UPDATE: Important Questions
As things presently stand there is still a lot of uncertainty over the future of BWFC. The Bolton News reports that there are additional sticking points in the planned Sports Shield led takeover that the Football League want to see resolved. However, with another winding-up hearing due this coming Monday, time once again is not on our side. It should be noted that the information being requested by the Football League is in respect of their interest in ensuring that the affairs of one member are in the interests of all of its constituent members. We consider that the interests of the Community and BWFC supporters are subtly different.
BWFCST holds the view that central to the future of the club should be the Club heritage and football ethos. This is the Club DNA. After a lot of discussions with football institutions we see four pillars that are needed to reinforce the club DNA if we are to push forward, regain our financial health, and become a community & supporter centred Football Club.
Up to date we have attempted to ascertain from the information available to us the detail behind proposed purchasers of the club. Fans will remember that the original shareholding of BWFC was presented with some of this information when the current owner bought into the club. Irrespective of who the potential buyers of the Club are we consider that the following questions should be answered in the interests of transparency to the community and BWFC supporters:
- Who are the individuals behind the corporate vehicles being used to bid for the club? What is their background and track record in both football and business? What are their motivations in investing in the buy-out of the club?
- What is the source of funds for these individuals and corporate vehicles? How much debt, both corporate and personal, is being used to finance their investment? How are the club assets or shares in the football club being used to provide security against these borrowings?
- Is the financing available, unconditionally, on day one or is the financing staged over time? If it is staged financing, what is the time frame envisaged and is future funding conditional or unconditional? If it is conditional, what are those conditions? If future funding is to come from third parties not presently included in the takeover how are new partners to be considered?
- Do any investors have preferred terms such as exit-rights, debt to equity conversion rights, control-rights, priority charges over cash flows, enhanced voting rights, or rights to fire the board?
- Recognising the extent of the financial support already in place at BWFC, what is the status and intentions regarding any current loans to be left in the club at sale?
- How is the business and any proposed turnaround-plan to be financed? What assumptions underpin that business plan? How will club assets be used to provide security over future financing?
- How will the club reorganise finances should it be relegated to League One at the end of this season? How will players’ contracts be handled to ensure compliance with the League One salary cap rules and what will be the cost of doing this? Do the funding arrangements of individual and corporate investors either allow for this or have special conditions if the club is relegated and remains in the lower divisions for one or more seasons? If administration is to be avoided this season what assurances can be given in respect of prevention of a future administration in the context of a potentially decreased income stream in 2016-17?
- Who are the individuals to be on the Board and Executive Management Team? What is their experience in managing stressed businesses? How long will the turnaround to Break-even take and how much funding is needed to achieve this? Will this funding be from equity or debt? How much asset sales are envisaged in doing this and what assets are at risk? Have any business plans assessed what level of employee restructure will be required? How much will need to be paid out to players, management, back-room staff, and current directors as severance compensation? How will the new board deal with existing contractual obligations to agents?
In asking these questions we wish to highlight the potential risks that the club might face, not only to relegation to League One this year, but ensuring that the issue of stability is at the forefront of plans now. It would be wrong of us to blindly hope for the best.
Finally, we ask the Club to give the supporters and local community some comfort that plans are in place to circumvent HMRC being successful in obtaining a court order to wind up the Club. After nearly four months of uncertainty we require answers in order that our club is saved and restored to a stable footing.