Kieran Maguire, a financial expert in football, has called West Brom’s interest rates on potential loans “exorbitant.”
Early in 2023, the parent company of the Baggies borrowed £2 million from Warmfront Holdings before promptly lending the same sum to a different business at a cheaper interest rate [Kieran Maguire, 6 April].
Maguire highlighted the structure of the Baggies loan shortly after talking about the “clown-show years” when Bolton Wanderers experienced financial difficulties, raising questions about the nature of teams getting loans from outside corporations and whether or not it is a secure process.
Mature claimed in an interview with The Price of Football on September 25 that West Bromwich Albion was paying interest on a loan they had taken out from Warmfront Holdings. Currently assuming that the loan is not being returned at 5% per month
“That calculates out to 77 percent interest per year when compounded. With those interest rates, it borders on loan sharking. It may also be a reflection of the level of risk that lenders would assign to a West Brom institution owned by Guochuan Lai, which is a another matter.
West Brom is in a dangerous situation. There are laws governing some forms of borrowing from football clubs, but it is still feasible to take out expensive loans from the owner or other parties.
Worrying
One of the top names on the list of football club business rivals to avoid is Ken Anderson’s Bolton Wanderers, but alarmingly, that is exactly where West Brom currently stand.
It is an example of how fiscally careless those in charge at The Hawthorns are now being because Anderson and Bolton’s loan from Sports Shield only had a 4% interest rate compared to the Baggies’ 5%.
If this keeps up, West Brom’s financial and footballing future may be drawn into a very unsettling situation that may put everyone connected to the Albion in risk.
The Sports Minister Stuart Andrew and Conservative MP Nicola Richards had discussions on how an independent regulator could support organizations like the Baggies [12 September].
However, the asking price for acquiring the Baggies is presently £50 million, and despite interest from the United States and the Middle East, there won’t be many buyers willing to make that kind of payment given the financial uncertainties at The Hawthorns [Daily Mail, 20 September].
To prevent this from getting much worse and spiraling out of control, something urgently needs to be done.
