• City investors are intent on charging 25 per cent on borrowings up to £100m
  • Firms are offering loans way above Bank of England’s 0.1 per cent base rate
  • They are bidding to cash in on the economic uncertainty, according to reports 

This story has broken this morning, and it is only “according to reports” – a phrase I have often poked fun at, but this time it appears to fit with the facts we know as the piece argues that the loans are being sought just to allow the clubs to stay in business, not for any adventure into the transfer market.

The Sun, venturing into the same territory says that at least four Premier League clubs are ‘at the mercy’ of private equity or venture capitalist firms which are finding takers for these loans even at this insane level of interest (which they have no means of repaying) simply to avoid collapsing now.  The implication is that they can’t pay May’s salaries.

And this is simply because they have virtually no revenue stream, and no one else is willing to lend money to companies that are so very obviously in desperate trouble.

Part of the problem for the clubs is that they are unable to say to lenders not just when they will be able to repay any loan they take out, but also how they will be able to do so.  As you may know, if you have ever sought to take out a loan without having a solid job or a house or something else that shows how you can pay it back, you quickly come at the mercy of the money lenders.

These companies charge huge interest because a) some of their loans will turn bad and they will lose their money and b) no one else is offering to lend money.

The fact is that returning to playing behind closed doors, will not itself bring in any more money – it will simply reduce the size of the claim being made by Sky, BT and the overseas rights holders against the clubs.

That debt is currently being estimated at £762 million spread among the PL clubs.   Since the games cannot be played at their proper time, nor with crowds present, the broadcasters will still have a huge claim to make at the end of the season, and these debt-laden clubs have no way to pay it.

Of course it is not just a Premier League issue.  As Huddersfield owner Phil Hodgkinson was quoted as saying in a BBC interview, “The problem is not whether we finish [this] season or not, it is what happens after that.

“If we don’t come to an agreement there will be no football pyramid. There are clubs I know of that are only still trading because they are deferring wages, tax payments and other creditors. They will need paying at some point.”