does Ridsdale never learn-bankrupt by Christmas???

Sam's big plan to mortgage stars Jul 16 2006 </p>

Andy Rose, Wales on Sunday </p>

CARDIFF City owner Sam Hammam is planning to fund his squad rebuilding by 'mortgaging' his star players. <font color="#ff0000">The Bluebirds are already £1m over budget</font> having spent around £5m in transfers and wages ahead of the new season. But Hammam intends to lessen the financial strain by raising large sums of money and using the <font color="#ff0000">potential</font> future transfer value of top young players such as Michael Chopra and Joe Ledley as security. <font color="#ff0000">The scheme is believed to be similar to the 'player sale and lease-back' method employed by deputy chairman Peter Ridsdale in his previous incarnation as chairman of Leeds United in the Premiership</font>. Hammam is seeking to boost the club's income by a variety of footballing avenues including increased season ticket sales, merchandise sales and higher home attendances at Ninian Park. </p>

But his plan to raise additional funds by effectively mortgaging his squad may raise concern amongst fans - especially as a similar scheme is thought by some to have partly contributed towards Leeds' financial meltdown in 2003 with total debts of around £80m. There is no suggestion that City will suffer a similar fate, but with current long-term debts amounting to around £26m, Hammam knows he must continue to tread carefully, especially with the club now working to a strict business plan in order to make their proposed new £35m stadium a reality. &quot;We are working on it but it will depend on whether the conditions [of the loans] are good for us,&quot; confirmed Hammam. &quot;We are looking at raising money on the footballers themselves. &quot;They will act as security so we can take a loan over a number of years. &quot;There are people who will lend you money and if the s**t hits the fan we will sell one of those players to get the money back. &quot;We have shown we can do it by selling Cameron Jerome and we did it last year under extreme pressure with James Collins and Danny Gabbidon.&quot; <font color="#ff0000">Hammam refused to confirm the size of the loans that City intend to take out, but admitted he was talking of substantial six and seven figure sums</font>. &quot;We are trying to get to the Premiership,&quot; he added. &quot;We want to get there as soon as possible because the new television contract in the Premiership (for the season after next) gives every club on average £28m compared to the £300,000 we get now.&quot; <font color="#ff0000">But last night, a leading financial expert admitted he was surprised that a club like Cardiff were considering such a venture. &quot;This type of player sale and lease-back scheme hasn't been used much in the last three years,&quot; he said. &quot;Most people have steered clear of it</font> . &quot;It was easier to do a few years ago when the transfer market was buoyant. &quot;But given how quiet the transfer market is outside the top end I would be surprised if a club like Cardiff City were able to do that.&quot; And he also sounded a note of caution if Hammam goes ahead with his plan. &quot;<font color="#ff0000">If you default on your payments you will be pushed into administration as Leeds were</font>,&quot; he added. &quot;As long as you have enough revenue to service your debt you've got no problem. &quot;The decision is how much debt can you prudently afford to have. &quot;If you are selling players to pay off the debt then once your buyers know it's a forced sale the price goes down,&quot; he warned. </p>

 

and what happens if the players contracts run out? they'd be worth nothing. crazy

 

One thing I don't understand about this -

How is it possible to secure a loan with a player who could break his leg and end up worthless?(at least for the remainder of his contract.)</p>

 

Presumably the loans are very short-term. Sounds like Ridsdale is sailing very close to the wind.

 

Sounds to me...

like they are spending every penny they can to get to the prem so they get their money back?? Very risky indeed

 

let's help them...............

by beating them on the 5th

 

Insurance's taken out on the player...

Much like a the insurances you take out on a mortgage.</p>

So I'm led to believe anyway.</p>

 

Insuwance's taken out on the pwayer...

 

When does this wage structure thing come into effect?

You know the one - you can only use a certain %age of your forecast receipts to pay wages &amp; sign players.</p>

 

The players wages would be insured against.

But not the payments. All the sale-and-leaseback is doing is spreading the transfer fee over the length of the contract (plus interest). No different to the risk you take if you pay the fee up front and he breaks his leg.

 

Thats wight... For a minute I fowgot who I was!?!?!

 

Ah yes, insure the asset.

Bottom line it must be costing a fortune. It'll be a smile if they don't make it.

 

RE: Insurance's taken out on the player...

Lease back was used by Leeds, Bradford and Chelsea (pre abramovich). Financial meltdown agogo