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Dublin: 7 °C Thursday 14 November, 2019

Waterford's Europa League woes keep the spotlight on FAI governance

‘The noise around Abbottstown may have died down, but the impact of their governance has not,’ writes John O’Sullivan in this week’s column.

Waterford FC: denied a Europa League licence by Uefa.
Waterford FC: denied a Europa League licence by Uefa.
Image: Tommy Dickson/INPHO

“WE FEEL WE have been totally misled by the FAI.”

That’s been a common feeling recently. In the midst of all the noise about Oireachtas committees, €100,000 loans and gardening leave, it’s important not to forget that the above quote came from Waterford FC chairman Lee Power two months ago.

The Europa League draw will take place in Switzerland next week. Despite qualifying on the pitch, Waterford will not be in the draw, Uefa view the club as being less than three years old and deemed them ineligible for a Uefa licence; St Patrick’s Athletic take their place.

Waterford have been strong in the assertion that they were preparing for the competition in good faith, based on FAI communications, as their club statement of 19 April highlights: “We feel we have been totally misled by the FAI and were given assurances throughout this five-month process by them that the licence would be granted.”

One would assume that Power would be slow to make such a public assertion against an organisation who has been so quick to fine and sanction outbursts in the past unless he had documentation and details to back up the claim of reassurances being given. He hinted in April what this communication may be:

“As a club, we entered into substantial commercial agreements and invested heavily again into the team and also budgeted for the qualification money due in November.”

If Waterford did include European money in a budget subsequently passed by the FAI and independent licensing committee, whatever you think of their eligibility, it’s hard to argue against their being misled.

European money in a budget must have been discussed by Waterford and a number of senior FAI officials at their pre-licence budget meeting, a meeting held for every single club every year.

The meeting is the final part of licensing before the independent panel make their judgement. The FAI mandates that a number of club officials attend: the first-team manager, the chairperson, the club secretary and the general manager – responsible for the off-field running of the club under licensing – are all there. FAI attendees will be the league director, the finance director, the head of licensing and at least one other member of the licensing and finance teams.

There are pointed and targeted questions around the proposed club budget. The first-team manager is challenged to confirm that he is happy with the budget provided and the general manager and chairperson have to defend their projections for income and expenditure.

In these meetings I’ve had to list sponsors who have signed up for the coming season, as well as explain how clubs will hit their merchandise, fundraising and ticket sales targets. In my experience, every line item is examined.

That a club could leave prize money of €220,000 in their budget without discussion is unimaginable to me. I’ve had to go into great detail on a front of shirt sponsor for a fraction of that figure at a budget meeting, I’ve even had to talk about what fundraisers we would hold to raise money.

In my opinion, it is beyond doubt that the European income was discussed and if the budget was approved, it’s effectively an acceptance by the FAI that Waterford would be in Europe, despite questions about their eligibility being asked even before their position was confirmed last season. Remember, Derry City were denied a European place following their 2012 FAI Cup Final win for the same reason.

The difficult thing to process is the FAI seemingly signing off on a budget containing European prize money while Waterford’s situation was not certain, essentially exposing the club to a €200k-plus shortfall and solvency risk. Since the FAI demand losses are guaranteed by club owners of clubs, not only will Waterford United have a potential shortfall but Lee Power, by virtue of a written guarantee, becomes personally responsible.

A wealthy man he may be, but if he got reassurance from people in FAI licensing, competitions and finance for the club budget, his anger is justified.

With all the noise around FAI governance in recent months, next Tuesday will bring a stark reminder on how poor governance can directly impact League of Ireland clubs and individuals in a very serious way.

The noise around Abbottstown may have died down, but the impact of their governance has not.

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