Yes, £136.5 million is a hell of a lot of money. The realization is even worse when you see it as a financial deficit, not the surplus that we wish it was. We've seen a number of clubs go broke and enter administration in the past few years with only last-ditch efforts keeping them in existence. Portsmouth, Real Oviedo, Rangers, and Hearts are just some of a well-publicized long list but there is one key difference between those clubs and Bolton Wanderers:
The Trotters do not owe money to the banks or government agencies.
That's where football clubs get into deep, deep trouble. When they take out massive loans from banks to cover expenditures and they can't pay the banks back. That's when the administrators come knocking. Banks make money by taking calculated risks. Namely, loaning out relatively huge sums of money and making it back (and then some) in interest payments. Those figures add up and often, there is no way back for the borrowers.
For Bolton Wanderers, the situation is much different. Yes, the club is £136.5 million in debt, up £22 million from the previous year and very likely to rise again next year due to decreased income from television contracts. Yet, there isn't a sense of urgency to repay that debt thanks to one very important thing that the media seem to leave out of their headlines and only ask questions about it later.
Of that £136.5 million, only £11.5 million is owed to the banks with the remaining £125 million belonging to Eddie Davies', the owner of Bolton Wanderers Football Club, investment firm: Moonshift Investments Ltd. Furthermore, that debt has just been refinanced into a long-term loan with a reported ten-year notice clause attached to it.
What does that mean exactly? Well, if Eddie Davies tells Bolton Wanderers that he needs that sum paid in full tomorrow, that means that the club have until ten years tomorrow, to the day, to return that money plus any interest owed. The same thing goes if Eddie decides in 15 years that he wants the money. He would then ask the club and they would have 25 years from today to pay the debt.
Eddie doesn't seem need the money that badly though. Bolton Wanderers are paying interest on the debt and allowing Davies to be pretty comfortable while still investing in the club, the facilities, and the area surrounding the Reebok Stadium.
A lot of the reason for this debt is (wait for it...) Gary Megson. In 2006, Bolton Wanderers debts totalled just £29 million and have since skyrocketed. The exorbitant spending under Gary Megson in both salaries and transfer fees was a major reason for this. One of the very positive things that Owen Coyle did in his tenure (and following Bolton's relegation to the Championship) was cutting the wage bill dramatically, with reports claiming that it was halved. This was extremely important as being in the Championship, Bolton will receive nowhere near the amount the did from Premier League TV contracts, with only a sliver coming down to them in so-called Parachute Payments.
To put this into perspective, Rangers (of Scotland) had a very similar debt figure, a reported £134 million, but the vast majority of that money was owed to the government. Before the sale of Rangers last summer to new owners, £93 million of Rangers' debt was owed to Her Majesty's Revenue and Customs in backed VAT, PAYE, and other big and small tax cases.
Bolton Wanderers are in nowhere near that bad of a hot seat.