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Aviva take-over by the IRFU remains a speculative possibility

By FRANK QUINN
WITH the current investigation into the finances and governance of the FAI continuing, it might be a good time for the IRFU to step in and relieve them of some (or all) of their debt. It would need to be a subtle helping hand extended to help both parties.
The FAI has been burdened with the debt for the building of the Aviva Stadium now for over eight years. Their original commitment to the deal was approx €80m and this figure has been reduced very slowly to around an estimated €40m (to be clarified by the investigation currently underway into the FAI finances).
The original cost to build the stadium was €418m, to be shared by the government and the two governing bodies of the IRFU and the FAI. The Government of the day contributed €218m, This left a balance of €200m to be shared by the two associations, €120m by the landlords IRFU and €80m by the FAI. The IRFU cleared its debt completely and relatively quickly by the sale of the ten year tickets, which are about to be renewed. The FAI was not as fortunate in their efforts as a large part of the debt is still in place.
The benefit would be to relieve the FAI, with a proposed new governing body and executive, of the serious long term debt to allow it to start afresh after some very unsavoury publicity and difficulties with the Irish Sports Council and the Dail watchdog committees.
They would then be in a position to rent the stadium as required for their games from the Stadium Company, indeed as they do now.
As the government put up half the investment, I assume it would be necessary to get their permission if one of the parties wanted to sell their share holding and to whom. With the IRFU assuming full control, it safeguards the asset and remains under Irish control. This in turn would remove the risk of other bodies becoming lenders to the FAI in return for control of some assets.
The Chairmanship of the Company is rotated between the two major shareholders, not the government (who may not even have a board member). The fact that the government put up half of the investment without having a controlling interest in the project remains a bit of a mystery.
The IRFU would assume the full responsibility for the stadium under a revised agreement with the parties involved. The IRFU currently receives an annual rent for the ground of €700-900 thousand per annum from the Stadium Co.
Is it a viable proposition for the IRFU to clear the debts of €40m at the FAI now? To borrow this sum, if necessary, on the strength of all their assets and fulfil a repayment schedule while not interfering with the investments in their own sport, it will be necessary to fulfil all current contracts in running the stadium. This would include taking full control, including selling of all ten year tickets for possibly two
associations and agreement on a rental per game with the FAI. A long term contract to play all FAI games at the Aviva, as of present, would fulfil the franchisers’ rights in the current agreements and the naming rights for the Stadium.
When the stadium was being built the FAI rented Croke Park at a fee in excess of €1m per game, just like the IRFU who paid €1.25m per game during the three year construction period. Due to the capacity of 83,000 the latter are reported to have made a better return than if playing in Lansdowne Road.

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