Bolton £163 million in debt (!)

BigGully · Dec 31, 2013

I am just trying to see why companies that supply football clubs cannot also start acting like normal businesses too.

Surely far greater restraints with their credit line might lessen the speed of cumulative debt, it seems that the football industry acts like no other.

As for salary caps, not a chance, billionaires love negotiating with millionaires so until each club have billionaires for owners it wont happen.

nicko31 · Dec 31, 2013

There are of lot of parallels between Bolton and our former Labour government, failing to build a roof when the sun was shining. Also, time they ended parachute payments it just encourages financial indiscipline, putting on an extra £50KK in 12 months is crazy, it would have still been £20kk if their revenue had remained the same. Its a case of not sending the alcoholic to AA, just give em another Scotch!!

Still for a closed Premier League Mr. Gartside?

DIFFBROOK · Dec 31, 2013

Not read all previous posts, but I cant see how FFP will fit in with this. The principle behind FFP is to encourage clubs to be self sustaining without backing of owners. If FFP financial punishments are used in Boltons case, they will make an already heavily indebted club even more so. If a transfer embargo is put in place, then the club will have to unload quite a number of players, or re negotiate wages much lower - not easy or play more more youth players - or a mixture. Basically do what Leeds did- a fire sale. The result of course is probable relegation.

Unless of course FFP never actually happens.

drew · Dec 31, 2013

DIFFBROOK said:
Not read all previous posts, but I cant see how FFP will fit in with this. The principle behind FFP is to encourage clubs to be self sustaining without backing of owners. If FFP financial punishments are used in Boltons case, they will make an already heavily indebted club even more so. If a transfer embargo is put in place, then the club will have to unload quite a number of players, or re negotiate wages much lower - not easy or play more more youth players - or a mixture. Basically do what Leeds did- a fire sale. The result of course is probable relegation.

Unless of course FFP never actually happens.

Isn't the point that FFP will be a deterrent. Yes, a club like Bolton will struggle under the sanctions but that is the deterrent to everyone else not to follow their example. What would make it cast iron is that the Premier League should actively punish clubs that breach it in getting promoted. At present, they are paying lip service to it.

wakeytom · Dec 31, 2013

Hiney said:
Turnover £28.5 million
Wage Bill £32.7 million

In the words of the late great David Coleman "Quite remarkable"

I think one of the issues is the way that clubs account for there balance sheet. The specific around football accounting mean that a club can add a player to its balance sheet where in pretty much no other line of business this can be done. They can give whatever value they dream up and add them back in as intangibles so in effect propping up the balance sheet with a fake number. Also an earlier post asks why companies pump so much money in to a sister football club - not only may they have passion for it I would suspect that it is very tax efficient for a profit making organisation, plus again on there balance sheet they can add it back in as an investment, which in reality may never be paid and then have a further knock on effect if/when things go wrong.

Here is a bit of light reading on an old paper for '98:
etheses.bham.ac.uk/899/1/Rowbottom99PhD_A1a.pdf

Creaky · Dec 31, 2013

drew said:
Isn't the point that FFP will be a deterrent. Yes, a club like Bolton will struggle under the sanctions but that is the deterrent to everyone else not to follow their example. What would make it cast iron is that the Premier League should actively punish clubs that breach it in getting promoted. At present, they are paying lip service to it.

Why should the clubs, (staff, players, suppliers, fans, transport companies, sponsors etc), be 'punished' rather than the individuals, (i.e. the shareholders), responsible for the breaches in the first place?

KZNSeagull · Dec 31, 2013

drew said:
Isn't the point that FFP will be a deterrent. Yes, a club like Bolton will struggle under the sanctions but that is the deterrent to everyone else not to follow their example. What would make it cast iron is that the Premier League should actively punish clubs that breach it in getting promoted. At present, they are paying lip service to it.

I don't really see it as a deterrent, rather an attempt to force clubs to get their houses in order and stop this reliance upon sugar daddies (to some degree).

Not Andy Naylor · Dec 31, 2013

Hiney said:
Turnover £28.5 million
Wage Bill £32.7 million

In the words of the late great David Coleman "Quite remarkable"

And even more remarkable is that the wage bill is £20 million down on the previous year. Progress of a sort ...

drew · Dec 31, 2013

KZNSeagull said:
I don't really see it as a deterrent, rather an attempt to force clubs to get their houses in order and stop this reliance upon sugar daddies (to some degree).

Isn't that what a deterrent is for? ie get your finances in order or else!

Creaky said:
Why should the clubs, (staff, players, suppliers, fans, transport companies, sponsors etc), be 'punished' rather than the individuals, (i.e. the shareholders), responsible for the breaches in the first place?

You can't really separate the two though. Fans love the success that money sometimes buys so they have to suffer the consequences when it goes tits up. Pompey and Leeds being prime examples. Same with any business that struggles, employees lose jobs, customers lose service. In football the players move on and fans will have to put up with several years in the doldrums. Look at this form, there are numerous threads from so called fans saying we should splash out in the transfer window irrespective of the long term consequences of not achieving promotion. You can't have it both ways.

Dorset Seagull · Dec 31, 2013

For the accountants out there could it be clubs are declaring higher losses at the moment (ie some of next years) so that next years are less than they would be enabling them to meet FFP?

edna krabappel · Dec 31, 2013

TRHK said:
Corrected for you!

I'm not so sure it's exactly the same. Yes, Bloom kept us afloat for the last of the Withdean years, and has undoubtedly invested in the team, but a huge amount of his investment has gone towards critical infrastructure designed to make the club more sustainable in the long term. What long term investments are Forest making in their future?

Paddy B · Dec 31, 2013

Dorset Seagull said:
For the accountants out there could it be clubs are declaring higher losses at the moment (ie some of next years) so that next years are less than they would be enabling them to meet FFP?

To a point I suspect this may happen but in Bolton's and Blackburn's case it will be a drop in the ocean. Leicester, QPR and Forest must also be miles away from the £8m losses.

I can't help but think that one of those clubs will find a legal loophole to counter the embargo.

Acker79 · Dec 31, 2013

Dorset Seagull said:
For the accountants out there could it be clubs are declaring higher losses at the moment (ie some of next years) so that next years are less than they would be enabling them to meet FFP?

I believe the acceptable losses are set for everyone. i.e. This season's reported finances 8m is acceptable, for next season it is 5m, regardless of how much was lost last season.

Stumpy Tim · Dec 31, 2013

drew said:
Who are on these 5 or 6 year contracts then. I don't think you will find anyone at the Albion on such a contract, nor the vast majority of players. In fact, can you provide links to show who exactly is on a 5 or 6 year contract? As for the past, don't you remember Bamber throwing around 10 year contracts like they were confetti. All well and good had we stayed in the First Division but alas we didn't.

Well a simple Google gave me these:

http://www.dailymail.co.uk/sport/football/article-2467050/Adnan-Januzaj-signs-year-contract-Manchester-United.html
http://www.mirror.co.uk/sport/football/news/luis-suarez-signs-new-liverpool-2938989
http://www.bbc.co.uk/sport/0/football/23974832
http://www.theguardian.com/football/2013/sep/10/shay-given-aston-villa
http://www.dailystar.co.uk/sport/football/332543/Southampton-s-Danny-Fox-set-to-join-Bolton
http://www.bbc.co.uk/sport/0/football/22112980
http://www.bbc.co.uk/sport/0/football/21195116
http://www.walesonline.co.uk/sport/football/football-news/flying-winger-nathan-dyer-signs-5669523
http://www.bbc.co.uk/sport/0/football/25415390

hans kraay fan club · Dec 31, 2013

Stumpy Tim said:
Well a simple Google gave me these:

http://www.dailymail.co.uk/sport/football/article-2467050/Adnan-Januzaj-signs-year-contract-Manchester-United.html
http://www.mirror.co.uk/sport/football/news/luis-suarez-signs-new-liverpool-2938989
http://www.bbc.co.uk/sport/0/football/23974832
http://www.theguardian.com/football/2013/sep/10/shay-given-aston-villa
http://www.dailystar.co.uk/sport/football/332543/Southampton-s-Danny-Fox-set-to-join-Bolton
http://www.bbc.co.uk/sport/0/football/22112980
http://www.bbc.co.uk/sport/0/football/21195116
http://www.walesonline.co.uk/sport/football/football-news/flying-winger-nathan-dyer-signs-5669523
http://www.bbc.co.uk/sport/0/football/25415390

Leo Ulloa.

El Presidente · Dec 31, 2013

wakeytom said:
I think one of the issues is the way that clubs account for there balance sheet. The specific around football accounting mean that a club can add a player to its balance sheet where in pretty much no other line of business this can be done. They can give whatever value they dream up and add them back in as intangibles so in effect propping up the balance sheet with a fake number. Also an earlier post asks why companies pump so much money in to a sister football club - not only may they have passion for it I would suspect that it is very tax efficient for a profit making organisation, plus again on there balance sheet they can add it back in as an investment, which in reality may never be paid and then have a further knock on effect if/when things go wrong.

Here is a bit of light reading on an old paper for '98:
etheses.bham.ac.uk/899/1/Rowbottom99PhD_A1a.pdf

That's gibberish.

El Presidente · Dec 31, 2013

Acker79 said:
I believe the acceptable losses are set for everyone. i.e. This season's reported finances 8m is acceptable, for next season it is 5m, regardless of how much was lost last season.

Yup that's correct, but failure to stay within the defined limits will lead to the imposition of sanctions. However, there will be no sanctions implemented during the first two seasons (2012/13 and 2013/14) in order to give clubs a sensible period of transition.

Therefore Bolton have an incentive to accelerate some expenditure into the 2012/13 season as their losses do not invoke any penalties.

Stat Brother · Dec 31, 2013

[tweet]417999405921230848[/tweet]

Creaky · Dec 31, 2013

drew said:
Isn't that what a deterrent is for? ie get your finances in order or else!

You can't really separate the two though. Fans love the success that money sometimes buys so they have to suffer the consequences when it goes tits up. Pompey and Leeds being prime examples. Same with any business that struggles, employees lose jobs, customers lose service. In football the players move on and fans will have to put up with several years in the doldrums. Look at this form, there are numerous threads from so called fans saying we should splash out in the transfer window irrespective of the long term consequences of not achieving promotion. You can't have it both ways.

Not a matter of having it both ways for many of those affected by the success or failure of a club.

Suppliers for example will have invested in order to provide the necessary goods or services during the 'years of plenty' then along comes the league and penalises the clubs reducing demand.

Sponsors may well have a contract with the club based on the exposure at the time of signing - along comes the league and penalises the club and reduces the exposure the sponsors are receiving whilst still paying at a rate calculated on the performance of the club before the penalties were imposed.

Staff, one of the first areas where cost reductions are made - how have they benefited during the good years in sufficeint measure to compensate for losing their jobs during the lean years..

Transport companies and their employees - infrastructure invested in to service the club no longer needed.

I could go on but better maybe to look at the owners - transfer embargos penalise them not one jot - financial penalties by way of fines only put t6he club's future at risk if owners simply refuse to, or are unable to pay.

Bolton for instance, if their losses are, as reported, likely to be in the tens of millions then what is the point of fining the club further millions - how likely is it the club will be able or willing to pay up? Fine the owners as individuals though and then they would have to pay up or be banned from being involved in running a football club.

El Presidente · Dec 31, 2013

Creaky said:
Fine the owners as individuals though and then they would have to pay up or be banned from being involved in running a football club.

It wouldn't stand up in court, football clubs are companies and therefore have a separate legal identity to their shareholders.

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