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Page last updated at 22:01 GMT, Wednesday, 15 September 2010 23:01 UK

Football Association finances hit by Setanta demise

Wembley Stadium
Wembley's business plan relies on concerts and other events

By Gordon Farquhar
BBC Radio 5 live sports news correspondent

Television company Setanta's collapse left a £60m hole in the Football Association's finances as the governing body posted a £3m loss for 2009.

That was better than 2008's £12m loss as the FA dealt with losing television rights money and costs of £17m in its move from Soho Square to Wembley.

FA chief executive Alex Horne said: "2009 was a difficult year for the FA as it was for the economy as a whole."

FA turnover was up £52m to £314m as staff costs rose from £30.1m to £34.7m.

That £4.6m increase reflects the difference in England manager Fabio Capello's £6m annual salary compared to that of his predecessor Steve McClaren, who was paid £2.5m.

The move to Wembley cost so much because the plan to sub-let the old offices collapsed, though a severance deal has now been done with the new landlord, while the FA has also implemented a major cost-cutting programme.

FA 2009 financial year highlights
Turnover: £314m, up £52m
Operating profit after expenses: £5.7m
Loss after tax: £3.07m
Investment back into footballL: £103m, up £16m
Wembley gate receipts: up £3m
Loss after tax: £3.07m
Expenditure on England representative teams: £30m
Cost of moving offices from Soho Square to Wembley: £17m
Annual wage bill for monthly average of 568 employees: 34.6m

"Alex Horne's contention remains that Wembley will break even in 2014 and will no longer require FA handouts," said BBC sports news correspondent Gordon Farquhar.

"The FA also points to the fact they invested £103m back into the game, up by £16m on the previous year, the highest it has ever been, and that half of that amount went into supporting "grassroots" football.

"When the mortgage is paid at Wembley some time in the early 2030s, the stadium ought to provide huge cash benefits for the game, but until then it remains a risk for the FA."

According to Wembley chairman David Bernstein, last year was an exceptional year for the venue, with 38 major events taking place in the stadium.

Despite that level of activity, which has contributed to the well-documented pitch problems Wembley has suffered - the £9.6m operating profit, up £3.7m over the previous year, was wiped out by the interest charges on loans of £23.6m, leaving an overall loss of £14.2m after tax.

Wembley's business plan relies on concerts and other events to boost the bottom line, but that has brought a conflict of interest over the stadium's primary purpose as a world class football venue.

FA 2009 financial year highlights
Turnover: £314m, up £52m
Operating profit after expenses: £5.7m
Loss after tax: £3.07m
Investment back into footballL: £103m, up £16m
Wembley gate receipts: up £3m
Loss after tax: £3.07m
Expenditure on England representative teams: £30m
Cost of moving offices from Soho Square to Wembley: £17m
Annual wage bill for monthly average of 568 employees: £34.6m

Those criticisms of the playing surface have led to a complete re-think of the pitch strategy, and a new "Desso" surface has now been laid.

Directors have also highlighted the risk to the business of Club Wembley clients failing to renew their seats and boxes, or defaulting on payments, with premium seats representing 21% of the group turnover.

Over the coming months the FA needs to find a headline sponsor following building society Nationwide's decision not to renew its deal with England's governing body, as well as funding the planned National Football Centre at Burton, which has a financial shortfall of between £8-10m.



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see also
Setanta goes into administration
23 Jun 09 |  Business
FA faces Setanta cash shortfall
23 Jun 09 |  Football
Wembley set for talks over pitch
14 Apr 10 |  Football
Burton receives council go-ahead
17 May 10 |  Football


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FROM OTHER SPORT SITES
Sunday People Sports News: FA still feeling economic strain - 14 hrs ago
Sky Sports FA hit by difficult year - 32 hrs ago
Yorkshire Post FA still feeling economic strain - 33 hrs ago
Manchester Wired Football Association finances hit by Setanta demise - 41 hrs ago
ESPN Star England FA in financial crisis! - 45 hrs ago


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