_s8qraKsPr2LZKpW6SPM8HTTJnQ4_3kzeDXpuXn9g2CyCwd6_D4yRI0fyGOqIQ/s1600/Dundalk+2013-2018.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="312" data-original-width="534" height="232" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHvUGBNFhVAH8SlEEgjIo3Up2G7OFL0oUemjhNZ99jRUNaq89__o3dOX2gxZ9Fd-ZO6E5X9Wxmmfs4R_s8qraKsPr2LZKpW6SPM8HTTJnQ4_3kzeDXpuXn9g2CyCwd6_D4yRI0fyGOqIQ/s400/Dundalk+2013-2018.PNG" width="400" /></a></div>
<span style="font-size: large;">2018 also shows how they are pulling away from the rest on the pitch, with their highest points per game of 2.42 and also winning the cup. With almost all the 2018 squad signed up for next season and a large bank balance plus future guaranteed monies from the CL it will be hard to catch Dundalk.</span><br />
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<span style="font-size: large;"><b><u>Player Churn</u></b></span></div>
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<span style="font-size: large;">What makes Dundalk's success even more impressive to me is the amount of key players they have lost and Kenny has replaced them every time. All of these players were lost with no transfer fee income to the club due to short contracts, a situation that they seem to be rectifying this year with longer contract terms. At the end of the 2014 season they lost their top goal scorer <b><u>Pat Hoban</u></b>, followed by at the end of the 2015 season losing <b>Richie Towell</b>, again the top goal scorer. At the end of the 2016 season they lost <b>Andy Boyle,</b> <b>Ronan Finn</b> and <b>Daryl Horgan</b> both of whom where key players in winning the league the previous 3 seasons. Finally at the end of 2017 they lost both <b>David McMillan</b> and <b>Patrick McEleney</b>. </span><br />
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<span style="font-size: large;">They suffered for these losses eventually in 2017 and being up against a very strong Cork City team with their lowest points per game since Kennys first season but with the re-signing of Pat Hoban for 2018 they have gone from strength to strength. </span><br />
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<span style="font-size: large;"><b><u>Oriel Park/New Owners</u></b></span></div>
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<span style="font-size: large;">Over 2016 and 2017 the owners of Dundalk FC spent circa €900k on acquiring the lease of the club and Youth Development Centre </span><a href="https://www.talkofthetown.ie/dundalk-fc-take-over-lease-at-oriel-park/">https://www.talkofthetown.ie/dundalk-fc-take-over-lease-at-oriel-park/</a><span style="font-size: large;"> which allows them to develop the ground and they also relayed the pitch with a new artificial surface. The success on the pitch together with the acquiring of the site allowed the club to be sold if someone was interested.</span><br />
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<span style="font-size: large;">The club was sold to Lilywhite Holdings LLC on 18th January 2018. The 2018 season was the first season for the clubs new owners and clearly it has been a very successful season. The new LLC is the 100% owner of the club and is a subsidiary of Peak 6 Investment LP. Peak 6 have a lot of interests in sports clubs as can be seen with their interests here </span><a href="https://www.peak6.com/strategic-capital/">https://www.peak6.com/strategic-capital/</a> <span style="font-size: large;">but buying an Irish club would have historically been seen as an odd investment.</span><br />
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<span style="font-size: large;"><b><u>Future Domination??</u></b></span></div>
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<span style="font-size: large;">Dundalk built their success in the earlier years on good management and unearthing players. In recent seasons with the cash made in 2016 they have been able to recruit more established players. This has allowed Dundalk to continue the success while not losing money.</span><br />
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<span style="font-size: large;">In previous decades, even in the 2000's the dream was to make big money in European Football. This was very hard to achieve but now even limited success in Europe as champions is worth a lot.</span><br />
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<span style="font-size: large;">Due to Dundalk regularly winning in Europe and their very good year in 2016 Dundalk now have a coefficient of 7 for the 2019/20 CL campaign. This ranking will comfortably see them seeded for round 1 in the CL. At a minimum Dundalk are guaranteed 2 games in Europe assuming they lose their first one in the CL. Based on the 2018/19 figures these 2 games are worth €800k (€540k from the CL and €260k from the EL). However if they can win their first round game which they will be seeded they will make €1.2m (€920k from the CL and €280k from the EL).</span><br />
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<span style="font-size: large;">Why I think its very hard for any club to catch Dundalk without significant outside investment is that most LOI clubs would not have turnover of €1m per annum from normal football activities and Dundalk can make this level of income from just 3 games. From clubs that do publish a P&L only Cork City would be above the €1m and I suspect Shamrock Rovers would be too. Rovers, Waterford and maybe Cork City will all be unseeded in the EL next season meaning they may bring in circa €240k from Europe v €1.2m for Dundalk. Obviously if these teams can win a few games this prize money will go up but as unseeded teams this will be harder than Dundalk.</span><br />
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<span style="font-size: large;">In recent years clubs like Rovers, Derry and Pats have made losses (Rovers) or been heavily subsidised (Derry/Pats) and they have not been able to keep up with Dundalk. Only Cork City who have made modest profits over the last few seasons have been able to keep pace but they have indicated for 2019 they will have to reduce spend etc. Other clubs like Bohs, Sligo, Galway, etc have cut their cloth to measure but can't compete in the league as a result.</span><br />
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<span style="font-size: large;">Given the financial head start that Dundalk will have from European money, for any team to catch them they will need very deep pockets. Some clubs have benefactors but the scale of Euro money means these benefactors will have to spend more to try and catch up. And ironically the team with the biggest benefactor are Dundalk who don't need them based on their rewards on the pitch.</span><br />
<span style="font-size: large;"><br /></span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-80171771153864596832018-10-09T19:09:00.002+01:002018-10-09T19:09:14.072+01:00Shamrock Rovers Financial Update 2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvlKHz7tBzuMdgHuM3CO_VzfGx6sUl5MBjE156lBr4bkRkXVMdSBe7u_m8otdt-i197IdJRzBjo5DAFOGIeL6Z2A7yelAdwXGiORpAbiupwRt86mVe0XhP3-rlwukgmZ15XKmdiLJIZyI/s1600/337px-Shamrock_Rovers_FC_logo.svg.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="296" data-original-width="337" height="175" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvlKHz7tBzuMdgHuM3CO_VzfGx6sUl5MBjE156lBr4bkRkXVMdSBe7u_m8otdt-i197IdJRzBjo5DAFOGIeL6Z2A7yelAdwXGiORpAbiupwRt86mVe0XhP3-rlwukgmZ15XKmdiLJIZyI/s200/337px-Shamrock_Rovers_FC_logo.svg.png" width="200" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
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<span style="font-size: large;">I previously did post on the 3 years to Nov'16 </span><a href="https://leagueofirelandfinance.blogspot.com/2018/08/shamrock-rovers-fc-financial-update.html">https://leagueofirelandfinance.blogspot.com/2018/08/shamrock-rovers-fc-financial-update.html</a> <span style="font-size: large;">and a lot has changed since then.</span><br />
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<span style="font-size: large;"><b><u>Corporate Structure</u></b></span></div>
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<span style="font-size: large;">At Nov'16 the club was circa 93% owned by Shamrock Rovers Members Club CLG (419156) with Ray Wilson owning the remaining 7%. Following a deal between the members club and Ray Wilson, new shares were issued and the operating club (Shamrock Rovers F.C. Limited) is now owned 50% by the members club and 50% by Ray Wilson with both parties owning 368 shares.</span></div>
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<span style="font-size: large;">Also a new legal entity called Shamrock Rovers Academy Limited was created which is 100% owned by the operating club. This would line up with their plans to invest in that side of the club and they have done so over the last 2 years. Hopefully the table below shows this as its own of the more complicated structures.</span></div>
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<u><b><span style="font-size: large;">Profit & Loss</span></b></u></div>
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<span style="font-size: large;">As explained Rovers lost <span style="color: red;">(€1.2m)</span> from 2014 to 2016 and the table below shows the 2017 combined P&L position.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf5BaWz800x2v7yEo5MgoTdmTPnM9fY1WjEwGEPREu2RCMFSJcMp0cgjlu1bATqPJAYi7rnbWBTy8rX1RbI7b5j6qFT0zhgwhReAhYaO3dusbGe4AtstfhCwQdcJTLk7PdqEPzxMhiC7U/s1600/SRFC+2017+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="216" data-original-width="282" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf5BaWz800x2v7yEo5MgoTdmTPnM9fY1WjEwGEPREu2RCMFSJcMp0cgjlu1bATqPJAYi7rnbWBTy8rX1RbI7b5j6qFT0zhgwhReAhYaO3dusbGe4AtstfhCwQdcJTLk7PdqEPzxMhiC7U/s1600/SRFC+2017+P%2526L.PNG" /></a></div>
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<span style="font-size: large;">In 2017 Rovers split out the assets and costs of the academy making it easier to compare the regular football activities to that of other clubs. The members club effectively operates at break even, it collects subs and passes this money on to the operating club for season tickets etc.</span></div>
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<span style="font-size: large;">The operating club lost circa <span style="color: red;"><b>(€289k)</b></span> in the year which was well down on the loss in 2016 of <span style="color: red;">(€661k)</span>. However some of the 2016 losses would have also been to do with the academy so its hard to compare both years. Also from 2016 to 2017 Rovers prize money from Europe went up from +€215k to +€440k as they had 2 games in Europe in 2017 v 1 in 2016.</span></div>
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<span style="font-size: large;">Rovers are one of the few clubs that in 2017 have given payroll information in terms of costs so we can compare their cost here v some other clubs. In 2017 in the operating company Rovers spent <span style="color: red;">(€1.2m)</span> on 34 employees of which 28 relate to the playing and management side. As a comparison in 2017 Cork City who won the league spent <span style="color: red;">(€1.1m)</span> on wages, Sligo Rovers spent <span style="color: red;">(€546k)</span> and Finn Harps <span style="color: red;">(€232k)</span>. The 2 tier nature of the league is highlighted here with Rovers & Cork well ahead of the likes of Sligo and Harps in terms of playing resources. </span></div>
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<span style="font-size: large;">In terms of the academy, this is a new company with only 1 year of trading. In the year the academy lost <span style="color: red;"><b>(€354k)</b></span>. Its 2 main costs in the year were payroll of <span style="color: red;">(€83k)</span> and depreciation on its investment in Roadstone of <span style="color: red;">(€79k)</span>, the second one more an accounting cost than a cash cost. The loss in the year was in line with their expectations as they get this off the ground. There is not much info in the accounts on what type of income/costs that are captured in here, if the Bazunu transfer goes into the academy accounts in 2018 it will obviously make a big different to that P&L. I think from Rovers point of view splitting the 2 entities, the first team and academy into 2 companies is good as they can clearly measure both.</span></div>
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">The operating company has accumulated losses of <span style="color: red;">(€1.63m)</span> and negative reserves of <span style="color: red;">(€1.18m)</span> at Nov'17. In affect this has been funded by a €1.225m long term loan from Ray Wilson. This is an interest free loan that per the accounts won't be asked to be repaid in the next 12 months. On that basis Rovers have no trading concerns.</span></div>
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<span style="font-size: large;">The operating company like most clubs as it does not own its ground has little fixed assets, it has large current assets which I assume is money owed by the academy company to the operating company.</span></div>
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<span style="font-size: large;">The principle asset Rovers now own sits in the academy company. The club have invested circa €610k in facilities in Roadstone over the last 2 years. They have a 10 year licence at this venue per the 2016 accounts. The academy company owes circa <span style="color: red;"><b>(€1m)</b></span> in current liabilities and there is no breakdown of this but I would assume most is owed to the operating company and Ray Wilson who are funding this investment.</span></div>
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">Rovers are doing things differently to other clubs and also doing some of the same things;</span></div>
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<span style="font-size: large;">On the <b><u>different side</u></b> to others they are heavily investing in the youth side of the club, between operating losses and capital investment the club has spent at least <b><u>€0.9m</u></b> over 2016 and 2017 and probably more but I can't strip those costs out of 2016. Time will tell if this works or not, but the standard plan of putting all the money into the first team hasn't worked for most clubs so a change of model can't do any harm. The Bazunu sale in 2018 is a big lift to that plan.</span></div>
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<span style="font-size: large;">On the </span><b style="font-size: x-large;"><u>same side</u></b><span style="font-size: large;"> to others they are losing money on running the club. They have lost circa </span><span style="color: red; font-size: large;">(€1.5m)</span><span style="font-size: large;"> over 2014 to 2017 with </span><span style="color: red; font-size: large;">(€289k)</span><span style="font-size: large;"> in 2017 alone. This is no different to most clubs, however Rovers benefactor is loaning money rather than putting it through the P&L like Pats, Derry & Limerick and as a result they build up losses. They actually spent more in payroll than the champions did in 2017 which shows their intent in the league. They have the €1.225m loan and as its from a fan they are in a strong position financially but like most clubs they are not operating on a sustainable basis. This is a league wide challenge but Rovers losing money, with €440k from Europe and the second highest average attendance in 2017 shows the challenge for all clubs. </span><a href="http://www.extratime.ie/articles/20256/25-increase-in-attendances-for-league-of-ireland/">http://www.extratime.ie/articles/20256/25-increase-in-attendances-for-league-of-ireland/</a></div>
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chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-80894213122987694512018-09-13T17:10:00.001+01:002018-09-13T17:11:06.139+01:00The 2000's - The Decade of Excess<div class="separator" style="clear: both; text-align: center;">
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<span style="font-size: large;"><b><u>The 2000's - When most LOI clubs partied</u></b></span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">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. </span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">However while all this success was going on the picture behind the scene was not as nice for the clubs.</span><br />
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<span style="font-size: large;"><b><u>The Cost of Success</u></b></span></div>
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<span style="font-size: large;">The table below shows the losses these 7 clubs ran up over the 2000's. Per the <b><u>published accounts</u></b> or <b><u>examiner/liquidator reports</u></b> the clubs lost at least <span style="color: red;"><b><u>(€28.4m)</u></b></span> and if you read a bit more they lost <span style="color: red;"><b><u>(€35.7m)</u></b></span> 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.</span><br />
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;"><u><b>Bohemian FC</b></u></span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">However off the pitch Bohs lost <span style="color: red;">(€4.4m)</span> 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 <span style="color: red;"><b><u>(€7.8m)</u></b></span>. 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.</span></div>
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<span style="font-size: large;">Bohs were left with debts of circa <span style="color: red;">(€5m)</span> 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 <span style="color: red;">(€3.5m)</span> of a loan of <span style="color: red;">(€4.5m)</span> with the sale of Dalymount park to the council.</span></div>
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<span style="font-size: large;">Ultimately to fund the success over the decade Bohs sold Dalymount for <b><u>+€3.5m</u></b>, had deposits of another <b><u>+€3.4m</u></b> for a failed sale and the bank wrote off </span><b style="font-size: x-large;">+€1m</b><span style="font-size: large;"> of the loan.</span></div>
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<span style="color: blue; font-size: x-small;">* Club accounts from 2001 to 2010 on the CRO company number 8751</span></div>
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<span style="font-size: large;"><b><u>St Patricks Athletic FC</u></b></span></div>
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<span style="font-size: large;">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 <span style="color: red;">(€2.6m)</span>. By the end of 2010 these losses had risen to <span style="color: red;"><b><u>(€5.7m)</u></b></span> meaning Pats lost <span style="color: red;">(€3.1m)</span> between 2007 and 2010.</span><br />
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<span style="font-size: large;">However when you read the accounts, it is noted that St Pats also had debt forgiveness to its parent company of <span style="color: red;">(€3.9m)</span> in those 4 years. At the end of Nov'10 the company owned its parent company circa <span style="color: red;">(€3.7m)</span> even after the <span style="color: red;">(€3.9m)</span> write off. In reality over the decade the club lost circa <b><u><span style="color: red;">(€9.6m)</span></u></b> on the pitch. The club still owns the stadium unlike most of the clubs covered here which still remains its principle asset.</span><br />
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<span style="font-size: medium;"><i>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.</i></span><br />
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts from 2001 to 2010 on the CRO company number 189439</span></span><br />
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<span style="font-size: large;"><b><u>Shamrock Rovers FC</u></b></span></div>
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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 <span style="color: red;"><b><u>(€3.6m)</u></b></span> 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 <span style="color: red;">(€1.7m)</span> 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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts from 2001 to 2010 on the CRO company number 245954 & Court Order of 02/08/05 exiting Examinership</span></span><br />
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<span style="font-size: large;"><u><b>Drogheda United FC</b></u></span></div>
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">Between 2005 and 2007 (3 seasons) Hinge Trading limited lost circa <span style="color: red;"><b><u>(€4.5m)</u></b></span> 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.</span><br />
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<span style="font-size: large;">The court accepted examinership document is available to read but the quality is very bad to make out all the losses and the agreement.</span><br />
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<span style="font-size: large;">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 <span style="color: red;">(€0.7m)</span> which it ran up over 2008 which led to Hinge Trading going into Examinership.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts from 2001 to 2010 on the CRO company number 266933/366788 & Court Order of 30/01/09 exiting Examinership</span></span><br />
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<span style="font-size: large;"><b><u>Shelbourne FC</u></b></span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">Where the <span style="color: red;"><b><u>(€6.2m)</u></b></span> 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 <span style="color: red;">(€6.2m)</span> loss over the decade and really over the 6 years to 2006.</span></div>
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<span style="font-size: large;">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 <span style="color: red;">(€6.2m)</span> accumulated losses is a fact as such.</span></div>
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts 2014 on the CRO company number 106863</span></span></div>
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<span style="font-size: large;"><b><u>Derry City FC</u></b></span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">The last annual accounts the company filed before their trouble was Nov'07 and at that stage accumulated losses stood at a modest <span style="color: red;">(£166k)</span> 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.</span></div>
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<span style="font-size: large;">Per the administrators report of Nov'11 & Nov'12 there were <span style="color: red;"><b><u>(£1.5m)</u></b></span> 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.</span></div>
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts 2001 to 2007 on the CRO company number NI028477 and administrator report Nov'11/12</span></span></div>
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<span style="font-size: large;"><b><u>Cork City FC</u></b></span></div>
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<span style="font-size: large;">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 <span style="color: red;">(€250k)</span>. At the end of 2006 Brian Lennox sold the club to Arkaga and was then later sold again to Tom Coughlan.</span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">In 2007 when the last published accounts were published Cork City lost circa <span style="color: red;">(€0.7m)</span> for the year and circa <span style="color: red;">(€0.9m)</span> since 2002. The club owed Arkaga circa <span style="color: red;">(€1m)</span> in the balance sheet at that date.</span></div>
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<span style="font-size: large;">I only estimated losses of another <span style="color: red;">(€0.6m)</span> in 2008 and 2009 to come to the <span style="color: red;"><b><u>(€1.5m)</u></b></span> 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.</span></div>
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<span style="font-size: large;"><span style="color: blue; font-size: x-small;">* Club accounts to 2007 on the CRO company number 366256</span></span></div>
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">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 <span style="color: red;"><b><u>(€35.7m)</u></b></span> across 7 clubs seems massive. The real losses in the league would be higher, probably over <b><u><span style="color: red;">(€40m)</span></u></b> an example being Sporting Fingal who only played 3 seasons and in the first 2 of those needed <span style="color: red;"><b>(€1.25m)</b></span> 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.</span></div>
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<span style="font-size: large;">What did all these losses get us apart from some success for some clubs and some UEFA ranking points. <b><u>Very little</u></b>. 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.</span></div>
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<span style="font-size: large;">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.</span></div>
chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-47756679604006846752018-09-11T16:24:00.002+01:002018-09-11T16:24:21.580+01:00Finn Harps FC Financial Update 2014-2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0LdhJUoL8asi5UlKRCdHSDLjr6g3Ej-DB4Suyq5HEwxqbHTBaInZ1LbpvPzr8wa0ayUt_fE21FKY_Oi7dG1_rGRTehZaQpePUVuRLkK7D_01qD8eGtPCHWlPXLuzI0cJGhOQHqEZxsJQ/s1600/Finnh.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="200" data-original-width="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0LdhJUoL8asi5UlKRCdHSDLjr6g3Ej-DB4Suyq5HEwxqbHTBaInZ1LbpvPzr8wa0ayUt_fE21FKY_Oi7dG1_rGRTehZaQpePUVuRLkK7D_01qD8eGtPCHWlPXLuzI0cJGhOQHqEZxsJQ/s1600/Finnh.png" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
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<span style="font-size: large;">Finn Harps were founded in 1954 and first played in the league in 1969. Their legal structure is similar to Cork and Sligo Rovers and they operate as a co-op under the name of Finn Harps Co-operative society Limited (No: 4898R) and this legal entity was created in January'97. Finn Harps currently play their home games in Finn Park but are hoping to move to a new stadium that has been in the pipeline for many years and in recent months positive progress has been noted in terms of this development </span><a href="http://www.fai.ie/domestic/news/fai-welcomes-finn-harps-stadium-project-funding">http://www.fai.ie/domestic/news/fai-welcomes-finn-harps-stadium-project-funding</a> <span style="font-size: large;">Over the 4 years in review here Harps finished 5th in the first division, followed by 2nd and a playoff win for promotion to the premier division in 2015, followed by 10th in the premier division in 2016 and relegation in 2017 with an 11th place finish and the league being reduced to 10 teams.</span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
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<span style="font-size: large;">Over the 4 years, Finn Harps made a small loss of circa <span style="color: red;"><b><u>(€14k)</u></b></span> with all this loss coming in 2017. It would appear in 2017 that Harps tried to avoid relegation with the reduction in league size with a large increase in payroll which was up <span style="color: red;">(€70k)</span> on 2016.</span><br />
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<span style="font-size: large;">Overall over the 4 years Harps looks like a prudently run club at the minute with the club not really spending more than they are taking in. While they appear to be loss making, if you exclude depreciation on the stadium and the grant write back the club would have made a cash surplus of circa <b><u>+€25k</u></b>. This depreciation and grant amortisation is to do with the stadium assets.</span></div>
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<span style="font-size: large;">In terms of revenue Harps have increased that significantly over the 4 years, a promotion push in 2015 increased gate receipts by almost +€60k on 2014 and gates again increased by +€65k in 2016 with Harps being in the premier division. Gates fell a little in 2017 as the team were towards the bottom of the table. Being in the premier and having a level of success is very important in terms of revenue to a club like Harps in looking at the P&L.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUPOVfxupR2qI2XYAc7q70Fg5U0GDfGaNKy4O-h5OyOHcr2LUGB0AuvzRiKJboe434pCucIZDr9qa65fsYdwwxDbLWdxf8-164XWxPXfImydESOrULenbyXub3ej0l5fT7ZqzteWdPGNU/s1600/Finn+Harps+Revenue.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="127" data-original-width="470" height="107" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUPOVfxupR2qI2XYAc7q70Fg5U0GDfGaNKy4O-h5OyOHcr2LUGB0AuvzRiKJboe434pCucIZDr9qa65fsYdwwxDbLWdxf8-164XWxPXfImydESOrULenbyXub3ej0l5fT7ZqzteWdPGNU/s400/Finn+Harps+Revenue.PNG" width="400" /></a></div>
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<span style="font-size: large;">In terms of revenue and thus resources available to invest in the team Harps would have the lowest revenue of the teams that share their data. The table below shows that Harps bring in only 17% of what Cork City bring in and only 1/2 of what Bohs bring in. This disparity in terms of revenue immediately puts them at a disadvantage in terms of staying competitive.</span></div>
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<span style="font-size: large;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHF-8r_AjXK8Oqs2LrVwJYaEVqlbIHjfxPRIqi-ZSRSCzyMbsBR7qJFxxSllGJxW2b9pVi8ygBYopgLZarfmjPtTDrvNEPqzqbVVIvduHoxnBEFtl9IRBU-j0kERY-psqLmJLj4GmXfPA/s1600/Revenue+Compar.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="189" data-original-width="487" height="155" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHF-8r_AjXK8Oqs2LrVwJYaEVqlbIHjfxPRIqi-ZSRSCzyMbsBR7qJFxxSllGJxW2b9pVi8ygBYopgLZarfmjPtTDrvNEPqzqbVVIvduHoxnBEFtl9IRBU-j0kERY-psqLmJLj4GmXfPA/s400/Revenue+Compar.PNG" width="400" /></a></span></div>
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<span style="font-size: large;">Like Sligo Rovers, Harps get decent support from their supports and local community with with in 2017 circa €125k of their revenue coming from Draw Tickets, Lotto & Half Time draws, Donations and 500 club donations. This is a very big revenue source for the club and accounts for circa 27% of all their revenue.</span></div>
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<span style="font-size: large;">In terms of costs, like most clubs Harps main cost is the playing side of the club. Payroll was very modest in 2014 and 2015 when in the first division at <span style="color: red;">(€93k)</span> and <span style="color: red;">(€109k)</span> but did increase with the move to the premier division. In 2016 this cost increased to <span style="color: red;">(€164k) </span>with a further increase in 2017 to <span style="color: red;">(€232k)</span>. Most clubs don't have to declare their payroll figure any more but of those that have this is by far the lowest payroll cost to date.</span></div>
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">While Harps have been well run over the last 4 years this may not be the case since they first started trading as the company has accumulated losses of circa <b><u><span style="color: red;">(€627k)</span></u></b> and given that the capital invested is only +177k the club has negative reserves of <span style="color: red;">(€450k).</span></span></div>
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<span style="font-size: large;">The principle asset Harps have relates to the stadium and property which appears to be on a long leasehold. This asset is valued in the books at circa +€774k at Nov'17.</span></div>
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<span style="font-size: large;">Harps have very little current assets but do owe <span style="color: red;">(€333k)</span> in current liabilities at Nov'17. Just over 1/2 of this is owed to fans of the clubs through personal loans which does reduce the likelihood of these debts being called in. This also again highlights the dependence of the club on its fans.</span></div>
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<span style="font-size: large;">Harps biggest "liability" relates to Government grants and this is not a real liability as such and won't have to be repaid as long at the ground is used. This amount is not disclosed in full but would be circa <span style="color: red;">(€720k)</span> at Nov'17 and is more an accounting liability than a real liability. Harps also have a debt of <span style="color: red;">(€228k)</span> in long term debts but as this amount hasn't changed in 4 years there is clearly no immediate threat of this being required to be repaid by the club.</span></div>
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<span style="font-size: large;">So while the balance sheet is not very healthy, the 2 main debts owed to fans and a long term liability make up most of the "real" debt and on that basis there seems little risk of Harps being in any trouble with their debt given they are being run prudently today.</span></div>
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">Harps are another club living within their means but struggling in terms of performance as a result. Harps don't have a benefactor and have had no European money in the 4 year period, but as the revenue shows just being in the premier division makes a big difference to the club. Looking at the Balance Sheet Harps did live outside their means in the past and have the legacy debt as a result but thankfully this debt is structured so as not to threaten their future at the minute.</span></div>
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<span style="font-size: large;">Harps will now need to focus on getting back to the premier division (they have a good chance of this in 2018) while moving ahead with the new stadium. However competing in the premier division will remain a challenge given their location and population in attracting both players and fans in order to drive revenue to be able to compete. This challenge though is not unique to Harps as the gap widens even within the premier division between the teams with Europe/Benefactors and those without.</span></div>
chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-6495878098714759052018-09-05T18:08:00.004+01:002018-09-05T18:14:08.543+01:00Longford Town FC Financial Update 2015-2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBpqgSWxC93ibmnZG0-3WckT-pcuS3WWjD5ZOoLPci23b0se62tPaerbRlnZEGbXuhczzsO0VQJt7AhbZk5QfpPlVCa_CSSJyYdEUXHGv8aQHDzB8ZdyeDS0-aEBTdYeMaLyDimbRcx50/s1600/LongfordTown.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhBpqgSWxC93ibmnZG0-3WckT-pcuS3WWjD5ZOoLPci23b0se62tPaerbRlnZEGbXuhczzsO0VQJt7AhbZk5QfpPlVCa_CSSJyYdEUXHGv8aQHDzB8ZdyeDS0-aEBTdYeMaLyDimbRcx50/s200/LongfordTown.png" width="200" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
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<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">Longford Town trade under a company called Domeford Limited (450246) which was set up in Dec'07. Longford joined the league in 1984 and originally traded as Longford Town Football Club Limited (93442) which was set up in Feb'83. At some point in 1997/98 the original company became a property holding company owning the stadium that Longford Town now play in. I can't make out what entity owned/ran the club between 1998 and 2008 when Domeford then took over. Longford finished 6th & 12th in the premier division in 2015 & 2016 and finished 5th in Division 1 in 2017. Longford play at the City Calling Stadium which as I said is owned by the original football club company. Domeford is owned by 2 people with a 50% stake each who have owned this shares since the company was set up in Dec'07.</span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span><br />
<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">Over the last 3 years, Longford Town were in the premier division for 2 of them and the first division for the last one. As you can see in the table below, the club has broken even for the 3 seasons.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigpizojQY3BmJBbnMU2e1k8vOgZv-Xo4mGFFd1TI10oWZXKgn-0t1TDRYxn14J1hR00R3iR3vLE1Yo4bmnzctXtpBWF5vQfAZJtqh_AFamumMGplcyIn6jZLEj3-0AVe4RencfC8ZBmZ8/s1600/longford+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="117" data-original-width="399" height="116" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigpizojQY3BmJBbnMU2e1k8vOgZv-Xo4mGFFd1TI10oWZXKgn-0t1TDRYxn14J1hR00R3iR3vLE1Yo4bmnzctXtpBWF5vQfAZJtqh_AFamumMGplcyIn6jZLEj3-0AVe4RencfC8ZBmZ8/s400/longford+P%2526L.PNG" width="400" /></a></div>
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<span style="font-size: large;">From reading the accounts there does not seem anything exceptional in terms of income in the accounts which would show a club living within in means and running on a sustainable basis. The club got promoted to the premier division at the end of 2014 and as a result its wages cost went from <span style="color: red;">(€130k)</span> in 2014 to <span style="color: red;">(€198k)</span> in 2015. Given they finished 6th that season after stepping up it was a very good season for them, although they did lose money. </span><br />
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<span style="font-size: large;">In 2016 the club broke even with wages running at <span style="color: red;">(€205k)</span> in the year. The club clearly didn't increase investment here where as other clubs in the league did and as a result Longford struggled and finished last. The club made a small profit in the year after settling back into the premier division.</span><br />
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<span style="font-size: large;">2017's profit was very strong and there is nothing to indicate anything exceptional in here. Payroll fell to <span style="color: red;">(€155k)</span> after falling back to division 1. To put this into context Longford finished 5th this season behind Waterford who won the league. Waterford with the money from Lee Power ran up losses of <span style="color: red;">(€289k)</span> in this 1 year which shows what the likes of Longford are up against in terms or resources.</span><br />
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<span style="font-size: large;">Overall there is very little P&L information shown but it would appear that the club is well managed and living within in means, even though as more benefactors come into the league it makes it harder for the likes of Longford to both get up and stay up.</span>
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">At the end of Nov'17 Longford have negative reserves of <span style="color: red;">(€147k)</span> from circa 10 years trading. They have current assets of +€67k and liabilities of circa <span style="color: red;">(€216k)</span>. The great thing as regards these liabilities is that circa <span style="color: red;">(€176k)</span> is owed to supporters and related parties which have given this money interest free and won't be requesting repayment in the immediate future. As a result of most of the liabilities being owed to fans this would indicate that the balance sheet is in quiet a good place for going forward.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">Longford seem a well run club living within its means. It has no real debt issues that would worry a reader. Its challenge will be getting back to the premier division, it is currently in the final playoff position with 2 league games to go. If they can secure promotion they will have to invest in the team in order to stay up and given the wages demands in the premier division with European money and benefactors this will be a big demand on the club.</span><br />
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<span style="font-size: large;"><b><u>Longford Town Football Club Limited</u></b></span></div>
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<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">This company owns the City Calling Stadium having originally also run the football club. This is an interesting company whose only asset is the stadium. The company spent a lot of money building the ground in 2003/2004 and spent circa €1.37m on the stadium. At the height of the property boom, the company revalued the stadium to be worth circa €3.5m (Nov'07 accounts). The company owed money on the building of the stadium to various people but given that valuation the balance sheet looked very strong in Nov'07.</span><br />
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<span style="font-size: large;">However in the Nov'15 accounts the property was again revalued and this time to be worth €280k which is its carrying value today. This company is probably a good example of the Irish property bubble and its impacts on accounts.</span><br />
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<span style="font-size: large;">At Nov'17 its main asset is the ground worth €280k and it has liabilities of circa <span style="color: red;">(€800k)</span>. Luckily for the club and this company circa <span style="color: red;">(€744k)</span> is owed to Jim Hanley or his company. Per the accounts he has indicated he won't be looking for repayment in the immediate future which leaves the ground and thus the club safe. Jim Hanley is the current Longford Town FC chairman and long time supporter and the club are obviously lucky to have his support re the legacy stadium debts.</span><br />
<span style="font-size: large;"><br /></span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-57837574084792493992018-09-05T15:05:00.003+01:002018-09-05T18:13:58.378+01:00Bray Wanderers FC Financial Update 2014-2016<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2frkA7cfAs93VXVQTVh-xUVrsRna7rGkch6iQaUOHlThB_OBFXim6NFpBYIoPhG0hBp18vCvvFYv383EEAuywjF0xPw3wHwpExBnLUxaoxR-GjNiA4t03Y4mjh5s1cKd9gSnau7yIuzQ/s1600/Bray_Wanderers_F.C._crest.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="196" data-original-width="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2frkA7cfAs93VXVQTVh-xUVrsRna7rGkch6iQaUOHlThB_OBFXim6NFpBYIoPhG0hBp18vCvvFYv383EEAuywjF0xPw3wHwpExBnLUxaoxR-GjNiA4t03Y4mjh5s1cKd9gSnau7yIuzQ/s1600/Bray_Wanderers_F.C._crest.png" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span><br />
<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">Bray Wanderers are set up like most clubs and are run by a limited company rather than a co-op. The club joined the league in 1985 and have used the same trading company in all that time, "Bray Wanderers Limited" number 108824. Bray Wanderers play at the Carlisle grounds which they lease from Bray Urban District Council on a 35 year lease starting in 2001. </span><a href="https://www.independent.ie/regionals/braypeople/news/grounds-subject-to-35year-sports-lease-31377014.html">https://www.independent.ie/regionals/braypeople/news/grounds-subject-to-35year-sports-lease-31377014.html</a> <span style="font-size: large;">In these 3 seasons Bray Wanderers finished 10th/8th and 6th respectively in the premier division with another 6th place finish in 2017.</span><br />
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<span style="font-size: large;"><b><u>Ownership</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">I am including a special section here as unlike most clubs it is less obvious as to the ownership of the club. Bray have issued share capital of €817,431 with 817,431 €1 ordinary shares having being issued. Most of these shares were issued between 2004 and 2006 when the club raised circa €760k in issuing shares to owners. Most of these went to fund losses in those years with the club losing circa <span style="color: red;"><b><u>(€450k)</u></b></span> in 3 years between 2004 and 2006.</span><br />
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<span style="font-size: large;">Even before recent difficulties the club has always relied on the support of benefactors and over 2012/13 circa <span style="color: red;"><b><u>(€600k)</u></b></span> of loans to shareholders were written off by these shareholders which significantly improved the balance sheet position at that time.</span><br />
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<span style="font-size: large;">There have been lots of share transfers since then but at August'17 circa 757k of the shares were owned by Milway Dawn Limited (561046) a company controlled by Gerry Mulvey with 80% ownership and Denis O'Connor with 20% ownership. The remaining shares were owned by Pat Devlin 40k, John Deering 18.5K and John O'Brien 1.5k. So in reality and as noted in the 2016 Bray Wanderers accounts, Milway Dawn were the parent company of the club and ultimate owner. </span><br />
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<span style="font-size: large;">Another company set up at a similar time was </span><span style="font-size: large;">Unknowns football club limited (554661) which was set up in December'14 by Denis O'Connor but was dissolved in Oct'17 and it never filed accounts over the years it was active.</span><br />
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<span style="font-size: large;">Milway Dawn were only set up in April'15 and have not filed any accounts or returns with the CRO except for the period to April'16. As a result it is very hard to discuss this entity and the CRO has them listed for strike off due to being overdue by 12 months and more with their submissions.</span><br />
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<span style="font-size: medium;"><span style="font-size: large;"><span style="color: #6fa8dc;"><u>I would caveat all the above with that the recent acquisition of the club in recent months, the ownership will again have changed but I don't yet have visibility of this but should in due course.</u></span> </span><a href="https://www.rte.ie/sport/soccer/2018/0726/981290-bray-wanderers-unveil-new-chairman/">https://www.rte.ie/sport/soccer/2018/0726/981290-bray-wanderers-unveil-new-chairman/</a><span style="font-size: large;"> </span></span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span><br />
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<span style="font-size: large;">The P&L for 2017 will be due in the coming weeks and I will update this then. The auditors/directors for the company release very little detail in the accounts with no related party notes included in the 2016 accounts. This note is usually where you would note exceptional investment from an owner as in the case at Limerick/Derry or Pats.</span><br />
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<span style="font-size: large;">In the 3 years under review, Bray appear to have only lost circa <span style="color: red;"><b><u>(€78k)</u></b></span> with a big profit of <b><u>+€142k</u></b> in the 2016 year. This is the year that Milway Dawn came about but as they haven't filed accounts its hard to understand how much they put into Bray in that year and thus how much they may have lost as a result. I would be surprised that Bray would make such a profit in that season from "normal" trading given their league position and losses in the previous 2 seasons but I doubt I will ever be able to confirm same.</span></div>
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<span style="font-size: large;">In the 2015 accounts there is a note that "Unknowns Football club limited" paid Bray circa €54k for shirt sponsorship and a concession to operate a mobile food stand in the ground. This would have helped the 2015 accounts from a profit point of view.</span></div>
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<span style="font-size: large;">The one thing of note in the accounts was that payroll increased from <span style="color: red;">(€184k)</span> in 2015 to <span style="color: red;">(€356k)</span> in 2016 an almost doubling of this cost and the club started making big profits.</span></div>
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<span style="font-size: large;">This was the start of Bray Wanderers increasing the playing budget which they did further in 2017 but as most reading this know it did not end well with the club having difficulties paying players in 2017 </span><a href="https://www.irishexaminer.com/sport/soccer/bray-chairman-not-confident-as-players-told-they-can-go-453953.html" style="font-size: x-large;">https://www.irishexaminer.com/sport/soccer/bray-chairman-not-confident-as-players-told-they-can-go-453953.html</a><span style="font-size: large;"> although it was reported that all wages for 2017 were ultimately paid.</span></div>
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span><br />
<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">The Balance sheet of the club at Nov'16 is in a reasonably healthy position with net debts of circa <span style="color: red;"><b><u>(€176k)</u></b></span>. They also have a fixed asset of circa €257k which relates to the carrying value of the improvements the club made to the grounds over the years mainly between 2006 and 2008.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">There were 2 difficulties looking at Bray, firstly even by LOI standards they disclose very little information and I think some important notes to accounts like related parties are missing. That makes it very hard to discuss either the true P&L or what monies are owed to who. Secondly the change in shareholders and number of companies involved also make it hard to follow, especially given that 2 of the companies are not submitting returns over those years.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Overall we all know that the club has had significant financial difficulties in 2017 and 2018 and ultimately the club have new owners in the form of Niall O'Driscoll. Hopefully under his tenure the club will stabilise as looking at the accounts for the last 3 years and also make to the 2000's the club has been surviving off the generosity of various shareholders in taking up new shares and writing off debts for a long time now. Bray Wanderers as a club have been trading on an unsustainable basis for a long time.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Bray Wanderers are a good example of when a benefactor runs out of cash for whatever reason. It is very hard to be sustainable and competitive in the league and harder to bridge the gap between the teams in Europe and the teams out of Europe. Bray tried this in 2017 and on the pitch were doing well unless funds became an issue. Limerick are another example where the chairman has invested a lot but funds are again drying up. The result in 2018 is that both of these teams are in the bottom 2.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-72249319559218339522018-09-04T13:42:00.001+01:002018-09-04T13:42:22.823+01:00Sligo Rovers FC Financial Update 2014-2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4DPW1oL4Uc4eFguAqrnhyphenhyphenv4Jowjj7w9tNCLcqJ_jyxtMWLHUmwIT-MRQLq25YouV-7kx-iVHVlwQkp0Ch44ipJSbsJ0rfzct2DUNRS4lwhGn1VeUu1SKeU1XwHNjeyP-OcqLOda47FKY/s1600/SligoRoversLogo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1200" data-original-width="1200" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4DPW1oL4Uc4eFguAqrnhyphenhyphenv4Jowjj7w9tNCLcqJ_jyxtMWLHUmwIT-MRQLq25YouV-7kx-iVHVlwQkp0Ch44ipJSbsJ0rfzct2DUNRS4lwhGn1VeUu1SKeU1XwHNjeyP-OcqLOda47FKY/s320/SligoRoversLogo.png" width="320" /></a></div>
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<span style="font-size: large;"><u><b>Background</b></u></span></div>
<span style="font-size: large;">Sligo Rovers legal set up is similar to Cork City in that they are a co-op operating under the legal name of "Sligo Football & Sports Development Society Limited" number 4473R. Sligo Rovers first played in the league of Ireland in 1934 and have been operating under this legal entity since May 1988. In the 4 years 2014-2017 Sligo have finished 5th, 9th, 5th and 9th again with very up and down league campaigns. In 2013 Sligo finished 3rd and won the FAI cup which put them in Europe in 2014 which has an impact on their accounts/revenue in 2014. Sligo as a co-op publish very detailed accounts like Cork which allows more review of the P&L which I will cover below. Sligo Rovers play at the Showgrounds which they lease from the Sligo Showgrounds Sporting Trust Foundation.</span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Over the 4 years in review Sligo Rovers broke even. I included an extra year as it looks like Sligo made and banked good profits in 2014 from Europe and tried to use this money in 2015 to get back into Europe. They haven't yet made that breakthrough and thus their income from 2015-2017 is lower than 2014.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUB4P0zByvad7EJqK4kpcBTuukBgIW0PXaC2bd2BeONPngPil0JinrLmYlkUi_JXWLyJswVKFxKZbEe2v9dHzUmkPze7f4ns21PdVioBxdXwJOMWdBj1tt805oFVO4YzSykSIhLpieTzk/s1600/sligo+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="119" data-original-width="480" height="156" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUB4P0zByvad7EJqK4kpcBTuukBgIW0PXaC2bd2BeONPngPil0JinrLmYlkUi_JXWLyJswVKFxKZbEe2v9dHzUmkPze7f4ns21PdVioBxdXwJOMWdBj1tt805oFVO4YzSykSIhLpieTzk/s640/sligo+P%2526L.PNG" width="640" /></a></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">In 2014 they made <u><b>+€208k</b></u> profit and had their highest revenue of the 4 years with <b><u>€1.47m</u></b> in revenue. In that year they had 2 European games and the prize money was €250k from that and the gates from the 2 European games were €115k. In terms of their revenue Europe was worth circa €365k and they haven't had this income since. As a result their income over the last 3 years is in the range of €1.05m with most of the drop from 2014 down to the lack of Europe.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">The standout number in terms of Sligos revenue in the fundraising amounts. Over the 4 years the fundraising committee have raised circa +€1.55m or +€386k per annum. This is far more than I have noted in other clubs that published detailed accounts and even the 2017 directors report noted the "heroic" efforts of this committee or otherwise the loss of <span style="color: red;">(€93k)</span> would have been far worse. I think its safe to say that Sligo are the model for members clubs in being part of the community and raising money through the community.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">In terms of comparisons of revenue, most clubs don't disclose a P&L but 4 clubs do. All 4 are in affect members owned clubs with no private backer. Harps played in the premier division in 2016 & 2017. This table shows the level of disparity in terms of resources available with unsurprisingly Cork doing the best of these 4 teams with decent European money over the 4 years. Cork City generated 66% more revenue than Sligo, 121% more than Bohs and 424% more than Harps. Of that circa €2m has come in European and League Prize money which shows the gap that success can drive.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibWr2l_rU08HEHbUnylBM5RDlrnAvu_j0u8mnMx1mNzC7pT153XKS3LcrOXUnUTglzMwH-rT3Mh93QV3u68wClKcKqC6BvfqHAaeD6cVUdrM8m18AQ75YYx6PRjqgafNpf3ztp-SMZh3Q/s1600/Revenue+Compar.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="189" data-original-width="487" height="248" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibWr2l_rU08HEHbUnylBM5RDlrnAvu_j0u8mnMx1mNzC7pT153XKS3LcrOXUnUTglzMwH-rT3Mh93QV3u68wClKcKqC6BvfqHAaeD6cVUdrM8m18AQ75YYx6PRjqgafNpf3ztp-SMZh3Q/s640/Revenue+Compar.PNG" width="640" /></a></div>
<span style="font-size: large;">Sligo Rovers have obviously managed their costs well in the 4 years with a break even position. Their main cost as with all clubs is players and Sligo Rovers have cut that Budget from <span style="color: red;">(€733k)</span> in 2014 to <span style="color: red;">(€546k)</span> in 2017. They have now in affect adapted to not having the European money and cut their cloth accordingly but now struggle to get back to Europe. In comparison Cork City have increased their playing budget from <span style="color: red;">(€669k)</span> in 2015 to <span style="color: red;">(€894k)</span> in 2017 and now spend 64% more than Sligo on the players/managers wages which obviously gives them a big advantage.</span><br />
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<span style="font-size: large;">In the 4 years Sligo have charged circa <span style="color: red;">(€80k)</span> of depreciation and capital grant write offs to the P&L. This is not a cash item so over the 4 years the club would have made a circa <b><u>+€70k</u></b> cash profit.</span><br />
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<div style="text-align: center;">
<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">The balance sheet here like most clubs is fairly small with a net asset at Nov'17 of €97k. Since this co-op was founded almost 30 years ago the club have run up accumulated losses of <span style="color: red;">(€110k)</span> which for 30 years trading in this league is not a bad result at all.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">The principle asset Sligo Rovers have is the development to the grounds which stands at €431k at Nov'17. The club are depreciating this asset to the tune of <span style="color: red;">(€50k)</span> per annum which is hitting their P&L each year and would be a non cash hit to the P&L.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Sligo would appear to have current and long term liabilities of <span style="color: red;">(€448k)</span> in the balance sheet however circa <span style="color: red;">(€201k)</span> of these relate to government grants that are being written off each year and assuming Sligo don't leave the showgrounds ultimately won't be repaid and are thus not a "real" liability. </span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<br />
<span style="font-size: large;">Overall Sligo Rovers look a very well run club, over their entire history trading with this entity they have lost very little and in these 4 years their reported loss is circa <span style="color: red;"><b><u>(€10k)</u></b></span>. They are very dependent on their links with the local community and what they fund raise through these links. This money has allowed Sligo to stay competitive in the premier division but as with other clubs there is a gap opening. With no European money in the last 3 years, Sligo have had to reduce budgets and that has impacted on their league position. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">They have a strong balance sheet, overall nothing in the accounts would show Sligo Rovers other than a well run club, with a good asset (The Showgrounds) to build upon, their challenge will be how to get back into the top 3 with no benefactor and no European money as clubs like Dundalk/Cork/Rovers continually benefit from these sources of income. That challenge is similar to all clubs in that position, the risk is that we don't chase the dream as most did 10/15 years ago and bankrupt ourselves in the process.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-46840683438057874802018-08-27T18:32:00.000+01:002018-08-27T18:32:15.866+01:00Bohemian FC Financial update 2015-2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEfotBnSSzk3eJ6Kt0XVzn9T_bDCZFNWLBQU5sJm6UfoXmPGbOfLzRTEyzVvD39em1qksMkooLMWqbvGinAji0KPnSZPeeXnXz0ycA62Uv1qsq46qZAEfL02199KdkBGk7blgQMVmycQ4/s1600/Bohs+Crest.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="224" data-original-width="220" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEfotBnSSzk3eJ6Kt0XVzn9T_bDCZFNWLBQU5sJm6UfoXmPGbOfLzRTEyzVvD39em1qksMkooLMWqbvGinAji0KPnSZPeeXnXz0ycA62Uv1qsq46qZAEfL02199KdkBGk7blgQMVmycQ4/s1600/Bohs+Crest.jpg" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
<span style="font-size: large;"><b><br /></b></span><span style="font-size: large;">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. </span><span style="font-size: x-small;">More on that later. </span><span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span><br />
<span style="font-size: large;"><b><u><br /></u></b></span></div>
<span style="font-size: large;">The P&L for Bohs over the last 3 years is impressive on first viewing. Per the accounts Bohs made a profit of <b><u>+€1.7m</u></b> 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 <b><u>+€79k</u></b> over the 3 seasons.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzJEi_XYE0y0DJbGOiv-tgetJ8SFuI305GgQBF3SXGQE9RKrPRtMfj1y0mIRVxFUw6Tm0PdGqJbyObFGCGOUfdhYo-Qcbm-dS1_RZbH3LGLTf8alTjy569zWIuMFnDx0vfbV1qFvKQ3gk/s1600/Bohs+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="199" data-original-width="408" height="195" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzJEi_XYE0y0DJbGOiv-tgetJ8SFuI305GgQBF3SXGQE9RKrPRtMfj1y0mIRVxFUw6Tm0PdGqJbyObFGCGOUfdhYo-Qcbm-dS1_RZbH3LGLTf8alTjy569zWIuMFnDx0vfbV1qFvKQ3gk/s400/Bohs+P%2526L.PNG" width="400" /></a></div>
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<span style="font-size: large;">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 <span style="color: red;">(€5.2m)</span> 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</span><span style="font-size: x-small;"> </span><a href="https://www.independent.ie/irish-news/bohemians-say-yes-to-the-sale-of-dalymount-park-in-65m-deal-26363606.html">https://www.independent.ie/irish-news/bohemians-say-yes-to-the-sale-of-dalymount-park-in-65m-deal-26363606.html</a> <span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">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 </span><a href="http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/">http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/</a> <span style="font-size: large;">but still below 4 or 5 other clubs.</span></div>
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<span style="font-size: large;">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. </span><a href="https://leagueofirelandfinance.blogspot.com/2018/08/2015-2016-premier-division-accounts.html">https://leagueofirelandfinance.blogspot.com/2018/08/2015-2016-premier-division-accounts.html</a><span style="font-size: large;"> </span><span style="font-size: large;">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.</span></div>
<span style="font-size: large;"><b><br /></b></span>
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<div style="text-align: center;">
<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
<span style="font-size: large;"><b><br /></b></span><span style="font-size: large;">At the end of Nov'14 which is the start of this 3 year period, Bohs had ran up accumulated debts of <span style="color: red;">(€6.2m)</span> and the principle asset they owned was Dalmount Park. Per the submitted accounts the principle debts were a <span style="color: red;">(€4.4m)</span> bank loan and members loans of nearly <span style="color: red;">(€0.8m)</span>. 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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 </span><span style="color: red; font-size: large;">(€0.4m)</span><span style="font-size: large;"> but the ground was now sold to the council. </span><a href="https://www.independent.ie/sport/soccer/league-of-ireland/council-strikes-34m-deal-to-buy-dalymount-park-31075591.html">https://www.independent.ie/sport/soccer/league-of-ireland/council-strikes-34m-deal-to-buy-dalymount-park-31075591.html</a> <span style="font-size: large;">Almost all of the net debt was then owed to members who contributed to fund the sale with members being owed circa <span style="color: red;">(€0.35m)</span> 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. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><b><br /></b></span><span style="font-size: large;">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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Overall though while not a successful 3 years on the pitch a very successful 3 years off the pitch</span><span style="font-size: large;"> financially. </span><span style="font-size: large;">The challenge for Bohs now is how do they compete with the likes of the clubs that a) <u>have regular European income</u> or b) <u>have a benefactor</u>. 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.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-60475010340364731332018-08-25T17:49:00.004+01:002018-09-12T13:23:27.442+01:002015-2016 Premier Division Accounts<div style="text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkpNYUqdqhpVJA3_Wax1xrxBxwlRZru9RiUuRv09_FAdOrtSZSSPvYlt93JwdewbmsQWa-KdcjGs7y43pEcJaEJiwKKLKJPbADM7OJriEVEQDoSpPyPlU5TqxY_juRdsgohoHp_Vvnskk/s1600/League_of_Ireland_logo.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="316" data-original-width="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkpNYUqdqhpVJA3_Wax1xrxBxwlRZru9RiUuRv09_FAdOrtSZSSPvYlt93JwdewbmsQWa-KdcjGs7y43pEcJaEJiwKKLKJPbADM7OJriEVEQDoSpPyPlU5TqxY_juRdsgohoHp_Vvnskk/s1600/League_of_Ireland_logo.png" /></a></div>
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<span style="font-size: large;"><b><u>Overview</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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. </span><br />
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<span style="font-size: large;"><b><u>The 2015 Season/Financial Year</u></b></span></div>
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<span style="font-size: large;">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 <b><u>+€1.4m</u></b>, however I had added back 2 separate types of income to come to what I define as sustainable profit. </span><span style="font-size: x-small;">(see table below)</span><span style="font-size: large;"> </span><br />
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<span style="font-size: large;">The adjustments to the reported numbers are that 3 clubs have benefactors, this reduced the losses in those clubs by circa </span><span style="color: red; font-size: large;">(€0.8m)</span><span style="font-size: large;"> 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.</span><span style="font-size: large;"> This obviously isn't a recurring profit and distorted the P&L in that year.</span><br />
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<span style="font-size: large;">After the adjustments the combined situation would have been a loss of just over <span style="color: red;"><b><u>(€1m)</u></b></span> with 3 clubs making a profit and the other 9 a loss. 3 clubs account for <span style="color: red;">(€0.93m)</span> of the combined loss with Limerick losing <span style="color: red;">(€410k)</span>, Pats <span style="color: red;">(€348k)</span> and Sligo <span style="color: red;">(€170k)</span>. In both the cases of Pats and Limerick, the ultimate owner of the club put in </span><span style="font-size: large;">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 <span style="color: red;">(€170k)</span> 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.</span><br />
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<span style="font-size: large;">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. </span><br />
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<span style="font-size: large;">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. </span><span style="font-size: large;">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.</span><span style="font-size: x-small;"> Derry City don't seem obliged to file the cash payroll number hence the absence here.</span><br />
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<span style="font-size: large;"><b><u>The 2016 Season/Financial Year</u></b></span></div>
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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 <b><u>+€2.2m</u></b> and excluding Dundalk the other 11 made a loss of <span style="color: red;"><b><u>(€1m)</u></b></span> which is broadly similar to 2015.</span><br />
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<span style="font-size: large;">3 clubs account for all of the loss in the "sustainable" column with Shamrock Rovers <span style="color: red;">(€661k)</span>, St Pats <span style="color: red;">(€324k)</span> and Derry City <span style="color: red;">(€288k)</span> losing a combined <span style="color: red;">(€1.27m)</span> 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 <span style="color: red;">(€0.8m)</span> but their circumstances have changed since.</span><br />
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<span style="font-size: large;">The same 4 clubs as 2015 were in Europe and made circa €8.8m with Dundalk making €7.5m. </span><span style="font-size: x-small;">(I don't believe all this was booked in 2016 so I expect 2017 to be very strong as well) </span><span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><b><u>European Monies</u></b></span></div>
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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 <span style="color: red;">(€0.3m)</span> 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.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 </span><span style="font-size: x-small;">(if they need to use them)</span><span style="font-size: large;">, 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 </span><span style="font-size: x-small;">(and they already seem to be benefiting from this)</span><span style="font-size: large;">. 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. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: x-small;">* 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.</span><br />
<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">** 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.</span><br />
<span style="font-size: x-small;"><br /></span>
<span style="font-size: x-small;">*** 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. </span><br />
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<span style="font-size: x-small;">**** 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.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-8409651289829964612018-08-23T18:20:00.003+01:002018-08-23T19:39:29.320+01:00Cork City FC Financial Update 2015-2017<div class="separator" style="clear: both; text-align: center;">
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<b><u><span style="font-size: large;">Background</span></u></b></div>
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<b><u><span style="font-size: large;"><br /></span></u></b></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;"><b><u>Revenue:</u></b></span></div>
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<span style="font-size: large;">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:</span><br />
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<span style="font-size: large;">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. </span><span style="font-size: x-small;">(Sligo finished 9th, 1 point off 7th)</span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: medium;"><span style="font-size: large;">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. </span><a href="http://www.extratime.ie/articles/20256/25-increase-in-attendances-for-league-of-ireland/">http://www.extratime.ie/articles/20256/25-increase-in-attendances-for-league-of-ireland/</a></span><br />
<br />
<span style="font-size: large;">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.</span></div>
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<div style="text-align: left;">
<span style="font-size: large;">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 </span><span style="font-size: medium;"><a href="http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/">http://www.extratime.ie/articles/21267/league-of-ireland-attendances-2018----the-story-so-far/</a></span></div>
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<span style="font-size: large;"><b><u>Costs:</u></b></span></div>
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<div style="text-align: left;">
<span style="font-size: large;">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 <span style="color: red;">(€1.5m)</span> to <span style="color: red;">(€2.5m)</span> an increase of <span style="color: red;"><b>(€1m)</b></span>.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Of this payroll increased by <span style="color: red;"><b>(€335k)</b></span>. Payroll at Cork City has increased from <span style="color: red;">(€745k)</span> in 2015 to <span style="color: red;">(€1.02m)</span> in 2016 to <span style="color: red;">(€1.1m)</span> 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 <b><span style="color: red;">(€90k)</span></b> from 2015 to 2017.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">The costs of hosting home games and the European travel has increased by <span style="color: red;"><b>(€163k)</b></span> from 2015 to 2017 but given they had bigger crowds and 1 extra game in Europe this again would not be a surprise.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">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 <b><u>+€498k</u></b> which highlights they were running at break even mostly up to 2014 and have increased reserves by +€406k in the last 3 years.</span><br />
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<span style="font-size: large;">Cork had <b><u>+€295k</u></b> in the bank at Nov'17 and were owed circa <b>+€500k</b> in current debtors. I would imagine some of this is 2017/18 Europa league monies paid after year end.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Cork had current liabilities of circa <span style="color: red;"><b><u>(€315k)</u></b></span> at Nov'17 most of this being trade creditors and monies due in taxation.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">As Cork don't own the ground, they have very little fixed assets with their main fixed assets being €50k of motor vehicles.</span><br />
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<div style="text-align: center;">
<span style="font-size: large;"><b><u>Summary</u></b></span></div>
</div>
<div style="text-align: left;">
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <b><u>+€0.4m</u></b> 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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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. </span><span style="color: blue; font-size: medium;"><u>Will this change in 2018?</u></span><span style="font-size: large;"> 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. </span></div>
chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-17048704001441956392018-08-23T14:27:00.003+01:002018-08-23T14:27:29.570+01:00Waterford FC Financial Update 2017<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJl9XxYYyFr701B2qK7YgQngQ_F6E7nOW-p2l6kgdOBdHs0vD9e3tUjpDEIC7CN-ZgK4pLZJNo2wd5303uVnZ98T_QsnpePtCmOcciAoDyWmo8o2rpdQ1ioY2mS72-jHBoEH4ccWzDn1g/s1600/waterford.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="231" data-original-width="218" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJl9XxYYyFr701B2qK7YgQngQ_F6E7nOW-p2l6kgdOBdHs0vD9e3tUjpDEIC7CN-ZgK4pLZJNo2wd5303uVnZ98T_QsnpePtCmOcciAoDyWmo8o2rpdQ1ioY2mS72-jHBoEH4ccWzDn1g/s1600/waterford.png" /></a></div>
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Background</u></b></span></div>
<br />
<span style="font-size: large;">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 <a href="http://www.the42.ie/lee-power-waterford-united-3081677-Nov2016/">http://www.the42.ie/lee-power-waterford-united-3081677-Nov2016/</a>. 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.</span><br />
<span style="font-size: large;"><br /></span>
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">In 2017 Waterford lost <span style="color: red;">(289k)</span> 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 <span style="color: red;">(€400k)</span>. 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.</span><br />
<span style="font-size: large;"><br /></span>
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Again the balance sheet of Waterford is very simple as it is only finished 1 year of trading. The company has a deficit of <span style="color: red;">(€289k)</span> 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 <span style="color: red;">(€431k)</span> 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.</span><br />
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<div style="text-align: center;">
<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-36487590517703314712018-08-22T20:05:00.002+01:002018-08-22T20:05:38.074+01:00Limerick FC Financial Update 2014-2016<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFyDG2fXhNdiO5j_R7BS-lw-MxYK0GkhS1p-k87Z3CGfQ_8hiWWnQv8KcLCgvzRaD8y_P7o-eqeAd8VLRoNvqddghcShTRAsSm33xb_x0JDB9xsQsuvoJBJs4WhzMPcHd89h2tTlgzqLg/s1600/limerickfc_1.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="405" data-original-width="405" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFyDG2fXhNdiO5j_R7BS-lw-MxYK0GkhS1p-k87Z3CGfQ_8hiWWnQv8KcLCgvzRaD8y_P7o-eqeAd8VLRoNvqddghcShTRAsSm33xb_x0JDB9xsQsuvoJBJs4WhzMPcHd89h2tTlgzqLg/s320/limerickfc_1.jpg" width="320" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <a href="https://www.ledp.ie/index.php/projects/the-markets-field/">https://www.ledp.ie/index.php/projects/the-markets-field/</a></span><br />
<span style="font-size: large;"><br /></span>
<br />
<div style="text-align: center;">
<span style="font-size: large;"><u><b>Profit & Loss</b></u></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsOKW4DTM5XnvHMhB4OSsuAVnc3rAF6kc9ZXHsE-i6CfWp5TDDUCdigARRN-XryGYSa6aA_b3RDWVCsCxhh66bmUPfmmXepjXdxvQC3GSU8P43Tc2OykDU8xfi10OfceQoDcXLRe6NaeE/s1600/Limerick+P%2526L.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="198" data-original-width="498" height="126" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsOKW4DTM5XnvHMhB4OSsuAVnc3rAF6kc9ZXHsE-i6CfWp5TDDUCdigARRN-XryGYSa6aA_b3RDWVCsCxhh66bmUPfmmXepjXdxvQC3GSU8P43Tc2OykDU8xfi10OfceQoDcXLRe6NaeE/s320/Limerick+P%2526L.PNG" width="320" /></a></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;"><br /></span></div>
<div class="separator" style="clear: both; text-align: left;">
<span style="font-size: large;">So at a minimum on a underlying trading basis Limerick would have lost over <span style="color: red;">(€1m)</span> 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.</span></div>
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<span style="font-size: large;"><br /></span></div>
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<span style="font-size: large;">All 3 years the club are losing substantial funds with a loss of <span style="color: red;">(€200k)</span> 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 <span style="color: red;">(€400k)</span> and were relegated. Pat O'Sullivan gave circa €340k in donations that year to fund the club.</span></div>
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<span style="font-size: large;"><br /></span></div>
<div class="separator" style="clear: both; text-align: left;">
<span style="font-size: large;">Lastly in 2016 Limerick were in the first division, the club won the league but again lost circa <span style="color: red;">(€400k). </span>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.</span></div>
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<span style="font-size: large;"><br /></span></div>
<div class="separator" style="clear: both; text-align: left;">
<span style="font-size: large;">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 <a href="http://www.limerickfc.ie/statement-from-chairman-pat-osullivan">http://www.limerickfc.ie/statement-from-chairman-pat-osullivan</a> & <a href="https://www.rte.ie/sport/soccer/2018/0111/932534-500-000-gap-limerick-owner-set-to-sell-club/">https://www.rte.ie/sport/soccer/2018/0111/932534-500-000-gap-limerick-owner-set-to-sell-club/</a></span></div>
<span style="font-size: large;"><br /></span>
<br />
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Balance Sheet </u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Limerick's balance sheet at Nov'16 is quite modest. As they don't own the ground they have little fixed assets.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">They have a deficit of only <span style="color: red;">(€167k)</span> 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 <span style="color: red;">(€308k)</span> 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 <span style="color: red;">(€400k)</span> 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. </span><br />
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<br />
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <span style="color: red;"><b><u>(€4m)</u></b></span> 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. </span><br />
<span style="font-size: large;"><br /></span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-69499937436531781662018-08-22T13:59:00.001+01:002018-08-22T13:59:22.286+01:00Dundalk FC Financial Update 2014-2016<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_9JN9tInu0gYQYHiK1DDcZClXqP3bE6GF5fFQPDo7v2MCSceo5hwuvWp_5Q1QCzKqj1CiFmET0MFKVw_wGvgnilDrsIHaecOkrKm0aHYFK_5_TG3mnL4Amwx-AxfAcm0i244OHGgLVwQ/s1600/Dundalk_F.C._crest.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_9JN9tInu0gYQYHiK1DDcZClXqP3bE6GF5fFQPDo7v2MCSceo5hwuvWp_5Q1QCzKqj1CiFmET0MFKVw_wGvgnilDrsIHaecOkrKm0aHYFK_5_TG3mnL4Amwx-AxfAcm0i244OHGgLVwQ/s1600/Dundalk_F.C._crest.png" /></a></div>
<div style="text-align: center;">
<b><u><span style="font-size: x-large;">The Role Model or the Exception that proves the rule?</span></u></b></div>
<div style="text-align: center;">
<b><u><span style="font-size: large;"><br /></span></u></b></div>
<div style="text-align: center;">
<b><u><span style="font-size: large;">Background</span></u></b></div>
<div style="text-align: center;">
<b><u><span style="font-size: large;"><br /></span></u></b></div>
<div style="text-align: left;">
<span style="font-size: large;">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. <a href="http://www.the42.ie/dundalk-peak6-american-takeover-3805254-Jan2018/">http://www.the42.ie/dundalk-peak6-american-takeover-3805254-Jan2018/</a> 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.</span><br />
<span style="font-size: large;"><br /></span>
<br />
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Profit & Loss</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">For the 3 years 2014 to 2016 Dundalk made accumulated profits of <b><u>+€3.36m</u></b> with all 3 years being profitable (2014 <b><u>€53k</u></b>, 2015 <b><u>€116k</u></b> and 2016 <b><u>+€3.2m</u></b>). 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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <span style="color: red;">(€644k)</span>. By Irish standards this was a low cost team.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <span style="color: red;">(€988k)</span> but again they won the league and qualified for the champions league the following season. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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) <a href="https://www.uefa.com/MultimediaFiles/Download/competitions/General/02/51/12/27/2511227_DOWNLOAD.pdf">https://www.uefa.com/MultimediaFiles/Download/competitions/General/02/51/12/27/2511227_DOWNLOAD.pdf</a> and €580k from being eliminated in the champions league <a href="https://www.uefa.com/uefachampionsleague/news/newsid=2398575.html">https://www.uefa.com/uefachampionsleague/news/newsid=2398575.html</a> 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 <span style="color: red;">(€988k)</span> in 2016 to <span style="color: red;">(€2.7m)</span> and increase of <span style="color: red;">(€1.7m)</span> year on year. Obviously this was well worth it given the increase in revenue.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Obviously the 3 year story at Dundalk is fantastic, even without the bumper 2016 year they were making money and winning the league.</span><br />
<span style="font-size: large;"><br /></span>
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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 <span style="color: red;">(€23k)</span> the season beforehand. The joys of success!! Dundalk also spent €400k on the ground and increased their fixed assets accordingly that year.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">In terms of liabilities Dundalk owed Corporation tax of <span style="color: red;">(€0.5M)</span> which is probably a first for an Irish club and a welcome bonus to the revenue commissioners, and also owed <span style="color: red;">(€0.5m)</span> in PAYE/PRSI on what I assumed are accrued bonuses for the Euro run. These 2 liabilities are up <span style="color: red;">(€0.95m) </span>so you can see the taxman was a big winner from the success. The other liability of <span style="color: red;">(€0.8m)</span> 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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">Clearly the Dundalk balance sheet at Nov'16 looks great and it was a great 4 seasons for them from 2013 to 2016.</span><br />
<span style="font-size: large;"><br /></span>
<div style="text-align: center;">
<span style="font-size: large;"><b><u>Summary</u></b></span></div>
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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. </span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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.</span><br />
<span style="font-size: large;"><br /></span>
<span style="font-size: large;">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. </span><br />
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chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-30780290094833784732018-08-21T21:08:00.000+01:002018-08-21T21:08:03.526+01:00Shamrock Rovers FC Financial Update 2014 - 2016<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigtf0golvbyk-nq_lJHXy-6-etHE9zhDsH4ChWs4arswT8dcPXJoobo00Ds0Qw_pU54c3KjzkhfB2cPAoHaub7MYeHwAD2zku_BxdxQqCXGZM6MJJq5jornnKp31Em2OYTikjB6fj5JM8/s1600/337px-Shamrock_Rovers_FC_logo.svg.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="296" data-original-width="337" height="281" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigtf0golvbyk-nq_lJHXy-6-etHE9zhDsH4ChWs4arswT8dcPXJoobo00Ds0Qw_pU54c3KjzkhfB2cPAoHaub7MYeHwAD2zku_BxdxQqCXGZM6MJJq5jornnKp31Em2OYTikjB6fj5JM8/s320/337px-Shamrock_Rovers_FC_logo.svg.png" width="320" /></a></div>
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<span style="font-size: large;"><b><u>Background</u></b></span></div>
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<span style="font-size: large;">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. <a href="http://www.extratime.ie/articles/16110/rovers-invest-in-youth-as-route-to-success/">http://www.extratime.ie/articles/16110/rovers-invest-in-youth-as-route-to-success/</a></span><br />
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<span style="font-size: large;"><b><u>Profit & Loss Account</u></b></span><br />
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<span style="font-size: large;">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.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCg8Q5X68bzg0IsWD8v1gEUHUBxALGIoNgXS8RHUiO1X4MUquZobI6hCB8JF0HagUZjU-IXgDras5kyM4i5Cg75M2gl_I_yazKAz9mSH6eHY-RfjDLRCkvayP0dufFCdeA03lYVRrGdUA/s1600/Capture+2.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="212" data-original-width="496" height="136" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCg8Q5X68bzg0IsWD8v1gEUHUBxALGIoNgXS8RHUiO1X4MUquZobI6hCB8JF0HagUZjU-IXgDras5kyM4i5Cg75M2gl_I_yazKAz9mSH6eHY-RfjDLRCkvayP0dufFCdeA03lYVRrGdUA/s320/Capture+2.PNG" width="320" /></a></div>
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<span style="font-size: large;">As you will note in the 3 years Rovers lost circa <span style="color: red;">(€1.2m)</span>. Most of these losses came in 2014 <span style="color: red;">(€0.5m)</span> and 2016 <span style="color: red;">(€0.65m)</span>. 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 <span style="color: red;">(€1.2m)</span> 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.</span><br />
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<span style="font-size: large;">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 <span style="color: red;">(€1.2m/€1.3m)</span> 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. </span><br />
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">The trading company had a deficit of <span style="color: red;">(€0.8m)</span> at the end of November'16. This was made up of assets of circa +€0.6m and liabilities of circa <span style="color: red;">(€1.4m)</span>. 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. </span><br />
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<span style="font-size: large;">The liabilities are not broken in any detail so their is no breakdown of the <span style="color: red;">(€1.4m)</span>. 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.</span><br />
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">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 <span style="color: red;"><b><u>(€1m)</u></b></span>. 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.</span><br />
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<span style="font-size: large;">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.</span><br />
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chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-13484083697661027092018-08-21T17:04:00.003+01:002018-08-21T17:04:59.740+01:00St Patricks Athletic FC Financial Update 2015-2017<div style="text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgd0l9lv2b-3DWyP3Nn_8hY7_HuVHH_cJbVt6JrM2o6qXwpBt2n9jFaIeTXbpPgPEgeSgGXETJyLkANCkVs9q-6KdGBRgX9LiRyEHQ33W6NAM-gGAe66gfksakn_ZCfKpeaft4r2GflT00/s1600/St._Patrick%2527s_Athletic_F.C._crest.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="316" data-original-width="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgd0l9lv2b-3DWyP3Nn_8hY7_HuVHH_cJbVt6JrM2o6qXwpBt2n9jFaIeTXbpPgPEgeSgGXETJyLkANCkVs9q-6KdGBRgX9LiRyEHQ33W6NAM-gGAe66gfksakn_ZCfKpeaft4r2GflT00/s1600/St._Patrick%2527s_Athletic_F.C._crest.png" /></a></div>
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<b><u><span style="font-size: large;">Background</span></u></b></div>
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<span style="font-size: large;">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. </span></div>
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<b><u><span style="font-size: large;">Profit & Loss Account</span></u></b></div>
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<span style="font-size: large;">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). </span></div>
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<span style="font-size: large;">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 <span style="color: red;">(€1.35m)</span> from football activities in the last 3 years. This would compare with circa <span style="color: red;">(€700k)</span> lost by Derry City in the same period although I suspect the Derry figure would be higher again except for the Development Committee monies.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGcEaz3sbHw1Mwd7UEcSZ3GstWkMoZgikrt-6rCHGRIlH41o11nSXEb9yZppURRnxcTTd3Rbh1FS33fknBh-dufoTorPbZiECa5CBTTCJZssdzT1rYVu5qlYV_-nnv6Nsb7eU_GIwi80o/s1600/Capture.PNG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="178" data-original-width="478" height="119" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGcEaz3sbHw1Mwd7UEcSZ3GstWkMoZgikrt-6rCHGRIlH41o11nSXEb9yZppURRnxcTTd3Rbh1FS33fknBh-dufoTorPbZiECa5CBTTCJZssdzT1rYVu5qlYV_-nnv6Nsb7eU_GIwi80o/s320/Capture.PNG" width="320" /></a></div>
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<span style="font-size: large;">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 <span style="color: red;">(€300k)</span>. You can then see the impact of having no European football in 2017 with the loss close to <span style="color: red;">(€700K)</span> for a full year.</span></div>
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<span style="font-size: large;">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.</span></div>
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<span style="font-size: large;"><b><u>Balance Sheet</u></b></span></div>
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<span style="font-size: large;">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 <span style="color: red;">(€3.3m)</span> and accumulated losses to date of <span style="color: red;">(€5.8m)</span>.</span></div>
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<span style="font-size: large;">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. <a href="https://www.independent.ie/irish-news/courts/bank-sues-as-45m-stadium-later-revalued-at-just-1m-29667483.html">https://www.independent.ie/irish-news/courts/bank-sues-as-45m-stadium-later-revalued-at-just-1m-29667483.html</a> In today's market depending on what the site was used for who knows.</span></div>
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<span style="font-size: large;">Pats have current liabilities of <span style="color: red;">(€3.9m)</span> at the end of Nov'17 of which <span style="color: red;">(€3.8m)</span> 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 <span style="color: red;">(€3.8m)</span> debt is after the <span style="color: red;">(€1.4m)</span> debt write off explained earlier which shows at a minimum Mancar has put <span style="color: red;">(5.2m)</span> into the company in the 10 years it has owned it, which is not far off the <span style="color: red;">(€5.8m)</span> 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.</span></div>
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<span style="font-size: large;">The other main liability Pats have is a long term liability of <span style="color: red;">(950k)</span> 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.</span></div>
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<span style="font-size: large;"><b><u>Summary</u></b></span></div>
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<span style="font-size: large;">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 <u><b><span style="color: red;">(€5.2m)</span></b></u> 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 <span style="color: red;"><b><u>(€1.35m)</u></b></span> 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.</span></div>
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chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-28994028800579740012018-08-20T17:49:00.000+01:002018-08-20T21:04:15.406+01:00Derry City FC Financial Update 2015-2017<span style="font-size: large;">The current limited company (<span style="background-color: white; border: none; color: #0b0c0c; font-family: "proxima_nova" , "arial" , sans-serif; line-height: inherit; margin: 0px; padding: 0px;"><span style="font-size: xx-small;">NI601341</span>)</span><strong style="background-color: white; border: none; color: #0b0c0c; font-family: proxima_nova, arial, sans-serif; line-height: inherit; margin: 0px; padding: 0px;"> </strong>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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">Over the 3 years to 30th November 2017 Derry City have shown a P&L trading loss of <span style="color: red;">(£25,356)</span>. The company made a loss in 2015 of <span style="color: red;">(£5,732)</span> a further loss of <span style="color: red;">(£34,565)</span> 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.</span><br />
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<span style="font-size: large;">At the end of November'17 the balance sheet is in a relatively healthy position with assets of £162k and liabilities of <span style="color: red;">(£117k)</span> 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.</span><br />
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<span style="font-size: large;">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 <b><u>£593k</u></b> (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 <b><u>£271k</u></b> (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.</span><br />
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<span style="font-size: large;">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.</span><br />
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<span style="font-size: large;">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 <b><u>£593k</u></b> 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 <a href="https://www.bbc.com/news/uk-northern-ireland-foyle-west-44735832"><span style="color: blue;">https://www.bbc.com/news/uk-northern-ireland-foyle-west-44735832</span></a> about the clubs future financial security. Without his donations the club would be trading at a loss of <span style="color: red;"><b><u>(£618k)</u></b></span> 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.</span><br />
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<br />chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0tag:blogger.com,1999:blog-6352754760577160655.post-27281088395008042352018-08-20T17:47:00.000+01:002018-08-20T20:29:21.437+01:00Thanks for reading...<span style="font-size: large;">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.</span>chippiehttp://www.blogger.com/profile/10622770332190201376noreply@blogger.com0