Rovers has balance sheet deficits of €2m ahead of proposed Desmond deal
Proposed transaction expected to be put before shareholders for vote in coming weeks
Shamrock Rovers football club, in which Dermot Desmond is preparing to invest about €2 million, is carrying a combined deficit of roughly that amount on the balance sheets of the club and youth academy.
Accounts recently filed for Shamrock Rovers FC (SRFC) show its liabilities exceeded its assets by €1.28 million last year, while Shamrock Rovers Academy (SRA) had a deficit of €764,000.
The figures show SRFC made a loss of just under €100,000 in the year to the end of last November on revenues of €2.14 million.
The club’s auditors flagged its balance sheet deficit as a “material uncertainty”. The auditors also highlighted that SRA owes the club €873,000 and viewed the recoverability of this in the context that the academy also has a balance sheet deficit.
The auditors concluded, however, that the “fair value” of the young footballers registered to its youth academy “significantly exceeds” the amount it owes the club, suggesting that player sales could cover the debt if ultimately required.
The academy, meanwhile, made a loss of €410,000 last year on an income of just €85,800. Almost half of the revenue came from donations and fundraising, while a little over a third came from player registration fees.
The club said the academy’s revenues were “in line with directors’ expectations and is due to the academy still being in its development phase and only generating minor income”.
“We have to invest further in the academy side. We’re in this for the long haul,” said club finance director James Nolan on Wednesday. “You’ll see from the accounts that we can’t keep spending on it at the same rate we are, because we don’t have it [the cash]. The level of outside investment we are potentially putting in shows what is required.”
At SRFC, revenues rose last year from just over €2 million annually but the club’s matchday revenues actually fell by more than €230,000. The shortfall was more than made up by, however, by player sales.
The club said it sold goalkeeper Gavin Bazunu to Manchester City after year end, and the finances of the deal will be recognised in the following year’s accounts. If the transfer had been recognised in the 2018, accounts, however, revenues would have been €500,000 higher and the annual loss would have been turned into a €375,000 profit.
Mr Desmond’s proposed investment will be used to help boost the club’s academy and any gains will be reinvested, the club said. It is expected the proposed transaction will be put before shareholders for a vote in coming weeks.
Rovers is 50 per cent owned by a fans’ group and 50 per cent by businessman Ray Wilson. Mr Wilson’s stake would reduce to 25 per cent if Mr Desmond invests.