Bolton Wanderers’ losses soar to £35.4m

SOARING player wages, paying off its sacked manager and falling commercial revenues left Premier League football club Bolton Wanders nursing losses of £35.4m.

Accounts for parent company Burnden Leisure for the year to the end of June show that despite an increase in revenues – driven by TV earnings – to £61.7m from £59.3m, the club’s losses more than doubled from £13.2m in 2009 to £35.4m.

After investment in the playing squad of around £15m, staff costs rose to £46.3m from £40.8m the year before.

The accounts reveal that “restructure of the football management team” had cost £4.2m. This saw manager Gary Megson sacked in January and replaced with former player Owen Coyle.

The accounts reveal that owner Eddie Davies refinanced the club to the tune of £84m last year and fund the day-to-day working capital of the business through his Moonshift Investments company. Notes to the accounts say the club are in “discussions with potential lenders” to provide working capital facilities.

As well as the football business, Burnden operates the De Vere Whites Hotel, which is integrated into one of the stands at the Reebok Stadium.

Despite higher occupancy levels of 75%, an average room rate of £54.93 and revenue per available room (£41.18) were both below 2009’s levels as discounts were offered to woo guests.

In his statement chief executive Allan Duckworth said: “The prevailing economic conditions continue to impact negatively across all business activities.

“A combination of further team management changes and the poor economic climate has meant the past year has been extremely difficult and this is reflected in the financial performance of group.”

Mr Duckworth said management changes had left the squad and backroom staff levels “larger than optimum”, which mean higher wages.

Poor-on-the pitch performance – before the new manager was brought in Bolton had been languishing near the relegation zone – meant lower income from sponsorships, broadcasting and matchday revenues.

“These extra costs and reduced levels of income have, in turn, led to increased borrowings and higher finance charges.”

Mindful of the economic environment Mr Duckworth said season ticket prices had been frozen. This helped average attendances hold up at 21,881, slightly down on the 22,485 in the previous season.

Looking ahead he said the club was looking at ways to reduce the wages to turnover level, which at 86% is “unlikely to prove sustainable in the long term.”

He added: “Reducing the level of wages relative to turnover whilst maintaining a competitive playing squad will be a major objective over the short to medium term.”

Mr Duckworth said he hopes the newly-introduced Premier League rules on squad sizes and the UEFA financial fair play regulations, which are due to come in in the next two years, may help football clubs improve their financial performance.

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Meanwhile Burnley FC, which was relegated back to the Championship after just one season in the Premier League, has reported a record profit of £14.4m for the last financial year.

Despite promotion the club opted not to invest heavily in its playing squad and wage bill, and has been cope with the impact of relegation. The previous year has seen the club post a loss of more than £11m.

Club chairman Barry Kilby told www.burnleyfootballclub.com: “As we predicted our exposure to the increased revenues of the Premier League has enabled the club to achieve record profits of £14.4m.

“This has been used to good effect to correct the losses incurred over previous years, repaying debt and strengthening the balance sheet.”