[Archived] Rovers Sold ??

[Paul]

I got thinking further about this and one point puzzles me. On average the trust has put £7m per annum in to the club to keep Rovers afloat. The new TV deal is worth at least £30m per season which I think is an increase of £15m. Assumming the £7m was more or less to keep the club on breakeven, does this mean Rovers will shortly become profitable?

[philipl]

Given the size of the increase in receipts over the past 15 years, Premiership football should be wildly profitable.

But it is a competitive sport with a wide trap door for those who fail and large quantifiable rewards for those who succeed. And it is dependent on a few very highly skilled workers who unusually are exposed to ranking and competition with very crude but immediately visible measuring sticks for performance and achievement.

So instead of the booty going to the owners of capital, this is one instance where the suppliers of labour have managed to take very nearly all of the cake.

There were plenty of signs that the Premiership was getting a handle on its cost base (particularly when clubs thought the new media deal would see a reduction in income which was the most likely prognosis until very close to the huge new deal being completed) but changes of ownership have put a massive new twist into the wages spiral.

Abramovich (like Jack Walker before him) arrived at a time when the traditional powers in the game were in no shape to respond to his economic aggression (Man U and Liverpool in ownership crises with Arsenal still building their stadium) so actually had relatively little effect other than perhaps give Fat Freddie and ENIC a certain license to make their respective failures even more expensive. I doubt in reality, Abramovich's spending spree did much to impact the wage bills any where other than Chelsea.

However, Gaydamak and Magnusson have changed the rules for the broad mass of Premiership clubs with their wages spree (why else go to Pompey or WHam unless you are paid to?) inevitably impacting all the other clubs who spent big in transfers this summer with wage bills no doubt rising to match them. The chances the Premiership owners had to get some breathing space through the new media deals has effectively been wrecked by some of them selling out at the new higher prices largely based on the value attributable to the media deals but with no clear mechanism for turning them into returns for owners.

Rovers have been selectively increasing their wages bill whilst refusing to be had in some high profile cases- Neill and Bellamy. No doubt Rovers were internationally competitive when Roque arrived whilst Nelsen and Samba have been awarded contracts commensurate with the market, football management are about to be adjusted (code for a 50 to 100% pay rise), Benni is being negotiated with, and so on.

Of all the clubs in the Premiership, Rovers' recent stability in personnel probably means they are financially managing the windfall better than most. How that will play through in terms of when the club choses or is forced to join the main action of rising transfer prices and wages remains to be seen. However, Rovers cannot remain isolated from what is happening elsewhere in the Premiership as it is the clubs whose ambition it is to emulate Rovers' recent performance which are the ones driving the new wages spiral.

For Rovers, new media deals in France and Germany (and even Holland) whilst small beer compared with the Premiership, will have the knock-on effect that the sort of mega bargain low risk transfers of the recent past will not be available at quite such a bargain or be quite such low risk.

[Paul]

Not even sure it's all speculation Paul. I'd accept what Chesh and Phil are saying in good grace, unless someone can demonstrate what they are saying is wrong.

Personally I think they are pretty close to the truth, though, without going back to read 122 pages, I doubt they actually know the make up of the trust. I say this for the very simple reason if they do it's likely they shouldn't be publicising it. Both simply know how, from other experience, it is likely to work.

I have a cousin who was a senior partner in Price Waterhouse Cooper and myself have experience with venture captitalists, (I claim no great knowledge), these are people who used very similar language to that used by Chesh and Philip when discussing possibilities or speculating on matters. While I appreciate anyone can learn to "talk the talk" it seems to me the way the arguements are constructed and understandable explanations given much credence can be put on their "speculation."

[Blackburn Ender]

In January, 2001, Paul Egerton-Vernon, Jack Walker's personal solicitor in Jersey and the chairman of the holding company responsible for looking after the club's affairs said: "The trust fund was structured by Jack Walker to provide on-going support for the club for the forseeable future and arrangements have been made to ensure that support is there now and for the years to come."

I appreciate this does not amount to in perpetuity, but it does suggest a certain longevity to the trust's running of the club.

He also said: ". The football club is one of a number of businesses that Jack Walker acquired.

"The funds of the club are generated by the success or otherwise of the other business interests that he put in place. So I can certainly confirm that there is no diminishing pot where, as the years go by, the amount gets smaller. It's a dynamic business, the business generates funds and the funds will then be used in a sensible way for the club."

The phrase "as the years go by" also suggests some very long-term goals.

[USRoverME]

Actually those posts make me wonder... I know the flybe thing is tied in, but do we know what other businesses are in teh Walker Trust?

After all Rovers are a drain on the trust, taking money out, not putting any back in. Therefore the other business intrests must do well enough to compensate for that drain. If there other businesses not doing well recently that are also becoming a drain on the Trust, then I could see where forward looking trustees might investigate if its better for the club to be sold.... No idea if that's the case or part of the truth or not, but business climates can change.

[BrianPotter]

Actually those posts make me wonder... I know the flybe thing is tied in, but do we know what other businesses are in teh Walker Trust?

After all Rovers are a drain on the trust, taking money out, not putting any back in. Therefore the other business intrests must do well enough to compensate for that drain. If there other businesses not doing well recently that are also becoming a drain on the Trust, then I could see where forward looking trustees might investigate if its better for the club to be sold.... No idea if that's the case or part of the truth or not, but business climates can change.

I've posted a number of times on this subject pretty much along the lines of Phil and Chesh. I would agree 100% with their views on the sale of the club and the deeds of the Trust.

With regards to the "other" businesses which are controlled by the Walker Trust, the number and diversity of companies is astounding. They are all controlled by a number of Walker Trust holding companies based in Jersey, the main one of these holding companies (of which there are a number) is Rosedale (JW) Investments.

The number of compaines in which the Trust (via the holding companies) have a major share holding is very extensive (I think people would be very surprised by the magintude of the Trusts portfolio). The companies owned by the Trust range from well known names such as Rovers and Flybe to overseas companies such as Datastrip. There are also a number of Property Companies (noteably based in Leeds, Sheffield and London) which are also owned by the Trust and have a combined land and property portfolio worth over £300m.

I'm a little short on time at the moment, but will post a list of companies owned by the Trust when I get chance.

[John]

Keith Harris on foreign owners in the Premier League...

[Alex Rover]

Keith Harris on foreign owners in the Premier League...

[philipl]

Fat Freddie going shopping Interesting that Rovers are not identified as a Premiership club looking for new owners in the immediate future.

The more I think about this situation, the deeper my feeling of grattitude towards Jack Walker becomes.

[Paul]

From the Guardian

The grapevine suggests that Bolton Wanderers will not long remain in current hands and Mike Ashley, who bought Newcastle off Shepherd and his co-investors the Hall family might also consider offers. "Mike's a trader and a very successful one," said Shepherd. "I wouldn't be surprised whatever he did."

Anyone who has kept a passing interest in Mike Ashley and SWI (who own OUR shop) will appreciate this is precisely how a certain sector of supposed investors work. Are we approaching a day when football clubs are simply traded as one man sees an opportunity to increase his personal wealth?

I remain to be convinced the current wave of "investment" in football is a good thing or that it will ultimately have a positive outcome. Fans of any club need to look far beyond the sudden influx of cash and new players into the long term influence of today's investors. There is and always will be a very limited number of prizes and we can't all have one.

[John]

Hughes believes a new investor is needed for him to continue building on the success of the last three years.

[philipl]

First time I have seen that spin on that story.

[bluebruce]

First time I have seen that spin on that story.

It's not really a spin, it's all there straight from Hughesy. Unless you just mean how they've left out most of the other stuff. But I haven't seen that material in any of the other articles on it.

[Exiled in Toronto]

Hardly a surprise though. Hughes clearly believes the club can keep progressing. The Trust either don't agree or don't fancy the ride. The oft-quoted 7 million a year support is an average going back well into the Souness era involving the writing off of loans largely spent by Souness; the current, ongoing level is 3 million. Hughes wants to go forwards, the Trust have cut back. I agree with Hughes - the sooner Rothschilds pull their fingers out and find a decent buyer, the better.

[philipl]

EiT look at the accounts. £6m new cash last year, £6m new cash the year before, £6m new cash the year before that.

[bluebruce]

EiT look at the accounts. £6m new cash last year, £6m new cash the year before, £6m new cash the year before that.

How does one look at the accounts? And what constitutes 'new cash'?

[RevidgeBlue]

EiT look at the accounts. £6m new cash last year, £6m new cash the year before, £6m new cash the year before that.

To the best of my knowledge that statement is completely incorrect. i.e. not what John Williams has consistently stated at the Fans Forum. My understanding is that the actual cash injection from the trust is 3m p.a. and that has been the situation for several seasons now.

From your previous posts I understood you were trying to say the Trustees were effectively putting in 6-7m p.a. by totting up the loans written off by the Trustees over the last few years and adding them to the actual cash injection in on an average annual basis.

[philipl]

Go back and read my reviews of the accounts each year then.

The pattern is the £3m straight cash gift year then an additional £3m cash has been going in by way of new low interest soft loan.

Periodically those loans have been turned into shares which means the club does not have to repay them. Some £89m has been converted from various categories of loans made by the Walker Trust into share capital over recent years. That is an accounting exercise to the extent that it doesn't contribute cash to Rovers but a very important one in that it has given the club a decent balance sheet which has enable it to make moderate bank borrowings on reasonable terms.

In terms of what really matters when it comes to paying salaries and transfer fees, the reality is annual cash injections of £6m which compares with annual cash injections of £5m prior to 2001 if you average the amounts Jack put into the club over the years of his ownership involvement with Rovers during his lifetime.

EiT says the Trust has cut back- not true in the last set of accounts. After all the conversions of loans into share capital, the make up of the clubs borrowings once again showed the loan from parent at low interest with soft repayment terms incrementing by £3m. Whether this remains the case in last season will be revealed in the accounts which will be circulated to shareholders in the coming weeks and will be public in the early new year.

[Cheshireblue]

I just thought I'd bring this back to the top and check whether or not the Club had been bought yet?

Any update Nicko?

[nicko]

I just thought I'd bring this back to the top and check whether or not the Club had been bought yet?

Any update Nicko?

Interesting timing for your question.

I thought you would know.

[Spansterkid]

Interesting timing for your question.

I thought you would know.

Is that a 'yes, there's an update', Nicko?

[Cheshireblue]

Is that a 'yes, there's an update', Nicko?

No, it was a thinly veiled response. He doesn't have an update, because the club is not, nor was it ever about to be sold, and particularly not to Dan Williams.

[EwoodGlory]

It wasn't said that the club was about to be sold. Whats was said, was that there was discussions regarding a takeover.

The club confirmed by the club, with a press release on the official website.

[emglch]

personally, i hope that there will be a takeover deal really soon by a suitable bidder. hughes has recently mentioned that it is not possible to keep signing gems like nelsen and samba. With the current financial strength, blackburn won't be able to compete with the likes of villa, west ham, man city, portsmouth and newcastle on the transfer market. neither do we have the stadium and the crowd to really cash in on the gate receipts. What hughes has done at blackburn is trying to get players to play at their top week in week out. most of these players realistically will not make it to the first team of the top 4 clubs. when the players don't perform, we get results like aston villa midweek.

[thecomebackid]

"...Ipswich chief executive Derek Bowden believes that the £44million takeover of the Coca-Cola Championship club by businessman Marcus Evans is "absolutely essential" to win promotion back to the Premier League..."

Apologies if this is being discussed on another threas, but I just came across the above quote was lifted from the Daily Mail of yesterday (not my usual choice of newspaper!). Valued virtually the same as our very own. Ipswich Town; Am I missing something?