If New Year’s Eve is a day to bury bad news, then New Year’s Eve 2013 was a day for football to bury very bad news indeed. Chelsea received the denunciation of a cynical football press for revealing their latest ludicrous losses, producing only part of their results and doing so on New Year’s Eve. Under all that attention, any non-EPL club’s results seemed destined for the “news-in-brief” section, if they were considered newsworthy at all. The problem with the latest results from Burnden Leisure PLC, Bolton Wanderers’ parent company, was that the figures were just too big and too deep (in the) red to be buried.

The Bolton “record debt” story is becoming a traditional annual event for football finance writers. When this site visited the Whites’ finances in 2010, the club were a “record” £93m in debt, placed there by a thumping annual loss of £35.4m.  Since then, of course, Bolton have been relegated and debt records have continued to fall. Last year, Burnden Leisure and club chairman Phil Gartside broke some sort of straw-clutching record when he said that “for the second year running we have reduced our losses.” There was to be no hat-trick, with BL losing (ulp!) £50.7m in the 12 months to June 2013, outstripping Chelsea by £1.3m. These figures brought two quotes to mind – well, three if you include the short one with the sweary bits.

Some years ago, BBC Radio Five Live held a debate/discussion on English club football debt. The then Supporters Direct chief Dave Boyle wistfully recalled days when “relegation just meant you’d had a bad season” before lamenting its near-fatal effect, given that multi-million parachute payments couldn’t bridge the financial chasm between Premier and Football League. Portsmouth was the topical example – a club cited by more than one fan in on-line discussions about Bolton’s latest losses. A joke, of sorts, from Canadian comic Tom Stade also sprang to mind, although the precise set-up and punchline didn’t. The gist was that “Africa” was $12trillion in debt and Stade mused that if he “was Africa” he might have had a word with someone when it got to $7trillion (I did say a joke “of sorts”).

The “someone” with whom Wanderers could “have had a word” is BL owner Eddie Davies, a 67-year-old lifelong fan (except for about thirty years of his adult life when he… er… wasn’t), who has bankrolled Wanderers for over a decade, something for which you could not accuse Gartside of being ungrateful. “It should go without saying,” Gartside gushed in BL’s 2013 Annual Report, “that Eddie Davies continues to provide a humbling level of support to the club.” And, in a tone more suited to North Korea than North Greater Manchester, he praised Davies’ “indomitable generosity.” And Gartside hasn’t let this sort of stuff “go without saying” for years. In 2003, when Bolton’s team contained a number of what you would now call “top, top players” on short-term loan, Gartside said: “We are watching Jay Okocha, Youri Djorkaeff and Ivan Campo courtesy of Eddie Davies.” Six years later, Gartside was still acknowledging “the special contribution of our owner Eddie Davies.” And in 2011, he admitted that, “I have said this before” as he told BL shareholders that they should not “ever underestimate what Eddie Davies does for our club.”

The latest accounts make that nigh-on impossible. Davies, via his company Moonshift Investments, is owed all but £12.5m of Wanderers’ debt. Gartside has made much of Davies being a “Boltonian” not “a Russian or an Arab,” which makes the debt a “soft” debt (even though Moonshift is actually Bermuda-based, British Virgin Islands-registered company with financial interests other than Bolton). But Wanderers’ business model belongs in the same column as the Russian Abramovich. In September 2004, when debts were merely £30m, Gartside’s rejection of an investment proposal from then-director Ian Currie included the claim that the board had “developed a successful football and business model for the club” which was “widely admired by others in football, including many in the Premier League.” But even then, this model resembled little more than “don’t worry, Eddie will pay.” Less than a year previously, Gartside had exhorted club shareholders to back to sell their shares to Davies for, literally, ten-a-penny (no “indomitable generosity” there), to increase his BL stake from 29.7% to 94.5%.

As the local Bolton News reported in December 2003, Wanderers “would be in serious financial difficulty” without Davies. And Gartside added that “I can’t bear to think about where we would be without (Eddie’s) support.” There was understandable anger that shares for which cost 69p when the club was floated on the Stock Market in April 1997 were “effectively worthless” four-and-a-half years later. “My 1.135 million shares are not worth peanuts,” noted one shareholder, correctly. But another shareholder’s concern still applies, eleven years and a week later: “What happens to the club if something happens to him?” When Uefa briefed journalists on their “financial fair play” (FFP) proposals in 2010, they cited events at Gretna, where owner/benefactor Brookes Mileson bankrolled the club from non-league football to European football, only for it to collapse when he became too ill to “sign the cheques” and then passed away in 2008. FFP, Uefa claimed, was designed in part to prevent a repeat.

In a Bolton News interview as long ago as May 2001, Gartside noted that Davies had “put more money into Bolton Wanderers than any other person in (its) history.” At that time, his major contribution was a £2m loan to BL from his Bermuda Trust Company. Gartside insisted that Wanderers “can’t constantly rely on that sort of generosity.” Yet they have. And he added: “We have to run the business properly.” Yet they haven’t. Gartside has never seemed concerned enough to follow through on a Plan B (some Bolton fans believe Gartside isn’t concerned enough about anything very much these days). He and Davies have appeared to spend as much time in the press formulating a mutual appreciation society.

In April 2005, in one of his rare appearances in print, in the Bolton News, Davies claimed Gartside was doing “a magnificent job” of running the club “day-to-day.” Yet Gartside has since presided over seven consecutive multi-million pound annual losses, totalling £157.7m. And while in 2004 the Bolton News said: “as chairman Gartside has seen Bolton rise from the lower reaches of the old first division to the top half of the Premiership since…October 1999,” he has now presided over the return journey. As one Bolton fan said, in a thoughtful debate on the forum of The-Wanderer fan website: “We are around the same place we were in 1999. The overwhelming difference is our debt… £20m in 1999, £163m today, which even allowing for inflation is a massive increase.” And while Bolton’s managers since the halcyon days under Sam “I would be more suited to Real Madrid” Allardyce were being allocated their portions of the blame, this fan noted that Gartside “has overseen and authorised this… Surely this is the man who should go.”

It is difficult to argue this point, especially considering Gartside’s oft-stated ambitions for the club and how distant so many of them remain. BL’s first chairman, David Williams, resigned in February 2000 because he was “continually frustrated in his efforts…to broaden the company’s horizons” and believed that “BL was being run as a ‘local businessman’s club.’” (Bolton News, March 2000). But fans were concerned that football would not be the prime focus of Burnden Leisure. And, within a year, Gartside‘s declared intention was “to build BL into a broad-based sports media and leisure company.” This remains the intention, according to last month’s BL annual report, in which Gartside announced that – as “a change of business strategy” which started last season – “new diversified revenue streams continue to be identified and invested in…to support our core activity of football and… to protect against the variability of income from football activities.” Last season’s £50.7m loss is a guide to the level of protection this strategy has provided.

Four months earlier, Gartside declared that “we are building a Premiership team at Burnden Leisure, both on & off the pitch” and spoke of the board’s determination to progress “on a sustainable basis and with our finances in order.” Last season’s £50.7m loss is a guide to the level of sustainability and order this strategy has provided. Gartside must also regret calling Wanderers “a trading club… not a selling club” in 2010, given the Whites’ largely execrable record in the transfer market, with losses far outweighing gains. As the “Manny Road” website noted in a terrific article last week (“Bolton Wanderers – And How they wasted £40m”), “Bolton may be a trading club, but they’re a bit rubbish at it.” And after thirteen years of broad-based sports, media and leisure and of determination to put finances in order, BL remains a going concern almost by the skin of its proverbial teeth. The “Notes to the Financial Statements,” in BL’s 2013 Annual Report, avoid the dreaded near-mantra of financially-troubled clubs about “material uncertainties casting doubt on the company’s ability to continue as a going concern” over the following 12 months.

But the board admit that in a “reasonable downside scenario” their “forecasts and projections…show a funding requirement compared to the current level of facilities.” And that leaves their “going concern” status unaffected only because “this funding requirement arises immediately following the 12 months from the signing of these accounts.” This “downside scenario” is particularly “reasonable” in Bolton’s case because their EPL parachute payment drops from £16m to £8m next season. And those Uefa FFP regulations designed to prevent clubs from “doing a Gretna,” or…well…doing a Bolton? From next year they are Football League regulations too. So Gartside can’t say: “Don’t worry, Eddie will pay.” Because Eddie can’t pay.

Davies could convert “his” £151m “debt” to equity, of course. And Bolton fans have noted with some envy that Leicester City’s Thai regime did just that at the end of last year, almost like a Christmas present for the club. “It would be a nice little problem-solver,” noted one Wanderers fan, correctly. Except the problem is that, for all Gartside’s claims, the debt isn’t “Eddie’s” but “Moonshift Investment’s.” And unless “Moonshift” is Davies’ “weekend name,” it is unclear whether they would have Wanderers’ “best interests at heart” as much as Davies has, if at all. Shorn of Davies’ philanthropy, BL has what its accounts call “a range of mitigating actions…under the Board’s control.” These include “the sale of players” (with some very high-earning players also being out-of-contract in the summer) and a phrase which usually indicates real financial concerns, “securitisation of future season-ticket sales.”

In August 2001, the Bolton News interviewed Gartside just before the club’s second spell in the top-flight. It said Wanderers had “learned an expensive lesson in 1997/98 when they spent a record £11m on players and still got relegated.” And Gartside claimed: “We wouldn’t be doing our job properly if we spent the way we spent before. When we went down last time we were in danger of slipping out of the leagues. We were that much in debt…we had to sell a team to survive.” “That much” in debt was £30m. So the “danger of slipping out of the leagues” appears far greater now, even allowing for inflation, especially as Bolton’s youth system (from the Eddie Davies Academy, natch) isn’t believed to be producing adequate replacements for the  very likely stream of summer departures. Gartside didn’t “do his job properly” in 2001 and Davies’ “humbling” support for the club has largely masked the fact that he hasn’t done his job properly since.

As with so many football finance horror stories, it is all-too-easy to spot the problem. It is usually less easy to spot the solution. And in Bolton’s case, it is less easy still. As one fan noted during the afore-mentioned “Wanderer” website discussion, “there isn’t an answer sometimes.” The depressing thing for Bolton Wanderers is that with their debts of £163.8m – however “soft” – he could be right.

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