Posted by Editor on 11th December 2012 at 06:17 PM
Council rejects £750k rescue loan for Salford City Reds
By Tom Rodgers
Councillors today rejected a rescue plan for the troubled Salford City Reds.
City Mayor Ian Stewart also pledged that Salford council would "no longer help [Salford City Reds] financially".
At a closed cabinet meeting at Swinton Civic Centre today councillors failed to agree a £750,000 lifeline for the club.
The cabinet were asked to agree a maximum £750,000 loan until November of next year.
The money would have been matched by joint venture owners Peel, then the council and the developer would have taken over the running of the club.
The council faced public uproar when local news outlets got wind of the plan.
Opposition councillors branded the plans "a disgrace" and pointed out that no money had yet been paid back on the original loans to the Reds.
The joint venture deal is "off the table", say Salford council, because of concern over the riskiness of the loan, doubts that the money would be paid back, and the difficulty of starting a joint venture in the current economic climate.
The council has already given Salford City Reds loans of over £1.5 million.
The Reds were served with a winding up petition in October because of unpaid bills and have already had their bank account frozen.
Ian Stewart, who is a Director of the rugby club, did not attend the meeting and did not vote, following legal advice.
Mr Stewart said the decision had been "taken with a heavy heart" and would be a great disappointment for thousands of local Reds fans.
But he added: ”Times are tough and we would have loved to try and help them out, but given the spending cuts the city council is already facing, that proved impossible.
“The Reds have had a long and proud history in Salford over the last 116 years, but they are now victims of cashflow problems and the current economic climate.
“The city council’s ability to support the club financially is now at an end, and it is for the club’s existing Board to decide the future of the Reds.
"Whilst we can no longer help financially, we will do everything in our power to support the club and would urge any single investor or group of investors who are interested in a take-over to act extremely quickly before the Club Board of Directors make a final decision on the future of Salford City Reds.”
Comment by dc ( member ) 11th December 2012
Better than throwing a single more penny after bad though, Ruthie? We all know the club is going to end up in the pocket of Peel, it's been on the horizon for the past few years. Whether the fans want to continue to chuck in their attendance money is up to them.
Comment by Ruthie ( member ) 11th December 2012
If the club is wound up what will happend to the 1.5 million loaned to them by Salford City Council. More of my hard paid taxes down the drain.
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