Letters, WSC 184
Dear WSC
While Ian Kelp (Letters, WSC 183) makes some valid points about the bizarre soft spot banks have for football clubs in allowing them to trade on nought but promises year after year, I fear that he is too puritanical in his approach to business planning. Page one of the Company Treasurer’s Handbook tells us about cashflow planning and a seemingly valid contract promising revenue at fixed future times is a reasonable thing to make plans on, or, if necessary, borrow against. No business waits until the money is in the bank account before planning how to spend it, or indeed actually spending it. Would Marks and Spencer wait until it had a queue of unsatisfied customers waving bunches of tenners in the branch until it ordered a batch of knickers from its suppliers? Where the clubs have probably been naive is in what appears to be a less than watertight contract. If it is true that Carlton and Granada can walk away without liability for their little joint venture, the clubs should be looking at the quality of their legal advice. The fact that the share prices of both Carlton and Granada rose once the situation became public is a pretty depressing sign of what the City thinks of that contract.
Jonathan Gibbs, via email