Hatters CEO 'dubious' of the financial rescue package announced to help Championship clubs

Sweet won't put Town's future stability at risk with over borrowing
Luton Town chief executive Gary SweetLuton Town chief executive Gary Sweet
Luton Town chief executive Gary Sweet

Luton Town chief executive Gary Sweet admitted he is ‘dubious’ about the £250m rescue package agreed by the Premier League and English Football League (EFL) last week to help ease the financial challenges faced by EFL clubs due to the coronavirus pandemic.

News broke last Thursday, that the EFL will be assisted in receiving a £200m loan for Championship clubs, with a £50m grant also agreed for League One and Two clubs.

With the Premier League paying up to £15m to help the EFL to secure the loan they can lend to Championship clubs interest free to support their efforts to meet PAYE liabilities up to the end of June 2021, it means Town could borrow up to £8.33m if they wish, which must be repaid by June 2024.

However, giving his reaction to the Luton News, Sweet said: “Regarding the rescue package, I’ll remain dubious until the detail is known.

“To be clear what this is though, it’s an interest free loan that the EFL will secure from a bank and the Premier League paying the interest only.

“It has to be repaid from the next three years of broadcast income so the first argument here is the more a club borrows now to support its operations the less competitive it will be over the next three years.

“It still isn’t known what would happen if a club got relegated meaning it couldn’t repay, for example.

“If we can operate without borrowing at all we’ll do it, unless we’re able to use it to leverage income down the line of course.

“Additionally, each club’s lending capacity will vary according to its PAYE commitments and given our low cost base, pretty much every other club could borrow more than us.

"Practically, we’ll probably need some but we simply cannot risk our future stability by doing so.”