The main good news story in Ireland is that Shamrock Rovers have qualified for the group stages of the Europa League (the first time an Irish club has done so since the mid 1960s). This means a large cash windfall for the club. There is a large economics and political science literature documenting how windfalls can leave recipients worse off due to adverse changes in behaviour – the club faces an institutional/organisational challenge to make sure it is ‘Norwegian’ in its husbanding of the windfall.
19 replies on “Are Windfalls a Curse?”
Perhaps they might start by paying back the several million Euro of tax and Social Insurance written off when the company went into administration!
Irish football clubs are very much in the liberal market variety of capitalism. They bought and paid players they could not afford during boom. All profits were invested in shareholders rather than clubs (Wexford Youth under Mick Wallace being the exception and arguably the best model). German clubs are legally restricted from running a deficit which precludes them from adopting a Man City approach to expansion. All investment goes into youth facilities (human capital and infrastructure). Netherlands are somewhere in between. I have great plans for a comparative political economic analysis of European football. The organisation of national leagues/clubs generally reflects their variety of capitalism. There are 4 clubs in the UK that are, in effect, a mini-league in themselves reflecting their aggressive market approach to coordination, and inevitable inequality this produces. In Germany most clubs in the top half of the league have a reasonable prospect of competing for the top spot, the same applies to Nordic countries. The Spanish players are currently on strike whilst in Italy Berlusconi runs the show. So, yes, let’s hope the league of Ireland (and economy at large) start looking to the European north for policy advice 🙂
Windfall?
Au contraire. Hard work, team work, committment, no €500,000 Chief executive.
Credit where credit is due. A fantastic result.
All they need to do now, is keep the management consultants away and the carpet baggers out. If the take the NAMA approach they will be bust in 6 months.
Philip,
there were no ‘group stages’ of the Europa League in the 1960s. Nor was there any Europa League. Richard Tol will round on you if you post any further on these highly specialised topics.
Colm,
According to the Wiki the first Fairs Cup from 1955-58 featured a group stage. Was the Fairs cup not the precursor to the UEFA cup which in turn became the Europa league?
A better way of putting it is that this is the first time an Irish team will still be involved in the competition after December.
@ tull. The fairs cup was a group stage. But to be fair Colm did say there was no league stage in the 1960’s. there wasn’t
@Kevin O’Brien
A better way of putting it is that this is the first time an Irish team will still be involved in the competition after December.
JTO again:
I assume that you mean ‘southern Irish’?
I am sure its wrong if you include ‘northern Irish’ teams.
Linfield reached the quarter-finals of the European Cup in the late 60s. They drew 2-2 v Bulgarian team at Windsor Park. I was at it. They lost the away leg. I can’t remember exactly, as its so long ago, but, being the quarter-finals, it must have been February or March when it was played.
Great game! Live on Setanta. Great goals. The power of tradition. Giles considering a run for the Presidency …
Shamrock Rovers draw Tottenham Hotspur … Happy Windfall Days! Wonder could we cut a loan deal with L.A. Galaxy on Robbie – and if Morgan can captain England then we might as well bring Posh’s other as well … Giles seriousuly considering a run for the Presidency …
If the management at Shamrock Rovers is concerned about the negative impact the windfall might have on the club, I will solve the problem for them. I will gladly take the money and pass it on to Waterford United.
Consider how much money does Celtic FC make here? A tidy sum I would wager.
That is where the real windfall will come from, winning back the fans ( as in their football expenditure).
Another windfall you might hope for is that players will think twice before going to minor Scottish clubs to showcase their talent. Up until now this has been the rational thing for them to do, and the fans understand that, but it has been very frustrating to see, for example, Wes Houlihan moving from Shels to Livingston, or Alan Mannus moving from Rovers to St Johnstone, apparently because otherwise he wouldn’t get a look-in to the Northern Irish squad (something else which you would hope might change down the line).
@Aidan R
“There are 4 clubs in the UK that are, in effect, a mini-league in themselves reflecting their aggressive market approach to coordination, and inevitable inequality this produces.”
At last someone calls it as it is. Liverpool are not a top four club.
best performance by a LOI club was Shelbourne in 1964 – they reached the 2nd round of the Fairs Cup ( UEFA Cup/Europa League) played Atletico Madrid lost the home leg 1-0 on 25/11/1964 and lost the away leg 1-0 on 2/12/1964.
Best performance by any team on the island was, as JTO said, by Linfield. They reached the quarter final of the European Cup (Champions League) drew the home leg 2-2 against CSKA Sofia on 1/3/1967 and lost the away leg 1-0 on 15/3/1967.
@aidan r
“German clubs are legally restricted from running a deficit which precludes them from adopting a Man City approach to expansion.”
Dunno about you but it’s almost as though there is a sort of pattern emerging with regard to the Germans.
I think Leeds tried the Krugman approach a few years ago after relegation.
This club is really the perfect rep for this little country, having traded though at least half a dozen different entities in recent years, also an administration where the largest creditor, the State, strangely changed its vote at the last minute.
Each time, walking away from huge tax liabilities. Just like Ireland and its recent past
Would you stop with this guff.
The current ownership didnt “walk away” with a tax liability. The previous ownership went into examinership. They were not able to pay their debts, so the club, their main assets, was sold from underneath them, for a much as the examiner could get.
Whatever the creditors got out of it, I dont know, but they got a better deal than if the club went into liquidation. Maybe if some Oil Sheik came along they would have got all their money back, who knows.
As regards Windfalls, Sports journalists dont seem to be the most attuned to the financial side of things. SRFC will either have to rent the Aviva, or install a substantial amount of temporary infrastructure in the Tallaght Stadium. Either way, it is going to cost quite a bit.
@Kevin o Brien well said. This begrudgery is mind blowing. Brilliant achievement for Shamrock Rovers. We should be proud of the achievement and not try to bring it down.