Monday, February 4, 2008

Why the GAA must remain amateur


No, not the American western/cowboy TV series set at the Ponderosa Ranch, but the most popular word used in headlines to describe GAA finances in recent years. Whether announcing rental income from Croke Park, TV rights money or a new sponsorship deal, “Bonanza” is the word of choice for journalists, evoking images of a GAA treasure chest as deep and as rich as Aladdin's Cave.

Just like Aladdin’s Cave, however, it is a myth that the GAA is overflowing with riches. While it is true that the popularity of Gaelic Games ensures that the GAA generates substantial income for an amateur organization each year, reports rarely tell the full story of the GAA's finances. The false impression created leads many to the lazy conclusion that “with all the money floating around why shouldn’t the players get paid for their efforts?”

The untold story leads to a radically different judgement. For a start, the media seldom reports on the enormous costs involved with running an Association of the size and nature of the GAA. The cost of staging the games alone is considerable. In 2002 the GAA spent almost €4.5 million on match related costs (over 27% of total gate receipts). Nearly half of this money went straight back to the various grounds as rent, to be used for ground maintenance, development and to assist with recurring running costs. Another 25% was accounted for by sundry expenses such as Gardai and security, printing and promotional expenses, stewards and catering, medals and trophies.

Then there’s the money directly related to the needs of the panels involved. In 2001 up to €10 million was spent by county boards on preparation of their county teams alone. Croke Park contributes most of this both directly and indirectly subsidisng activities at County level with €8.7m in 2006. This money is spent by county boards on players to cover expenses such as travel and accommodation, meals, equipment, playing gear, and other general expenses incurred by county boards during the preparation of teams during a Championship season. The enormity of the expense involved can be gauged from the fact that the increase in the minimum mileage allowance for players costs county committees an average of €1.25m per annum (that was the cost in 2002). A further 6% of gross gate receipts are used to finance the players Injury Scheme which is available to players at all levels of the Association.

The alarming expenses of training inter-county teams have to be added to the increased expenses associated with county teams administration of internal club competitions and other general running costs. The number of games played at all levels of the GAA gives a clearer indication of just how much money is needed to fund the Association. For instance, the Leinster Council estimate that up to 1,800 games are played throughout the province in second level school competitions alone in any given year. Only a tiny proportion of these games would even collect a gate—even then it would hardly be worth counting—and thus the cost of running such competitions has to be financed from more central funds.

Aside from match related costs, grants to the Association’s club and County board units, and administration expenses, plans for the development of the games have all to be financed from central funds. To date all surplus revenues from previous years have been used to fund the redevelopment of Croke Park or loan schemes for clubs. The GAA’s commitment to coaching and games development is an investment in the future, designed to protect the Association’s longer term ambitions. €5 million was spent on Games development in 2002 to finance a network of coaching officers and administrators, summer camps, schools of excellence, grants to primary, second and third level schools and colleges, subsidies for hurleys and helmets, Feile competitions etc. The Provinces similarly reinvest the revenues they earn. In 2001 Leinster Council alone had a coaching and games development budget of well over €1.25 million.
In total upwards of 75% of the revenues generated by Central Council in 2006 were ploughed back into the Association. (See the 2007 Annual Report) This resourcing is intended to benefit players, clubs and counties alike. Contrast this with professional soccer where the wages to turnover ratio for Italian clubs was 76% in 2002-03, Spain (72%), France (68%) and England (61%) according to Deloitte Football Finance. Or look at it another way, the Premier League redistributes just 7½% a year to the Football Foundation, the body responsible for grass roots and community football development.
The GAA’s income and re-investment is an unbroken virtuous circle (see diagram above) whereby the commitment to investment in the future will guarantee the survival and continued development of Gaelic games. This outstanding contribution—propelled by voluntary input—depends on the money staying in the game.

1 comment:

deiseach said...

Alan Sugar said of the English Premier League in the mid 90's that "The money coming into the game is incredible. But it is just the prune-juice effect - it comes in and goes out straight away. Agents run the game." How those advocating paying players expect the GAA to be any different is a mystery.