Sports clubs – up there with the church and the pub as the lynchpin of every community, rural or urban.  Forget about the sports code, it’s not really big picture stuff.  Debt isn’t exclusive to the GAA, FAI, IRFU, Tennis Ireland or Golf Union , or whatever you’re having yourself.   The age of debt is upon us.  So are its cousins, “haircut” and “de-leveraging”.  The simple fact is that many sports clubs are on their knees financially and some have already bitten the dust.

For the sake of some clarity, let’s rattle off a few recognisable clubs that have been outted: -  Thomas Davis GAA, Portlaoise GAA, Drogheda United  FC , Cork City FC,  Limerick golf and Country Club to name a few. Sure there are sporting bodies deep in the red, look no further than Basketball Ireland.  Plenty are teetering on the verge,  no longer being tolerated by their banks. The sports governing bodies have no financial means of bailing them out.   It’s a mountain that no amount of club raffles can resolve.

Is it their fault?  Perhaps some went wild with developing their facilities or got stuck in a botched land swap.  More simply did not have the right people behind the financial helm in the age of cheap credit.  Look no further than any of us if we want to start finger pointing.

Spare a thought for the poor unfortunate trustees of clubs, who are on the hook personally  for the debts of the club, if there is no disclaimer in the club Constitution. Let’s hope many clubs have incorporated ensuring limited liability for the members.

We know what the problem is.  So what’s the solution if .  The answer is restructuring.  Debt needs to be managed, not by more debt but by a general recognition by key creditors of the reality of  the situation. 

Step 1 – Identifying the problem - Find out how much is owed and to who. 

Step 2 – Statement of Affairs – Get your accountant to prepare current assets and liabilities

Step 3 – Get buy in from members. 

Step 4  - Dialogue – Start talking honestly to creditors

Step 5 - Scheme of Arrangement – make a full and final offer  to your creditors.

Step 6 – Follow through

Larry Fenelon*

Larry is a partner in Leman Solicitors.  He is an expert in Sports law.  He  advises athletes, clubs and sports governing bodies on a variety of legal issues, Larry is a keys advisor to over 25 sports governing bodies in Ireland.  He is at the forefront of Sports arbitration in Ireland, and has lectured extensively in Sports Law.