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Thursday 23 January 2020

FAI can't guarantee staff will be paid due to €18m black hole

Football chiefs issue apology for 'mistakes of past'

Donal Conway and Paul Cooke at the FAI Annual General Meeting
Donal Conway and Paul Cooke at the FAI Annual General Meeting

Football Association of Ireland (FAI) chiefs have admitted they cannot guarantee staff salaries next month as the organisation stares into the financial abyss.

Delegates attending an AGM heard of the beleaguered association facing potential liquid- ation unless it secured a financial deal.

Executive lead Paul Cooke insisted the new FAI directors would not trade "recklessly" and would not continue unless it was a "going concern".

It means that unless an €18m black hole in its finances is sourced urgently, the FAI's 210 staff could be left without wages on January 25.

Mr Cooke confessed that its bailout hopes now rest on upcoming "round table" multi- party discussions between the Government, the Bank of Ireland and Uefa.

Last night, the FAI issued a public apology "for the mistakes of the past".

Viable

Sports Minister Shane Ross stressed that he did not want to see the FAI enter examinership or be wound up with liquidation.

Aviva Stadium
Aviva Stadium

"These are not viable options for the FAI or Irish football," he said.

However, Mr Cooke, a chartered accountant, posted a grim outlook to members at the Citywest Hotel, revealing liabilities of €62m and rising.

Warnings of examinership or even liquidation were issued as the dire state of FAI finances became even clearer.

Mr Cooke suggested their banking partners are amenable to a rescue package, but the deal is contingent on buy-in from the State and Uefa.

"If we don't see ourselves as a going concern, we cannot continue," said Mr Cooke.

"The seven new directors of this organisation have a responsibility to ensure we can look ahead and pay our way, including wages for staff.

"If we cannot foresee that due to the lack of long-term funding, that throws everything into question. We are engaged in discussions but, if there was no future, then as directors we have a decision to make.

"There are other creditors out there, we are incurring other liabilities so we if we are not in a position to see ourselves as a going concern, we cannot continue, it doesn't matter what's due when.

"While we're looking for €18 million, this is €18 million that our plans show that we can pay back. That's a key thing to remember. We have the income stream to pay it back We'll be able to pay it back from 2022/23, from whatever source it comes from."

Included in the FAI's liabilities is €29m due to Bank of Ireland for the Aviva Stadium and €6m owing to Sports Direct.

Mike Ashley's sportswear company is being repaid €100,000 a month after a deal hatched by former chief executive John Delaney went awry.

Mr Cooke outlined the impact of the FAI going out of business, confirming the Euro 2020 play-off against Slovakia would be in doubt.

"Liquidation is the nuclear option," he said. "There would be no international matches and at a minimum uncertainty over our League of Ireland clubs participating in European competitions arises. All of our commercial deals would be over.

"Examinership, from a footballing perspective, is prefer- able. Creditors wouldn't get paid, but you have to have a viable financial plan for that."

The possibility of the FAI's stake in the Aviva Stadium being sold or forming part of collateral was not ruled out.

Given the Irish Rugby Football Union has dismissed any notion of buying out their co-owner, a deal with the Government is essential.

However, even within that business plan, cost savings - including redundancies - are expected. Staff are braced for bad news.

"What our staff have gone through over the past year has been horrendous," Mr Cooke said. "How they've kept functioning I do not know.

"We will keep staff informed because they need to be kept motivated. If this is dragging on longer, we will meet them."

Mr Cooke confirmed the €18m bailout figure that Mr Ross had cited following a meeting between the parties on December 16.

Despite the minister ruling out a direct bailout, a further meeting was held four days later. He said Mr Ross was "not unreceptive" to collaborating on their business plan.

The minister is due to meet with Uefa, which has been funding the FAI since the cash crisis kicked off, on January 14. State funding to the FAI remains suspended since April.

Later last night, Mr Ross issued a statement saying: "Over the Christmas period, [Junior] Minister Brendan Griffin and I have been moving with other stakeholders to find a solution to the crisis.

Radical

"A radical change in the FAI culture is essential to underpin other reforms.

"The long-awaited appointment of an independent chair and three other independent directors, expected in the very near future, should provide the necessary impetus for a new confidence in the reform process."

Earlier at the AGM in Citywest, outgoing FAI president Donal Conway was asked to make a statement of apology.

The statement, when it came later, read: "The board has tonight issued an apology to the hundreds of thousands involved with Irish football at all levels of the game, to the Irish public and to FAI staff."

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