FAI soccer jerseys, âŹ6.5m from Mike Ashleyâs Sports Direct and the end of a 28-year merchandise deal
October 30, 2022 by Mark Tighe
FAI board meeting, November 3, 2018
It is four months before John Delaney, the FAIâs chief executive, will dramatically move out of his job to become executive vice-president in a doomed attempt to maintain a position of control at the top of Irish football.
The Irish menâs team is managed by Martin OâNeill and Roy Keane but following a series of drab performances, including a 4-1 away defeat to Wales, they have just weeks left in the job. Delaney is setting out the lay of the land to his fellow FAI directors in Abbotstown. He complains the FAI is in an âimpossible situationâ with the League of Ireland, with regular complaints it is not doing enough to improve the domestic game.
âNo other association in Europe gets tagged like this over structure, prize money, etc,â Delaney fumes. âAll these are our responsibility, which is not right.â
Speaking about the FAIâs financial predicament, he says they have become âresults dependentâ and are âoff budgetâ by âŹ279,000 for the year. Ticket sales for an upcoming home friendly against Northern Ireland are even worse than those the FAI experienced for poorly attended games against Wales and Denmark.
âWe have an issue that people do not want to pay to watch this team,â Delaney says, setting out how the disastrous ticket sales had left the FAI âŹ1.5m below a sales forecast and scrambling to bring in other income to fill the void.
Delaney, a master at spinning plates to temporarily plug FAI financial holes, has a plan. He tells the board he met Robbie Keane, Irelandâs record cap holder and top goal-scorer, about the potential of him becoming an assistant to Mick McCarthy in a replacement package for the OâNeill and Roy Keane team. It was âhighly confidentialâ that Robbie Keane wanted to eventually become Ireland manager.
Stephen Kenny, then Dundalk manager, had been offered the under-21 managerâs job. Delaney had made it âclearâ to Kenny that even if Ireland performed badly under OâNeill in upcoming matches that month he would not get the top job. It was âtoo earlyâ for Kenny to get the first-team job, even though John Giles, the former Ireland manager, had advised Delaney it was between Kenny and McCarthy as OâNeillâs potential replacements.
Although Delaney predicts the FAI will be âtight on cashâ for the next year, he sees hope on the horizon. He says once the FAIâs current contract with its kit suppliers JACC/Toplion, the Irish franchise holder for Umbro and New Balance, expires in 2020, the FAI will get a âŹ6.5m cash injection from the Mike Ashley-led Sports Direct. Delaney had regularly complained to the board that JACC/Toplion had been late in its payments to the FAI, which itself developed delaying paying creditors into a fine art.
In contrast, Sports Direct had already provided âŹ6.5m to the FAI in 2016 and seemed to get relatively little in return. For that payment, which was key to providing the FAI enough capital to convince Bank of Ireland to take on the associationâs âŹ30m-plus stadium debt, Sports Direct was given headline branding of the FAIâs annual summer schools, a licence to a 50-seater box in the Aviva stadium and naming rights for the FAIâs training centre which was not activated. The key part of the deal, however, was that Sports Direct would from August 2020, after making a second âŹ6.5m payment, become the exclusive kit supplier to the FAI until 2030, ending JACCâs then-26-year term as the FAIâs kit supplier.
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It was only after Delaney was suspended from the FAI in April 2019 that his bizarre deal with Ashley and Sports Direct emerged publicly. Amid the turmoil of 2019 the FAI board learned that Delaneyâs Sports Direct deal allowed Ashley to force the FAI to repay the âŹ6.5m if he called in the payment before 2020, which he did.
To add the FAIâs woes, Jonathan Courtenay, the chief executive of JACC/Toplion, reacted furiously to the Sports Direct revelations. He believed the FAI had breached the terms of his contract which he said gave his company first option on renewing the kit deal which is the largest in the Irish sports market. To ward off any legal action from JACC/Toplion, in July 2019 the FAI, then led by interim general manager Noel Mooney, agreed that JACCâs contract with the FAI would be extended for six years from 2020. The terms of this deal put the value of the contract at between âŹ1.6m and âŹ1.9m a year to the FAI.
A lot has happened since 2019 in the FAI with Roy Barrett, an experienced stockbroker appointed as independent chairman in early 2020, and Jonathan Hill, a former English FA executive, becoming the FAIâs new permanent CEO.
What had not changed was JACC/Toplionâs inability to promptly pay its contractually due bills to the FAI on time.
A source in the association said it was a âserial offenderâ and attitudes in the association had changed. The Irish firm owed the FAI âŹ550,000 in July of this year (2022), although this overdue amount was reduced to some âŹ150,000 by this month. Already facing flak for failing to attract a shirt sponsor for the menâs team, the FAI decided it had had enough.
Last Sunday there was an FAI board meeting that authorised Barrett to terminate the contract with JACC/Toplion due to alleged breaches of the terms of its contact. There has been some criticism that it was Barrett, and not Hill, who sent the email on Monday morning to JACC/Toplion informing it of the decision but sources indicated this was done based on the FAIâs legal advice. A short statement announcing the termination of the deal was released by the FAI.
In response, JACC/Toplion said it found it âhighly irregular and unwarranted in terms of any working [relationship], that the associationâs longest-standing, most loyal sponsor, and the sponsor which has contributed more financially than any other sponsor to the association would be treated this wayâ.
There had been signs Courtenay was feeling pressure and was sensitive to criticism of his companyâs FAI work in recent weeks. Martin Prendergast, chairman of the Republic of Ireland Supporter Club London, is a keen collector of Ireland football jerseys and has bought some privately from Courtenay previously.
Prendergast issued a number of tweets critical of the lack of promotion of the orange jersey that the womenâs team had worn in their victory over Scotland in Glasgow earlier this month that secured the teamâs first ever World Cup qualification.
Prendergast pointed out that the official FAI club shop Twitter account had not tweeted since April and criticised an alleged lack of availability of the jersey outside Elverys shops and official channels. He said it was the âworst commercial deal everâ.
In response, Prendergast received WhatsApp messages from Courtenay calling for him to delete his tweets or he would initiate legal action over his âcampaign of slander and defamationâ of Courtenay and his companies. The message called on Prendergast to never mention or allude to Courtenay, his company or his brands ever again.
Prendergast said he was âshockedâ to receive the threat of legal action and he deleted some tweets as a precaution but did not believe he had said anything defamatory.
A source close to JACC/Toplion said it felt it was subject to âa pincer movementâ in the last week after the FAIâs move on Monday morning.
Over recent months JACC/Toplion had been facing increased pressure from Deal Partners Logistics (DPL), its biggest creditor, to repay its debts. A connected company to the Joe Diggins-owned Tower Trade Finance, a business that specialises in providing supply-chain finance to companies, DPL had issued a statutory demand to JACC/Toplion for the repayment of âŹ6.8m in August. On Wednesday, DPL launched High Court action to seek the appointment of a provisional liquidator to JACC/Toplion.
It said DPL had been engaged with JACC/Toplion âin the hope they could come to an arrangement to repay the indebtednessâ but the decision by the FAI âhas dashed any residual possibility that the company might trade its way out of its current situationâ.
When the hearing was renewed on Thursday afternoon in front of Judge Brian OâMoore, the judge said he was surprised there was no appearance by JACC/Toplion in court. He said this led him to take more seriously concerns raised by DPL that there were poor financial controls in the kit supplier and that there was the possibility that preferential payments could be made to some creditors, including two recently dormant companies owned by JACC/Toplionâs directors that were owed some âŹ400,000.
DPL also alleged that JACC/Toplion had previously withdrawn âŹ1m worth of stock from a warehouse without informing it, an alleged breach of its agreement. It also complained that JACC/Toplion had attempted to take further stock on Monday without telling it of the FAIâs termination of its contract. Diggins accused JACC/Toplion of a âmajor breach of trustâ.
Ulster Bank, which was owed about âŹ3.8m, and Revenue, which was owed âŹ2.5m, did not oppose the proposed provisional liquidator appointment which Judge OâMoore then made. A hearing over the appointment of a permanent one is on Friday.
This weekend, a source close to the company said it was co-operating with the provisional liquidator and would not oppose the full liquidation of the company. It accepted the FAIâs termination of its deal meant the companyâs was unable to trade its way out of its debts that amount to more than âŹ13m. It does, however, strongly dispute some of the allegations made by DPL and plans to file a responding affidavit this week.
In the meantime, the FAI and a number of professional sports teams including League of Ireland clubs are scrambling to get new kit suppliers. Ireland will wear Umbro for its matches against Norway and Malta next month. When the menâs team qualify for a major tournament it can boost jersey sales by over 100pc on a normal year and the FAI will be hoping for a similar boost from the womenâs teamâs World Cup adventure in Australia next year.
UK firm Castore, which is making inroads in the football market with Newcastle United, Glasgow Rangers and Wolverhampton Wanderers, is understood to one of a number of brands that have expressed an interest in the FAI contract.
One League of Ireland source said JACC/Toplionâs liquidation will mean clubs will miss out on much of the lucrative Christmas market this year. It takes at least four months from design to get delivery of jerseys from their normal manufacturing location in east Asia.
For John Fallon Snr, a former Toplion worker who was seconded to the FAI in 1996 as its âUmbro liaisonâ and became the FAI and Mick McCarthyâs kit man, last week was a sad end to an eventful journey. He remembers when Roy Keaneâs impending departure from the 2002 World Cup was only made apparent to the FAI when a request from Saipan was made for Toplion to send a new number six jersey to the Far East.
âThey have been brilliant supporters of Irish football and must have injected over âŹ20m into the game,â Mr Fallon said. âItâs really sad for the 30 workers there and for Jonathan and his [now deceased] dad John before him and all the work they did. They can be proud of having one of the longest deals in world football. Itâs just a pity it ended this way.â