As the stadium buyout in Salford draws to a close, the city council has approved a $350,000 loan.
SALFORD will receive a £350,000 loan from the city to ensure their continued operation.
In spite of their 60-14 thrashing of Hull FC on Saturday, the Red Devils are desperately short on cash and are waiting for the local authority to approve a deal that would allow them to buy out the AJ Bell Stadium.
As a result, they would be eligible for a lease of up to five years and, most importantly, would be able to collect revenue from food and beverage sales, which they do not collect at present.
However, Salford mayor Paul Dennett wants to loan the club the money at 4.66 percent interest, and personal guarantees from club members, as reported by SunSport.
As stated in the filings, “without any temporary liquidity support while it embarks on the preparation of a restructuring plan, it is likely to go out of business in the short/medium term.”
Prior to voting on whether or not to buy the entire stadium, the council explained the importance of Sale Sharks RU to the community and why it had rejected a bid from the rugby union team.
The club is an employer in Salford in its own right and has contractual arrangements that support jobs more broadly, so if Salford Reds were to go out of business, it could have a significant impact on jobs and employment in the city.
Because of its long history in Salford (it was founded in 1873) and its contributions to the city’s health and social well-being (it partners with schools and community clubs across Greater Manchester to encourage young people to reach their full potential and adopt healthy lifestyles, among other things), Salford Reds deserves special recognition.
To put it another way, “the failure of Salford Reds would leave a significant gap in the market based on the club’s support network, employees, work in the community, effect on surrounding businesses/employment, and its profile and heritage.”
Two payments of £175,000 will be made on the loan, with the second payment not being released until Salford Council has received security for the loan or a guarantee.