Cash-flow is the problem...

Profit and loss versus balance sheet; income and sales can look strong based on the P&L but need cash for salaries and buying power. If it's all tied up in in creditors or long-term debt then it isn't realisable. That and risk appetite.

Most player sales have payments structured over time so £12m of sales may not appear in cash for for 2 - 3 years. However, getting high earners off the books reduces running costs immediately and helps with managing working capital.

A lot of clubs carry a mountain of debt, either to invest or to increase working capital. That's all well and good if you can service the debt but it comes with a risk. It's easier if your owner/investor is minted as they can just throw more money onto the bonfire to keep the flames going. 3rd party lenders are less keen in burning their money and want a return or at least be assured that they'll get it back with some interest.

Posted By: Worthing Yellow, Sep 1, 01:40:50