Council rejects rescue plan for Salford City Reds
Councillors today rejected a rescue plan for the troubled Salford City Reds.
They refused to agree a £750,000 lifeline for the club as part of a proposed new joint venture between Salford City Council and Peel, which would have taken-over the running of the club.
The city's Cabinet had been asked to agree a maximum £750,000 loan until November of next year. Peel were also due to provide a further £750,000 loan.
But now the joint venture deal is off the table after councillors expressed concern about the financial viability of the rescue plan, the level of risk of such a loan, and embarking on such a joint venture in the current economic climate. The council has already invested £1.5 million into the Reds.
The Reds were served with a winding up petition in October because of unpaid bills and has already had their bank account frozen.
Salford City Mayor Ian Stewart, and his deputy Councillor David Lancaster did not attend the meeting, took no part in the debate and did not vote, on legal advice.
Mr Stewart said the decision had been taken with a heavy heart by councillors and would be a great disappointment for thousands of local Reds fans.
But he added: "Times are tough and in many ways, the Reds are yet another victim of the recession.
"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 cash flow 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 takeover to act extremely quickly before the club board of directors make a final decision on the future of Salford City Reds."
- Date published
- Wednesday, 12 December 2012
- Reference number
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