Dark clouds are starting to form over the Macron Stadium at the moment. As if a dismal performance on the pitch isn’t enough for the embattled supporters of Bolton Wanderers to have to put up with, recent events off the field are also now adding to what is turning out to be an extremely unsettling end of the year for a club that was a member of the Premier League just three and a half years ago. With debts of £185m and the funding of benefactor Eddie Davies having dried up with alarming speed, the club has now been served with a winding up order by HMRC over unpaid tax.
Following the stepping aside of chairman Phil Gartside due to ill health and the appointment of the former Portsmouth administrator Trevor Birch as a consultant to attempt to dig the hole in which the club has found itself, there has been little good news to come from the club. At the end of last month, the club confirmed that it had been unable to pay its players for the month of November due to ‘short-term funding issue’ caused by ‘the ongoing situation surrounding the club’s ownership off the field.’ The club is believed to need an amount of money in the region of £5m just to be able to continue trading until the end of the season, including £900,000 to cover running costs for last month.
It’s taken less than two weeks for a winding up order to be served upon the club by HMRC. That this has happened shouldn’t be a major surprise to anybody with so much as a cursory knowledge of the tax office’s belligerent attitude towards football clubs or of the club’s dreadful current financial state at the moment, but knowing this doesn’t make the matter any easier to deal with. HMRC had rejected requests from the club to be given more time to conclude a sale and issued the petition over PAYE and VAT which has gone unpaid for November to the tune of around £600,000. It is not known how or even whether this bill can be settled prior to an appointment at the High Court, at which its continuing survival would be down to the goodwill of the presiding judge. Adjournments have served football clubs well in previous such hearings, but there are no guarantees that one would be granted.
Manager Neil Lennon has attempted to sound a somewhat upbeat note, stating earlier today that the club has “a few plans in place” to avoid the dread scenario of administration, which, while it would put an immediate halt to the winding up petition issued against the club, would mean a twelve point deduction – reducing the club’s points total for the season to zero and surely condemning it to relegation at the end of this season – an almost certain fire sale of players during the January transfer window. According to the club’s last set of published accounts, it had in the region of £45m of tangible assets – the majority of which is the Macron Arena itself – but as by far the biggest creditor of the club, it would be Eddie Davies who will have the final say on who any new owner of the club may or may not be. Whether that is a good thing for the supporters of the club remains to be seen.
By the end of last week, three groups seemed to have emerged as the front-runners in the race to buy the club, with a consortium by the name of Sports Shield, fronted by former player Dean Holdsworth, seeming to have edged ahead of the other two, a consortium led by another former Bolton player, Stelios Giannakopoulos, and a third from the Middle East. Each was asked to provide indisputable proof they can cover the club financially during the due diligence process, which should have seen preferred bidder status given to one of the bidders, to be followed by further checks of all legal paperwork and the company’s accounts, with the new owners to be in place by Christmas, in time to pay back wages for November and put the club on a firmer financial footing in time for the start of the new year.
It took just three or four days for the cracks in this anticipated series of events to start to show. With no arrangements still in place, local newspaper the Bolton News reported just yesterday that “no guarantees have been given to administrative or managerial personnel” that they will be paid when their wages fall due again, four days before Christmas. It’s easy to get caught up with ideas of overpaid footballers with plenty of money in the bank, but we should pause to remember that Bolton Wanderers employs more than three hundred people, the overwhelming majority of whom are on no more than ordinary wages. Should their wages not be paid on the twenty-first of December, they will have gone the last two months before the festive season without having been made. If we wish to talk about the moral aspect of football as a business, it’s worth pausing to consider that uncomfortable truth for a moment.
By last night, the takeover talks still seemed to be stalled. Although the horrendously huge debt to Eddie Davies has been the headline figure throughout this entire debacle, it’s not really the main issue at play with regard to the sale of the club. After all, Davies has agreed to write it off if the right buyer can be found, with the club for sale for £15m. The issue with the takeover talks by now seem to be reservations over the amount of money being borrowed by those looking to buy the club. The club needs in the region of £25m to guarantee being able to maintain its wage bill, based on current estimates, and a further £10m to pay off loans secured against the Macron Stadium, mostly money that may now be considered to have been thrown onto the fire that the club’s wage bill long ago became. It has even been suggested that the potential buyers are growing impatient with the escalating costs of keeping the club alive as a going concern.
And today came the winding up order. With a court date reportedly set for the 18th January, there are now five and a half weeks left to play for the club to somehow, from somewhere, get something sorted out over this. It could put itself into administration, which would at least mean that it staves off the winding up order and ensures that the club gets to choose who the administrator is, but that twelve point deduction would surely be the final nail in the coffin for any hopes of there being any chance that the club will stay in the Football League Championship this season and, while this scenario would not damage the club’s finances to the extent that relegation from the Premier League did, it is still another big drop-off in revenue that may well disincentivise new buyers.
The alternative – because it seems unlikely that short term borrowing will do anything more than dig the club even more deeply into the hole in which it already finds itself – it can either try, somehow, to persuade Eddie Davies to put his hand into his pocket one more time – and there’s a case for saying that he should do this, certainly in the case of non-playing staff – or try to iron out the kinks in the proposed takeovers that have coughed and spluttered like a misfiring engine over the course of the last few weeks or so. With £600,000 due to HMRC, November’s wage bill outstanding, and December’s due to be paid in less than two weeks, it feels like something of an understatement to suggest that time is most definitely of the essence.
Amid the conjecture, it’s difficult to get a sense of exactly what the position is regarding the possibility of anybody actually being able to maintain Bolton Wanderers as a going concern without it entering into administration. It is unlikely that anybody would find out the full details of such a takeover until it was signed, sealed and delivered, and the level of the club’s overheads, the amount of money required to clear existing securities over the stadium itself make such a deal still seem out of touch in the time spans now imposed upon the club by the winding up hearing next month. As such, administration feels like the more likely resolution to this issue, although this could, of course, change.
At this juncture, however, we should perhaps pause for breath and consider the madness of the position in which Bolton Wanderers Football Club finds itself today – literally hundreds of millions of pounds in debt, yet facing a fight for survival over a few hundred thousand pounds. Granted, through television incomes, access to the sort of revenues that many, many clubs would kill for, but still unable to stabilise their running costs once relegated from the Premier League. So much of the of the discussion of the finances of crisis-ridden football clubs exists within the bubble of professional football itself that we seldom take the time to stop to consider why this keeps on happening, time and time again, at a period in the game’s history when more money is flowing through it than ever before. And whilst it is clear that there has been mismanagement involved in the running of this football club, the case of Bolton Wanderers throws into sharp focus the need for greater distribution of television money across the whole of football – not just the Premier League – and for more effective auditing of club accounts to ensure that they can exist as a going concern for the duration of a season without farcical situations like this occurring. No, as it goes. We’re not terribly optimistic about that, either.
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