Dundalk FC will earn a minimum of €550,000 from their Champions League participation; clubs in the Europa League will earn a minimum of €200,000.
It leaves a situation where 85% of prize money earned as Champions will now come from UEFA; but it’s important to note that no club will see a cent of the increased prize money until June 2016.
Dundalk FC, as 2014 champions enter the 2015/16 Champions League competition. UEFA will only release prize money after the 2016 final. So there’s no immediate boost to club coffers. Dundalk FC has earmarked some money for work at Oriel Park though it may need to be started sooner than 2016. For Cork City, back in Europe for the first time in a number of years, European money has no influence on their 2015 budget, unless they were to guarantee a bank loan with it, which does happen.
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In fact, one club who will receive European money in May this year will use it to repay their bank, having used UEFA prize money as collateral for a loan that allowed them to finish the 2014 season without financial issues. That bank loan masked that particular club’s 2014 finances.
In a similar way, European money has masked issues with league finances in recent years. Following the FAI merger, the media pack accompanying the yearly league launch provided evidence on improvements in the overall health of the league. The numbers of clubs making profits was highlighted, as was any reduction in cumulative loss. Positive work was certainly done and overall clubs are much more prudently run than the pre-merger years. However as clubs’ costs have reduced, UEFA prize money is having a bigger impact.
In 2013, the cumulative club “profit” was less than the figure won in European prize money. Only the UEFA prize money, paid to four clubs, kept the collective balance sheets of the entire 12 positive.
European qualification can guarantee close to one fifth of the yearly income target of even the bigger clubs. At the league launches in 2014 and 2015, there was little mention of the clubs’ collective financial health. It’s only when you speak to individual clubs that you realise that many are making losses in recent years. Crowds have largely stagnated, sponsorship is significantly harder to come by and domestic prize money is down. European money makes a significant difference within the league.
If you’re a club looking up the table, European money is only increasing the gap between top and bottom. You could run many smaller Premier Division clubs for a year with the money Dundalk will draw down in May 2016. With Alan Mathews’ resignation and statement adding questions about Bray Wanderers finances to those self diagnosed problems at Limerick and Athlone in recent months, we are running the risk of having mini-leagues within the division in financial, as well as sporting, terms.
Unique
Of course, people will rightly point out the effect of UEFA prize money is replicated across every European league, but we have some unique difficulties. To start, there is no income whatsoever from television rights, not one cent. In 2014, the 12 Premier division clubs paid more into the association coffers in terms of affiliation fees and fines than the total prize money. In Ireland, clubs outside of the European spots are not winning back their entry fee.
While the difference in winnings earned between top and bottom is insignificant compared to the English Premier League for example, the fact that clubs at the foot of the table are finding it more difficult to break even is a real concern.
Dundalk boss Stephen Kenny. Donall Farmer / INPHO
Donall Farmer / INPHO / INPHO
We certainly cannot continue to have a situation where League clubs don’t break even in their one-to-one relationships with the FAI. The Association shouldn’t have club fees cover the ‘cost’ of prize money, when there are other revenue streams coming into the league.
Can the clubs themselves address the widening gap? One novel suggestion came from Shamrock Rovers at a clubs meeting a few years ago. During a period when they were in Europe year on year, they unselfishly suggested that for at least a limited period, the money won by the four teams qualifying for Europe should be shared among the other eight Premier clubs on projects that would benefit the league as a whole.
The league needs that kind of novel thinking and leadership. You cannot have a strong league without having strong individual clubs. With the successful clubs looking at increased European money while those lower down the table are clearly struggling, leadership is badly needed.
Opinion: European prize boost makes it even more of a league of two halves in Ireland
THERE WAS SOME good news this week with the announcement of an increase in European prize money for Irish clubs.
Dundalk FC will earn a minimum of €550,000 from their Champions League participation; clubs in the Europa League will earn a minimum of €200,000.
It leaves a situation where 85% of prize money earned as Champions will now come from UEFA; but it’s important to note that no club will see a cent of the increased prize money until June 2016.
Dundalk FC, as 2014 champions enter the 2015/16 Champions League competition. UEFA will only release prize money after the 2016 final. So there’s no immediate boost to club coffers. Dundalk FC has earmarked some money for work at Oriel Park though it may need to be started sooner than 2016. For Cork City, back in Europe for the first time in a number of years, European money has no influence on their 2015 budget, unless they were to guarantee a bank loan with it, which does happen.
In fact, one club who will receive European money in May this year will use it to repay their bank, having used UEFA prize money as collateral for a loan that allowed them to finish the 2014 season without financial issues. That bank loan masked that particular club’s 2014 finances.
In a similar way, European money has masked issues with league finances in recent years. Following the FAI merger, the media pack accompanying the yearly league launch provided evidence on improvements in the overall health of the league. The numbers of clubs making profits was highlighted, as was any reduction in cumulative loss. Positive work was certainly done and overall clubs are much more prudently run than the pre-merger years. However as clubs’ costs have reduced, UEFA prize money is having a bigger impact.
European qualification can guarantee close to one fifth of the yearly income target of even the bigger clubs. At the league launches in 2014 and 2015, there was little mention of the clubs’ collective financial health. It’s only when you speak to individual clubs that you realise that many are making losses in recent years. Crowds have largely stagnated, sponsorship is significantly harder to come by and domestic prize money is down. European money makes a significant difference within the league.
If you’re a club looking up the table, European money is only increasing the gap between top and bottom. You could run many smaller Premier Division clubs for a year with the money Dundalk will draw down in May 2016. With Alan Mathews’ resignation and statement adding questions about Bray Wanderers finances to those self diagnosed problems at Limerick and Athlone in recent months, we are running the risk of having mini-leagues within the division in financial, as well as sporting, terms.
Unique
Of course, people will rightly point out the effect of UEFA prize money is replicated across every European league, but we have some unique difficulties. To start, there is no income whatsoever from television rights, not one cent. In 2014, the 12 Premier division clubs paid more into the association coffers in terms of affiliation fees and fines than the total prize money. In Ireland, clubs outside of the European spots are not winning back their entry fee.
While the difference in winnings earned between top and bottom is insignificant compared to the English Premier League for example, the fact that clubs at the foot of the table are finding it more difficult to break even is a real concern.
We certainly cannot continue to have a situation where League clubs don’t break even in their one-to-one relationships with the FAI. The Association shouldn’t have club fees cover the ‘cost’ of prize money, when there are other revenue streams coming into the league.
Can the clubs themselves address the widening gap? One novel suggestion came from Shamrock Rovers at a clubs meeting a few years ago. During a period when they were in Europe year on year, they unselfishly suggested that for at least a limited period, the money won by the four teams qualifying for Europe should be shared among the other eight Premier clubs on projects that would benefit the league as a whole.
The league needs that kind of novel thinking and leadership. You cannot have a strong league without having strong individual clubs. With the successful clubs looking at increased European money while those lower down the table are clearly struggling, leadership is badly needed.
Follow John on Twitter @johngosullivan
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