West Bromwich Albion and the ambiguity of loans on loans

West Bromwich Albion have undergone a transformation since the arrival of Carlos Corbran, but the club have questions to answer about their financial situation.

West Bromwich Albion were always playing second fiddle to their pre-Christmas trip to Coventry City. Terry Hall, a Manchester United fan but still one of Coventry’s most famous sons, had died two days earlier and the hosts delivered a moving tribute to the singer which the team followed with a 1-0 win.

This result ended a run of victories that breathed a little life back into Albion’s season. Defeat at home to Sheffield United at the end of October had dropped them to the bottom of the Championship, two and a half weeks after the almost unsurprising departure of Steve Bruce. The team reacted fairly positively to Bruce’s absence, picking up a win in his first game under Richard Bell, but the Sheffield United game – the first game for new permanent manager Carlos Corbran – gave an indication of just how much work the player had put in. The new director had to do.

But since then, Corbran has been breaking out of this hitherto crippled pool of players. Between the Sheffield United match and the Coventry City match, Albion won five in a row, scoring nine goals and conceding only one. Those five victories more than doubled the team’s points tally for the season, taking them from 14 to 29 in just six weeks, an even more attractive number when we consider that they played no league matches between November 12 and November 12. December 12th. A run from the whirling heights lifted them to sixteenth in the table.

There have been clouds over The Hawthorns for most of 2022. On December 11, 2021, they were in third place in the Championship table, a position they had more or less held since the start of the season. By mid-March they were in 14th place, a quick return to the Premier League after relegation at the end of the previous season. They recovered to 10th in the table, but this was not the return to championship many expected. Steve Bruce was appointed manager at the start of February, replacing Valerin Ismail amid numerous warnings online from Newcastle United supporters about what they might expect. It turns out that those warnings were not unfounded.

But if Bruce’s departure from Hawthorn One cloud that hung over the club rose, while others stubbornly remained in place. Questions had been raised for some time about the way the club had been run in recent years, and at the center of these concerns were loans granted by the club to current and former owners. The club had previously denied any investigation into how this loan came about – a public meeting previously saw the leader of the consortium that owns the Guochuan Lai club use his vote to block it.

The club’s chief executive Ron Gourlay agreed to investigate a £3.7m loan to former owner Jeremy Pace at the start of May, but there was further contention with the publication of the club’s accounts up to the end of June 2021 showing a further loan of £4.95m to Wisdom Smart Corporation Limited, another company owned by Lai, has been involved in helping his company through the Covid pandemic. Lay promised to repay this sum – plus £50,000 in interest – by mid-September. This was later extended to the end of December, but will that deadline now be met?

There is an obvious significance to the fact that the club has money in the bank by the end of the calendar year. The transfer window opens again soon, and with Carlos Corbran making remarkable progress with this group of players since his arrival at The Hawthorns, it seems the club has already understood the value of giving him some money to spend on strengthening the squad during this time.

After all, the team was heading in the right direction again, and such is the nature of the tournament that although Albion’s 16th place in the table looks mediocre, they are only five points away from a play-off spot. On top of that, Albion is running out of money for parachutes in the Premier League at the end of this season. If they don’t get promoted this season, they will be worse off financially next season. Lai is believed to owe the club around £10m.

Gourlay has already stated that It has been “confirmed by Guochuan Lai that the £4.95m loan payable to the football club by Wisdom Smart will be repaid by the revised deadline of 31st December 2022”. But that raises another question: If that money is guaranteed to be received on New Year’s Eve, then why would West Bromwich Albion consider taking out a loan from MSD Holdings, the sneaky lenders of money to Michael Dell’s football clubs? It was difficult to obtain specific details of this loan. It is believed that this loan could be as much as £25m, with an enigma in the interest rate.

So many questions and so little answer. What happens if he does not repay his loan and the club is not promoted at the end of this season? Because that’s £30m in loans raised at the club plus Jeremy Pace’s historic loan, and with the umbrella payments coming to an end, taking out £25m to spend in the January transfer window seems somewhat like a gamble the club can’t afford. his loss.

The worst-case scenario sees these loans pile up on the company’s accounts, adding a layer of wholly unnecessary uncertainty to the club’s financial well-being, and that’s before we get to the small issue of why a football club would make loans to support the club’s other corporate owners in the first place. If West Bromwich Albion fail to get promoted at the end of this season, it will be the first since the League of Leigh took charge of the club in 2016 that there has not been any Premier League money flowing through the club.

Whatever may or may not be happening throughout 2023 on The Hawthorns, what exactly is going on behind the scenes there needs to be determined and fixed. The obfuscation and delays in obtaining these loans must stop, and the promised investigation is given the potential to reveal what the truth may actually be as to how the club has been run in the past few years. Because the stakes could rise throughout the next year, and the Premier League is already littered with the corpses of clubs who have fallen from the Premier League and mismanaged their way away from a comeback. West Bromwich Albion cannot join this unhappy club.

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