Town chief executive Simon Clegg says fans shouldn’t be concerned about the level of debt that the Blues have built up during their continuing push to get back into the Premier League.

The club’s inter-company debt stood at £55 million at the end of the financial year to June 2010, the most recent set of accounts.

That figure is made up of owner Marcus Evans’s annual injection to cover losses, plus his initial investment and £36 million relating to the debt purchased from financial institutions — the Norwich Union bond which built the new stands and the club’s overdraft with Barclays - when he became Town’s major shareholder in December 2007.

Clegg told TWTD: “The owner continues to back the club. He came into the club with his eyes wide open and has the resources to fund the ongoing expansion of the club and the purchase of new players.

“There is an inter-company debt and we’re well aware of that, but it is not something which is of major concern to me or the football club. There is nothing externally due to any creditors beyond the group, aside from £2 million in historic loan notes.”

Clegg says that that being the case, fears that the club might return to administration at some point in the future are misplaced: “As we are structured at the moment, I can’t see that there is any chance of re-entering administration.

“It’s a situation where one of the owner’s companies owes money to another of his companies but ultimately both are owned by him.”

Regarding plans for reducing the debt, Clegg says this would be something which would be looked at once the club is in the top flight with the specifics decided nearer the time: “This is hypothetical and it would be wrong to speculate on how future Premier League monies would or would not be used. The focus at this present time is to get ourselves into a situation where this becomes a reality.”

Town’s player wage bill was 85.3% of turnover in the year to June 2010 and Clegg confirms that this year’s figure isn’t going to be any lower.

However, the Championship recently agreed in principle to introduce UEFA’s Salary Cost Management Protocol, which would mean reducing player wages to 60% of turnover, something Clegg admits will be tough for the club to implement: “We’re all under pressure from the Football League to move towards some sort of break-even model and that will be challenging going forward. We have to adhere to whatever rules and regulations the Football League put in place.

“There was an agreement in principle at the AGM in the summer and the devil is in the detail and we are not at the detail stage yet.”

Story syndicated from TWTD.co.uk

Photo: Action Images

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