Following the financial crisis of 2006, at the start of the 2007 season, the club was left with just two senior players by January, and the club's financial crisis resulted in the club pulling out of the Setanta Cup. The crisis even bagan to threaten their participation in the Champions' League for 2007. Shelbourne's woes were deepened on 25 January 2007 when owner and general manager, Ollie Byrne, was taken to hospital with a reported brain tumour, most likely, stress-induced.

Shelbourne, with no manager and just one remaining senior player by February were said to be massively in debt - some reports putting it at €6 million, and others between even €10 million and €12 million. The fiasco only served to increase the pressures on the FAI, who already had to find two new replacement clubs to participate in the league following the extinction of Dublin City F.C. and Limerick F.C. in 2006. The association decided to set up a review of the awarding of a Premier Division licence to the club and eventually decided that the club should be stripped of the chance to compete in the Premier Division. Shelbourne had their Premier licence revoked and were, instead, considered lucky to be placed in the First Division for the 2007 season. There had been worries that the club would face outright extinction and that the FAI would throw the club out of the league altogether, especially after Limerick, who had less severe problems than Shelbourne, were denied a First Division licence. Liam Moggan, the chairman of the FAI's Licensing Committee resigned in protest after the decision was made to grant Shelbourne a First Division licence as he believed that the club - manager-less, player-less and heavily in the red - did not meet the criteria for the awarding of such a licence, even though its criteria were less strict than those required to pass for a Premier licence. It is probable that the Committee as a whole took an extremely sympathetic view while taking into account the long history of the club and, facing a minimal time-frame for exploring alternatives before the kick-off in March, logistical factors, such as ensuring that the league began with the preferred number of teams, when coming to a final decision to keep Shelbourne in the league.

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