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Covid impact on club finances


Spiderpig
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An interesting  article on the BBC website regarding the covid loans taken by every premiership club apart from Celtic. It seems we borrowed the 3rd highest amount behind Aberdeen and Rangers, just under £3m, so we are not the debt free club we thought we were.

It seems the loans came with very strict conditions and looks like we will be paying them back for the next 20 years . To me it seems unfair that the championship,  league 1 & 2 clubs were given grants, with nothing to pay back while top flight clubs are saddled with debts for years to come.

https://www.bbc.co.uk/news/uk-scotland-58104430

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The club also mentioned at the time that they'd had a favourable insurance payout for the interruption to their business, however, so hopefully that will mitigate things to some extent. (Apparently we were one of only 6 clubs that had insurance covering an outbreak of contagious or infectious disease.)

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You'd imagine the club put a lot of thought into the decision before putting in a request. I think it's fair to say that we can trust the club these days to make the right decision and have the best interests of the club and supporters in mind. 

I don't see us as a club trying to stay afloat any more but more a club trying to progress and achieve as much success as we can. 

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It’s literally free money but will require planning to ensure it is paid back. The quarterly reporting required should help prevent a club going into free fall as it should be spotted early on.  Governance is being forced on the clubs in return for the cash. That blowtorch didn’t come cheap.

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Interest free loan to be repaid over 20 years is a pretty sweet deal. Even if we didn't need it, sticking it in the bank and collecting interest would make it worthwhile.

The lower league clubs were hit much harder than us for various reasons, and I have no problem with them receiving grants instead,

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Bit of a double edged sword. Aye very favourable (I was actually worried the Turnbull cash would've been absolutely decimated through all this? But it does stick us in 2 million odd of debt which I'd rather we didn't have which is a shame to be honest. Will help offset the impact of not having the season ticket cash injection each summer. 

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6 hours ago, Onthefringes said:

It would’ve been negligent not to apply given the favourable terms.

100% this. Interest free money over 20 years. 

Wish I could have that deal.  I would buy cryptocurrency……joking.

In all seriousness there are shares in stable FTSE 100 companies paying 5-7% dividends. Over 20 years you could pay the Gov from dividends and after 20 years you would still have £3m. Obvs inflation would make that worth a lot less but no brainier…

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