Cork City’s Money Problems Rock Eircom League

Cork City has become the latest Eircom League of Ireland club to face financial problems. In a season that has already seen Cobh Rangers, Sligo Rovers, Galway United and Kildrae County facing serious problems, the situation at Cork is worrying for the League of Ireland as a whole. Cork City is one of the biggest and best supported teams in the league, so its fate will be a warning for the rest of the clubs, that no team is safe from financial difficulties. ‘It’s hard to understand, I can’t get my head around it,’ admitted Fran Gavin, director of the Eircom League.

Cork City has become the latest Eircom League of Ireland club to face financial problems. In a season that has already seen Cobh Rangers, Sligo Rovers, Galway United and Kildrae County facing serious problems, the situation at Cork is worrying for the League of Ireland as a whole. Cork City is one of the biggest and best supported teams in the league, so its fate will be a warning for the rest of the clubs, that no team is safe from financial difficulties. ‘It’s hard to understand, I can’t get my head around it,’ admitted Fran Gavin, director of the Eircom League. Gavin noted that Cork City has had four chief executives in the last eighteen months. ‘That’s not a good sign’, he said. It was reported that the club was considering a High Court application to appoint an examiner to oversee the running of Cork City. Some reports suggested that Cork City had racked up debts of €800,000, but a statement from the club said that some of the reported figures were inaccurate and grossly inflated. The club also said that it had been engaged in negotiations with potential new investors for some weeks. For all the bad news, thirteen Eircom League clubs are showing half-year profits and a new rule states that only 65 per cent of income can be spent on wages.

UPDATE: Problems grow at Eircom League – 2/9/08

The Football Association of Ireland is trying to insist that its five-year plan for the Eircom League is ahead of target. But in fact the financial problems of the League are growing against the background of difficult economic conditions. Fran Gavin, Director of the League, has admitted that ‘in monetary terns, this is the biggest crisis the League has had. Everybody will re-assess themselves at the end of the year. It’s a reality check. Cork has focussed everybody’s mind on how volatile football is.’ As a result of Cork City going into examinership, the Irish equivalent of administration, the club has been docked ten points by the FAI. 11 members of staff at the club have lost their jobs, with the remaining staff told their wages are being cut by 70 per cent. FAI chief executive John Delaney criticised Arkaga Holdings, the company which took over Cork City last year and then, he says, left it high and dry. Cork’s weekly bills came to roughly €60,000, with the players and management costing €35,000. Even on healthy gates of up to 4,500, it meant there was a lot of leeway to be made up. Even regular transfers to England with fees totalling well over €1m could not make up the gap.

The public perception is of a League in crisis. The cracks first appeared when Galway United pleaded inability to pay and off-loaded five full-time players, to be quickly followed by Sligo Rovers, who released a similar number. The worry for the League now is that other investors will pull the plug. Drogheda United have been financed to the tune of €12m in the expectation that their new ground would come on stream and provide a cash cow to finance the club’s activities. After four years, not a sod has been turned and the investors’ patience is wearing thin. Bohemians did a deal with developer Liam Carroll and its millions have been keeping the club afloat. However, a court challenge to that deal threatens the League leaders’ revenue stream – and their hopes for a new ground. Kilkenny City were the last club to go out of League fotball, unable to raise the funds to meet the requirements of Uefa licensing. Delaney was unable to give assurances that Kilkenny’s fate would not be shared by some of the present 22 clubs.

In the last year, the FAI has pumped €5m into the League, in prize money, provision of live TV, marketing campaigns and in bringing Shamrock Rovers to the stage where they are ready to move to Tallaight. Delaney has promised more prize money next year and more deals like the one recently announced with Boylesports, which will direct money to the clubs from perimeter advertising. Fran Gavin believes that the public-private partnership route is the way ahead. ‘That’s why Sporting Fingal is being watched so closely,’ he says, ‘where you have Fingal County Council providing the facilities and Gerry Gannon putting a team on the pitch. And now we have the tie between South Dublin County Council and Shamrock Rovers in Tallaght. These may be the models for the future of the League.’

UPDATE: Credit Crunch Hits Irish Teams – 24/12/08

The Irish economy has been hit particularly hard by the credit crunch and vulnerable football teams are taking a hit. Drogheda United and Athlone Town are fighting to stay afloat and they have now been joined by Finn Harps. The Donegal club has accumulated debts of almost €300,000. Club chairman Mr Derek Wilkinson said the financial situation was ‘very serious’ adding that the Ballybofey-based club required money ‘in a hurry’ if the club was to survive. Harps were relegated from the Eircom League of Ireland Premier Division last month and now face a financial battle to even survive before the 2009 season kicks off. After an emergency meeting of the club’s board of directors it was announced that in the region of €150,000 would be needed to set a workable budget that comes within the licensing regulations. Raising that by 26th January will not be easy in the current economic climate.