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Wanderers Ways. Neil Thompson 1961-2021

Bolton's Debt Reduction


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do you not remember that last time we saw division 1 football at the reebok?!

 

it was fucking embarasing,much more embarasing than anything we could witness in the premiership.

 

birmingham city at home with 11,668 fans on?...do you really want to go back to this?

 

getting raped by rodney jack infront of 12k?

 

and dont forget this time we wouldnt have big sam and his big ideas to birng us back and take us on another ten year trip to europe and back.

 

getting relegated would be a complete disaster for all concerned.

The point was that we cannot afford to be in the prem, unless we become the plaything of a billionaire

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This high interest scheme to cover debts owned by the lender has always puzzled me but I'm not an accountant (though 3/4 of the board are).

 

Let's say I lend 100 quid to someone and charge 10 quid interest, then the borrower owes me 110 quid.

 

The borrower can't pay the 10 quid interest because he's got other people to pay so I lend him the tenner's interest and a bit more to pay off other debts but continue to ask for 10 per cent on the total amount he owes.

 

If this continues, at some point, the debt swells way beyond the original amount and while I'm handing out more money to my poor friend, the money is taken from the interest I received from him. In this case, my poor friend is me so in a sense, I've created artificial debt.

 

I'll take the charitable route and suggest it's all goodwill to BWFC though the cynic in me can't help wonder about this high undoubtedly tax-free interest paid to E. Davies

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his motives are largely irrelevant

 

its not like we chose to borrow money off him while hundreds of other lenders were queuing up

 

unless we think there were others offering better deals

 

Aye but he inherited a stadium and hotel worth around 60m and a club with less than 30m debt when he paid fuck all for it 15 years ago. If he enjoys an above average return on all his investments, I'm struggling to understand how he's done badly out of it.

 

While we're in the Prem, it's hard to understand why he would pull the plug on us if the interest on artificial debt is paid. If Burnden Leisure loses the best part of the 45m from Sky for dropping out of the league, then it's a different story where we have to enter administration because there's no way we could service a 55m wage bill, 15 admin expenses and 5-10m on interest payments with turnover of about 20m even with extra funding.

 

Then how much does E.Davies lose? His outlay may only have been his initial lender to us. Plus he would have first dabs on the fixed assets which are still 50m.

 

As I say, this is just speculation and most likely, I don't understand what's going on. Also it doesn't concern us since we're not investors. But it does concern me as a fan when our net debt grows from 50m to 110m in 2 years without any clear explanation.

 

And the Club glosses over this by crowing about attendances rising by 5% - whoopy fcking do, 800k extra, covers Petrov's summer wages.

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If Burnden Leisure loses the best part of the 45m from Sky for dropping out of the league, then it's a different story where we have to enter administration because there's no way we could service a 55m wage bill

 

I would imagine that there would be a fire sale to clear the high-earners off the wage bill and the rest would drop down to Championship wages. We also get 4 season's worth of parachute payments from the Premier League don't we?

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Parachute payments are 12m a year over 4 years. We might recover 10m from transfer fees and another 8m from wages for contracts that have ran out/players who have moved on and there's some cash from championship TV income but there's still another 10m to find. We might be Ok for the first year but the next year might be pushing it if the wage bill remains northwards of 40m.

 

Oh well, when you've seen the dross of the Eighties, even the worse case doesn't scare you.

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I would imagine that there would be a fire sale to clear the high-earners off the wage bill and the rest would drop down to Championship wages. We also get 4 season's worth of parachute payments from the Premier League don't we?

 

Our squad if already half full of Championship players, I would guess some of them are on not far off Chmpionship wages.

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i know next to fuck all about this sort of thing.

 

My guess is there's a large amount of the usual tax avoidance going on alongside some book cooking.

 

From what I can gather, this is all about 1 bloke lending himself some money and making interest off it then slkihznpizzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

 

I think it's important for us all to remeber that when things like this come out, it makes your common or garden fan a complete irrelevance.

 

That is all.

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We might be Ok for the first year but the next year might be pushing it if the wage bill remains northwards of 40m.

 

True, but i don't think the wage bill would remain that high for that long. I think the main concern would be ending up with a team of youth team players and old lags and falling straight through into League One.

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It is a bad set of accounts but everyone forgets that Eddie was netting interest of 10% which I think is now at 5% so every year he has been getting the money back over the last 10 years via interest payments, if Eddie stays around for the next 10 years and gets between 5-10 million back per year in interest payments then I dont think he is going to starve, and the majority of the debt will have been paid back and he still owns the club the office space, the assets such as the players etc, which he can cash in any time he wants to up sticks. In short the accounts do not mean a great deal its all smoke and mirrors Eddie and his money men have most bases covered in my opinion.

 

This i dont like. How much interest would he get at a bank? Less? Wonder if other owners like Abramovich, whelan etc charge their clubs interest on what they put in.

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This i dont like. How much interest would he get at a bank? Less? Wonder if other owners like Abramovich, whelan etc charge their clubs interest on what they put in.

 

The more relevant question is if you could find a bank to lend us money, what would they charge and how quickly would they want their money paying back - in full?

 

We only pay interest on his loan and there is no official deadline for paying back the whole amount. Therefore, I think he is entitled to charge more than he would get for sticking it in the bank.

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Do I listen to all the knowledgable folk on here, or:

 

BN Link

 

 

From the BN:

 

Gartside is adamant the level of debt is not a concern and that owner Eddie Davies remains committed to bankrolling the club.

 

He said: ?Again, and I have said this before, we cannot ever underestimate what Eddie Davies does for our club. As a fan and our owner, he continues to significantly back us on and off the pitch, and he has done that again.

 

?As the report shows, our debt is to Eddie, and as a result of that support, we have no dangerous levels of bank debt which is a major plus fact for our club.

 

?Eddie has invested more than ?100 million in the Wanderers. He is a huge factor in the time we have enjoyed in this elite league and he continues to back us.

 

?As well as that, we are also in a strong position as regards our facilities, as we own them. We have an excellent infrastructure in place and we will look to build on that as we seek to continue developing.

 

?The annual report also reflects that we have made further investment in our academy and right across the business.

 

?We have always sought to progress on and off the field and we will continue to invest in these areas as we look to the future.?

 

 

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so we basically owe everything to eddie.

 

so if we went into administration he would only be entitled to a small % of his money back.

 

you can only be forced into administration by one of your credtors forcing a court order through so does that make our position as solid as it can ever be? even if we could not service the debt why would he try to get it back when he knows he would get a few pence in the pound?

 

have to say if i had spent ?100m on something would hope it was slightly better than what we have after his money has gone in.

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so we basically owe everything to eddie.

 

so if we went into administration he would only be entitled to a small % of his money back.

 

you can only be forced into administration by one of your credtors forcing a court order through so does that make our position as solid as it can ever be? even if we could not service the debt why would he try to get it back when he knows he would get a few pence in the pound?

 

have to say if i had spent ?100m on something would hope it was slightly better than what we have after his money has gone in.

 

or he can take a nice steady annual percentage out on his (debt) investment. Oh, wait a minute, why didn't he think of that.

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I know very little about Eddie Davies, so forgive me, buti s it Eddie Davies actual money, like from his own bank account ??

 

Or on the back of Businesses he has with other investers ??

 

You're into the murky world of off-shore businesses in Bermuda now - so who knows!

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i know next to fuck all about this sort of thing.

 

My guess is there's a large amount of the usual tax avoidance going on alongside some book cooking creative accounting.

 

From what I can gather, this is all about 1 bloke lending himself some money and making interest off it then slkihznpizzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

 

I think it's important for us all to remeber that when things like this come out, it makes your common or garden fan a complete irrelevance.

 

That is all.

 

Minor adjustment.

The only other point I'd make is that there must be some REAL money in all this ?111m debt. The club have been paying transfer fees, wages & other costs with something.

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Minor adjustment.

The only other point I'd make is that there must be some REAL money in all this ?111m debt. The club have been paying transfer fees, wages & other costs with something.

 

Wasn't there a thread recently showing each teams net spend over the last ten years? If I remember correctly then Blackburn where the only team who had turned a profit from transfers and we had lost circa ?30m over ten years on fees. If that is correct then the debt is roughly made up of ?35m ground (initial ED Burnden Leisure bailout), ?30m Transfers, ?50m business losses (overspend on wages, interest payments to ED Bermudan account).

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or he can take a nice steady annual percentage out on his (debt) investment. Oh, wait a minute, why didn't he think of that.

 

 

We owe him ?100m he takes 5%, we now owe him ?105m. he has ?5M do this for 20 years, he has his money back (i am not adding interestr to interest)

 

Surely there is more to it than that ?

 

He pops his clogs, he has a clause in his will that on his death that debt is written off, we are debt free (nearly)

 

Is this not like the abramovic did at chelsea? basically told them the debt to him could be written off.

 

he could turn round and say i want my money back, sell everything and get say 10p in the ?, so gets a lump sum of ?10M and then nothing else.

 

So keep taking his ?5m and write the debt off in the future, he is getting a better return than he would at the bank, but no bank would lend us this much so we are all better off. Imagine when he dies he will be happt to avoid inheritance tax.

 

That sounds logical but also a bit daft.

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