[Archived] How Come Our Club Is Only Worth 55 Million

[Bazzanotsogreat]

I'm not quoting it from anywhere. You're being pedantic suggesting that our wage bill isn't 40m. The fact is - it's too high - hence us being skint.

It is too high, like every other club in the league. Id hazards a guess that the wages/turnover ratio will be smaller this season.

Whether you or Paul like it, the fact is that if we do not spend money we will go down and we will not come back up, it’s that simple. Id like to be romantic and believe that money spent is not the most fundamental factor in football, but im sorry it is.

Anyone who thinks a midfield composing two injury prone players, one veteran and a player on ANC duty is good enough for any side in the premiership is watching a different game to me.

If you look at the example I used in Stoke they have spent 5 million this January, yet there losses are higher than rovers. How can this be? they have a chairman putting his own money in

[Bazzanotsogreat]

So we didn't pay Savage for half the year or Savage was on £4m- £80K a week?

No 40k a week, so its million.

remember this statement pip before dissecting other people’s posts.

"Rovers have the potential to spend big in this January transfer window"

For some-one so "clued up" you dont half change your opinion

[LeftWinger]

It is too high, like every other club in the league. Id hazards a guess that the wages/turnover ratio will be smaller this season.

Whether you or Paul like it, the fact is that if we do not spend money we will go down and we will not come back up, it’s that simple. Id like to be romantic and believe that money spent is not the most fundamental factor in football, but im sorry it is.

Anyone who thinks a midfield composing two injury prone players, one veteran and a player on ANC duty is good enough for any side in the premiership is watching a different game to me.

I agree with you - our midfield isn't good enough. But obviously we decided we couldn't afford players who could improve us at the moment. I'm sure we'll find the money if the right player becomes available. In the summer we could have splashed out 5m on Chopra - if we wanted - or we could have waited until someone of Santa Cruz' quality was available for cheaper. It's the way we have to work - just be a bit clever with our money.

I'd rather us be cautious than do a Leeds - we don't have their supporter base - we might be well and truly screwed if that happened to us.

[Paul]

It is too high, like every other club in the league. Id hazards a guess that the wages/turnover ratio will be smaller this season.

Whether you or Paul like it, the fact is that if we do not spend money we will go down and we will not come back up, it’s that simple. Id like to be romantic and believe that money spent is not the most fundamental factor in football, but im sorry it is.

Anyone who thinks a midfield composing two injury prone players, one veteran and a player on ANC duty is good enough for any side in the premiership is watching a different game to me.

If you look at the example I used in Stoke they have spent 5 million this January, yet there losses are higher than rovers. How can this be? they have a chairman putting his own money in

At no point have I said I do not want the club to spend money on players. All I have done, and I recognise you have immense difficulties with any facts that do not suit your arguement, is to present the real financial information published by the club. Obviously if the club do not invest in players we will eventually go down, the trick is to balance the books and try to keep finding the players

Fans are asking questions about the club's finances. I'm very interested in this because I want to understand what is happening to Rovers. There are two choices available to us all - read the tabloid nonsense written by third rate hacks, the hype from Sky (Oh I wonder why?) OR to look at the real facts published by the football club and the statements accompanying those figures from the chairman and chief executive. Now which is the more reliable source?

I'm not sat here defending the club or the trust. I'm just reading published information.

I notice you didn't accept the bet yet. Here's my £5.

[Bazzanotsogreat]

At no point have I said I do not want the club to spend money on players. All I have done, and I recognise you have immense difficulties with any facts that do not suit your arguement, is to present the real financial information published by the club. Obviously if the club do not invest in players we will eventually go down, the trick is to balance the books and try to keep finding the players

Fans are asking questions about the club's finances. I'm very interested in this because I want to understand what is happening to Rovers. There are two choices available to us all - read the tabloid nonsense written by third rate hacks, the hype from Sky (Oh I wonder why?) OR to look at the real facts published by the football club and the statements accompanying those figures from the chairman and chief executive. Now which is the more reliable source?

I'm not sat here defending the club or the trust. I'm just reading published information.

I notice you didn't accept the bet yet. Here's my £5.

Here is mine: 40 m or over you win , anything less i win.

And paul I get the Feeling your you think im having a go at you personally, im not I have no axe to grind at all . Our opinions differ but that’s healthy, at least you stick to your guns (unlike our financial guru) which entitles you to say whatever you please.

[Paul]

Here is mine: 40 m or over you win , anything less i win.

So now we both need a big signing in the summer............for different reasons though

And paul I get the Feeling your you think im having a go at you personally, im not I have no axe to grind at all . Our opinions differ but that’s healthy, at least you stick to your guns (unlike our financial guru) which entitles you to say whatever you please.

No offense taken. I am just interested in understanding, rather than assumming we have a bucket load of money. Only thing I would say is I will never deliberately mis-quote or mislead with anything I try to interpret.

[USABlue]

55 Million? Sold. When I win the lottery

[USRoverME]

No way... American investors are bad!

[allanncd]

A business is worth the lower of the the value of its assets (net of liabilities) and the net present value of its future profits. On the second basis Rovers are worth nothing because even as a mid-table Prem team they still make a loss (see the 2007 accounts). However they have alot of potential to make even bigger losses particularly if relegated. That's why nobody except a philantropist would touch Rovers with a barge pole and certainly not at the ridiculous price apparently set by Rothschilds. Of course on a net asset value basis Rovers have a postive value thanks to MH skill in the transfer market. Unfortunately any potential buyer knows he could leave tomorrow. In any case the Trustees are constrained from selling to asset-stripper which is the only way anyone could turn a profit out of selling. Unless the asking price is substantially reduced and a buyer is willing to guarantee substantial new investment (in both cases "substantial" means c£30m) nothing is likely to happen. When the club is eventually relegated the Trustees will sell the team to minimise their losses and Rovers will become another small town club struggling on limited resources like Bumley, Nobenders and Pool.End of.

[Jan]

A business is worth the lower of the the value of its assets (net of liabilities) and the net present value of its future profits. On the second basis Rovers are worth nothing because even as a mid-table Prem team they still make a loss (see the 2007 accounts). However they have alot of potential to make even bigger losses particularly if relegated. That's why nobody except a philantropist would touch Rovers with a barge pole and certainly not at the ridiculous price apparently set by Rothschilds. Of course on a net asset value basis Rovers have a postive value thanks to MH skill in the transfer market. Unfortunately any potential buyer knows he could leave tomorrow. In any case the Trustees are constrained from selling to asset-stripper which is the only way anyone could turn a profit out of selling. Unless the asking price is substantially reduced and a buyer is willing to guarantee substantial new investment (in both cases "substantial" means c£30m) nothing is likely to happen. When the club is eventually relegated the Trustees will sell the team to minimise their losses and Rovers will become another small town club struggling on limited resources like Bumley, Nobenders and Pool.End of.

perfectly and succinctly put.

[simcla]

We are not privy to the details of the trust, it may be that the Trustees may be obliged to put additional funding in place if it looks like we may be struggling, but not if we are mid table or higher, i.e. standing on our own two feet.

[Scotty]

When the club is eventually relegated the Trustees will sell the team to minimise their losses and Rovers will become another small town club struggling on limited resources like Bumley, Nobenders and Pool.End of.

Do you honestly think the trustees would allow that to happen? Personally, I think they'll fund us to stop that from happening but I'm only guessing.

[LeChuck]

Do you honestly think the trustees would allow that to happen? Personally, I think they'll fund us to stop that from happening but I'm only guessing.

They didn't really offer significant funds when it appeared we'd be going down in Hughes' first season in charge, we relied on Hughes finding bargains in Nelsen and Mokoena and scrapping our way to safety with Dickov up-front on his own.

[Damage]

At the moment we are all in a state of ignorance as to what the trustees are actaully thinking. Personally I think they have no plan - they are just drifting. That isnt particularly good for BRFC but it isnt necessarily bad! Yes i know it sounds crazy ................ however lack of plan WILL be bad in the long term. I think the time is now ripe for the trustees to come out publicly and state their future intentions for the club unless, of course those intentions are more dereliction that construction (in which case silence speaks louder than a thousand words).

I have in the past been more than vocal against chancers and speculators, and remain so, however like many other I am browing increasingly concerned for the clubs future. Personally I would be interested in who had the ear of the trustees? In relation to the whole of the trust BRFC is quite a minor part. Surely if the trust felt that BRFC was a "burden" on the rest of its assets it could find a suitable way to divest from BRFC (a la Jack Hayward at Wolves - now that is a fan in the mould of Uncle Jack).

I' not one for kneejerk "why aint we bought someone for £10m?" type questions and probably think we have done well not to buy this window, but I think the lack of purchase is through necessity rather than desire! No money was made available in my opinion. Unfortunatley MH will be away at the next decent opportunity and we will be left with nickos castoffs!

lol yeah right!

[philipl]

If you read the reports at the beginning of the annual report you will see there is a lot of foresight and planning going on at Rovers.

The club's problem is one of multiplication-

Arsenal have a big, rich catchment area. 60,000 x £30 per seat= £1.8m per game

Portsmouth have a small stadium, rich catchment area 20,000 x £30= £0.6m per game

Newcastle have a relatively poor, big catchment area 50,000 x £15= £0.75m per game

Rovers have a small, poor catchment area 20,000 x £12 = £0.24m per game

[Bazzanotsogreat]

If you read the reports at the beginning of the annual report you will see there is a lot of foresight and planning going on at Rovers.

The club's problem is one of multiplication-

Arsenal have a big, rich catchment area. 60,000 x £30 per seat= £1.8m per game

Portsmouth have a small stadium, rich catchment area 20,000 x £30= £0.6m per game

Newcastle have a relatively poor, big catchment area 50,000 x £15= £0.75m per game

Rovers have a small, poor catchment area 20,000 x £12 = £0.24m per game

Hmm..... i doubt that pompeys match-day revunue is anywhere near that of the barcodes or three times as big as rovers

[LeChuck]

Hmm..... i doubt that pompeys match-day revunue is three times as big as rovers

Just spend a couple of minutes researching and you'll find it's at least that.

Their season tickets and ticket prices are at least three times more expensive than ours.

[andrew92]

i couldent care less if the club is worth £1 or £400m, we need new investment for new players! thats it, anyway a high price may make investers think twice.

[joey_big_nose]

If you read the reports at the beginning of the annual report you will see there is a lot of foresight and planning going on at Rovers.

The club's problem is one of multiplication-

Arsenal have a big, rich catchment area. 60,000 x £30 per seat= £1.8m per game

Portsmouth have a small stadium, rich catchment area 20,000 x £30= £0.6m per game

Newcastle have a relatively poor, big catchment area 50,000 x £15= £0.75m per game

Rovers have a small, poor catchment area 20,000 x £12 = £0.24m per game

Pretty accurately states our position: screwed. Our saving grace is the TV money is spread realatively evenly (at least within the Prem). But as all these bigger stadiums are built we will get crushed, along with Wigan and Bolton Prem. Sad reading.

Could this see the rise of the South East Commuter clubs (Reading being the first example)? THats where the money is, if not the tradition....

[philipl]

We saw Luton, Watford, Brighton, Wimbledon all ascend into the top division for the first time in the '80s- they didn't stick there and Reading are looking very wobbly at the moment.

However, the underlying economics look sick for Rovers.

The multiplication effect has been there all 13 of the 15 seasons we have been in the league although Jack's largesse helped cover the difference when all the numbers were vastly smaller but gate receipts were a far higher proportion of revenue.

[iamarover]

We saw Luton, Watford, Brighton, Wimbledon all ascend into the top division for the first time in the '80s- they didn't stick there and Reading are looking very wobbly at the moment.

However, the underlying economics look sick for Rovers.

The multiplication effect has been there all 13 of the 15 seasons we have been in the league although Jack's largesse helped cover the difference when all the numbers were vastly smaller but gate receipts were a far higher proportion of revenue.

And therein lies the small amount of hope. The EPL in the Far East is expanding exponentially and the next deal could be astronomical. As gate revenue becomes less and less important and TV revenue grows, the Rovers have to rely less and less on the gates - provided of course we can keep our Prem status. Equally important is the share out. The NFL has a more democratic system which means the town of Green Bay - similar size to Blackburn - can always compete. Together with a more equitable draft system of course. Maybe one day these American owners may do an NFL - and abolish relegation altogether to protect their massive investments. And then it all changes again. We shouldnt be too pessimistic. Newcastle still havent won a trophy in my lifetime. And hopefully never will.

Small comfort as well - if times look bleak for us - think how bad it is for the Dingles.

[American]

To be fair, Green Bay sells out every game, and has a huge waitlist for season tickets. They also don't have as much competition within a 50 mile radius.

[Rovers in America]

What makes me laugh the most is when the do there annual accounts and the value they give to the playing squad. I think it goes off what the paid – x% each year or something – rather than increasing as the players get better.

Going off the current prices at a minimum anyone that bought Rovers are buying easily £75 million worth of playing talent (Samba £8m, Bentley £12m, Cruz £8m, Nelsen £6m, Reid, McCarthy, Pedersen all worth at least £5m each) – Except for maybe Ooijer, Tugay, Friedel and Mokoena, I don’t see any of our 1st 18 or so players that would go for less than £3 million.

It's all based upon accounting principals (I'm an accounting major over in the States and will be taking my CPA test the start of 2009). You can't really value them at what you *think* they will be worth for accounting statements. This leaves too volatile an environment and the extreme possibility for a club to overstate their assets. You've got to use something more concrete. In most of accounting we use historical cost for the value of the asset on the books.

Historical cost is basically what you paid for the asset. Thus, say you bought a plot of land for $100,000 back in 1975. If that land is still sitting there, it would still be on the books at $100,000, even if the area has increased in value ten fold and be worth $1,000,000 today. That's because you may see it as worth $1 mil, but another person may see it as worth $1.5 mil, while another at $500k. That leaves too much discretion in the hands of the statement preparers and volatility because next year that area of land could increase or decrease in value quite a bit. However, when you do sell that piece of land for say $1.2 mil, you recognize a gain off it and pay the according taxes and such. Basically it's a tax deferment.

Same with players. Let's take MGP for example. Blackburn acquired him for 1.5 mil in 2004. However, if you account for his value based on what you *think* he is worth, you will see wild swings in the value that he contributes. You could probably say his value was 1.5 mil in 2004, 1-1.5 mil in 2005, 4 mil in 2006, 5.5 mil in 2007, and for 2008 thus far maybe 2.5 mil. For an asset with such a wild swing in value, if you're trying to depreciate that asset over the life of the contract, you'd be recognizing a huge impairment cost this year with a value decrease of 3 mil right now. Meanwhile if you base it off of the player's original fee or based on his wages or such, you're going to see a lot less volatile swings.

Typically in accounting you want to avoid overstating your assets and understating and your liabilities.

[Anti Euro Smiths Fan]

We saw Luton, Watford, Brighton, Wimbledon all ascend into the top division for the first time in the '80s.

Not entirely true Philip - Before their 1982 promotion to the top flight under David Pleat, Luton had actually been in the top division twice before in their history, once in the 1950s and again in 1974.

Brighton, a club I know quite well because my 84-year-old grandfather supports them, were actually promoted to the top flight in 1979. When I used to visit my grandad in Sussex, I saw Brighton play a few times at home in the 1980s. I remember as a kid standing on the windswept terraces of the old Goldstone Ground and seeing them lose 1-4 at home to Liverpool, not long before Mark Lawrenson left Brighton to go to Anfield.

Anyway, going back to Rovers...

Hope the board watched the game and are appalled at themselves for not getting money available

Agreed.

As far as the Walker Family trustees are concerned, I fear that some of them don't fully understand football.

If they did understand football they would realise there's a need for investment in our team, which over the last couple of months seems to have gone stale. Revidge Blue made the point on another thread that it's now only two wins out of ten at home in all competitions, with both of those wins coming after poor performances. (Newcastle and Sunderland).

Clearly things haven't gone entirely well for the club since November, with some shocking performances both home and away. Our problems are particularly acute in midfield, where we lack both quantity and quality.

If the trustees were real football people they would recognise there's a need for further investment instead of pulling the purse strings tight at the moment. I suspect though that the trustees care more about balance sheets than they do about our lack of quality in midfield.

Monetary figures matter more to them than the fact that Pedersen hasn't scored in over 30 Premiership games and our team has been bloody awful to watch at home in recent months. We could easily have lost at home to both Middlesbrough and Everton, rather than picking up draws. The warning signs are there for all to see that we lack quality in certain areas. The trustees should understand that too.

[Bazzanotsogreat]

Just spend a couple of minutes researching and you'll find it's at least that.

Their season tickets and ticket prices are at least three times more expensive than ours.

Just taken a look at pompeys turnover for the 04/05 season which was 36 million, ( less than our own ) assuming they got 25-30 million in tv revunue for that season (which seems ok) that means that a 600,000 per match revunue is way out. If they had that sort of match rev there turnover would well-over 50 million.