Deep in debt but Bolton Wanderers have no need to panic, says football finance expert
A LEADING sports finance expert has moved to calm fears Wanderers are heading for some sort of Portsmouth-style meltdown.
After a loss of £50.7million was announced at the end of last month, escalating debts to a whopping £163.8m, concern spread among the club’s supporters that the Whites may be heading for serious financial peril.
The likes of Portsmouth, Leeds United, Leicester City and Coventry City have all slid towards administration after dropping out of the Premier League – and none incurred losses of the size revealed at the Reebok on New Year’s Eve.
But while Robert Wilson, a lecturer on sport finance at Sheffield Hallam University, points out that Wanderers dropped out of the Premier League at the worst possible time, he is confident as an outsider looking in on the club’s accounts they are in no immediate risk, so long as owner Eddie Davies continues to foot the vast majority of the bill through his business interest Moonshift Investments Ltd.
“They are in the eye of a perfect storm at the moment,” he told The Bolton News. “It was absolutely the wrong time to get relegated from the Premier League and for the FFP regulations to hit.
“I would be happy to say that under the current ownership structure, with the owner (Eddie Davies) happy to continue putting money into the club for whatever benefit or reason, the debt does not concern me.
“It appears the club are now financially coming into line with where they need to be and so the next five years are crucial. I’d expect over that period to see them start to break even and begin paying a small amount of that debt off.
“I’d compare their situation more to Southampton when Markus Liebherr took over They have a stable ownership and have not had the upheaval of a Leicester City, Leeds or Portsmouth.
“If Bolton’s owner woke up tomorrow and decided to sell everything the club owned, then I would imagine a large portion of the money he has invested would be recouped – and that is another reason it doesn’t worry me. It is a soft debt.
“If Bolton were in the same situation as Leeds, for example, and did not hold as many assets, it would be a different story.”
The lack of any public communication from Davies or his chairman Phil Gartside in the light of the accounts has not helped to quell the feeling of unease among supporters.
The club have outlined plans to pursue “alternative revenue streams” key to which seems to be their £100m office and school development alongside the Reebok, which they hope will get the go-ahead from planners early this year.
Wilson reckons only promotion to the Premier League – and a share of broadcasting revenue which is now nearly three times the size of the one they previously enjoyed – will start to see the debts reduced.
“In terms of a business objective then getting back to the Premier League is absolutely vital but the worrying thing for Bolton is that it is becoming increasingly harder,” he said.
“Three teams who come down every year do so with a parachute payment that enables them to keep hold of better players, given the right relegation clauses, and retain stronger squads. This is one of the main problems of FFP and it creates an environment where other clubs could be frozen out.”