The FAI Bail-Out

by | Feb 14, 2020

The FAI got its money just in time. Ireland’s beleaguered, cash-strapped football association agreed a financial deal with the Irish government, European football governing body Uefa and its main creditor, the Bank of Ireland, days before Ireland’s general election potentially redefined “Irish government.”

Throughout January, a new governance broom swept through the association’s upper echelons. Two long-promised independent directors, a long-promised independent chair and interim chief and deputy chief executives were appointed. A new president was elected.  And former FAI chief John Delaney departed football altogether, resigning from Uefa executive committee membership, eleven months after the ‘John Delaney’ saga began (see previous FAI articles).

The FAI’s financial problems were exacerbated by the withdrawal of state funding last April, as Delaney’s €100,000 ‘bridging loan’ to the FAI developed from story to scandal. The association received €2.9m annually from Sport Ireland, the statutory oversight authority for, and part-funder of, Irish sports development. The new financial ‘package’ doubles that annual amount and adds annual interest-free loans totalling €7.5m, indicating the depth of the financial crisis.

Negotiations between the FAI, the government and Uefa took place throughout January, with the FAI seeking an €18m ‘bail-out,’ although desperately trying to avoid that term, after Delaney’s financial legacy was made terrifyingly clear by the December publication of all outstanding annual accounts: €62m liabilities leading to fears ranging from redundancies to insolvency.

And the New Year brought yet more financial misery, as it emerged that the FAI owed An Garda Siochana, Ireland’s state police, €357,244.95 for the year to 12th December 2019, an especially ill-advised debt given that a Sport Ireland-commissioned report into, among other things. the FAI’s “fitness to handle public funds,” was referred to said police in November.

But new officers started appearing on 8th January. Roy Barrett, the independent chairman. managing directed Goodbody Stockbrokers, Ireland’s oldest stockbroking firm, whose sale to Bank of China (UK) was approved last December. And Catherine Guy and Liz Joyce became independent directors. Guy was a ‘managing partner’ in self-styled “progressive” Dublin law firm, Byrne Wallace before becoming Autolease Fleet Management CEO last year. Joyce is the Central Bank of Ireland’s Human Resources Director. Delaney would have got away with absolutely FAI, if these three had been in post.

“The Old Guard have now been excised,” sports minister Shane Ross raved. Unwisely. A phrase which can be said of him after he lost his seat in Saturday’s general election. This excision, however, likely aided the bail-out financial package talks, which continued when four Uefa bods arrived in Dublin on 14th January, including secretary-general Theodore Theodoridis and financial director Josef Koller.

Two appointments await announcement. Another independent director is, Barrett said late last month, “a number of weeks away”. While the high-profile, highly popular former Ireland lanky frontman Niall Quinn “absolutely” ruled himself out of the running to be permanent FAI CEO, while also denying that he had the “skill set” for independent directorship.

But change was imminent on both sides of the negotiating table. Sports minister Shane Ross, clearly aware of his Fine Gael party’s poor opinion poll ratings ahead of the general election, saw “no reason why any change of government would make too much difference” to bail-out financial package talks “because everybody has the interests of Irish football at heart.” And the talks had  “nothing but support from opposition people” as it was not, wait for it, a “political football.” Ross could have lost his seat at the election for that wordplay alone. He lost it anyway.

FAI staff’s trade union, Siptu, were also optimistic about their more prosaic concerns, January salaries being paid. After meeting Ross, Siptu organiser Derek Hynes accepted Ross’s “reassurance that all the stakeholders, including the banks, Uefa and the government, are committed to protecting the association” and claimed “progress has been made in protecting jobs and football in the community.”

But with the big election looming, Ross was impatient, despite the FAI’s progress towards a new tomorrow. Barrett was tasked with producing bail-out financial package proposals within a week of 20th January meetings between FAI, government and bank. Ross demanded them “as soon as possible because the financial position is critical.” And only a cynic would suggest that he wanted the credit for ‘saving Irish football’ on his election leaflets. After all, the situation was “not a political football.”

Ross also declared that the FAI was “not moving fast enough” on governance reform, especially installing a permanent CEO. But that day, former Athletics Ireland CEO and Irish rugby club near-namesake, Gary Owens, became interim CEO, effectively replacing “executive lead, whatever that is” (to give him his full title) Paul Cooke. A permanent CEO would be installed “in the coming weeks,” the FAI said, possibly once Ross lost his seat at the election, a cynic might suggest.

But the headlines here were taken by deputy interim CEO appointee…Niall Quinn. Especially when he promised to defer his salary until he knew “how the redundancies work out and where the association gets to.” And that he would be paid “a fraction of what the old gang, and I mean a fraction of what the old gang were at.”

Quinn’s appointment completed something of a “getting the band back together,” as he, Owens and Barrett were all in the “Football in Ireland Visionary Group” which last May published 31 pages of ambitious Irish football reform proposals, the headline-grabber being a fully-professional League of Ireland by 2026, independent of the national association, like the EPL. An IPL, if you will. The proposals predictably dissolved on contact with FAI bureaucracy. They may re-solve again soon.

Meanwhile, the association presidency was up for grabs. FAI board member Martin Heraghty chaired supporter-owned League of Ireland club Sligo Rovers for over three years, while FAI council member Gerry McAnaney lost the FAI vice-presidential election last July. So, at the FAI’s Extraordinary General Meeting on 25th January, the presidency went to…McAnaney, by a 2-and-a-bit-to-1 majority. He will preside until July’s FAI AGM. The gods alone know where the association will be by then.

But at least it will BE. The bail-out financial package, announced on 30th January, will far exceed the €18m requested, over time, with the restoration of the withheld €2.9m state funding, €5.8m state funding from 2020 to 2023. And annual interest-free loans of €2.5m until 2022 will, Ross reported, “safeguard” the government’s “interest in the Aviva Stadium,” which will host four Euro 2020 games. These loans will go to the 42.5% FAI-owned “stadium operations company.”

Heralding Irish football’s “new dawn” without a sliver of self-awareness, Ross trumpeted “a rigorous rebuilding of the FAI from a toxic, autocratic, unfit-for-purpose organisation to a fresh, cleansed association that can honourably represent and support Irish football, at home and on the world stage.” He could, to many, have been talking about his own government.

Ross made the money “absolutely conditional” on the FAI completing its governance reforms, which in his eyes meant severing all Delaney-era links. This vision became blurred when Delaney-era director John Earley joined the FAI’s new, surely ironic, “High Performance Committee.” Earley resigned and was instantly re-elected at last July’s AGM. He re-resigned, in Irish football’s “best interests,” in December. Ross’s reaction, “he did resign from the Board and I welcomed the fact that he did resign. I’m not going to comment on that particular unusual event,” required no further comment.

Ross insisted confusedly that the money was “quite the opposite to a bailout, it’s a highly conditioned loan and grant.” Although the “42.ie” website produced a near-1000-word total rebuttal of that claim, with a “chief economist” and a university “Emeritus Professor of Economics” saying that of course it was a bailout, the FAI would have been ****** without it (I’m paraphrasing here).

Either way, the conditions include barring former FAI directors from future FAI Board committees (notwithstanding Earley’s appointment), making six of its 12 directors independent, keeping CEO pay inside government pay guidelines and, to Siptu’s delight, keeping “all low to middle-income FAI employees insulated from mandatory redundancy for 18 months.”

However, if 2020 is a new world in Irish football, it is a new universe in Irish politics. Three parties all-but-tied for the most seats. And the make-up of any new government is enormously unpredictable. The new bosses should not be the same as the old bosses, in football or national government. But, last February, no-one would have predicted John Delaney’s departure from office, or Sinn Fein’s arrival in it.