Thursday, 30 January 2020

Irish Government Announce Rescue Deal for FAI

The Irish minister for transport and tourism, Shane Roos, today unveiled a refinance deal with the beleaguered FAI

What I'm unsure of is how much UEFA is underwriting the annual grant increase and their underwriting of the new 7.5 million euro (interest-free loan) over three years. The Sport Ireland annual funding of 2.9 m is exclusive of UEFA. That is a state funding grant between the government and the FAI. But I welcome the doubling of the fund to 5.8 million euro from 2020. It is well overdue. But I would like more detail of where the additional funds come from.

In a nutshell, here is the essence of the deal:

1. Bank of Ireland have agreed to withdraw the threat of calling in the AVIVA Stadium repayments and requesting an administrator on the asset. The government will work with a third party agent so the repayments bypass the FAI and go directly to the Bank of Ireland. This process will continue until 2024, when the FAI will take back the repayments on the stadium loan, and begin repaying the interest-free loan of 7.5 million.

2. Here is what is important to stress that I have no doubt the barstoolers will fold their arms and put on the angry faces about tax-payer money. It isn't!! It is Bank of Ireland's refinance deal of 7.5 million. In other words, BOI have agreed to a temporary arrangement of three years where the government administer the repayments to BOI with a loan term extension and topping up the overall amount by 7.5 million. Think of it like a bridging loan which will be handed back to the FAI in 2024 without the additional interest which BOI have agreed to wave.

3. Sport Ireland have released the 2.9 (2019) grant to the FAI but it comes with significant stipulations as to where the money goes. The government have ring-fenced it to development levels, LOI and and local areas. Again, the FAI have agreed to use state funding through a third party working with Sport Ireland rather than from the FAI accounts.

4. As above, the doubling of the annual state funding to 5.8 million from 2020 requires a third party administrator working with the new four independent and outside members. It cannot go into FAI accounts. This is the area UEFA has agreed to cede some ground for three years. Technically, UEFA don't allow government interference but it seems they have agreed to this third party compromise as a way around their regulations. I want to be clear about that 5.8 million. I'm still working with colleagues as to the exact details. My current understanding is that it is a 50/50 split between UEFA and the government state fund. But UEFA's commitment is strictly for three years. The FAI is on its own from 2024.

So, before the barstoolers take over.... let's summarise.

No. This isn't a government tax-payer bailout. You will hear that on social media in the coming hours and days. The 7.5 million has been extended by BOI. The state funding increase from 2020 is an agreement between the government and UEFA and we are not likely to know publicly what that shared split is. Otherwise, UEFA would have every member state jumping up for a dig out. I cannot confirm this (so with caution), my suspicion is that once again UEFA have partly or wholly funded that new share of the 5.8 million from advancing the FAI Euro co-host payments and grants through 2020/23. Regarding the interest-free 7.5 million loan... I simply don't know. Perhaps UEFA have underwritten the interest payments but I doubt they are directly contributing to that.

There are no excuses now for the FAI. They were never going to get a free 18 million bailout.

They have a governance plan to adhere to. The pressure of the AVIVA payments have been removed for three years. They have new interim members and independent members at the top. They have footballing and business people involved with no baggage to the old regime. Their operational costs are looked after for the next three years. There are no excuses now and going forward.

But this come with a caveat. the lower FAI council. None of us are fools here. We all know that 60+ strong council is still rife with local community influence from politicians and local businessmen and women, inserting themselves into clubs, particularly in rural areas. That still needs to be eradicated in the coming years. It is up to the new independent appointees to ensure the insidious culture of brown envelopes, meet you at the petrol pump or mass in the parish church on Sunday does not attempt to reinsert its head above the wall and onto future boards. Because in the years to come, a new generation of future board members are still going to try and emerge from this ugly past with a local wink and a nod for enough council votes.

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