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With Anderson suggesting that he won't be going anytime soon, and no sign of buyer on the horizon, I've been wondering if administration is the best option i.e. that we should bite the bullet and take our medicine now rather than wait until the situation gets even worse?
I think it's fairly clear that we won't be able to trade our way out of the current mess as all indications are that we are still trading at a significant loss, the last published accounts indicating something like >£12 million a year. Sure the cutbacks have possibly reduced that figure, but a loss is a loss and with loans having been taken to prop up the business the servicing of those debts will inevitably take it's toll.
I'm not aware of any assets left other than players that can be sold (big thanks to the ST for ensuring the ground itself can't be flogged - although realistically we should be selling it and moving to a field as befits our financial status) and cashflow is struggling as bills are only paid when legal action is taken against the club. Any money spent on a team that is heading for relegation barring a miracle will just be a case of allowing another leak in the dam to burst.
Sadly, Eddie Davies won't be coming to the rescue yet again so unless anyone has any bright ideas, it won't be long before the club is no longer able to borrow money to keep going and at that point we won't be able to pay our dues and time will be called.
None of this will adversely affect Mr Anderson of course as he has kindly pointed out in his recent tweet to Dale Vince. But his welfare is not our concern - the club is.
A CVA would allow the club to continue to trade.
It would relieve any pressure from the creditors.
It would prevent further abuse of the remaining assets.
It would put an end to further winding up orders.
Any unsecured debts will be written off at the end of the CVA period.
That's the upside. there is of course a downside.
The club will have to cut it's cloth according to it's means which will inevitably mean dropping to a lower level - perhaps the correct level?
There is a negotiable cost.
It will be impossible to get further credit (although I think we are almost at that point anyway)
The businesses trading credibility/reputation will be marked with the fact that it has been in administration. Not that our reputation hasn't already been dragged down.
CVA is a long and painful process for everyone who cares about the business (not you Anderson) but to me seems preferable to liquidation - and given that rapidly reducing finances can only be juggled around for a finite period liquidation remains a strong possiblity. Of course, if the company enters into a CVA and Anderson doesn't adhere to the terms of the CVA, liquidation could still happen - and I'm not sure he has any incentive to do that.
So here's the rub..
Whilst BWFC has to start trading within the club's means sooner or later and without a wealthy buyer that probably means years of austerity in the lower divisions (remember the '80s!) I can't imagine that Anderson will be prepared to do anything about it as it would be tantamount to an admission of failure and it's pretty apparent that his image is more important to him than the club's best interest. Financially we are sinking but he can shuffle the deckchairs on the Titanic as much as he likes, it won't change the outcome.
If Anderson is incapable of making swingeing changes within the current set up to make the business viable (which would make him unpopular and he has singularly failed to do so yet) or enter CVA to let someone else do it, the only hope is that someone buys him out and soon as far as I can tell.
Can any of you financial geniuses see any other option?
I think it's fairly clear that we won't be able to trade our way out of the current mess as all indications are that we are still trading at a significant loss, the last published accounts indicating something like >£12 million a year. Sure the cutbacks have possibly reduced that figure, but a loss is a loss and with loans having been taken to prop up the business the servicing of those debts will inevitably take it's toll.
I'm not aware of any assets left other than players that can be sold (big thanks to the ST for ensuring the ground itself can't be flogged - although realistically we should be selling it and moving to a field as befits our financial status) and cashflow is struggling as bills are only paid when legal action is taken against the club. Any money spent on a team that is heading for relegation barring a miracle will just be a case of allowing another leak in the dam to burst.
Sadly, Eddie Davies won't be coming to the rescue yet again so unless anyone has any bright ideas, it won't be long before the club is no longer able to borrow money to keep going and at that point we won't be able to pay our dues and time will be called.
None of this will adversely affect Mr Anderson of course as he has kindly pointed out in his recent tweet to Dale Vince. But his welfare is not our concern - the club is.
A CVA would allow the club to continue to trade.
It would relieve any pressure from the creditors.
It would prevent further abuse of the remaining assets.
It would put an end to further winding up orders.
Any unsecured debts will be written off at the end of the CVA period.
That's the upside. there is of course a downside.
The club will have to cut it's cloth according to it's means which will inevitably mean dropping to a lower level - perhaps the correct level?
There is a negotiable cost.
It will be impossible to get further credit (although I think we are almost at that point anyway)
The businesses trading credibility/reputation will be marked with the fact that it has been in administration. Not that our reputation hasn't already been dragged down.
CVA is a long and painful process for everyone who cares about the business (not you Anderson) but to me seems preferable to liquidation - and given that rapidly reducing finances can only be juggled around for a finite period liquidation remains a strong possiblity. Of course, if the company enters into a CVA and Anderson doesn't adhere to the terms of the CVA, liquidation could still happen - and I'm not sure he has any incentive to do that.
So here's the rub..
Whilst BWFC has to start trading within the club's means sooner or later and without a wealthy buyer that probably means years of austerity in the lower divisions (remember the '80s!) I can't imagine that Anderson will be prepared to do anything about it as it would be tantamount to an admission of failure and it's pretty apparent that his image is more important to him than the club's best interest. Financially we are sinking but he can shuffle the deckchairs on the Titanic as much as he likes, it won't change the outcome.
If Anderson is incapable of making swingeing changes within the current set up to make the business viable (which would make him unpopular and he has singularly failed to do so yet) or enter CVA to let someone else do it, the only hope is that someone buys him out and soon as far as I can tell.
Can any of you financial geniuses see any other option?
