The council's press office has now decided to add its pennyworth with a story explaining the deal in carefully chosen words. 3.5% above base rate is, we are told "a better return than any other commercial investment". Really?
But it's still not as good a return as the 7% we were getting before, something which the council's press office mysteriously forgot to mention. Not to mention the millions wasted by the council on the scheme since 2007 - the rent-free stadium, the huge hidden subsidies, the cost of all the bailouts and the gift of commercially valuable land to the club.
What an investment and what a return!
To nobody's surprise the latest bailout of the Scarlets by Carmarthenshire County Council was approved unanimously at Monday's meeting of the Executive Board. No surprise, not least because everything which is up for "consideration" at board meetings is always approved unanimously.
The Ministry of Spin has been at it again, as we can see from the Llanelli Star's treatment of the story.
The first line of the article reads,
CARMARTHENSHIRE Council is set to reap extra cash after hiking interest rates on a multi-million pound loan to the Scarlets.
Any readers familiar with the details (not included in the newspaper's coverage) might wonder how a new interest rate of 4% constitutes a hiking of interest rates which were previously set at 7%.
Here is how it works. The original loan was £2.4 million, with interest set at 7%. Back in 2010 the club asked for relief, and a deal was struck whereby it would pay 4% interest, with the remaining 3% being rolled up to form part of the loan. This has meant that the loan outstanding has now risen by £216,000 to £2.61 million.
By cutting the interest rate (not "hiking" it) to 3.5% above base rate, the club will now pay 4% on the entire debt as opposed to 7% previously.
That will indeed bring in an extra £8,000 of cash, but the deal actually means a rather bigger loss to the taxpayer of around £78,000 per year currently. Because the new interest rate is variable, the actual extent of the write-off is anyone's guess, but over the 10 years remaining, the taxpayer has probably just given the club somewhere between £750,000 and £900,000.
Any accountants out there will be able to come up with their own figures.
Not mentioned in the Llanelli Star's write-up is that the new deal will also mean that payments by the club into the sinking fund meant to cover repairs and maintenance of the stadium have been, er, "hiked" from the originally agreed rate of £125,000 per year to £10,000 per annum this year, and £15,000 from 2016. The fund, payable to the county council, was to have been capped at £500k, rising from then on by inflation.
In other words, the new deal reduces sinking fund payments by the club to the council by around £320,000 over the next three years.
In return the club has agreed to make its squad available to the council for PR purposes on terms to be agreed, while the thresholds at which the club would start paying rent on Parc y Scarlets have been reduced. Given that there is no likelihood of these thresholds being reached in the foreseeable future, that was not a difficult concession to make.
To its slight credit, the Star does note that the meeting which approved the new bailout also approved plans to get shot of the council's public playing fields, bowling greens, etc.
As they say, don't believe everything you read in the papers. And especially not if it's the Carmarthen Journal or Llanelli Star reporting on the county council.