Salford City Reds has received a £350,000 loan from Salford City Council, yet the Council isn't disclosing in full what the loan is for. There are rumours that the money is being used for ongoing costs at the club, which would suggest that the Red Devils have serious financial problems.
When asked to confirm whether the loan was to pay wages, Salford Council Leader, John Merry, didn't deny it. But would only say "We're committed to ensuring the club sees its way into 2012 at its new stadium, and last year we provided a loan of £350,000 to them to help do this."
Yet, as has been previously revealed, Salford City Council is already setting up a Joint Venture Company with Peel Holdings and has agreed to take out a possible £20million loan for the new stadium's construction. At this present time the Reds don't actually have a stadium to move into, and the carefully worded statement from John Merry …`helping them see their way into 2012' doesn't really mean anything.
Meanwhile, the Reds don't actually own their current stadium at The Willows. It was sold to Godliman Watson Homes Ltd by the Wilkinson Corporation last year. So questions must also be asked about the collateral that has guaranteed the loan.
Long suffering Salford City Reds fans, who have witnessed numerous disappointments in connection with the new stadium, will be asking what security the club has going into the future, and about the current financial situation of the club, as a new season begins.
John Merry added "Salford City Reds is a premier league club and its presence plays an important part in the city's economy and its future.
"The club puts a lot back into our communities and works tirelessly with young people and schools and we will support it like any other organisation that benefits the city in such a way."