Delaney says FAI debt may not be cleared by 2020
Chief executive concedes that repayment schedule could now be pushed out
John Delaney launching the St Kevin’s Boys Academy Cup at the Skylon Hotel yesterday. “Why not invest more money into the game? That will become a decision for the association as we trade through nearer to 2020. But if we want to clear it by 2020, we will clear it by 2020.” Photo: Morgan Treacy/Inpho
FAI chief executive John Delaney has hinted for the first time that the association may miss its target of being debt free by 2020.
Despite the scale of the difficulties the association has endured in its attempt to repay its share of the cost of redeveloping Lansdowne Road, Delaney had, in the face of widespread scepticism, previously steadfastly stuck to the time-frame for clearing the debt.
Delegates to successive recent AGMs have been assured the target would be met.
But speaking yesterday at the launch of the St Kevin’s Boys Under-12 Academy Cup tournament, Delaney acknowledged that the repayment schedule could now be pushed out. He said the association could still meet the deadline but observed: “It’s a question of whether we want to clear it by 2020 or not.
“At some juncture the board may say ‘why would we clear it?’. Why not invest more money into the game?’ That will become a decision for the association as we trade through nearer to 2020. But if we want to clear it by 2020, we will clear it by 2020.”
That the FAI would be making repayments beyond 2020 has, in fact, always seemed somewhat inevitable and the news over Christmas that Danske Bank had sold its roughly €60 million debt to a consortium that included the Dermot Desmond-founded QED Equity and American private equity firm Kohlberg Kravis Roberts was always likely to be accompanied by a rescheduling of its commitments.
As part of the deal the association, which had been due to pay a staggering €53 million between 2015 and 2018, is reported to have received a discount of up to €12.5 million on its overall borrowings while the payments it is required to make over the next six years are set to fall by up to €20 million.
It is, as Delaney said yesterday, “a very good outcome for the association,” although it would also actually appear to be an acknowledgement by the new owners of the organisation’s’s debt that the previous repayment plan was simply unrealistic with the consortium likely to have agreed what they felt was a more sustainable repayment plan.
Few outside the association ever seemed to believe that the original repayment schedule could be met by an organisation whose revenue in 2012 dropped by roughly €6 million to €39 million despite the €11 million in exceptional payments made to it by Uefa related to that year’s European Championships. Nobody within the FAI though ever seemed to seriously question Delaney’s claim the deadline would be met.
At the 2011 AGM, held in July, he told delegates that the association’s debts, put at €67 million in the previous year’s accounts, were actually around €50 million at that stage. The accounts for that year subsequently put them at roughly €63 million six months later.
“We’re bound by confidentiality at present in terms of what the net result of it (the debt writedown) is,” he said yesterday, “(but) at our AGM in July, we’ll present our annual accounts and will be able to talk in greater detail about it at that stage.”
In fact, it seems likely the accounts themselves will provide an indication of the timeframe over which the association must now repay its remaining debt and that this will indeed extend beyond 2020.
Delaney is adamant, however, that the association will be boosted by significant revenues that year with the 46-year-old, remarkably enough, mentioning the prospect of selling 10,000 premium level seats despite the disastrous failure of the scheme the first time around.
“What’s always forgotten with 2020 is that we’re selling 10,000 premium seats forward, the naming rights come up for renewal and all those types of things are up for play,” he said yesterday.
More immediately, Delaney believes the new management team of Martin O’Neill and Roy Keane can play a major part in turning around the association’s fortunes.
“Martin’s appointment has brought positivity to the game because it got a bit flat and that’s no disrespect to Giovanni Trapattoni,” he said. “The added bonus has been the appointment of Roy as his assistant because it has brought an attention to the international team outside of football.
“I was getting my hair cut before Christmas and some guy said to me that the women in here are talking about the international team so we must have cracked it. . .
“Ultimately results matter,” he concluded, “but there’s a honeymoon period here at the moment with the positivity.”