The Long Read: Bolton Wanderers & Another Close Shave

by | Sep 15, 2018

It’s been five and a half years now since Aldershot Town became the last Football League club to be pushed into administration. Considering how many clubs have done so since the game’s wage inflation really kicked in – there have been thirty-five insolvency events involving Football League clubs (and Portsmouth, who were in the Premier League at the time of theirs) over the last twenty years – that we should have gone so long without one should be a cause for celebration. Perhaps the rule changes designed to limit a club’s ability to spend £20 when it only has £10 in its pocket are finally having some positive effect. Perhaps football clubs have finally learned the lessons of the past, that some degree of financial pragmatism is required to keep a club without a £100m television contract as a cushion afloat. Perhaps we’ve all grown up a bit.

Viewing this story entirely through the prism of insolvency events, however, only tells a part of it. There have been close shaves over the last five and a half years, and the closest of all serves to remind us that the nature that the financial affairs of a football club tend to have far more to do with that club’s particular story than can ever be successfully legislated for by the game’s governing bodies. Last summer, Aston Villa’s overspending to get back into the Premier League returned to bite the club on the backside. An extraordinary gamble on getting promoted into the Premier League failed at the last hurdle with defeat in the Championship play-off final, and within days there was substantial talk of a complete financial collapse which was only averted with a fresh injection of wide-eyed new hopefuls seeking to avoid the all too common mistakes of the recent past at Villa Park.

Then, there’s Bolton Wanderers. Bolton’s collapses have been predictable yet entirely idiosyncratic, perhaps the inevitable legacy of a life lived beyond its own means for far too long. At the very start of this week there was a very real possibility that the club might find itself in the hands of administrators, but this has been put off again following some last minute negotiation as the club came to process the news of the death of the man who, depending on your own prejudices, either gave Bolton the means to be able to support eleven consecutive years of Premier League football or set up the conditions which have made the years following their tumble from the top flight so painful.

Born in Little Lever, a couple of miles south-east of Bolton, in 1946, few contest Eddie Davies’ that contribution to Bolton Wanderers Football Club was heartfelt and sincere. Having made his fortune in the less than glamorous world of kettle parts and thermostats, he joined the club’s board of directors in 1999, becoming the majority shareholder on Burnden Leisure Ltd., the holding company that owns the club, four years later. Bolton had flirted with the Premier League prior to Davies’ arrival on the board, though, getting promoted in 1995 before getting relegated straight back from whence they came the following year, repeating this trick in 1997.

Getting the club into the Premier League therefore, was a known quantity by the time of the start of the new century. Keeping it there, however, wasn’t, and Davies’ acquisition of the club coincided with promotion for a third time in six years in 2001, with the club this time holding onto its prized Premier League place. The four years immediately following Davies’ acquisition of the club were its most in decades with four consecutive finishes in the top eight, but at the the end of the 2011/12 season a run of just one win in their last seven league matches of the season saw the club relegated in eighteenth place, finishing just a point below seventeenth placed Queens Park Rangers and completing a trifecta of founder members of the Football League to be relegated from the Premier League, alongside Blackburn Rovers and Wolverhampton Wanderers.

The condition of the club at the time its relegation from the Premier League in 2012 was documented at the time by David Conn in his annual review of Premier League club finances, and there weren’t too many lines to have to read through in order to reach a pretty grim prognosis for its future: “Bolton ended 11 years of Premier League earnings heavily in debt, seriously loss-making and stating they were seeking still further borrowing “to meet liabilities as they fall due.” Davies had, as of that time, put £137m into the club in loans whilst the clubs match day revenue for the whole season sat at comfortably less than £10m per year. More than perhaps any other in the Premier League at that time, the club had become hopelessly over-dependent on television money – £43m for the 2011/12 season – and Davies’ munificence.

The club’s first season outside the Premier League since 2001 ended with a seventh place finish in the final Championship table, edged out of a play-off place by Leicester City on goal difference. While Leicester would be the champions of the Premier League just three years later, though, Bolton Wanderers have never fully recovered from the shock of relegation and that failure to bounce straight back. Three seasons of increasingly diminishing returns set in thereafter, culminating in finishing at the bottom of the Championship table at the end of the 2015/16 season with just five wins – and thirty points – from their forty-six matches.

Davies had announced his intention to sell up in 2014, but with revenues still low, the debt level – although the majority of it was owed to him -still high and the club’s decline now evident for all to see, it’s unsurprising that there were few offers to take it off his hands. As the club plummeted from the Championship, however, more pressing matters were at hand. With Davies having withdrawn his funding for the club it was now starting to have significant issues with remaining solvent. A transfer embargo was put in place over breaching Financial Fair Play rules, whilst there was talk of wages not being paid (players did not receive their November 2015 wages, and only the sale of offices at the ground, combined with a contribution from the PFA, meant they were paid the following month).

In January 2016 the club managed to get itself a five week adjournment to a winding up petition brought against it by HMRC over an unpaid tax bill of £2.2m following the collapse of two proposed transfers during that month’s transfer window which would have brought £2m into the club. A statement issued by the club at that time read: “Bolton Wanderers has stated that due to the ongoing uncertainty surrounding the club’s current funding position, it has been unable to confirm to its staff today that they will receive their wages for the month of January on the due dates. Every effort continues to be made by the board of directors and its advisers to pay staff and also resolve the longer-term funding issue during what remains a difficult and challenging time for the football club.” Difficult and challenging, indeed.

With football insolvency expert Trevor Birch advising the club, though, a new buyer was found the following month. A deal was agreed by which Sports Shield BWFC Ltd., a company fronted by former Wanderers forward Dean Holdsworth, would buy the club for an upfront fee of £7.5m with a further £12.5m to be paid over the following five years and Eddie Davies writing off the entirety of the debt owed to him by the club. A further extension was arranged on deferring the winding up order, and the club was – after a fashion, at least – saved. There was, however, a catch to this. Holdsworth didn’t have the money to completely pay for this, so a £5m loan was arranged through a company called BluMarble Capital. Eagle-eyed readers will have spotted the dangers inherent in this deal, and by the start of the 2016/17 season Holdsworth had gone, with Sports Shield BWFC wound up at the High Court by BluMarble over non-payment of the debt.

Holdsworth may have been the public face of the rescue of Bolton Wanderers at the start of 2016, but he wasn’t the biggest shareholder in the club. Sports Shield had held 37.5% of the shares in the club, but the biggest shareholder became Ken Anderson, a Monaco and Switzerland-based former football agent and accountant, who acquired a 57.5% shareholding in the club through his company, Inner Circle. Anderson’s interest in the club wasn’t affected by Holdsworth’s issues. Indeed, in November 2016 Anderson acquired Holdsworth’s shares, becoming the de facto sole owner of the club. With Anderson now in charge of the club, Bolton Wanderers’ stay in League One only lasted for one season as the team – now under the management of Phil Parkinson – sailed to second place in League One behind Sheffield United, and last season ended with the club narrowly avoiding relegation back again, finishing in twenty-first place in the table, two points above relegated Barnsley.

By the start of this season, however, familiar storm clouds were starting to gather again. In July, the first team went on strike and refused to play a pre-season friendly match at St Mirren after the wages of one player and bonuses applicable to the whole of last season’s squad were not paid by the end of the previous month, whilst a month later the club found itself on the receiving end of another winding up petition, this time issued by the club’s catering partner, local chef and supporter Paul Heathcote, over an unpaid £200,000 bill. Anderson’s questioning whether Mr Heathcote’s decision to file a winding-up order to reclaim the debt was congruent with a “life-long supporter” of the club certainly wasn’t a strong look for the owner to be taking on, and this was hardly the first time that Anderson’s actions had betrayed what felt like a greater interest in the well-being of his own interests than those of the club. In February 2017 the club’s supporters trust applied – as many others have – to get the University of Bolton Stadium listed as an Asset of Community Value and were successful. Anderson, however, sought to get this removed, claiming that “we believe it is fundamentally restrictive to the progress we are trying to make at the club.” The result was a score draw. The ACV remained in place on the stadium itself but was removed from the hotel, car parks and business offices that surround it.

These situations eroded a degree of trust regarding Anderson on the part of some, and meant that goodwill would be in short supply should things start to go seriously wrong for the new owner. And a couple of weeks ago, they did. The team’s start to the season has been encouraging, with – at the time of writing – three wins and just one defeat from their first six games of the season, but Blu Marble Capital were getting anxious about non-payment of a loan taken out to secure the club’s future earlier, and matters came to a head at the start of the week. The club was in default of the loan and Anderson, who’d displayed such behaviour in the summer during his dispute with Blu Marble, seemed to be playing a game of high stakes brinkmanship with the lenders in only offering to pay back the amount that had been borrowed, with none of the interest that had been accrued against the loan since it had been taken out.

On Tuesday morning, then, Bolton supporters were glued to their screens watching a live blog on the Bolton News website as reporter Marc Iles sought to keep them up to date with these last minute talks. Blu Marble’s patience seemed to have run out and they were seeking to get an administrator appointed through the courts to try and recover their money. The consequences of this for the club could be severe. The Football League has raised its points deduction for entering into administration to twelve points, and the application of that rule would take the club from eleven points to minus one, with a two year long transfer embargo added for good measure. On top of this, and despite the fact that football clubs have broadly emerged from their insolvency events intact in the past, there’s no certainty that a club will survive such an event, especially if an administrator has been appointed by a creditor. Bolton Wanderers should avoid closure and winding up as a result of such a procedure, but there are no guarantees under such circumstances and the administrator’s first duty is to creditors, even though they should be seeking to rescue the business as a going concern.

For all the brinkmanship and the toing and froing over the amounts, cleared funds were ultimately required to be paid by noon, but as the time approached everybody was equally shocked as news filtered through of the death of Eddie Davies that morning at the age of seventy-two. Davies, who’d undergone coronary artery bypass surgery in 1996, had been on holiday at in Portugal at the time, and tributes came in immediately from the club and high profile supporters. This news put the club’s other issues on hold for a short while, but on Tuesday morning it was confirmed that settlement had been agreed between Ken Anderson and Blu Marble to pay off this loan and stave off the threat of administration again.

Anderson confirmed that payment had been made before expiry of the notice to appoint an administrator that had been lodged by the creditors, and that two other loans had been restructured over revised terms, which should free up around £1.5m for the club. Anderson commented to the club’s official website that, “I fully appreciate and understand that the last couple of days have caused some consternation for you all, and I would like to apologise for that, but the whole process has been very complex and far from easy”, a sentiment with which the club’s supporters might well agree. That feeling of impending dread is one with which they’ve become rather too familiar, in recent years.

The club understandably put these recent events to the back burner yesterday for their match against Queens Park Rangers in order to pay appropriate tribute to Eddie Davies, but normal service has to resume thereafter and it would be a reach to say that the club is out of the woods just yet. The winding up petition brought by Paul Heathcote hasn’t yet been dealt with, and it is strongly believed that the club still has outstanding monies due to players for unpaid wages and bonuses. Such considerations, however, were correctly put aside for yesterday as the club paid tribute to Davies. As existence-threatening to the life of the club events such as those that came to pass last week might feel, such issues pall in comparison with the death of a supporter, and particularly one who literally gave millions of pounds to the club that he loved.

There is, of course, an argument that can be constructed about financial doping, about sustainability, and about the leg up that Bolton received as a result of Davies’ munificence, but even those amongst us who might consider this with something stronger than distaste surely realise the impulse from whence this comes, the desire of the supporter to see his team win. The number of fans who idly dream of what they would do with their football club if they won the lottery may not be what they were during the 1990s (when it seemed to be something of a preoccupation amongst some supporters), but what Davies gave to the other supporters of Bolton Wanderers was a series of memories that they will never forget. He deserves their gratitude upon his passing.

Much as no parent should ever have to bury their child, it feels right that so few supporters ever have to outlive their football clubs. Clubs change over time, and the phoenix and breakaway clubs that we have seen over the last twenty years have proved that there are times when supporters need to walk away, but on the whole the idea of supporting a football club that, for whatever reason, simply seems to exist is mercifully rare and affects very, very few people. It is worth, however, reflecting upon where Bolton Wanderers. Many predicted that the club may well struggle if relegated from the Premier League, but it’s doubtful that many would have gone so far as relegation to League One and the financial episodes that have befallen the club over the last few seasons.

The key to Bolton Wanderers’ future comes with self-sustainability, and that point hasn’t been reached yet, as can be proved from the ongoing funding gap that appears in the company’s accounts. The long, tall and short of it is that £13m is in excess of £500,000 per month, and no football club can continue to sustain those losses without them having to be paid back one day. Reshuffling the pack on a near-perpetual basis to ensure than loans are paid cannot continue in perpetuity without situations such as those that we’ve seen at this club coming to pass, and it feels like a high risk strategy to have a no apparent plan to lift the club out of its current funk apart from keeping everything crossed that someone very wealthy indeed will buy the club and sink vast amounts of money into it. Eddie Davies tried that, and over a comparatively long period of time. And it didn’t work.

The simple answer to this question is probably “get back into the Premier League and stay there.” Had Bolton stayed up for another couple of seasons, they would have lucked out on the current television contract. Around £100m per year would almost certainly have cured just about any financial woes that we could imagine. Bolton Wanderers, however, are where they are, and perhaps Phil Parkinson will be able to work some alchemy and get the club back there. After all, the Championship is a competitive division and plenty of other clubs have come from nowhere to be promoted from it before. Bolton ended up on the wrong end of a two-one defeat against Queens Park Rangers, which can hardly be said to have helped, but at least, fans might choose to contemplate, this result wasn’t as bad as the one inflicted upon them by Blu Marble Capital might have been earlier in the week. It’s still been more than five and a half years since a Football League club suffered an insolvency event. But how much longer can this continue?