"What debt? There will be no debt. This is our loan not Liverpool's"

[Exiled_red]

Let's hope this commercial guy does something special. Biggest test will be when they sell the naming rights and how much they get for that, but it will be a few years until we see that.
If the club sorts out the marketing and the stadium so they are making similar to scum there is a chance the club can overtake them on income due to the possability of naming rights. This will be a long way off but also one of the reason I now believe G&H will try everything they can to stay in charge of the club, in 5+ years the club could be a good source of funds, but getting there could be a massive problem. Also I don't think they are the right guys to get the club there.

Even if we sell the naming rights to the stadium we're not going to be able to compete with Man Utd financially as with the loan taken out to fund the purchase of the club, and the loan that will be needed to fund the stadium we will have ~£500m of debt to service which will mean repayments of ~£40-50m a year!

At the moment the club rarely makes a profit, the naming rights and shirt sponsorship (A long term deal like Arsenals) may half these debts but that would still require us paying £20m a year off in loan repayments, plus investment in players!

[Catrin]

I don't have a problem with a loan to fund the stadium being secured against the club's assets. The loan would be used to purchase an asset that would generate the revenue needed to service the debt. An extra 30,000 seats, average £30 per seat, over 25 games, £22.5m p.a. of extra revenue.

It could be more tax-efficient for some of the cost of purchasing the club to be funded by a loan secured against the assets of the club. Loan interest is an allowable expense when calculating corporation tax. Dividend payments, from which H&G could make repayments on a loan in their name, are not. The downside is that a company has a choice in whether to pay a dividend but loan interest has to be paid regardless of financial performance. Since the club is a limited company it is a legal person and can enter into contracts e.g. loan agreements. Also, H&G's liability would be limited to the value of their shares, a nominal amount if the club was largely funded by loan capital. If the club underperformed financially, H&G's personal wealth would be largely unaffected.

What I really would have a problem with is loans to buy players being secured against the club. Any time a player is signed it is a gamble as to whether he will turn out to be a Torres or a Diouf. Leeds got into trouble by borrowing to buy players.