Bolton Wanderers club debt.

[PILTDOWN MAN]

It's all well and good saying reduce costs and increase profits but I think you'll find Albion are in as much debt as Bolton and it'll be hard to pay back to Bloom.

Sorry failed to answer the first point who said reduce costs and increase profits, I didn't. I said costs may be higher but takings are also. The only problem the club might have is that last year and some of this (increase in capacity) we have almost become saturated on takings per game (excluding the expansion) the club are able to extract further spending from the paying public. The extra seats will help but momentum will be needed to continued to keep the take up, up. That's the worry if the team doesn't continue its rise upwards the attendances will drop and that could be disastrous.

 

[PILTDOWN MAN]

Ahhh, it's in the future so we can forget about it. Good advice

That appears somewhat critical. Forget about what? Sorry but if you own a business and you invest X amount of money, but defer repayment until a later date, where upon you state that if the company is unable to repay, it will be converted into shares within that company the sum owed becomes relevant only to the value of company at that point. The only reason Bloom did not just pay for the stadium outright from his own money as a gift to his business is because if he did he would have to pay tax, by structuring it the way he did allows him to write off tax against the debt. You can not "gift" a company money. If he "invested" the money it would not have the tax advantages. Loaning a company money is tax advantageous.

 

[Notters]

BBC Sport - Bolton Wanderers debt figure rises to £136.5m

Bolton Wanderers recorded a loss of £22.1m in the last financial year, taking their total debt to £136.5m. However, £125m of the debt is owed to owner Eddie Davies, which has been refinanced into a long-term loan.

Pretty similar to us then really.

Except unlike TB, Bolton have had the benefit of about 10 years worth of Premier League dosh sloshing around in the coffers, and have STILL come out £140m in the red - which is a proper shit way to run a business. But then they're hardly unique in that respect.

But our debts come from the necessary cost of buying a stadium. The Reebok only £25m.

 

[Notters]

Ahhh, it's in the future so we can forget about it. Good advice

Which part of "it would be converted into shares" do you not understand?

 

[Notters]

BBC Sport - Bolton Wanderers debt figure rises to £136.5m

Bolton Wanderers recorded a loss of £22.1m in the last financial year, taking their total debt to £136.5m. However, £125m of the debt is owed to owner Eddie Davies, which has been refinanced into a long-term loan.

Pretty similar to us then really.

Except unlike TB, Bolton have had the benefit of about 10 years worth of Premier League dosh sloshing around in the coffers, and have STILL come out £140m in the red - which is a proper shit way to run a business. But then they're hardly unique in that respect.

But our debts come from the necessary cost of buying a stadium. The Reebok only £25m.

 

[Stat Brother]

We owe about 140m to Tony Bloom......................and its highly unlikely that amount will decrease soon

Don't be ridiculous I paid an extra 50p for a programme.

Well I did until I threw my toys out of my pram, cos I don't see why I should foot the bill, for the stadium.

 

[Uter]

It's a couple of years old, but here is an excellent article on the state of Bolton's finances (written by an Albion fan in Switzerland incidentally):

http://swissramble.blogspot.com/search/label/Bolton%20Wanderers

They have been running at an operating loss for the last few years and have accrued debt at an alarming rate:

Net debt: 2006 £29m, 2007 £43m, 2008 £54m, 2009 £64m, 2010 £95 and now it's a staggering £136.5m.

At face value we might appear to have similarities with Bolton, in that we both have our debt largely resting with one private individual. But there are very important differences:

"(Eddie) Davies has not exactly “given” the money to the club, as Bolton have to pay a price for his generosity. Last year, his company was paid £3.6 million in respect of “arrangement and guarantee fees” for the £85 million loan, which is linked to an interest rate of 5%. It’s also repayable on demand, though the directors have received assurances that repayment of the loans will not be demanded within 12 months of signing the financials statements. In fairness, these terms are an improvement on the previous year, when the interest rate was a very high 10% on a £23 million loan, which produced a £2m payment to Davies."

Our loans are interest free, so effectively Tony Bloom is gifting the club in the region £5m to £10m a season (in some respects the credit crunch did us a massive favour). I doubt we had to pay the sort of arrangement fees Davies required. I don't think our loan is repayable on demand either, but then Bolton's might not be anymore as they have restructured the debt since this article was written.

The most worrying thing for Bolton is their huge operating loss for the last few years. I doubt relegation will have helped, even if it has forced them to cut their cloth accordingly.

It remains to be seen if we are operating at a loss, but if we are I doubt it's massive and will certainly be peanuts compared to Bolton.

 

[El Presidente]

Do we? Like the other thread where you state, without any fact we are making a loss, this is complete crap. We, "we" do not owe the owner of the business, it's his business. He owns the majority holding in that business which in turn wholly owns the stadium business. The interest free loan is not owed until it has to be paid, which is in a number of years. No repayment or any interest is due until that period expires, if, repeat if, the business is unable to repay the loan amount at that juncture then the loan will be converted in to shares within the company, which he owns. That my friend is not the same as owing the bank. If Mr Bloom decides to leave before the end of the period he can not change the details neither can his death.

The club/business is now on a very secure footing and runs within its revenue raising capacity. Costs have been higher than expected but and a very big F**K OFF but the revenue streams have exceeded all expectations. So can we stop this bollocks being spouted about our finances on this and a few other threads by the same ill informed posters.

What drivel.

 

[El Presidente]

Loaning a company money is tax advantageous.

How?

 

[Sussex Nomad]

[MENTION=2928]PILTDOWN MAN[/MENTION] Looks like you're flogging a dead horse, sometimes our more esteemed NSC members care very little about the truth when there's a good story to be had.

 

[PILTDOWN MAN]

What drivel.

Please tell me why. Bloom has been interviewed and has said as much on a number of occasions.

 

[deletebeepbeepbeep]

Stadium: 90m
Stadium Improvements: 14m
Training Ground: 30m

So its not 'just' the Stadium and who knows what the accounts look like but the only Championship team that makes profit is Leeds and perhaps now Wolves.

I'm not being a doommonger but you can't gloss over the fact we owe a lot of money and then have a moan about other club's finances.

 

[Hotchilidog]

Stadium: 90m
Stadium Improvements: 14m
Training Ground: 30m

So its not 'just' the Stadium and who knows what the accounts look like but the only Championship team that makes profit is Leeds and perhaps now Wolves.

I'm not being a doommonger but you can't gloss over the fact we owe a lot of money and then have a moan about other club's finances.

The thing is we technically owe the money to ourselves, not to outside agencies and banks who are constantly knocking on our door after their money. Bloom stumped the initial cash for the Albion's infrastructure and he will either be repaid at the end of the loan period of have the loan converted into shares which he can either keep or sell on. The football side of the equation is being funded by the club's revenue streams. If we bring in less money we will spend less, simples.

To say that our financial state is the same as a badly run, basket cases such as Portsmouth etc is quite frankly ridiculous. The chairman has put HIS money where his mouth is (the loan is unsecured and interest free by the way, so the Amex need not be sold to repay him), that is a lot different to just going out and speculating idly on fly by night players we can not afford. The money has been spent on building an infrastructure that allows the club to generate the revenues required to operate at this higher level, and also to produce future talent for the first team.

We are a very well run club, that is not in immediate danger of the administrators or bailiffs coming in, and to say otherwise it to be disingenuous in the extreme.

 

[Rugrat]

To suggest that our debt is different from Bolton's is way off the mark imo. Most of their debt is to their owner and major shareholder as is ours. The basis of how the debt was accumulated is largely irrelevant. We don't know the contractual terms of the loan from TB only that he is not requiring it to be be paid right now (and nor does Davies) but you can bet that there are clauses in the contract that allow him to require instant repayment of all or part of it (such as in the event of sale) and to allow for interest payments and, and, and.

Nor do any of us know how the P&L looks since we moved into the Amex but we assume, because we have big gates and no debt to service that we are doing fine .. not unreasonable but assumptive

I'd say our situation is almost exactly as Bolton in terms of debt but equally I'd say it wasn't anything to get too bothered about either

 

[Westdene Seagull]

[MENTION=2928]PILTDOWN MAN[/MENTION] - how can you be so sure the club is in such a good financial position when the accounts covering any part of our Amex tenure are yet to be published ?

 

[upthealbion1970]

But our debts come from the necessary cost of buying a stadium. The Reebok only £25m.

Our debts are also interest free

 

[Brovion]

Relegated Bolton have stated that a near loss of £25 million last season has increased the total club debt to £136 million !! Just how do you settle that level of debt ? http://www.bbc.co.uk/sport/0/football/20310338

You eventually trade it in for ten league points and carry on as if nothing had happened.

 

[PILTDOWN MAN]

[MENTION=2928]PILTDOWN MAN[/MENTION] - how can you be so sure the club is in such a good financial position when the accounts covering any part of our Amex tenure are yet to be published ?

I have not commented on the health of finances other than to counter what some have said in regard to high running costs of the Amex. The takings have also exceeded all expectations. Based on the original number crunching released by the club, the running costs alongside the original loan repayments (prior to Bloom's money) the break even point was around 14000 spectators per game. The loan repayments are now irrelevant as has been documented, the crowds are a good 10000+ higher and the catering etc taking are well above expectations.

I have no evidence whatsoever of the clubs p&l but with higher takings one can assume there's higher costs also associated with it (more staff etc) but one would hope that the club is running at an operating profit at least. If not then we are truly well in the shit as we are nearing capacity. Bloom being a very rich astute chap I doubt there's a problem, especially as he is about to dip once more into his pocket for the training ground.

 

[GreersElbow]

It's all well and good saying reduce costs and increase profits but I think you'll find Albion are in as much debt as Bolton and it'll be hard to pay back to Bloom.

Whilst this maybe true, Bloom is the main creditor. He's also the chairman, and a fan. I highly doubt he's just going to ask for a payment of £20m tomorrow.

We don't know who Bolton's creditors are, for all we know. They could be owed to fans.....

 

[GreersElbow]

I have not commented on the health of finances other than to counter what some have said in regard to high running costs of the Amex. The takings have also exceeded all expectations. Based on the original number crunching released by the club, the running costs alongside the original loan repayments (prior to Bloom's money) the break even point was around 14000 spectators per game. The loan repayments are now irrelevant as has been documented, the crowds are a good 10000+ higher and the catering etc taking are well above expectations.

I have no evidence whatsoever of the clubs p&l but with higher takings one can assume there's higher costs also associated with it (more staff etc) but one would hope that the club is running at an operating profit at least. If not then we are truly well in the shit as we are nearing capacity. Bloom being a very rich astute chap I doubt there's a problem, especially as he is about to dip once more into his pocket for the training ground.

We do not know of the wage bill of the entire staff (including players, backroom staff and stewards) We also don't know the cost of transport subsidies, and we do not know the full cost of administrating the Amex. We cannot be certain.