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The Accounts - An alternative View

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The glossy brochures are out & we’ve had a few days to digest. Reasons to be happy  or grumpy?

Covering the year we spent in League One, a period where against all odds, Bolton got immediate promotion, despite being in a season long embargo. It was also a year of owners having unseemly public spats, late salary payments for staff, again, that never ending embargo and yet more public spats with disgruntled creditors.

Firstly, these accounts were submitted within a legal timeframe, so that’s a plus. Not something to get too carried away with it has to said, when businesses have a full nine months to arrange for auditors to check the accounts and publish the results. Something the vast majority of businesses outside the world of Bolton Wanderers seem to manage regularly...

I have wondered whether we haven’t recognised the difficulty of past failings because the record breaking lateness must’ve been down to the auditor being a Tibetan monk, located on the other side of Mordor and requiring a hearty team of hobbits & dwarfs to get the accounts to companies house via middle earth.

Anyhow, I digress.

So, it’s been revealed that Eddie Davies has now written off a gnats tadge short of £200m. The man that helped the BSA years happen, Jay Jay and all, but who also managed to blow the majority of that money getting us relegated from the Prem to L1 with that out of control boardroom spending. Some fans are convinced of a conspiracy that Eddie actually put in less than Anderson, others would rather burn at the stake than allow fans to believe it all didn’t come from Eddies pockets. Other views are generally that Eddie put ’just’ around £100m in, with the rest being covered by accrued interest payments rolled up over the years. The truth is that we’ll never know the truth. But even ‘just’ £100m isn’t something you find down the back of your sofa, so however Eddies era ended, you’ve got to tip your hat to someone who’s prepared to write off that kind of money.

Back to the accounts.

The major talking point was that £525k consultancy payment to Kenneth via Inner Circle Investments. Not bad for a years work. You can say that a Chairman who was instrumental in getting Parky and his back room staff into the club, ran rings around the EFL embargo, kept the creditors at bay and reduced cost, helped get in the players Parky needed for that vital promotion and therefore has earned every penny of that £525k. You can also say that an owners non investment of -£525k, unable or unwilling to sort out the embargo, causing barriers to the team that would’ve been better avoided rather than trying to find loopholes for. not to mention unreasonably late (previous) accounts and all the other off field dramas that should’ve also been avoided, is not how a club should be run. If you want to own a club then you need to have the investment at hand to do it properly.

One interesting point though was the auditor statement that directors remuneration was less than £200k so no disclosure is provided. What that means is that directors can get paid a salary of just under £200k and we’d be none the wiser. And that’d be on top of the various consultancy fees. It could also mean that not a bean was paid out in director salaries.

Over at the hotel, revenue was falling rather than racing ahead. The hotel did stump up a £728k loan to the parent company though, to help keep Burnden Leisure’s head above water. On the plus side, it should do well with the upcoming concerts and boxing match. On the down side, the revelation that companies are reluctant to book longer term conference contracts due to the uncertainties of the BL group, shows little faith in the long term prospects of said group.

Then we have player sales. £5.5m for Zach Clough & Rob Holding was poor business. Imagine what we may have a got if we had them for another season? But that’s what happens when running cost shortfalls force player sales. On the other side of the coin, the alleged £6.5m for Madine has to be the best transfer payment we’ve had since Anelka left for £15m. The thing is Anelka was worth every penny, Madine, well, what a steal that was. Particularly if it included £5m up front with another million on a likely Cardiff promotion. The bluebirds will never get a return on that. Hilarious.

Anyhow, the accounts.

The overall loans debt is now down to £22m. Obviously a plus point. A double plus is that around £10m of that is assumed to be a soft loan to Ed. I think it safe to say that this amount is likely to be written off as well over the next 3 years, as Prem football is now just a pipe dream.

So that leaves the hard loan debt to PBP, Brett Warburton and Blumarble. Brett and PBP co-owner Michael James are both Bolton fans, whilst I often see on social media the belief that Blumarble won’t want the liquidation of a founder member of the football league on their CV. So there’s nothing to worry about then. Well, the PBP loan has been in default since January, the BM loan is due on the 01 Sept 18 and £500k of Brett’s loan was due earlier this month.

Add on that the fact that the club has just £6m worth if assets, yet £32m of liabilities and the picture is suddenly a lot less rosy.

One possible plus point, one that is looking ever more likely, is Bolton avoiding relegation. That’ll be another £6-7m in next seasons budget if the club are successful in that aim.

Playing staff. We will have just 9 players left on contract at the end of this season. Just one of those is considered a high earner on a reported £16k per week. Nothing in comparison to those Championship clubs paying £20k, £30k, or £40k+ pw of course. And that’s the other big problem. Without any investment, next seasons squad is likely to be built on a budget that’s smaller than Burton Albion’s this season. It’s a simple fact that the teams with a small squad budget get relegated after a season or two. Burton are making a fight of it, but let’s be honest, they are likely to be relegated this season.

So, you don’t need to be a rocket scientist to work out that Bolton are only heading in one direction unless investment is provided the summer. For those thinking that a self financing club is the way forward, well I like the spirit but it’s la la land thinking. Bolton’s upper league infrastructure costs will always mean that breaking even is an impossible dream, even in League 2. If we had a small stadium and no debt in League 2, then yes, it’s doable, but we don’t. I’m not saying that spending more than you earn is a great thing to do, but that’s the game Bolton are in. If it’s sensible investment rather than reckless chucking of money at problems, then we can have a way forward.

So, once again, back to the accounts.

The auditors failure to yet again validate the going concern view of the chairman is a big concern. Basically they don’t see evidence to back up his view that the club can cover costs for the coming year. The club need to either get the loans restructured and get investment from somewhere. It’s going to be an interesting summer. In the meantime, come on you bloody whites, we HAVE to stay up.