Administration

[Martin41]

So unless I'm missing something, yes money may be tight, but where has there been talk of administration, except here of course....

[Hoop Blah]

I think HB was being facetious.

Nope. As Zac says, it looks like the payments are made annually which seems daft to me.

[ZacNaloen]

Annually isn't even the problem, if it was paid before the season starts there is no excuse, but I'm sure i've been told it gets paid end of the season.

[Royal Rother]

Seems eminently sensible to me. Otherwise clubs would gamble with it and spend on new players as soon as they receive it which is absolutely not the idea.

[ZacNaloen]

But then clubs have to take out loans just to cover the wages they took out just to stay in the premier league just to have a chance to stay in the premier league etc etc etc

[Royal Rother]

Yeah but there snowtorch wrong with that really - think it is fairly likely they could present a viable business plan to a funder for a loan secured against future Parachute payments to support contracted commitments.

But as I say, let them have it at the start of the season and many would just spend it on players.

[ZacNaloen]

It's still debt

And I imagine that's where the Vibrac loan everyone's panicking about came from.

[Royal Rother]

Snowtorch = nowt!!

[Pepe the Horseman]

I like it.

[Royal Rother]

It's still debt

And I imagine that's where the Vibrac loan everyone's panicking about came from.

Yes, but sensibly advanced against future guaranteed income. But they'll only get it if supported by a good business plan (presumably).

Perfectly good idea to get others (funders) to decide whether on merit whether the clubs have the necessary financial controls in place to warrant the loan. Then break covenants and it's a ton of crap that comes down on their heads.

[Hoop Blah]

I don't see the point in forcing clubs into an expensive loan against future income when they could just pay them the parachute money in instalments over the year.

Giving them the money upfront or guaranteeing it at the end of the season isn't going to change the way they spend it, it's just going to cost them more. If a relegated club are going to gamble using the parachute money then they're going to gamble it irregardless.

The idea of the payments is to help with the loss of income and contracted wage commitments. How is delaying the payments doing that in any way?

RR, vibrac or whoever aren't going to be fussed about a business plan for a football club looking to take out a £20m loan when they know there's a £23m windfall coming in 9 months time. All they're going to be interested in is how desperate the club is for the cash upfront and so what interest rate they can sting them for. It sounds just like footballs version of a payday loan.

[Royal Rother]

I think you are wrong but moneylending principles sure have changed in recent years.

[Hoop Blah]

Why?

[Royal Rother]

I think they would only ever get a small fraction of the £23m without a viable business plan and assurance of strong management practices and a regular and thorough health check.

[Hoop Blah]

If it needed a sound business plan then Vibrac wouldn't loan football clubs a penny surely?

[Man Friday]

Some people on here trying to sound as though they know what they're talking about by throwing around a few financial buzz-words when they have no more idea than the rest of us. (And I'm a qualified accountant.)

[Royal Rother]

Oh dear. No-one is suggesting they KNOW what is happening at RFC, but when it comes to Balance Sheets, P&Ls etc, I can assure you I do know what I'm talking about.

Take it or leave it.

[Stevie G]

HOUSE - Balance Sheets was the last one on my card.

Will RFC pay out, that's the question.

[Royal Rother]

[Hoop Blah]

https://www.westhamtillidie.com/posts/2 ... orporation

A quick google came up with this about Vibrac with some interesting comments about clubs securing loans against earnings and paying 10% interest rates on loans.

I still don't see how the arrangement is the best way of helping clubs avoid financial problems following relegation (not that these are relegated clubs in the examples).