This week the Football Association published their accounts for the year ending 31st December 2009, the headline figure being a loss of £3million, which looks well compared to the loss of £12 million in 2008. The main reasons for the shortfall this year being the demise of Setanta and ongoing costs of moving the Football Association headquarters from Soho Square to Wembley. In the long-term the FA should save on costs as far as the move is concerned but they have had to write off a hefty sum of money in the short-term. The move across London apparently costing £17million based on £12million in relocating to Wembley and then £5million on negotiating a deal to exit the ten-year lease with new landlords Aviva that was in place on Soho Square. Which is where the overall figure of £17million comes into play. £4.5million per year is the amount believed that the FA will be saving from now on though, made up of £3million in rents and rates at Soho Square and £1.5million on operating costs in a more purpose built environment. For the timebeing however, and with the current economic climate no doubt in mind, the closing of a final pension salary fund and a pay freeze has been brought in inside the FA, and when you see that staff costs are £30.1million per year you can understand why. That sum for 2009 is up £4.6million from £34.7million but a large amount of that is due to the bumper salary that the current England manager is on compared to his predecessor. Fabio Capello picking up a cool £6million per annum for not doing a vast amount so far, which makes Steve McClaren's £2.4million look like chicken feed really, although it should certainly keep him well stocked in umbrellas for a good while yet. Setanta going pop in June 2009 was a big hit on the accounts though, with the Irish broadcaster having agreed a £150million four-year deal in 2007 to show England and FA Cup matches from 2008. ESPN and ITV managing to step into the breach to a degree at reduced rates, ESPN paying a reputed £70million over four years for the rights, while ITV are already part-way through their £275million lump of the deal that they and Setanta brokered with the FA. FA chief executive Alex Horne commenting on the effect of television deals on their accounts: " 2009 was a difficult year for the FA Group as it was for the UK economy as a whole. The headline was the loss of our domestic broadcast partner, Setanta, as well as one of our overseas broadcasting partners, Gateway. But we have persevered and we made new broadcast deals with ITV, ESPN and Supersport and have now exited the Soho Square lease. " Gateway Communications being a lesser problem to the FA than Setanta, when a deal with the African broadcaster, worth £33 million over four years, collapsed in February 2009. As far as other "official partners" are concerned, the FA is still hunting for a main sponsor after they tried to hold out on a renewed £20million four year deal with Nationwide this summer in a quest for a better offer. Nationwide by now though having pulled out anyway with the financial markets turning bleaker earlier this year. Turnover meanwhile was up a healthy £52million to £314million, with a record £103million said to be put back into football, half of that though supposedly going at grass roots level. That could of course be even more when you consider that the National Football Centre at Burton, for the training of England teams, is now going to cost a remarkable £100million. The project still apparently being £10million short with a plan to make up the money through the building of 28 houses on the site in the mixer due to a legal challenge from local residents. The ever increasing costs of the National Footbal Centre certainly bring back memories of the New Wembley financial black hole which, by the way, is still making a generous loss for Wembley National Stadium Limited, albeit down to £15.6million in 2009 from £31.1million in 2008. The real test of those improving figures though is likely to come in 2017 when Club Wembley contracts are up for renewal, those contracts making up almost 70% of Wembley's revenue. It's still going to be six years after that though until the building costs of the stadium itself are fully repaid. The 2009 accounts for Wembley National Stadium Limited showing that, out of the original construction cost of £757million, it still owes £309m to the bank under the terms of a 2008 refinancing agreement and £62.4million to the FA. The gameplan being that Wembley will break even in 2014, with the FA budgeting to subsidise it at the cost of £20million per year in 2010 and 2011, and then £12 million for both 2012 and 2013. The FA is of course hoping to put a lump of money into the coffers by bringing the World Cup to England in 2018, and last year they spent £8million in their bid to do just that, the overall bid package likely to cost around the £15.5million mark. That could be small fry to some of the estimated, and I'd suggest they are very estimated at eight years away, profits from hosting the tournament, with early opinions saying the 2018 World Cup could cost £1billion to host, as against revenues in excess of £3billion. Before that potential financial windfall though, the FA has sought to cut costs further to the pension fund closing and pay freeze by, along with other measures, cutting its overheads by 10% and reducing the FA Cup prize fund. Whether that makes a difference in the long term however as the customer continues to tighten his belt remains to be seen, one thing is for sure though, I bet that Fabio continues to get his full £6million whatever happens down the line. |