Bolton Wanderers club debt.

[Rugrat]

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

Bolton's debt is to their Tony Bloom = Eddie Davies, so no different a (or largely the same) situation to our own

Edited ... may be barking up the wrong tree here ... thought Davies and Bloom were from the same mould

 

[Uter]

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

How the debt was accumulated is very relevant. Ours is from capital investment which has massively boosted our income. Theirs is from running a large operating loss for several years from rapid wage inflation. We pay no interest. They pay interest. Their debt is likely to increase over the coming years, possible to a point where they can't service the loans. Ours will not.

 

[Rugrat]

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.

I wouldn't be surprised if any excess from operating revenues (actual and projected ticket sales, merch, grub and booze) is what Gus gets as his playing budget and determines the wages he can pay therefore leaving the club running at break even. That's a sensible approach but if TB has the capacity and desire he might well be saying (as many do) to spend in excess of earnings as an investment strategy to get to the PL.

None of us know but I'm fairly confident we're being run in a controlled way ... whether that means we are making a profit, loss or breaking even I don't know. The biggest risk I see is with TB's other businesses ... as long as they run OK he'll (seemingly) have no need for repayment and can continue to invest ... if any other piece of his empire goes tits up that's when we could be at risk of the Arabs sniffing around but then I've no idea of his real worth so even that could be way off

 

[Rugrat]

How the debt was accumulated is very relevant. Ours is from capital investment which has massively boosted our income. Theirs is from running a large operating loss for several years from rapid wage inflation. We pay no interest. They pay interest. Their debt is likely to increase over the coming years, possible to a point where they can't service the loans. Ours will not.

You're right .. but I suspect now out of the PL they will be more prudent with their spending .. could be wrong. I'm not sure if their debt is attracting interest .. I see there was an interest payment but I assumed that was Davies exercising the opportunity as he had a need at the time .. rather than there being a schedule of interest payments.

 

[Triggaaar]

How the debt was accumulated is very relevant. Ours is from capital investment which has massively boosted our income. Theirs is from running a large operating loss for several years from rapid wage inflation. We pay no interest. They pay interest. Their debt is likely to increase over the coming years, possible to a point where they can't service the loans. Ours will not.

Added to those points, TB knew that the club would incur the cost of the ground, so that's a debt he planned for and accepted. I doubt that Bolton planned to have a large operating loss, plus relegation from the premiership. So they have a debt they didn't plan for, a debt which is getting bigger by the day, whereas we have a stable debt that was part of the plan.

 

[PILTDOWN MAN]

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.

Never stated we can be certain but the club has put on record that we have a tightly administrated playing budget and again it can be assumed that the rest of the staff are on tight budgets. The stadium is open daily for many events or simply for lunch, all this adds to revenue. In terms of staff the club is a relatively small business but one with a high profile. The travel subsidies are now added to the ticket price.

Only the accountants can be certain.

 

[deletebeepbeepbeep]

How the debt was accumulated is very relevant. Ours is from capital investment which has massively boosted our income. Theirs is from running a large operating loss for several years from rapid wage inflation. We pay no interest. They pay interest. Their debt is likely to increase over the coming years, possible to a point where they can't service the loans. Ours will not.

That's impossible to guarantee without knowing the terms of the agreement that Bloom paid for the Stadium +Upgrades +Training Ground under.

 

[Sam-]

Lots of profitable businesses fail. And lots of unprofitable ones can continue (football clubs in the main).

Profit is a number, what's really important is cash. I would suggest we may have a large debt. But we are likely to have some good cash flows. Bolton went all out cutting there wage bill and so on so massive respect for them understanding the issue and dealing with it.

People argue about losses and profits and that's secondary. Do you think football clubs operate to generate shareholder wealth ?

 

[PILTDOWN MAN]

That's impossible to guarantee without knowing the terms of the agreement that Bloom paid for the Stadium +Upgrades +Training Ground under.

We know, there's a tv interview, where he states that the loan is not repayable until the term of the loan expires. Even then if the club is unable to repay it WILL be converted into shares. Those terms were dealt with. So unless Bloom lied our debt will not increase in regard to Bloom's loan. The training ground is being financed again by Bloom and he has not stated how the arrangement will be. However given his previous intentions it is likely to be a similar arrangement. Added to which the training facility is likely to be a separate company, as is the stadium.

 

[Uter]

You're right .. but I suspect now out of the PL they will be more prudent with their spending .. could be wrong. I'm not sure if their debt is attracting interest .. I see there was an interest payment but I assumed that was Davies exercising the opportunity as he had a need at the time .. rather than there being a schedule of interest payments.

I hope for their supporters sake that they manage to control their debt. If you look at how their debt has rocketed in recent years they will struggle to do so. I'd be worried if I were a Bolton supporter. They will have to cope with a double whammy of rising interest payments and massive falls in revenue. It's the rate of increase that is so alarming. It's difficult to see them getting on top of it in the Championship.

 

[GreersElbow]

Bolton's debt is to their Tony Bloom = Eddie Davies, so no different a (or largely the same) situation to our own

Edited ... may be barking up the wrong tree here ... thought Davies and Bloom were from the same mould

Which lowers the risk of the creditor coming knocking for his/her money. A safer creditor than as you've pointed out below about foreign investors.

I wouldn't be surprised if any excess from operating revenues (actual and projected ticket sales, merch, grub and booze) is what Gus gets as his playing budget and determines the wages he can pay therefore leaving the club running at break even. That's a sensible approach but if TB has the capacity and desire he might well be saying (as many do) to spend in excess of earnings as an investment strategy to get to the PL.

None of us know but I'm fairly confident we're being run in a controlled way ... whether that means we are making a profit, loss or breaking even I don't know. The biggest risk I see is with TB's other businesses ... as long as they run OK he'll (seemingly) have no need for repayment and can continue to invest ... if any other piece of his empire goes tits up that's when we could be at risk of the Arabs sniffing around but then I've no idea of his real worth so even that could be way off

A sensible analysis. As long as if any debt is well managed and kept an eye on, it can be safe. It's not as though we've begged big banks, and foreign investors to pump in millions with the premise that we'll be in the premier league for definite in a few years.

 

[Brovion]

Added to those points, TB knew that the club would incur the cost of the ground, so that's a debt he planned for and accepted. I doubt that Bolton planned to have a large operating loss, plus relegation from the premiership. So they have a debt they didn't plan for, a debt which is getting bigger by the day, whereas we have a stable debt that was part of the plan.

That is the nub of it. On the face of it both club's debts are the same, i.e. the debt (or the bulk of it) is owed to one superfan rather than banks, charities, HMRC, etc. However our debt to our superfan comes from capital expenditure, whereas Bolton's debt comes from 'mismanagement' (for want of a better term).

Or to put it another way, we've got something concrete (in more ways than one!) to show for our debt, they've just got memories.

 

[35yearstop2divs]

a line from Steve Parish , we sit down at start of the year and decide how much we are going to loose (give !) you dont make money in Championship and most prem clubs are in massive debt , we know where all the money goes. I do have respect for Arsenal on this front and i reckon certain clubs in championship are going s#it or bust in pursuit of prem

 

[GreersElbow]

a line from Steve Parish , we sit down at start of the year and decide how much we are going to loose (give !) you dont make money in Championship and most prem clubs are in massive debt , we know where all the money goes. I do have respect for Arsenal on this front and i reckon certain clubs in championship are going s#it or bust in pursuit of prem

Sounds like the only sensible thing Parish has ever said.

But I agree with everything else, Arsenal's model is incredibly sustainable and they still regularly achieve top 4 without spunking loads. I can see Leicester's investors getting a bit anxious if Leicester don't get promoted soon...

 

[Lady Whistledown]

a line from Steve Parish , we sit down at start of the year and decide how much we are going to loose (give !) you dont make money in Championship and most prem clubs are in massive debt , we know where all the money goes. I do have respect for Arsenal on this front and i reckon certain clubs in championship are going s#it or bust in pursuit of prem

Seems reasonable- somebody on this thread said Leeds make a profit. Do they really?

They get lower crowds than us currently (and falling), they have a fairly large squad, albeit on (presumably) lower wages than previous seasons, a crumbling, big old stadium that can't being in spectacular revenues, and no change in TV money. Perhaps it's just Bates being ultra prudent, but I must admit, I'd be surprised if they were making a profit.

As this utterly reasonable Palace fan says...Championship clubs are unlikely to make a profit, apart from newly relegated ones who've cut their wage bill but still get parachute payments, surely.

 

[deletebeepbeepbeep]

Seems reasonable- somebody on this thread said Leeds make a profit. Do they really?

They get lower crowds than us currently (and falling), they have a fairly large squad, albeit on (presumably) lower wages than previous seasons, a crumbling, big old stadium that can't being in spectacular revenues, and no change in TV money. Perhaps it's just Bates being ultra prudent, but I must admit, I'd be surprised if they were making a profit.

As this utterly reasonable Palace fan says...Championship clubs are unlikely to make a profit, apart from newly relegated ones who've cut their wage bill but still get parachute payments, surely.

In 2011 they made a 3.5m profit after tax, source: the excellent swiss ramble The Swiss Ramble: Leeds United.

They also have an interesting article on the Albion pre-Amex: The Swiss Ramble: Brighton and Hove Albion

Which I think summarises everything well:

There is always some concern with the benefactor model, which works just fine as long as the owner remains dedicated to the football club, but can be problematic if his circumstances change. Bloom himself admitted that he had to “make a bigger commitment than I would have envisaged”, because of the difficulties in securing credit.

The other worry is the sheer size of the debt, which is approaching twenty times the club’s annual turnover. Unless the loans are converted into shares, there has to be a possibility of repayment at some stage, though this would presumably only be likely if Bloom were to fall on hard times. Considering their experiences with Bill Archer, the fans would be justified in feeling nervous about a repeat performance. As one fan memorably put it, “we don’t want to have all our eggs in one bastard.”

On the face of it, Tony Bloom is cut from a different cloth and has hastened to assure fans that he is nothing like Archer. Indeed, there are strong family ties to Brighton and Hove Albion, as his uncle Ray is also a director, while his grandfather Harry was vice-chairman when the club reached the old first division in 1979. You could say that the Albion is in his blood and Bloom himself is a lifelong supporter.

 

[Buckley's Mad Eye]

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

Sell Zaha? Oh Bolton, sorry as you were.

 

[perseus]

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

cf. On 10 November 2010, the Bolton Wanderers announced a loss of £35.4 million for the year ending 30 June 2010, with debt increasing to £93 million.

They do look like the bookies favourites at the start of the season.

Why did Dougie Freedman go there?