Salford financial issues(again…)

[DemonUK]

At the next SRD fsns forum, maybe someone should ask what were the amounts the club borrowed in May/July and August 2024.  There are 3 charges (debentures) registered all secured on any SRD asset from what I can see.  Before anyone has a go at me for releasing confidential information, it is not and is easily available in the public domain.

[Henson Park Old Firm]

https://www.loverugbyleague.com/post/nrl-owners-approached-over-potential-super-league-investment-as-financial-outlook-disclosed

[Toby Chopra]

This will all keep repeating itself until Salford pushes up their crowds to the 7k+ level as KR and Leigh have done.

But unlike those two, Salford don't seem to have a huge latent traditional support to activate, or at least they haven't been able to.

However, the City of Salford's has been one of the fastest growing places in the UK in the last decade and a large number of those arrivals are of substantial means - Manchester spillover and media etc. 

Somehow Salford haven't been able to tap that. Now to be fair, this isn't just a Salford problem, it's also a rugby league problem: our sport struggles often struggles to project itself into less traditional segments, even when the sporting excellence is recognised.

But Salford really need to crack this as that's where the potential and sustainability lie.

Edited November 26, 2024 by Toby Chopra

[JT RL]

Between 1960 and 1990 over 49,000 jobs were lost and over 65,000 people left Salford

[LeytherRob]

https://www.examinerlive.co.uk/sport/rugby-league/news/salford-red-devils-funding-deal-30456507
 

Some more explanation on the special measures-

As part of the conditions, which have seen Salford enter special measures, both the RFL and Rugby League Commercial will be hiring a figure tasked with improving the financial health of the club. The main instruction is to ensure that Salford's costs are at a point where the club can be sustainable and not in a position where further financial issues could arise.

That process will likely see the person or company appointed taking a deeper look at the finances of the club and working out what needs to be done to ensure the club can wash its face. That, inevitably, will result in the club having to scale back its spending.

Essentially, you could argue that Salford will be treated like a club that are in administration, but without the penalties that come with that because, and to be absolutely clear here, the club hasn't entered administration. However, the process that they are about to be subjected to is very similar to the one that a club under those circumstances would experience.

The extent of that, as well as the process of executing it, won't be determined until the regulators are in but there is an expectation both internally and externally at the club that it will result in some players leaving the club to lower the wage bill.

There are some moving parts in all this, with Salford currently seeking investment while they also hope the completion of the stadium deal will allow them to sign off on commercial deals and other streams that will bring in revenue. Should those things come to fruition, the likelihood is that the nature of the scale-back won't be as extensive.

But there is an expectation that, at present, considerable changes are likely to be forced on the club to ensure there isn't a repeat of their current situation.

 

[Worzel]

2 hours ago, Ainley Top said:

Wakefield and Castleford have been cheating the system for 20 odd years!

Well neither of them used a squad they couldn't afford to relegate my club, so you'll excuse me for not being as bothered as I am about the other cheats. 

[Worzel]

2 hours ago, Archie Gordon said:

It's a worry when 12th, 13th and 14th on the gradings are in some trouble. Fingers crossed.

I'd say it's to be expected, that's the segment that are trying perhaps a little too hard to be competitive with the 11th. 

[gingerjon]

16 minutes ago, JT RL said:

Between 1960 and 1990 over 49,000 jobs were lost and over 65,000 people left Salford

1990 was 34 years ago. Which makes it as close to today as 1956 was to 1990.

[JT RL]

Between 1960 and 1990 over 49,000 jobs were lost and 

1 minute ago, gingerjon said:

1990 was 34 years ago. Which makes it as close to today as 1956 was to 1990.

When did they move to the back of beyond ? 
 

[JT RL]

While the population of Salford has risen sharply since 2010

[Dave T]

5 hours ago, Archie Gordon said:

It's a worry when 12th, 13th and 14th on the gradings are in some trouble. Fingers crossed.

Probably the bigger worry is that i expect many more than that are no more than a modest shock event away from being in severe financial trouble.

[Trojan Horse]

2 hours ago, Worzel said:

Well neither of them used a squad they couldn't afford to relegate my club, so you'll excuse me for not being as bothered as I am about the other cheats. 

I wouldn’t waste the oxygen on such a lacking comment like that. 

[Trojan Horse]

3 hours ago, LeytherRob said:

https://www.examinerlive.co.uk/sport/rugby-league/news/salford-red-devils-funding-deal-30456507
 

Some more explanation on the special measures-

As part of the conditions, which have seen Salford enter special measures, both the RFL and Rugby League Commercial will be hiring a figure tasked with improving the financial health of the club. The main instruction is to ensure that Salford's costs are at a point where the club can be sustainable and not in a position where further financial issues could arise.

That process will likely see the person or company appointed taking a deeper look at the finances of the club and working out what needs to be done to ensure the club can wash its face. That, inevitably, will result in the club having to scale back its spending.

Essentially, you could argue that Salford will be treated like a club that are in administration, but without the penalties that come with that because, and to be absolutely clear here, the club hasn't entered administration. However, the process that they are about to be subjected to is very similar to the one that a club under those circumstances would experience.

The extent of that, as well as the process of executing it, won't be determined until the regulators are in but there is an expectation both internally and externally at the club that it will result in some players leaving the club to lower the wage bill.

There are some moving parts in all this, with Salford currently seeking investment while they also hope the completion of the stadium deal will allow them to sign off on commercial deals and other streams that will bring in revenue. Should those things come to fruition, the likelihood is that the nature of the scale-back won't be as extensive.

But there is an expectation that, at present, considerable changes are likely to be forced on the club to ensure there isn't a repeat of their current situation.

 

I mean, while I completely get this it’s also offering a helping hand to Salford and basically offering free financial consultation and advice to enable them to do what they should be doing. 
 

Not sure that teams like Halifax and other teams like Whitehaven get the same offer of support, either enforced or not. 
 

On one hand it appears a monitor but on the other it’s free financial review and advice.

 

I would have thought that the club would have to pay for their own financial advice like other clubs and that is what should be reviewed.
 

It seems like this is a repeat of 12 months ago November 2023 when the RFL put Salford in ‘special measures’ for which they afterwards continued to sign players….. let’s hope what seemed like a failed special measures recently isn’t repeated by the RFL or Salford.

 

Regardless, I don’t want to be critical too much despite the above. This is good news for the Salford club and fans. Hopefully it’s a valuable lesson for the Salford club which will help them better understand their finances and failures that have led them to this point. 

Edited November 26, 2024 by Trojan Horse

[LeytherRob]

4 minutes ago, Trojan Horse said:

I mean, while I completely get this it’s also offering a helping hand to Salford and basically offering free financial consultation and advice to enable them to do what they should be doing. 
 

Not sure that teams like Halifax and other teams like Whitehaven get the same offer of support, either enforced or not. 
 

On one hand it appears a monitor but on the other it’s free financial review and advice.

 

I would have thought that the club would have to pay for their own financial advice like other clubs and that is what should be reviewed.
 

It seems like this is a repeat of 12 months ago November 2023 when the RFL put Salford in ‘special measures’ for which they afterwards continued to sign players….. let’s hope what seemed like a failed special measures recently isn’t repeated by the RFL or Salford.

I do find it quite damning that the RFL haven't deemed Salford fit to get their own house in order with this advance monies and have had to assign someone external - not sure if this is standard or not when put into 'special measures', I was only aware of there being a ban on registering new players. It does also raise the question as to who is paying for this external auditor.

 

 

[Trojan Horse]

11 minutes ago, LeytherRob said:

I do find it quite damning that the RFL haven't deemed Salford fit to get their own house in order with this advance monies and have had to assign someone external - not sure if this is standard or not when put into 'special measures', I was only aware of there being a ban on registering new players. It does also raise the question as to who is paying for this external auditor.

 

 

Well it looks on the face of it that the RFL will. Probably at cost to the sport. With what could be a relatively permanent roll for a few months you could be looking at quite a hefty bill/resources. With all the discontent on IMG costs I can’t imagine this would be popular if it is funded by the RFL. 

It does seem like a vote of no confidence from the RFL to Salford. Having to micromanage a club who should be self managing and have their own competent accountant/financial advisor you’d expect. 
 

You mention a ban on registering players. But didn’t the RFL allow Salford in special measures to register and sign more players after November 2023? 
 

Perhaps we have to hope that the special measures are more effective this time round. 

Edited November 26, 2024 by Trojan Horse

[LeytherRob]

10 minutes ago, Trojan Horse said:

Well it looks on the face of it that the RFL will. Probably at cost to the sport. With what could be a relatively permanent roll for a few months you could be looking at quite a hefty bill/resources. With all the discontent on IMG costs I can’t imagine this would be popular if it is funded by the RFL. 

It does seem like a vote of no confidence from the RFL to Salford. Having to micromanage a club who should be self managing and have their own competent accountant/financial advisor you’d expect. 
 

You mention a ban on registering players. But didn’t the RFL allow Salford in special measures to register and sign more players after November 2023? 
 

Perhaps we have to hope that the special measures are more effective this time round. 

https://www.rugby-league.com/flipbooks/2023-operational-rules-tiers-1-3/index.html#p=26

Wording in A3:5 (f) is: 'to comply with the conditions specified by the RFL about the value, duration and type of contract it may enter into with players and not to enter into any contract without the RFL's permission'. So they could sign players but only with RFL's permission, I imagine acceptance would be done where it's a replacement for a higher earner.

 

 

 

 

[Trojan Horse]

1 hour ago, LeytherRob said:

https://www.rugby-league.com/flipbooks/2023-operational-rules-tiers-1-3/index.html#p=26

Wording in A3:5 (f) is: 'to comply with the conditions specified by the RFL about the value, duration and type of contract it may enter into with players and not to enter into any contract without the RFL's permission'. So they could sign players but only with RFL's permission, I imagine acceptance would be done where it's a replacement for a higher earner.

 

 

 

 

So when the RFL has Salford in special measures from NOV 2023 into the 2024 season and Salford continued to sign players it must as per your statement been granted permission by the RFL. 
 

Looks like last years special measures failed to properly consider the likely outcome and hedged its bets to contribute to Salfords current predicament. 
 

Do the RFL hold some accountability for the predicament Salford have found themselves in for allowing it? 
 

Very sad state of affairs. A little embarrassing on the surface and potentially more of a mess than in the public domain. 

Edited November 26, 2024 by Trojan Horse

[The Future is League]

I hope there are conditions in place now that the Red Devils have received this advanced payment, and that the Red Devils just don't keep signing players they can't afford wages wise.

[Expatknight]

Yet again the RFL have shown that they are a not fit for purpose organisation, they put in force rules but obviously don’t enforce them which makes a mockery of the whole thing. It is about time the game sorted itself out, some clubs just meander from one crisis to another knowing that the ‘old boys club’ Will step in and bail them out, no wonder we aren’t taken seriously. I thought the whole idea of bringing IMG in was to address this sort of thing, amongst others? where is the incentive to do the right thing when the governing body says one thing then does the opposite?  I.e. you can’t sign new players you can’t afford…..unless we give you permission, so you can really , please don’t do it again, well, not until next year then we will go through the discussion again, but this is your last chance, again, honest, we really mean it this time! Oh, and by the way we will give you free advice on how your club should be run. It is about time the clubs, all of them, were sat down and told they must get their houses in order and run like proper businesses, because in this day and age, that is what they are, or, as in business, that is it, as painful as it might be, then and only then will the penny drop. It isn’t good for the sport, the fans or the clubs to continually keep going running either at a loss or demanding handouts from all and sundry, quite frankly it’s embarrassing. At the end of the day the inevitable will happen, we are just delaying it, sometimes you have to be cruel to be kind.

[JohnM]

When is Salford not Salford? Boundary changes make like-for-like 1960 - 2024 comparisons less easy.

Under the Local Government Act 1972, the Municipal Borough of Swinton of Pendlebury was abolished, and Swinton has since 1 April 1974 formed an unparished area of the City of Salford, a metropolitan borough in the metropolitan county of Greater Manchester.

Eccles became part of Salford in 1974

1974: The City and County Borough of Salford was abolished and replaced by the City of Salford, which became part of the Greater Manchester metropolitan county. 

 Walkden was amalgamated into the City of Salford metropolitan district of Greater Manchester in April 1974, as part of the provisions of the Local Government Act 1972, having previously formed part of the Worsley Urban District in the administrative county of Lancashire.

[Worzel]

4 minutes ago, JohnM said:

When is Salford not Salford? Boundary changes make like-for-like 1960 - 2024 comparisons less easy.

Under the Local Government Act 1972, the Municipal Borough of Swinton of Pendlebury was abolished, and Swinton has since 1 April 1974 formed an unparished area of the City of Salford, a metropolitan borough in the metropolitan county of Greater Manchester.

Eccles became part of Salford in 1974

1974: The City and County Borough of Salford was abolished and replaced by the City of Salford, which became part of the Greater Manchester metropolitan county. 

 Walkden was amalgamated into the City of Salford metropolitan district of Greater Manchester in April 1974, as part of the provisions of the Local Government Act 1972, having previously formed part of the Worsley Urban District in the administrative county of Lancashire.

I think that we can all safely agree that whatever definition of "Salford" we use, and whether the population is declining or growing locally, with around maybe 3,000 hardcore fans and 1,000 other regulars the club still has a lot of unaddressed audience within their catchment to have a go at!!

 

[Worzel]

20 hours ago, Taffy Tiger said:

Not so sure about Toulouse

https://www.loverugbyleague.com/post/fragile-championship-club-facing-fresh-financial-issues-as-funding-cuts-possible#:~:text=Championship heavyweights Toulouse Olympique are,from the city being cut.

As soon as night follows day, Gledhill gets called out for spreading 

 

 

[RigbyLuger]

35 minutes ago, Worzel said:

As soon as night follows day, Gledhill gets called out for spreading 

 

 

He'll still be accredited by the RFL.

[The Future is League]

44 minutes ago, RigbyLuger said:

He'll still be accredited by the RFL.

I would hope not.

[JonM]

3 hours ago, Worzel said:

I think that we can all safely agree that whatever definition of "Salford" we use, and whether the population is declining or growing locally, with around maybe 3,000 hardcore fans and 1,000 other regulars the club still has a lot of unaddressed audience within their catchment to have a go at!!

If you're lucky enough to get the cheapest tickets in the lottery that Man Utd run, reselling seats returned by a season ticket holder, for an adult + child, you'll pay £132. There's a lot of locals who can't pay those kind of prices. No wonder non-league football in Manchester (and the NW more generally) is booming.

Edited November 27, 2024 by JonM