The Salford Council and Peel Holdings joint venture stadium company – still amusingly officially titled The City of Salford Community Stadium Limited – recorded losses of £10.278million in the year to 31st March 2013, latest accounts reveal.
The Stadium – now called the AJ Bell Stadium after Sale Sharks were handed the naming rights – was built with a £22million loan from Salford Council, with a further £600,000 public money loan approved this year "to enable it to fully discharge its liabilities" (see previous Salford Star article – click here).
The £10.278million losses include `impairment losses' of £7.9million, essentially a de-valuing of the stadium – which, adding in `impairment losses' of previous years, would appear to have reduced the stadium's value from £19million in 2011 to £7.649million in 2013.
Cynics might argue that this is preparing for a cut price sale of the loss making stadium to Marwan Koukash, who took over Salford City Reds rugby club this year, vowing to buy the ground.
Apart from the £7.9million `impairment loss', the stadium company lost £695,000 on `cost of sales', £834,000 on `administrative expenses', and over £1.1million on loan interest - leaving a total loss of £10.278million, compared to a £4.335million loss in 2012 when the ground was barely functional (see previous Salford Star article - click here).
Even without the write-down of the stadium's value, losses were still over £2million in the year 2012-2013, and the accounts show a `net liability' of almost £1.8million.
Oustanding loans total £22.423million, compared to £18.865million last year. And Salford Council was owed over £21.621million as at March 2013. The accounts record the interest payments as "nil".
Salford council tax payers, facing huge cuts to jobs and services, will be pleased to hear, however, that the directors of the Stadium company (which includes only Councillor David Lancaster as an accountable rep from the Council) have "received comfort from the directors of Salford City Council that the necessary level of support will be provided to the company".
Salford council tax payers will also be pleased to hear, we're sure, that Salford Council is directly employing a `Stadium Client Manager' on a salary band between £65,478 and £72,027…and that consultant D and R Tinker Ltd, run by former Salford Council employee Dave Tinker, was paid £12,354.63 "in relation to support to the stadium and its tenants" (see previous Salford Star article – click here).
They are obviously doing a good job because the accounts note that "match day income was lower than anticipated" due to "lower than anticipated attendance figures for both Salford City Reds and Sale Sharks".
Meanwhile, the stadium naming rights – which saw the word `Salford' taken from the ground's AJ Bell title - were handed to Sale Sharks as part of a deal drawn up in the hire agreement. The accounts state that "Sale Sharks were granted the entitlement to grant naming rights at the Stadium for a period of ten years subject to an annual payment". So, Salfordians will never know how much the Council ditched the city's name for…
While the actual stadium has been de-valued in the accounts, the land around it has not, and remains almost the same as it was in the previous accounts, apparently £15million. Statements from the company declare that the new road – the Western Gateway Infrastructure Scheme or WGIS – will "assist with the development of marketing opportunities"…
…Plans for this include retail and hotel sites…which could possibly be linked to other potential developments in the area – Port Salford and the controversial fracking industry.
Salford Council and Mayor Ian Stewart are currently sitting on the fence concerning fracking – but questions must be asked about conflicts of interest should the fracking issue come up, as the industry would certainly benefit land values around the Barton stadium – and bale the Council out of one mighty financial hole its dug itself at a time when cuts are killing the city.