COMMENT FROM THE BWFCST BOARD – THOUGHTS ON RECENT EVENTS
Threat of Administration
The news that surfaced on Monday morning that the club faced administration in December unless Dean Holdsworth allowed Ken Anderson to take control was both surprising and shocking in equal measure. We can only assume that this news represented the official club position, as the report in the Bolton News directly referenced Mr Anderson’s words on the club’s availability of funding.
In the days following, further stories appeared. Firstly, supporters concerns were raised in the Bolton News that key players could be sold in the January window to fund the club for the rest of the season. Mr Anderson attempted to allay such fears, but did say that keeping hold of key players was dependent upon Dean Holdsworth conceding and handed over sole control of the club to him. Then on Wednesday, there was a delay in paying players after reports surfaced that salaries had not been paid on schedule.
For the second time in 12 months, severe financial problems at the club seem to threaten not only the position that Phil Parkinson and his squad have achieved, but the longer term sustainability of the club as we know it. This last point is important because the debt, while vastly reduced following the previous owners hefty write down as part of the sale to Holdsworth and Anderson, has a significant portion that is “hard” debt. This debt is owed to external parties and heavily secured by floating & fixed charges (debentures) over every present and future asset of the club until it is repaid.
Recap of BWFCST Objectives
The Supporters’ Trust’s key objectives centre on the sustainability of our football club, encouraging financial responsibility and good governance, and being a representative voice for our members. We cannot claim to act as a representative voice for all fans because we recognise that many fans may not hold the same conviction about financial responsibility and sustainability and that this is something that fans have a right to be concerned with or be validly allowed to challenge the club over.
At our AGM two months ago, and following a survey of our members, the overwhelming consensus was that the Supporters’ Trust should raise specific concerns about the financial position at the club and the ongoing EFL embargo. The survey also overwhelmingly mandated that we should seek assurances that filing of the severely overdue accounts was in hand and that the club had sufficient funds to continue solvently until the end of the season. Further, there was a consensus that these issue be also raised directly with the EFL.
Have Answers Been Given?
Over recent weeks, we have been continuing to press for these answers. Mr Anderson chose to indirectly address these points in his public Q&A event scheduled for last week. Unfortunately, Mr Anderson subsequently cancelled less than 24 hrs prior to the event and the fans were denied the opportunity to question him in more detail.
The EFL has agreed to meet with us on 13 December ’16 when we will be able to look for some answers regarding the EFL monitoring and the transfer embargoes. We have been advised that the meeting will be with John Nagle, EFL Head of Policy.
The position is still no clearer today despite reports in the press that some form of deal has been done between Holdsworth and Anderson. As we go into this weekend’s FA Cup tie with Sheffield United, it appears that there is still no final agreement from the senior debt holder, Blumarble Capital.
On Thursday evening we wrote to The FA and the Chairman of the EFL seeking an explanation of how, under the monthly monitoring of the EFL following the March 2016 takeover, the club has run out of money? Additionally, we have asked them to investigate allegations that the promised capital contributions from the new owners, included within the EFL approval process, have not been made.
Whilst it seems that some money has gone in, there are claims that this has only been short term and has been paid back from club resources. If these are proven to be true, it would seem that the oversight and supervision of the club has fallen short of an expected standard and, against the background of a very public admission that the club has run out money, serious questions over internal governance and compliance with company law requirements necessarily arise.
The Devil Is In the Detail
To try and give some insight, we estimate that the current level of debt stands in the region of £30m, with just over a half of this sum still owing to Eddie Davies. The remainder of this debt is owed to Blumarble, to Prescot Business Park, and to a former club director.
The Blumarble debt seems to be of a more immediate concern and, based on reports that interest accrues at more than £4,000 a day, we estimate that by the end of June 2017, some £7.4m will be owing. It is our understanding that there is no regular monthly repayment of principal or interest and the whole amount is payable as a final “bullet” payment.
Reports in the Bolton News estimate annual losses to be running in the region of £10m. To get to the end of the season it could be that the club needs some £12m to £15m liquidity, excluding any income from player sales or any expenditure on new players in January. The accounts for 2015 are still not published, but it is easy to see that the auditors may be requiring some visibility of around £15m to £20m funding to get to the end of 2017 as part of their “forward looking assessment”.
So, as we stand in this first weekend in December, even if Holdsworth and Anderson manage to settle their differences, there are a number of very important issues that need to be addressed by the club and by the football authorities.
We will continue to press for information & transparency for our members. If you do have questions for the Trust board, or any comments & suggestions you want to raise, send us an email to email@example.com or to Ian Bridge on firstname.lastname@example.org.