Bolton Wanderers; a Stay of Execution and the Nightmare that is the Championship

Crisis club Bolton Wanderers have been given an extra 35 days by the High Court to sort their mess out, but their plight highlights some big problems in England’s second tier.

The Wanderers had been waiting for January 18 to come after being hit with a winding up order by HMRC.  The club were given a reprieve after their case was adjourned until February 22 but in truth that will do little to lift spirits among supporters.

There have been numerous reports a takeover is close but nothing has happened as yet and no doubt come February 21 they’ll be biting their fingernails again waiting for the inevitable shit to hit the fan.

How did they get here?  That would take a very long and complicated explanation; but essentially mismanagement on an unprecedented scale will have to suffice for the purposes of this article.  The more important question, is how do they get out of this?

Finding a new owner is the immediate priority but as neighbours Blackburn Rovers and fellow fallen Premier League outfit Leeds United will attest that doesn’t necessarily mean the end of the misery.  Indeed, some of the individuals linked with potential bids for one of the founding members of the Football League sound particularly sketchy… One major problem, unfortunately, is the division they find themselves in, at least for the rest of this season, as the Championship is no place for a financially struggling club.

Credit to the Bolton fans; they’ve set about doing something themselves by starting a supporters’ trust – it is always a good idea to have a group of people who genuinely care about a club involved in some capacity.  I briefly followed their first meeting, or technically a meeting to decide if they would form a trust, and they had a few guys from the Portsmouth supporters’ trust who’d made the trip north to talk to the fans.  The Pompey men suggested it was possible for a club to survive on gates etc in Leagues One and Two, to break even or make a profit – but not to work effectively as a business in the Championship.

Sadly, I can’t find these quotes anywhere but I assure you it happened, you’ll just have to trust me.

Why can’t a club sustain itself without big investment in the Championship?

The simple answer is the disparity in finances between the Premier League and the Football League, and that gap will only grow following the TV deal in excess of £5bn struck last year.  The Football League’s TV revenue is almost nothing in comparison, a Premier League club can expect to receive over £60m a season in TV money – a Championship side will make maybe £2m.

That would be all well and good if the temptation to spend to secure promotion to the Premier League didn’t exist, which is where many clubs come unstuck.  Any given club can overspend in a bid to achieve a promotion but when that dream fails to materialise you could well be left with a big bill and owners who are no longer willing to pick up the tab – then comes the dreaded administration talk. Even clubs who aren’t splashing out massively to try and get into the top division still face spiralling costs simply to compete with the other teams in the Championship.

That’s not what happened to Bolton incidentally, who somewhat ironically were one of the two teams involved in the first ever televised Football League match at Blackpool in 1960.  They arrived in the Championship in a sorry state of affairs and have never really spent heavily to try and get back up; they’ve actually been attempting to cut costs in every season since their drop out of the top flight.  But that’s really beside the point, the fact that they haven’t been able to reduce their expenditure effectively is due to the economic climate of the division; despite the exits of a number of high earners, the few they have retained and any lingering bills from the high-flying days have squeezed all of the money and then some out of the Macron Stadium.

Parachute payments help but in some ways they’re a poisoned chalice.  The apparent safety net encourages top flight clubs who are potential relegation candidates to pay big wages, knowing they should be able to cover them even if they do drop out of the Premier League.  But that isn’t always the case, those payments haven’t helped the Wanderers cover their wage bill and Blackburn and Fulham are also seemingly struggling.

These parachute payments lead to other clubs attempting to match the spending of the relegated sides.  Bristol City, for example, launched an ultimately unsuccessful £10m move for Dwight Gayle in the summer.  If a team in the Championship is going to challenge for promotion they’ve got to compete financially with the biggest teams in the division and that kind of spending will lead to trouble in most cases.  It is all well and good for the Robins to spend big for a season or two, maybe more, but that is not a sustainable business model to follow in the long-term if their promotion hopes fall short and outgoings continue to exceed the money coming in.  Sides in the Championship who have legitimate hopes of getting into the Premier League need to compete with the relegated outfits and perhaps teams at the lower end of the top flight for players, and the only way to do that is by offering big wages on long deals that may ultimately put the club at risk.

In the majority of cases spending beyond your means is the only way for success in the Championship and that is something that has to change if we’re to avoid losing some great and historic clubs to financial ruin.  For every club that does make it to the promise land there will be a few who don’t, and who are then left with debts that they may not be able to honour.

How can the problem be solved?

There is a very real chance that we’ve come too far for a comprehensive solution now sadly, and in any case I doubt the Premier League will see it worthwhile to help out.  As long as they’re making money who cares, right?

One measure could be to have some kind of relegation clause inserted in the contracts of all Premier League players, possibly an exit option or a significant drop in wages in the event of relegation.  That would ease the immediate financial worries of a club who have fallen into the Championship.

Another potential option is to increase the TV money in the Championship by giving less to the clubs in Leagues One and Two, who have smaller bills – but that is a notion that doesn’t sit well with me and will probably put more clubs at risk overall even if it does make life in the second tier a little easier.

Perhaps a cap on agent fees could be more workable, given that some £26m was spent by the current Championship clubs between October 2014 and the end of September 2015 (including the three who dropped out of the Premier League last season).  Extortionate agent fees are another symptom of teams competing for players who could possibly be targets for sides in the division above, given League One sides spent just over £3m (nearly half of which came from Wigan and a further near £300,000 from Millwall, who were both relegated from the Championship) and League Two clubs just over £1m.  Massive respect to Bury, Accrington Stanley and Hartlepool United by the way – who paid nothing.

I have no idea how feasible these ideas are, but regardless a conversation needs to be had otherwise more clubs will find themselves where Bolton are now, and I wouldn’t wish that misery on any real football fan.

Further reading;

Bolton Wanderers, Gary Neville and the Northern Decline (Gonzo Sports Desk)

Premier League relegation: Is the dreaded drop that bad for your club? (The Guardian)

Premier League TV Rights Money Distribution (Total Sportek)

The Championship (Football Economy)

Football League Club Payments to Agents (Football League)

Follow/abuse us on Twitter @GonzoSportsDesk, we’re not fancy we follow back.

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