What the Bolton News can learn from Gordon Brown
Saturday June 6th, 2009
There’s no such thing as boom without bust for Bolton Wanderers
It’s perhaps not the best time to be taking financial lessons from Gordon Brown, but The Bolton News repeated one of the beleaguered Prime Minister’s biggest mistakes this week.
Mr Brown once said he’d abolished the economic boom and bust merry-go-round. Then came the credit crunch.
On Thursday The Bolton News declared triumphantly that Bolton Wanderers were enjoying a “Premier League boom time.”
“The good news for English football is that, in the Premiership, they have a product that is way ahead of the rest in terms of popularity and the television companies recognise that fact,” wrote Gordon Sharrock in a piece with such a positive spin that it conjured visions of Phil Gartside and Gary Megson rolling around in piles of £10 notes in the Reebok boardroom.
Oh yes, there was plenty of boom, but what about the bust?
Buried away at the end of the article was this warning:
Debt is not necessarily a bad thing for clubs; as long as it is manageable within a club’s finances and is sustainable and repayable.
Of course, what this doesn’t say is that “sustainable and repayable” means being in the Premier League and never getting relegated, which even someone with limited knowledge of the club’s history will know is unlikely.
Elsewhere, the state of football’s – and indeed Bolton Wanderers’ finances – were being seen through slightly less rose-tinted glasses.
Here’s what The Guardian’s David Conn had to say about the economic outlook for the Wanderers:
With gates 11.4% down despite season ticket price reductions, losses and debts up, and Bolton one of the clubs more vulnerable to the recession, Wanderers are struggling to keep up. The club’s owner, the Isle of Man-based Edwin Davies, loaned a further £4.5m, apparently at annual interest of 10%, for which the club paid a £623,000 arrangement fee. Few doubted that the chairman Phil Gartside’s idea for a “Premier League Second Division” springs in part from his own fear that Bolton, at some point, are likely to face the financial horror of relegation.
The figures quoted by The Guardian for the end of the 2007-08 financial year are pretty stark, in fact. Yes turnover was up 16 per cent, but the wage bill was up 27 per cent and whilst it’s certainly possible to argue that those wages will be less for 2008-09 thanks to the departure of big earners like Ivan Campo, El-Hadji-Diouf, Nicolas Anelka and Stelios, it’s still difficult to see how any business with debts of £52 million can claim to be enjoying a boom.
For The Bolton News to use that word in the headline is not only misleading, it’s irresponsible.
The bottom line is that Bolton face a fine balancing act. On the one hand they can’t afford to let wages get out of hand, but at the same time they need good enough players to stay in the Premier League.
Phil Gartside clearly thinks Gary Megson is the man who can achieve this, and so far he’s been proven right. The problem is that the one thing Megson can’t deliver is a team good enough to stop attendances falling and fan disillusionment growing – but that’s another story. Another story that you won’t read in The Bolton News in fact.
What do you think? Have your say in the comment box below…
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3 Comments to What the Bolton News can learn from Gordon Brown
Whilst it can be argued that Bolton as a business ‘could do better’ they are in better shape financially than Liverpool, Man Untd, and Chelsea who are on the verge of refinacing their loans. On a second note, fans are not an issue for clubs, tv revenue, merchandising, sponsorship and associated income streams are! The premiership as a global brand is a cost effective vehicle for communication to a global audience
GudniBJune 6, 2009
I keep seeing the debt being quoted as £52million.
That is only the interest-bearing debt. Take a closer look at the balance sheet and you will see that total liabilities at 30 June 2008 were nearly double that. The boat was pushed out a lot further than most people realise in the two years to 2008 but over the last season lower staff numbers have hopefully helped get the finances into a bit better shape.
Manny RoadJune 6, 2009
Robert, fans may not be relevant in strict revenue terms but they are the lifeblood of any football club and are intrinsically linked to those other revenue streams you mention. You have to think that half empty stadiums are likely to reduce the amount tv companies and sponsors are willing to pay in the long term. At the end of the day sky are paying because of the draw of the big four. How long will they be willing to share that pot of cash with the rest of us before they break away in to some kind of euro super league. If/when that happens sky will not be paying mega bucks for games between Bolton, Blackburn, Wigan et al played in front of row upon row of empty seats.
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June 6, 2009