Back in the days when John Wilkinson owned Salford Reds, Salford Council contrived around £1.5million of loans to his company Salford Football Club Company (1914) Limited.
When Marwan Koukash took over the club in 2013 he agreed to take on that debt, and over £1million debts to other creditors, via a Company Voluntary Arrangement (CVA) with his company Salford City Reds (2013) Limited.
The terms for the CVA, the Salford Star has understood, were that Salford Council would receive 4/25ths of what it was owed - a total of £253,291 - by 2018, with the rest of the debt - £1.33million – spread until 2038, interest free.
The CVA payments to the Council were to be paid directly to the Council from RFL (Rugby Football League) amounts due to the club from tv rights and stuff. However, in summer 2015, the then City Mayor, Ian Stewart, agreed a payment holiday on the CVA for 17 months, meaning that the club didn't have to pay the Council and other creditors for that period.
The 'holiday' was extended by current City Mayor, Paul Dennett, for a further twelve months last Christmas. And now the Mayor has extended the 'holiday' for a further 36 months, in a decision taken under 'special urgency',with no input from any other councillors.
"The beneficial owner of Salford (2013) is transferring the ownership of the club, the
aim is to be self-sufficient with no further funding from the benefactor" states the official Council 'holiday' decision notice "Salford (2013) requires a period to consolidate its finances. The supervisor will then determine the level of payments that Salford (2013) would be able to make based on the previous year's income and expenditure and the projections for the year ahead."
From this statement, it looks like Koukash has washed his hands of the club, and handed a financial basket case over to a new Trust (of which no public details are forthcoming as yet) that will now be responsible for historic debts. Yet no Salford councillor or Mayor has yet taken responsibility for the historic financial cock-up that gave rise to loans and grants to Wilkinson's Reds in the first place.
According to the latest Salford City Council accounts for 2016/17, the long term Salford Reds debt is £1.061million, up from £1.038million the year before.
As part of the payment holiday agreement, the Council has insisted that "SFC 2013 settles its debt immediately with the council of £17,000 for ICT services previously delivered"; that "SFC 2013 makes a payment of £30,000 each year into the CVA to distribute to creditors"; that "SFC 2013 commits to honouring its Commercial Agreement and playing all of its home games at the City of Salford Community
Stadium"; and that it "retains the club name"...
* Salford Council is also currently helping out Salford Red Devils with an advertising campaign to push tickets for the new season, using an image by Salford Star photographer, Gareth Lyons.