Dr. Daniel Plumley, an expert in football finance, has joined us as our sole West Brom contributor. He’ll give his thoughts on the week’s hot subjects at The Hawthorns…
Dan Plumley has suggested that any potential acquisition of West Brom will include loan payback conversations.
According to the Daily Mail, Fred Chesnais is in talks to buy the club and its assets, including the stadium and training facilities, for £60 million.
The club has £12 million in unpaid loans, according to iNews, and Plumley stated that settlement of those liabilities following any takeover would most certainly be included in negotiations with Guochuan Lai.
“It’s always a negotiation,” he told West Brom News exclusively.
“I think from a due diligence standpoint, what you’d expect a good ownership that’s coming in and looking to buy the whole club to do is look at the debt attached to that club and where it sits, and you should budget for that.”
“You must factor that into your calculations in relation to the total price of the club, which is whatever the club is plus all the other debt collateral attached to it.”
“At that point, it becomes a negotiation, and you may not go in and play your hand by saying that’s the value, because it has all the debt loaded in.”
You’re probably going to start a bit lower, and there will probably be a discussion about that specific section of the debt, which is where it sometimes gets really complicated and where it frequently gets held up as it comes down to the details.
The individual who owes the money should probably bear the obligation, but it’s never that straightforward.
