Things were looking bleak at Hull City over the summer and there were fears that the club could be forced into administration. The short-term picture is now looking better, although challenges remain in the medium and long-term.
Things were looking bleak at Hull City over the summer and there were fears that the club could be forced into administration. The short-term picture is now looking better, although challenges remain in the medium and long-term.
Three things have helped. In August, a refinancing packing was agreed with Investec, the club’s bank, over a £9m loan. 23 players have been moved out and millions trimmed off the wage bill, although it will need to be reduced further over the next two transfer windows. The payment of some football creditors has been deferred with their agreement. They will still need to paid off within 12 months, but the club has gained more time to find new sources of finance.
Their strategy, which is sensible enough, appears to rely on going for relatively small sums from a range of sources, including medium-term loans from institutions and private investors on longer-term arrangements.
As far as the financial institutions are concerned, given that football clubs are perceived to be a risky investment, they are likely to ask for a high rate of interest – which even Manchester United has had to pay. For individuals, one might offer a variety of packages, including top quality match day hospitality, but some interested individuals might want a say in running the club and that is unlikely to be available.