Croke Park project €4m profit decline

GAA FINANCES:ALTHOUGH CROKE Park is expected to register an eighth successive year's growth in profitability, to nearly €20 million when its figures for last year are released in the weeks ahead, the stadium is projecting a €4 million decline in profits for the coming 12 months.

Stadium director Peter McKenna, speaking to The Irish Times, said that the ailing economy is expected to have an impact on the year ahead and that financial projections had to take note of that reality.

“We’re factoring in smaller attendances at GAA games and smaller take-up on conference facilities,” he said. “How will that impact on the bottom line? I would say that we’re looking at a swing of €4 million so we’re probably back to closer to 2006 figures if we look at it prudently. Our challenge is to try and hold our 2008 figures.”

He says the shortfall is being projected regardless of possible championship permutations.

“It is but you still have to take a view on it. Leinster hurling may have stronger numbers because of Galway and how they may perform in the province. We have the International Rules, which is new, and Dublin-Tyrone because it’s going to be a spectacular event like it was a couple of years ago. That will have a far bigger attendance than a normal National League match, perhaps even a full house.

“The championship depends on how Dublin do in Leinster but I think we have to be realistic that people will be looking at their spend and discernment will come into it. Big matches, All-Ireland finals and Leinster football finals, will get full houses but in terms of earlier rounds and qualifiers – regardless of what pairings are there – to be prudent we have looked at budgeting for reductions.”

Croke Park, which has developed into a major revenue engine for the GAA, has had two very good years since the arrival of rugby and soccer internationals – and that revenue will remain steady as per contract – at the venue but the expectation of the association’s own sporting and commercial events has been scaled downwards.

“Our figures, which are being audited at the moment, show a good positive increase on 2007. On a like-for-like basis we’ll probably be €2 million ahead in 2008. For 2009 we’d have a reasonable expectation but first indications are that the conference business and other activities in the stadium are going to drop back – that is in the numbers of events held and the numbers in attendance at those events.

“We had three concerts in 2008 and even got cancellation fees for the fourth, the Prince concert (which was called off at short notice). Currently we only have one concert for 2009 so there’s a swing there. We feel that the attendances coming into our own games will probably be less than they were in 2008.”

Nonetheless, McKenna is confident that the stadium will be able to weather the recession sufficiently robustly to continue being a net contributor to the GAA’s Central Council. He believes that €4 million can be transferred this year (net of the IRFU/FAI revenue) despite the contracting expectations.

“We’ve had eight years of increased profitability and we will still be net positive contributors to the association. So yes, there’s going to be a correction but we need to be confident that we can manage that and still maintain a strong profitability.

“Our big challenge will come in 2011 when soccer and rugby are no longer part of the stadium. We will need to look at those months between October and March and see if there are concerts or other events that we can take in.”

In two years’ time when Lansdowne Road is up and running the GAA will close the books on a very profitable four-year interlude that is likely to have raised €40 million over four years for the association. Funds generated by the staging of rugby and soccer internationals have been ring-fenced for disbursement by the National Infrastructure and Safety Committee and will constitute a major revenue loss.

Economic gloom has spread rapidly with the banking crisis and recession driving up unemployment. According to McKenna these events together with the global downturn have brought to a head trends visible by the end of 2007 and although the stadium recorded a rise in profit for last year, income was slightly down.

“2007 would have been a very strong year. Figures for 2008 were slightly down on that. Some of that would have been down to fuel prices. Effectively we had a double event. Oil went catastrophically high and that affected fuel and a whole series of import costs for businesses.

“Then when oil fell back this whole financial turbulence hit in. There had been indications since the end of 2007 that all wasn’t well. The optimism was that these were isolated instances of poor management when actually this has turned out to be far more global. It has unavoidable implications for us. You can’t buck the market but you need to respond in a positive way. If you offer good value for the spend – and we won’t be raising 2008 prices inside the stadium – people aren’t all going to sit at home and be dormant.

“There is a need for us as a society to talk and interact and engage and sport in a sense is one of the great outlets. We have been in far, far worse positions over the 125 years of the association’s history.”

It is just a week from the first major event of those 125th anniversary celebrations, the Dublin-Tyrone match which opens the National Football League season in Croke Park. Hopes are high that a full house will be in attendance just as was the case two years ago when the same counties launched the stadium’s floodlights.

Plans for a major fireworks display and light show have attracted controversy with some, including Mayo manager and Fine Gael TD John O’Mahony, stating that the cost of this display (between €400,000 and €450,000) is excessive and could be put to better use.

McKenna disagrees with the perspective, saying that the GAA has a great deal to celebrate.

“It’s a way of saying ‘thank you’ to supporters and expressing confidence that 125 years on from seven guys in Hayes’s Hotel we now have an enviable association in a strong position. Everything isn’t about money either. This event will wash its face and we should see it in the context of what we’re celebrating.

“We’re basically reinvesting the proceeds of the game in a special occasion to set down a marker. Yes we face challenges but are they that much greater than the challenges the association has faced at different times throughout its history.”