Simply Moore wrote:Also I found this quite interesting "A further loan of £30m was taken out on 15th August 2016 with Rights and Media Funding Limited, again secured on future income from the Premier League Broadcasting contract. This will be repayable in 2017". Rights and media by the way submit abbreviated and unaudited accounts which for a company dealing with those type of numbers is a little odd.
I know this time has passed on this loan so therefore obviously repaid but no doubt the same trick would have been done again (or some workaround as I remember there being some new league rule on this type of loan or am I making that up?) so you can only imagine the catastrophe being relegated will be for us financially. I've only skimmed through the accounts as I don't really have the time to dissect but on the surface of it, we don't appear to be much better off financially than we were in 2010 when they took over except now of course we don't have a material fixed asset.
From this season, the Premier League have only been party to loan agreements that are with lenders that are FCA registered and their source of funds is not offshore. Because the security was the TV money, the loans would be actually repaid directly from the Premier League - hence why they were a party to the agreements. So instead of using TV money as security this year for their loan from Rights and Media Funding Limited, they've used the properties they own and the lease on the Stadium as security.
This type of funding is not unique - many clubs do it each year to balance the cash flow. The majority of the revenue from TV broadcasting doesn't hit the bank account until the end of the season, but still counts as revenue for that season's accounts it's just that they don't get it until the end of the financial year. The opposite happens with season tickets when they get the cash up front and take it to revenue in the accounts on a match by match basis. In the past when season ticket income and broadcasting income were similar they balanced each other out so no real need to borrow money, but now with broadcasting income counting for the majority of revenue, they need loans to manage the cash flow.
If we went down this year we will still get our normal share of broadcasting income - in future years we would get parachute payments.
In the recent vote by the PL clubs about redistributing some of the international broadcasting revenues based upon league position (the so called big 6 wanting a greater share), the Club actually voted in favour of the proposal - as it meant the top 11 clubs would all get more money. The biggest losers would not have been the bottom 9, but the proposed reduction in parachute payments for relegated clubs in subsequent years.