Interest Free Loan

Thenumber1blue

Well-Known Member
Joined
19 Apr 2009
Messages
5,904
Newcastles debt is an interest free loan from Mike Ashley !

Debt is apparently ok in football !

Anyone know why we have never looked into doing this ?
 
This has been covered numerous times but there's always someone who asks the question without asking themselves why, if it's such a great idea, the financial and legal brains at ADUG haven't thought of it already.

FFP is based on income and expenses. Debt is not income. If you borrow money for a car or a mortgage, it's not part of your income. But the repayment is an expense.

ADUG can plough as much money as they want into the club's bank account but it's not income. If we spend it though, it's an expense and therefore taken into account for FFP.
 
Even if PB's post wasn't true and we did loan ourselves a big wedge it would be deemed cheating in our case anyway.
 
Football is a big, expensive business and the salaries employed are way out of kilter with general risks that go with the game as opposed to any other large scale business whereby anything goes so long as it is legal. Another thing, as the previous couple of posts point out, it counts as debt and this is something that is anathema to FIFA. Nevertheless, certain type of debt IS permitted such as that which is deemed to have an investment benefit and this we see with those funds used to rebuild stadiums and to develop academies. City had no problem with this whereas lower to mid-ranking clubs outside of London would find this impossible. Maybe ADUG could help other clubs in this predicament by offering interest free loans for these purposes. In itself, this would not help us in a monetary way, but if the Premier League were at some time in the future wish to tighten up on it's own FFP rules, maybe loans of this nature might be a way of influencing votes in a positive way.
 

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