Football finance experts on Carlisle United takeover & debt

The Price of Football podcast turned their attention to the Blues’ takeover talks on their latest episode.

And academic and author Kieran Maguire said it was perplexing why Purepay Retail Limited are still yet to give the Blues a conclusive answer on how the club’s seven-figure debt will be dealt with.

The situation has been described as a “significant hurdle” by the Piatak family who are closing in on a takeover deal at Brunton Park.

Maguire said: “Now, this debt’s around £2.5m, and there’s a hell of a difference between buying a football club for X with no debt, and buying a club for X when the following day you get a call or email [that says], ‘By the way, that £2.5m – we’d like it next week’.

“This is proving to be a stumbling block as far as the deal is concerned. What I can’t understand is the lack of communication [from] Purepay.

• CUOSC: Piataks want to strengthen Carlisle United's community bonds

“If they give an indication one way or the other at least people can proceed, because that will impact on price and then the club will have a slightly different future.”

Purepay have never commented publicly on the situation concerning the debt, which is a legacy of United’s loans from Philip Day’s Edinburgh Woolen Mill from 2017 to 2019.

Carlisle’s owners said they had held face-to-face talks with Purepay’s John Jackson – a former CUFC Holdings director – around the time of May’s League Two play-off final.

But proposals over the repayment of the debt, tabled since then, are yet to reach a resolution.

Maguire went on to say: “When you’re buying anything you need to know exactly what comes as part of that package.

“The Piatak family have expressed an interest, there have been negotiations with the shareholders of Carlisle with regards to a takeover.

Tom Piatak and Tom Piatak II, centre, pictured at Brunton Park last month (Image: Barbara Abbott)

“They want to acquire the assets of the club – that will be the stadium, training facility, contracts of the players, the goodwill of the fans and so on.

“They will have worked that out as a value.

“But if you buy the shares of a company you not only acquire its assets, you also acquire its liabilities, ie its debts.

“And Carlisle United was in a relationship with Edinburgh Woollen Mill, who went into administration.

“The administrators sold the debt which was due from Carlisle United to Edinburgh Woollen Mill to a company called Purepay.”

The debt was “novated” – transferred – to Purepay after EWM went into administration during the Covid-19 pandemic.

United’s debt continues to grow with interest amounting to about £3,500 a week, chief executive Nigel Clibbens said earlier this year.

Piataks set to meet Carlisle United staff as takeover moves closer

Carlisle co-owner John Nixon told a fans' forum in the summer that Day's legal team had told the Blues that the businessman had no involvement in discussions over the debt.

Maguire added: “The Carlisle board, they produce excellent accounts, I have nothing but admiration [for that] – they are proper custodians of clubs, they tick all our boxes in terms of what they want as far as the club is concerned, to be representative of the surrounding area, to being a hub…

“But once again [from] Purepay [they’ve] had nothing but silence.”

Maguire also speculated on the Piatak family’s interest in United, saying why he felt a lower-league English football club was more appealing to USA investors than a sporting club in their own country.

“It’s another American owner, because they’ve watched Ted Lasso, watched Welcome to Wrexham…” he said.

“Compared to buying an American sporting franchise, the sums involve here – low millions, in all probability – are very acceptable to American investors.”

The Piataks, headed by Magellan Transport Logistics owner and CEO Tom Piatak, will meet supporters’ trust members at a meeting on Sunday.

The Jacksonville businessman plus five family members will explain their interest in the Blues and answer questions.

A takeover deal is set to be very advanced, with a vote by CUOSC members after the meeting set to contribute to its terms.

The Piataks, who have set up a UK-based company Castle Sports Group which is linked to the takeover, are also expected to attend this weekend’s game against Derby County at Brunton Park – while manager Paul Simpson said the American family are also set to speak to club staff soon.

The latest Price of Football podcast, by Kevin Day and Kieran Maguire, can be found HERE