THE FAI WILL be paying sportswear company Sports Direct €100,000 per month in loan repayments until October 2025, members were told at an Annual General Meeting this afternoon.
The meeting took place remotely over Microsoft Teams.
The FAI struck a sponsorship deal with Sports Direct when John Delaney was Chief Executive in 2018. The deal was due to take effect from 2020, and in 2018 the FAI sought an early payment of €6.5 million.
Sports Direct, founded by Newcastle United owner Mike Ashley, terminated the agreement when Delaney went on leave in 2019, and the FAI reached an agreement to repay the money in monthly instalments of €100,000, which included 5% interest.
The FAI’s Finance Director Alex O’Connell told members today the final payment is scheduled for October 2025. The Association considered paying the debt off earlier before the pandemic took hold, but decided to stick to the original schedule to retain as much cash as possible.
The Sports Direct repayments are among the most eye-catching figures in the FAI’s stark set of financial accounts for 2019, a year in which the FAI made a €5.1 million loss in 2019, and saw total current liabilities grow to €76.1 million.
The Sports Direct arrangement is emblematic of a culture of drawing down funds early that took root at the FAI during Delaney’s tenure as CEO.
At the end of 2015, the FAI had drawn down €18.2 million in money owed in the future, and by the end of 2019 this had grown to €28.1 million. Some of this 2019 figure is down to a €10 million loan from Uefa, future television revenues drawn down after Delaney went on leave to keep the FAI afloat.
The FAI still owe Uefa €4 million, but do not have to pay it back until 2028.
New auditors Grant Thornton approved the FAI’s accounts for 2019 on a going concern basis, which represents progress for the embattled Association given Deloitte did not offer that opinion on the previous set of annual accounts. Finance Director O’Connell described this as “a significant step forward.”
Deloitte had served as the FAI’s auditors for more than 20 years, but resigned from the role at the beginning of 2020. Last year they filed a H4 notice against the FAI over an alleged failure to keep proper accounting records.
At today’s AGM, Chairperson Roy Barrett confirmed the FAI this year issued a protective writ against Deloitte, and the Association will decide next year whether to pursue further action against their former auditors.
In their report accompanying the annual accounts, Grant Thornton emphasised the “material uncertainty” of the Covid-19 pandemic, which has led all of this year’s international games and the FAI Cup finals staged behind closed doors. Ticket income and match hospitality brought in €11 million for the FAI in 2018.
Speaking to the media after the AGM, Barrett said he is confident the FAI do not face the threat of insolvency.
“Looking forward we will endure the same uncertainties as many others and that will impact our business in many obvious ways. But I am confident we are out of the woods.”
The FAI have forecasted their financial position up to 2023, and these budgets have been prepared on the assumption the men’s senior international team do not qualify for the 2022 World Cup or Euro 2024. The FAI believe they can be “cash positive by 2023″, which is a considerable revision on John Delaney’s oft-stated belief the FAI could be “debt free by 2020.” Now the final loan repayment on the Aviva Stadium has been pushed out to 2040.
Delaney’s severance payment of €462,000 was included in the accounts presented, and represents a good deal by the FAI given their potential liability on Delaney’s contract was €3 million, when loyalty and pension payments were factored in.
Jonathan Hill has taken over as the FAI’s first permanent Chief Executive since Delaney became Executive Vice-President in March 2019, though has been working remotely from his London home since taking charge in November.
A former marketing executive at the FA whose commercial clout is needed to improve the FAI’s bleak finances, Hill introduced himself to AGM members this afternoon and stressed his lack of baggage in taking the job.
“I think neutrality is pretty important. I’ve come into Irish football with no baggage. I’m bringing no history to the table and with no specific pre-existing relationships – be it within football, government, or media.
“I think, from the feedback so I’ve had so far, that it’s seen by many as being a real positive. The Association cannot be about one person.”
Among Hill’s tasks is to find a role for Robbie Keane. Keane was a member of Mick McCarthy’s backroom team but was not retained by Stephen Kenny this year, and Keane since had no role at the FAI in spite of being contracted for four years on a reported salary of €250,000.
“There is some engagement now through Jonathan, to try and see how we can best use Robbie in the future”, Barrett told the media.
Barrett also shared his thoughts on the motivational video and team talk Stephen Kenny presented to his players ahead of last month’s friendly with England at Wembley. A UK media report claimed some Irish players were left shocked by the political content of the video, though a subsequent FAI inquiry found Kenny had no case to answer.
Kenny subsequently said the video was a “non-issue” and said the leak of dressing room information did not come from his players, but that there may be people “behind the scenes or elsewhere” seeking to damage the team by leaking the information.
Barrett said Kenny has not told him who he believes leaked the information.
“No, in fairness he hasn’t”, said Barrett. “Who leaked the information, I don’t know. What I can say is personally I have a huge amount of respect and regard for Stephen and his team and the job he is doing. He enjoys the full support of myself and the board.
“It’s an organisation with a long history of leaks. It’s very difficult sometimes to get to the bottom of them. I wish we could, but as for Stephen and the job he is doing, we all have a high level of confidence that he will continue to improve the fortunes of the team.
“I was as disappointed as anybody to see the whole thing, to be frank.”
Barrett also defended the FAI’s decision to publish the 2019 accounts within minutes of the conclusion of the World Cup qualifying draw on 7 December.
The FAI board signed off on the accounts a day earlier, but decided not to publish that day to avoid taking any spotlight from the FAI Cup final. They were eventually published at 5.40pm the following day, just as the draw had concluded.
“The reason the accounts were delayed in their release on Monday was the auditors had some change to make in the wording. The accounts are the accounts, there is no getting away from them and I would have preferred to have released them weeks before if we could have.
“I understand the optics of it, but there was no attempt to confuse the World Cup draw with the accounts and hope the accounts would get buried behind it.”
The FAI, meanwhile, are set to meet with Sport Ireland on 2 January to present their proposals on how football can be safely played at all levels at Level three of the country’s Covid response.