The remarkable debt mountain unveiled in the latest set of accounts released by Bolton Wanderers has shone the spotlight once again on the fragility of football clubs’ finances.
It was another demonstration of how clubs often do all they can to reach and then stay in the promised land of the Premier League – even if it puts their long-term security in jeopardy.
Even for a sport well used to dealing with massive sums of money, the news that Bolton’s debts have now passed £160 million, with a loss of more than £50m last season, showed just how desperate and out-of-control some clubs have become when it comes to gambling on their top-flight survival.
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In terms of the raw figures, turnover in 2012-13 – the first year since relegation – was £28.5m, down from £58.5m the season before.
Expenditure fell, too, with total staff costs down from £55.3m to £37.4m. But gate receipts were £3.8m, down from £5.7m, while sponsorship and advertising revenue was cut from £4.3m to £1.4m.
Football clubs getting themselves into financial strife is nothing new. The likes of Portsmouth are poster boys of how not do things. If Bolton were to go to the wall – although there is no suggestion that that is about to happen – they would not be the first.
The financial results – posted by Burnden Leisure, the club’s parent company – also highlighted just how reliant Bolton are on the support of one man.
Owner Eddie Davies, via his company, Moonlight Investment, is owed more than £150m of the total debt. While there is no indication that Davies is about to pull the plug, it shows just how fragile a club’s future can be.
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Unveiling the figures, Bolton chairman Phil Gartside said: “This year’s results show the difficulties faced in the football business when a club has enjoyed a sustained and successful period in the Premier League, in our case 11 years, then suffers relegation back to the Football League Championship.
“The ever widening gap between the two leagues makes the transition extremely difficult, even with the benefits of parachute payments from the Premier League.”
Gartside’s mitigation for the huge debts makes it sound as though the problems are all due to the structure of the football pyramid, and that Bolton are the victims here.
Yet whilst other clubs have had their own problems adjusting financially after relegation, few have fallen as far or as fast as Bolton have done. Seeking to shift the blame on to the league system is curious given that Wanderers spent many years enjoying life at the top table.
There were few complaints from the club when the money was flowing in during their 11-year spell in the Premier League.
If Chelsea or Manchester United were to be relegated from the top flight, a financial shock would be more understandable (though not necessarily more defensible). After all, no realistic football pundit expects a team like that to go down any time soon.
But while Bolton deserve credit (no pun intended) for having survived for so long as one of the smaller clubs in the Premier League, they surely must have realised they were one of the dozen or so clubs that at any given time were at risk of relegation?
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To suggest that the current situation at the Reebok Stadium is an automatic result of relegation is wide of the mark.
The worst-case scenario should be built into the plans of any business – especially a business that has had 11 years of good times in which to prepare for a bad spell.
Where Bolton were unlucky was with the exact timing of their relegation.
After more than a decade in the Premier League, they slid down to the Championship just before the new £3 billion television deal kicked in. Having said that, some might argue that benefiting from the latest influx of TV money could have spelled even greater disaster in the future – the club would have been at risk of falling from an even greater height.
Looking at the wider situation, the financial developments at Bolton show just why so many Premier League chairmen sack their managers on such a regular basis.
If the current rate of dismissals continues, only eight of the 20 managers who started this season in charge of English top-flight clubs will be still in post at the end of the campaign.
Of the six who have departed so far during 2013-14, only Andre Villas-Boas, at Tottenham, left a club not fighting for survival. The other five all left teams currently in the bottom seven.
While not all clubs would get themselves into the same economic mess as Bolton find themselves in, the huge gap between finances in the Premier League and the Championship is reason enough for owners to panic when things are looking shaky on the pitch.
And a closer look at Bolton’s figures suggests that sacking a manager in a desperate bid to achieve success is perhaps not so risky in the wider scheme of things.
Although the Trotters lost more than £50m last season, the £2.3m cost of dismissing manager Owen Coyle and his backroom staff, plus the cost of prising Dougie Freedman away from Crystal Palace as Coyle’s replacement, pales into relative insignificance.
When you are losing money at the rate Bolton have been, and when taking a gamble by changing the manager costs “just” a few million pounds, it’s hardly incentive to stick with the status quo.
A £3m throw of the dice in a desperate attempt to win promotion at the first attempt is perhaps not entirely irrational from a financial point of view.
And it nearly paid off in this case. After his appointment, Freedman took Bolton from 20th place to seventh, missing out on the play-offs only on goal difference.
So two of football’s modern-day rules seem to be well intact – clubs will still spend too much as they chase the dream, and the job security of managers is unlikely to improve in the near future.
At least chairman Gartside appears to have accepted Bolton’s current fate.
“Financial Fair Play rules require an alternative funding structure and Bolton Wanderers is very much moving towards a self-sustainable future,” he said.
“Looking forward, we have to recognise we are no longer a Premier League club in the Championship but a Championship club with ambitions to play in the Premier League; a stark reality of the financial rules now imposed.”
Bolton fans should hope that that realism remains in place should their team ever make it back to the Premier League.