'Accountants have said I must put the club into SCARP' - Points deduction looming for Dundalk

Dundalk are likely to start life in the First Division with a points deduction after new owner John Temple admitted the SCARP examinership route is inevitable.

Local barrister Temple stepped in last month when the club were on the brink of ceasing trading but their on-field strife continued with relegation confirmed last Friday with two games left.

That brings an end to their 16-year stay in the top-flight, a period which saw unprecedented success, primarily under former Republic of Ireland boss Stephen Kenny.

They enjoyed two years of involvement in the group stages of European competition, grossing over €10m in prize money.

Now they are battling to merely survive and that entails a restructuring of massive debts.

They have one home game remaining, a vital one for five-in-row chasing Shamrock Rovers on Sunday, before the Louth derby against FAI Cup finalists Drogheda United on November 1.

The Small Companies Administrative Rescue Process scheme was introduced by The Companies (Rescue Process for Small and Micro Companies) Act 2021 to allow small and micro businesses to avoid liquidation and to ensure creditors get a better outcome than they would have if the venture was wound up.

Entering the process would result in a points deduction but Temple said that the FAI may insist on that punishment being served next season in the First Division.

Limerick were the last club to enter Examinership for their final season 2019, incurring a 26-point deduction.

Temple admitted, however, that the Lilywhites must overcome the barriers of outstanding football debt to even contemplate fielding a team in 2025.

While he insists current players have been paid their wages, as he vowed when taking over the club from Brian Ainscough last month, outstanding amounts owed to former manager Stephen O’Donnell and ex-players, Wilfried Zahibo and Louie Annesley, are the major obstacles right now in relation to the club receiving a license for 2025.

All of those liabilities must be resolved in some fashion for a license to be granted.

Asked whether the club could avoid going into SCARP, Temple said: “From the minute I’ve come in I’ve always been preparing for SCARP because you have to seek that protection.

“I’ve to sit down later this week and have a look. Auditors and accountants have told me if I want to keep this afloat I have to put it into SCARP.

TOUGH TIMES AHEAD: Dundalk chairman John Temple before the SSE Airtricity Men's Premier Division match between Dundalk and Bohemians. Pic: Ben McShane/Sportsfile

“The difficulty with going into SCARP is that we’re going to drop points instantly. The way the FAI look at that is what’s the point now?

“They don’t want to be short-changed and they’re trying to say to us if you’re going to be smart with us and you’re only going to drop points at the end of the season then you’re going to start next season on minus points. Now that’s not ideal for us. However, it takes several weeks to prepare to go into SCARP.

“The FAI have put us under huge pressure. They’ve said if you’re going into it then it’s not like a normal business.

“You don’t have the luxury of going for six months into SCARP, engaging and then getting your money together to pay off some bills and get a reduction right down.

“We must be in and out of SCARP within two or three weeks. That’s the difficulty because the FAI want us to be clear with our bills.

“Now if we come to an arrangement with our creditors and we get a certificate to say we’re clear then the FAI will have no issue with the licence but before we even get into SCARP the other issue they have is that there are three cases outstanding.

"You’re kind of getting a frame of why Dundalk is struggling now.”

Temple said those three cases were the biggest barrier to the club having a team competing in the First Division next season.

“We’re marred already going into the licensing process,” he said.

“Why? Because there’s several claims against Dundalk FC. Stephen O’Donnell, when they were in Europe – and they were never in Europe in Brian Ainscough’s time or mine – but when they were in Europe there were promises made and undertakings given to Stephen O’Donnell that he would be paid certain bonus money and that never materialised.

“Then, Zahibo who played for Dundalk a long time ago. He was promised money – not during my time or Brian Ainscough’s time – but he has a claim in for outstanding amounts.

“Also Louie Annesley. Part of the contract at the time was that he would get money for representing Gibraltar in a number of international matches so he is due payment for historical international matches which took place in 2023. That was never paid and that claim is now overhanging.”

Whatever emerges from the upcoming SCARP, cutbacks and layoffs are looming for next year.

With manager Jon Daly confirming he’s returning to Scotland, a new boss is required.

No contact has been made with former player Ciarán Kilduff, who quit Athlone Town within hours of their women’s double bid being ended by Shelbourne in Sunday’s FAI Cup final.

“There’s no discussions with anybody as of yet, “ he said.

“I saw on social media that Kilduff had resigned from Athlone Town and straight away the rumour mill started but we’ve had no engagement with him right now and we’ve had no engagement with anybody at this moment in time. I’m being very open about that.”

Asked for an update on the future of players, Temple referred the matter to CEO Peter Halpin, who said: “There’s nine under contract in total and there have been a couple of retention letters as well sent out. That’s really where we’re at right now.

“It was a case of waiting to see which division we are in, which was confirmed on Friday night last and now we’ll try to cut our cloth accordingly going forward and obviously a decision on a manager will need to be made very soon as well to ensure we hit the ground running rather than leaving it to the last minute so the sooner that decision process is made the sooner we can get a new man in place once Jon moves on.”

Temple added on the overall staff situation: “I’m going to have to rearrange some things for the viability of the club.

“It’s the old saying you can’t make an omelette without breaking a few eggs. The club that once was cannot go forward.

“Even just speaking to the financial controllers of Shels, Bohs and Shamrock Rovers, they’ve told me that I’m operating at about 40% higher costs than what they are.

“That’s the average – that I’m operating at about 30pc or 40pc higher – and yet look at where Dundalk are in the table and look where they are so the model that’s there is not working and it has to change.

“Nobody who comes into the club could sustain it at the level that it’s at. That’s just the reality of it. People are going to be unhappy but for the club to survive the model has got to change.

“The model can’t stay the same so invariably there will be layoffs because if people turn around and say ‘I’m not doing that, that’s not my job’ then I have to move you on. The club in the First Division is not going to be as busy as it once was.”

In conclusion, Temple confirmed bans from Oriel Park had been issued to seven people, including former owner Andy Connolly and his brother, ex-Chief Operating Officer Martin Connolly.

These arose following the unsavoury scenes which marred the end of the club’s match with Derry City on Friday night.

The match had ended for some time when a row ensued outside the boardroom area of the ground. This subsequently spilled out into the stands at a time when personnel from both clubs were conducting post-match interviews.

Elsewhere, the League of Ireland and Premier Sports have announced a new partnership which will see Premier Sports launch a bespoke platform for LOITV bringing League of Ireland fans access to the service through a range of apps on mobile, tablet and Smart TV.

The new platform from Premier Sports will see LOITV available on Android TV, LG TV, Fire TV, Sony, Hisense as well as apps for mobile and tablet on both Apple and Android.

As part of the new partnership, a new subscription model will also be launched ahead of the 2025 season. Fans will be able to avail of annual, monthly and 24 hour passes.

League of Ireland director, Mark Scanlon, said: “We’re delighted to make today’s announcement with a world class partner in Premier Sports to bring LOITV to the next level.

"The platform has come a long way in a short period of time and having every game streamed live along with an increase in TV broadcasts has become central to the growth of the League.

"This partnership will bring the platform to a whole new level thanks to the expertise from the industry leading team at Premier Sports and will allow supporters of the League of Ireland easy access to all the action via modern apps and Smart TVs.

"We’re very excited to roll out the new service and look forward to seeing LOITV grow even further in the coming years.”

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