Salford financial issues(again…)

[Charlie]

2 hours ago, DemonUK said:

Why would the bid be put in to the RFL? They are buying Salford not the RFL. Just because someone says something does not mean it's a fact. It's more a rumour which is also what you could apply to the fact there is an investor group. Rumours can become fact. Will they? I hope so for the sake of Salford and also for the game.

https://www.examinerlive.co.uk/sport/rugby-league/major-update-salford-red-devils-30839039

[Dave T]

There are three ways this goes as far as I see it.

1. New investment. Clearly the best option, and if the team is not decimated then even better. This has to be the aim.

2. Major cost cutting and scraping funds to survive. Second best option. If no investor is on the cards, they need to spend less and probably encounter a very tough season and likely exit SL at the end of the year.

3. Go bust. It all goes belly up, the club goes into admin and potentially fails to see out the season. This has to be avoided really.

The aim here is still no.1. That's clearly what the RFL, Salford and the SL clubs are wanting and is being worked towards. Of course there is risk associated with this, but the whole situation is risky. People are jumping straight to number 2, ignoring that number 1 is still alive as an option here. That's not to say that it will come off, it can still all go very wrong, but if there is a genuine offer on the cards then it just needs to be allowed to play out.

Maybe, just maybe the whole "Salford must sell immediately" was a nudge along to the potential investors.

[Dave T]

There are three ways this goes as far as I see it.

1. New investment. Clearly the best option, and if the team is not decimated then even better. This has to be the aim.

2. Major cost cutting and scraping funds to survive. Second best option. If no investor is on the cards, they need to spend less and probably encounter a very tough season and likely exit SL at the end of the year.

3. Go bust. It all goes belly up, the club goes into admin and potentially fails to see out the season. This has to be avoided really.

The aim here is still no.1. That's clearly what the RFL, Salford and the SL clubs are wanting and is being worked towards. Of course there is risk associated with this, but the whole situation is risky. People are jumping straight to number 2, ignoring that number 1 is still alive as an option here. That's not to say that it will come off, it can still all go very wrong, but if there is a genuine offer on the cards then it just needs to be allowed to play out.

Maybe, just maybe the whole "Salford must sell immediately" was a nudge along to the potential investors.

[Worzel]

21 minutes ago, Dave T said:

Maybe, just maybe the whole "Salford must sell immediately" was a nudge along to the potential investors.

I think that gives the RFL more agency that they have to be honest, it's a nice thought though!

Hopefully Salford do get the investment they need, but I still think they're playing Russian roulette and it's the whole league that the gun is pointed at rather than them. They should have started offloading players by now, the process needs deadlines with teeth otherwise if your scenario 1 fails (but too late) then we're only left with scenario 3 having lost the time to right-size the business before the season starts. 

[Dave T]

5 minutes ago, Worzel said:

I think that gives the RFL more agency that they have to be honest, it's a nice thought though!

Hopefully Salford do get the investment they need, but I still think they're playing Russian roulette and it's the whole league that the gun is pointed at rather than them. They should have started offloading players by now, the process needs deadlines with teeth otherwise if your scenario 1 fails (but too late) then we're only left with scenario 3 having lost the time to right-size the business before the season starts. 

I agree it's a gamble, but there are a couple of things we don't know just yet. Firstly how credible this offer is, and secondly what exactly is the genuine hard deadline.

We should also remember that if Salford offloaded 4 players off their payroll this month it may save them say £50-60k a month. I don't think there are huge sums of money being left on the table at the moment - nobody is paying a large transfer fee for Sneyd or Watkins really.

Selling players today doesn't bank them £800k and fix this.

Investment is the only real fix available.

Edited January 27 by Dave T

[The Future is League]

On 26/01/2025 at 16:15, JohnM said:

Investor or not, it'll keep dragging on. If they don't get an Investor, the "discussion" will continue...

If they do get investors, the "discussion" will continue: What's the motivation,hidden agenda, secret deal etc

What's happening now is that the precedent has now been set for clubs in the future if they find themselves in the same situation as the Red Devils and there is nothing the RFL/Super League can do about it.

[LeytherRob]

13 minutes ago, Dave T said:

I agree it's a gamble, but there are a couple of things we don't know just yet. Firstly how credible this offer is, and secondly what exactly is the genuine hard deadline.

We should also remember that if Salford offloaded 4 players off their payroll this month it may save them say £50-60k a month. I don't think there are huge sums of money being left on the table at the moment - nobody is paying a large transfer fee for Sneyd or Watkins really.

Selling players today doesn't bank them £800k and fix this.

Investment is the only real fix available.

The sustainability cap is to reduce the costs for the season by £800k, not find it right now. So selling a Sneyd or Watkins now could save 100-150k of that target.

The big question is whether or not the prospective new buyers have/are willing to provide funds in the meantime to keep SRD solvent, because they only have 2 home games (Leeds 22nd Feb and Hudds 20th March) covering the next 3 payrolls for Jan, Feb, March. In fact it's not until June that they start to really get all their home games hitting at once.

[RP London]

On 24/01/2025 at 16:04, M j M said:

It's not that subjective once now it's in place but the decisions on what metrics to include, what weighting to give them and where the line was drawn for an A grade were choices which were made. It could easily have been sliced very differently, with less weight on things which heavily favoured SL incumbency for example, with material impacts on how the gradings turned out.

Of course, but that is the same with anything, and again, change where those rules are and the behaviour around them automatically changes. 

[Worzel]

30 minutes ago, Dave T said:

I agree it's a gamble, but there are a couple of things we don't know just yet. Firstly how credible this offer is, and secondly what exactly is the genuine hard deadline.

We should also remember that if Salford offloaded 4 players off their payroll this month it may save them say £50-60k a month. I don't think there are huge sums of money being left on the table at the moment - nobody is paying a large transfer fee for Sneyd or Watkins really.

Selling players today doesn't bank them £800k and fix this.

Investment is the only real fix available.

I don't have the impression they have an immediate cashflow crisis, the £800k number is more about long-term running costs. £50k per month is £600k a year and would go a very long way to bridging that gap. The best time to have adjusted Salford's cost base was several years ago, but the 2nd best time to make a change you wished you'd made sooner is always "today".

I just think it's important we still make your scenario 2 possible. New investors can always re-stock the squad later on, the objective here is to keep Salford alive not "keep hopes of a Top 6 finish alive". There will be other seasons, if we're prudent now. If we're not, there may not be. 

 

[dealwithit]

Even without investment, they just need to offload a half dozen players and then try and loan a few replacements or give a few kids a top squad position. They’ll be fine if they just live within their means. Obviously the stadium deal and billboard are important parts of their revenue projections. London operated off half the cap and managed. Salford will have far more luck loaning players than london. 

[Dave T]

33 minutes ago, LeytherRob said:

The sustainability cap is to reduce the costs for the season by £800k, not find it right now. So selling a Sneyd or Watkins now could save 100-150k of that target.

The big question is whether or not the prospective new buyers have/are willing to provide funds in the meantime to keep SRD solvent, because they only have 2 home games (Leeds 22nd Feb and Hudds 20th March) covering the next 3 payrolls for Jan, Feb, March. In fact it's not until June that they start to really get all their home games hitting at once.

 

25 minutes ago, Worzel said:

I don't have the impression they have an immediate cashflow crisis, the £800k number is more about long-term running costs. £50k per month is £600k a year and would go a very long way to bridging that gap. The best time to have adjusted Salford's cost base was several years ago, but the 2nd best time to make a change you wished you'd made sooner is always "today".

I just think it's important we still make your scenario 2 possible. New investors can always re-stock the squad later on, the objective here is to keep Salford alive not "keep hopes of a Top 6 finish alive". There will be other seasons, if we're prudent now. If we're not, there may not be. 

 

I take both of these points. I just don't necessarily come to the conclusion that it has to be today (or a few weeks back really!). 

If cashflow is manageable at the moment (and it may not be and they are being 100% reckless!) then I can live with delays to an extent. As you highlight Worzel, the reduction is a long term solution, but it is based on there being no new investor - it is the way they stay alive with the current setup. 

If the offer for the club is genuine and strong, then the solution is different. 

[Dave T]

To add one final point, out of the two options that see them survive - the option that sees additional investment and them have a strong team is by far the better option than cutting costs to the bare minimum. 

The cost-cutting option is the last chance saloon play, but if they have a genuine decent offer (and often these things aren't as good as they seem) then Salford potentially come out of this a far stronger club. 

[Charlie]

Just now, Dave T said:

To add one final point, out of the two options that see them survive - the option that sees additional investment and them have a strong team is by far the better option than cutting costs to the bare minimum. 

The cost-cutting option is the last chance saloon play, but if they have a genuine decent offer (and often these things aren't as good as they seem) then Salford potentially come out of this a far stronger club. 

This is exactly why there are delays, a bid has been made and there going to wait until that’s sorted or not until anyone is sold. 
 

intresting point the rfl did register all Salfords players this week despite talks they east going to if no players were sold.

[DemonUK]

They don't have to find the 800k right now as someone pointed out, but the investor has to promise to fill that hole found by the RFL over the season.  Also I am impressed how leak proof the stated NDA is considering the number of people who have reported on the offer from speaking to Salford or copying another journos piece.

I may be on my own here, but I do not think there is a serious investor or a serious group of investors.  If I am wrong I apologise but the way this is being carried out is mighty unprofessional.  We have so far had 3 promised dates for expected offers to be announced.  When it doesn't happen nothing is said by the club. In two weeks time the CC starts and all the players who play for Salford that day will be cup-tied.  Have any of the supporter shareholders (there's quite a few) been made aware of the offers made.

A devils advocate view from the outside.

[dkw]

5 hours ago, DemonUK said:

Why would the bid be put in to the RFL? They are buying Salford not the RFL. Just because someone says something does not mean it's a fact. It's more a rumour which is also what you could apply to the fact there is an investor group. Rumours can become fact. Will they? I hope so for the sake of Salford and also for the game.

I think its because the RFL issued and regulate the Superleague (RL?) Licence that Salford have, they will need to be involved in the purchase as they need to agree the transfer of Licence.

[Charlie]

12 minutes ago, DemonUK said:

They don't have to find the 800k right now as someone pointed out, but the investor has to promise to fill that hole found by the RFL over the season.  Also I am impressed how leak proof the stated NDA is considering the number of people who have reported on the offer from speaking to Salford or copying another journos piece.

I may be on my own here, but I do not think there is a serious investor or a serious group of investors.  If I am wrong I apologise but the way this is being carried out is mighty unprofessional.  We have so far had 3 promised dates for expected offers to be announced.  When it doesn't happen nothing is said by the club. In two weeks time the CC starts and all the players who play for Salford that day will be cup-tied.  Have any of the supporter shareholders (there's quite a few) been made aware of the offers made.

A devils advocate view from the outside.

If the jernos are to be believed there has been a offer 

[Dullish Mood]

Let them go bust, replace them with Goole.  SL expansion box ticked.  Sorted.

[Taffy Tiger]

I thought that without investment they initially had to reduce salary cap to £1.2M immediately ?

[Dave T]

6 minutes ago, Taffy Tiger said:

I thought that without investment they initially had to reduce salary cap to £1.2M immediately ?

I suppose this is the point. Investment is being pursued. 

Of course whether it's a good and serious offer is the question.

[İzmir Rugby League]

Could Toulouse theoretically "buy" Salfords Super League licence? (Like Ottawa did originally)

[Barley Mow]

53 minutes ago, İzmir Rugby League said:

Could Toulouse theoretically "buy" Salfords Super League licence? (Like Ottawa did originally)

No. There is no Super League licence.

The way it currently works is that full member clubs (of the RFL), plus 2 guest clubs, get a place in one of the three tiers of pro-competition. The top 12 ranked of those clubs (under the grading system) get a place in SL, the others are in Championship or L1 depending on on-field performance. All 34 British full member clubs have the same status and SL clubs don't have any extra licence - just a better IMG grade.

The two guest clubs are Catalans and Toulouse who are members of the French Federation rather than the RFL.

Ottawa bought the professional operation at Hemel rather than a licence (essentially buying the club, except for its continuing amateur teams), the benefit to them was that they got the RFL membership. The RFL approved the purchase and a change in name/location from Hemel to Ottawa (and then to Cornwall).

If Toulouse were to do something similar with Salford, I doubt the RFL or FFRXIII would approve it - A Toulouse club already exists and plays in the British system - Both governing bodies could be seen to be losing a member club. From the RFL's point of view, they may as well just let Salford go bust - Toulouse have the next highest IMG grade anyway.

Edited January 27 by Barley Mow

[Exiled Wiganer]

There is more than one option 1 in Dave T’s scenario. 
There is cashflow and there is debt. As as I can see there is nothing stopping a potential bidder from saying to the RFL that they want to do a Bradford: wind up the old company, leaving the creditors high and dry, and laughing in Toulouse’s face, then acquiring the membership and right to use the stadium. And away they go. They may even make it conditional on not being punished in the next assessment. 
The game would then be faced with a take or leave it 11 or 12 team competition. That would be entirely consistent with there being no announcements or deadlines being missed. They have what they want for now - a stay of execution making it impossible for them to be kicked out whatever the terms of the offer. 

And all this happening in year one of the all new professional super league as we have never seen it before era. 

[RigbyLuger]

The RFL couldn't allow such conditions of a takeover as every other club would, rightly, complain. Salford's mess is of their own doing, and if they can't get out of it, that's not for other clubs/business to suffer.

[Taffy Tiger]

32 minutes ago, Exiled Wiganer said:

There is more than one option 1 in Dave T’s scenario. 
There is cashflow and there is debt. As as I can see there is nothing stopping a potential bidder from saying to the RFL that they want to do a Bradford: wind up the old company, leaving the creditors high and dry, and laughing in Toulouse’s face, then acquiring the membership and right to use the stadium. And away they go. They may even make it conditional on not being punished in the next assessment. 
The game would then be faced with a take or leave it 11 or 12 team competition. That would be entirely consistent with there being no announcements or deadlines being missed. They have what they want for now - a stay of execution making it impossible for them to be kicked out whatever the terms of the offer. 

And all this happening in year one of the all new professional super league as we have never seen it before era. 

I'm not sure they would be able to dictate to RFL , especially any condition for not being punished at the next assessment . We already know they would lose half of their finance points and SL/RFL already had contingency plans to go to 11 teams (snippit form LRL article below) in the event of Salford pulling out

 

''There has been speculation Super League have privately made plans to go to an 11-team competition should the worst happen and Salford’s financial crisis escalate: even if the chances of that are thinning as the days progress, with a takeover close.''

Edited January 27 by Taffy Tiger

[binosh]

6 hours ago, Worzel said:

I don't have the impression they have an immediate cashflow crisis, the £800k number is more about long-term running costs. £50k per month is £600k a year and would go a very long way to bridging that gap. The best time to have adjusted Salford's cost base was several years ago, but the 2nd best time to make a change you wished you'd made sooner is always "today".

I just think it's important we still make your scenario 2 possible. New investors can always re-stock the squad later on, the objective here is to keep Salford alive not "keep hopes of a Top 6 finish alive". There will be other seasons, if we're prudent now. If we're not, there may not be. 

 

I don’t know how they can’t have an immediate cash flow problem, they needed £500k advance already just to make payroll and pay HMRC, the RFL have told them to offload players immediately and we were told they phoned clubs themselves in a panic a few weeks back. 
 

They have ignored everything so far and have treated this scenario exactly like they have treated their budget before, like amateurs. They have a gun to the head of the RFL and have little to no respect for the other clubs, if this deal collapses they are risking the whole season and the relationship with Sky.