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

[Jan]

One interesting item in the interview is that we would have earned more money had we stayed in the UEFA Cup. Opposite of what some have suggested that it is a money losing proposition.

To be accurate, he said we'd make more Revenue by longer participation in UEFA. That's a given. He neglected to mention that there would also be more cost. However he was specifically referring to revenue at that point.

[allanncd]

If the company cannot make a profit in a good year why are the Trustees reportedly asking for £50m? Nobody spends a significant amount on a business that makes no money. Even if the company could maintain a profit of £4m this is before taking account of transfer costs - the equivalent of saying a bus company makes a profit only if the depreciation of its vehicles is left out of account. In fact as we all know footballers depreciate rapidly in value as age and injury erode value so a club with a zero transfer budget will not remain in the Prem for long. Why should any buyer pay £50m on that basis? The Trustees are being dishonest in seeking anything more than a nominal value for the company. Wiliams says the Trustees have been generous but fails to mention that the asking price will effectively clawback every penny they've put into the company since Uncle Jack's death. Some generousity that!

I sympathise with Mr Williams as he is not the owner or even a shareholder (except perhaps to a small extent) and he is simply acting as an agent to find a buyer. But it is time he tells the Trustees the stark reality they are evidently not getting from Rothschilds. I see a scenario where a failure to find a buyer able to put money into the company (instead of the shareholders hands) leads to a spiral of decline as key personnal leave and the club slides to relegation at which point the company has neither profits nor an net asset value.

[philipl]

How many times has it got to be said that the £65m, £45m, £50m figures were all Dan Williams' numbers. The Trustees have as far as I am aware never publicly put a price on the club. Please stick a sourced quote on here if I'm wrong on that point.

Yet again, John Williams spells out the situation very clearly in his interview and I cut and paste here:

LT Q What is the latest on the takeover front? Are there still interested parties at the table?

JW A "Yes, there are. There is interest but these things take a long time to evaluate.

"The periods that precede formal due diligence are vitally important because you need to make sure that you are talking to the principals of interested parties, and that those principals understand what the requirements are on the current owner's side of the fence.

As I speak to you today, there are three or four different discussions going on with interested parties, but I've got nothing concrete to say that would indicate a sale is imminent. But that can literally change with a phonecall."

I am going to be really naughty now but that translates as-

1) We are fed up of talking to time wasters who don't have the money themselves (Dan Williams, sorry)

2) The Jack Walker Will FORCES any buyer to make a long term commitment to keep pouring money into Blackburn Rovers otherwise the Trust cannot sell

3) If the buyer can pass 2) we start talking seriously about sales prices.

4) Nobody has got past 2) and most fell at 1)

My guess is that should a buyer covenant NOT to turn Rovers assets into shareholder cash, the Trust's perception of sale valuation would change. If you are the Walker Trust transferring land and buildings and valuable players, of course you want to be paid for those assets at market valuation if the buyer might cash in themselves shortly after you have sold them. However, you might look at the club's price differently if the assets or asset values are permanently locked into the club by the new buyers. Certainly the buyers would have every right to ask for a lesser purchase price if net tangible and intangible assets could not be reduced or transferred to other uses.

[Hughesy]

Good interview last night - only thing i wasnt so sure about was that Williams thinks backing the 39th game is the only way to raise our profile accross the world and doubted that we could raise our own profile. Why can we not?

[stuwilky]

One interesting item in the interview is that we would have earned more money had we stayed in the UEFA Cup. Opposite of what some have suggested that it is a money losing proposition.

I think what many people say (including myself) is that the UEFA cup is not a money spinner until the latter stages......

[bubblerrovers]

One thing that has to be said is the minute you stand still in the premier league you start a steady decline, we need to be brought asap. Sadly we have no chance or getting brought, how many rich rovers fans are out there.

[OscarRaven]

Do we have 10,000 supporters willing to spend £5000 grand each to buy rovers (£50M for cash).

Please note you will still have to buy your (season) tickets can't afford to lse that £8M a year, oh and transfer budget will be pretty tight too as we wont have any cash to invest over and above our income streams.

But on the upside we will have access to £30-40M a year of TV money and a vote at premier league meetings.

[Hughesy]

Any news on when the new Season ticket details are to be announced? Im sure in the minutes from the last meeting we were awaiting news on that and the next sponsorship deal some time soon.

Anything in Rovers in America to do with the new Sponsorship?? Disney Channel maybe?!

[RevidgeBlue]

"The periods that precede formal due diligence are vitally important because you need to make sure that you are talking to the principals of interested parties, and that those principals understand what the requirements are on the current owner's side of the fence.

As I speak to you today, there are three or four different discussions going on with interested parties, but I've got nothing concrete to say that would indicate a sale is imminent. But that can literally change with a phonecall."

I am going to be really naughty now but that translates as-

1) We are fed up of talking to time wasters who don't have the money themselves (Dan Williams, sorry)

2) The Jack Walker Will FORCES any buyer to make a long term commitment to keep pouring money into Blackburn Rovers otherwise the Trust cannot sell

3) If the buyer can pass 2) we start talking seriously about sales prices.

4) Nobody has got past 2) and most fell at 1)

My guess is that should a buyer covenant NOT to turn Rovers assets into shareholder cash, the Trust's perception of sale valuation would change. If you are the Walker Trust transferring land and buildings and valuable players, of course you want to be paid for those assets at market valuation if the buyer might cash in themselves shortly after you have sold them. However, you might look at the club's price differently if the assets or asset values are permanently locked into the club by the new buyers. Certainly the buyers would have every right to ask for a lesser purchase price if net tangible and intangible assets could not be reduced or transferred to other uses.

Agree fully with 1).

Do not agree at all with 2). I am surmising just as much as you are but I very much doubt there are any such stipulations in Jack's will. My guess is that the minute the required asking price is reached the Trustees will get shut of the Club five minutes ago.

To be fair to the Trustees, they do have to act ultimately in the interest of Jack's family so they can't really just sell the club for a tenner. Dan Williams did also indicate that the 65m quid being quoted, didn't consist solely of a "purchase price" but was more the overall cost of the deal, including an amount that would have to be spent on players. Nicko also hinted much the same, that the Trustees were looking for a guaranteed initial spend on the team, after that you can't really bind a prospective purchaser any longer.

I'm fairly bemused at the lack of progress for a deal for a relatively debt free Premiership outfit like Rovers when a championship team like Coventry in 38m quids worth of debt can seemingly readily find a buyer but maybe the "requirements" of the Trust also stretch to things like retaining ownership of Ewood and Brockhall and leasing them back out in the same way Jack retained ownership of the Walker Steel site when selling out to British Steel, and this is putting prospective buyers off.

We just don't know.

[RevidgeBlue]

Good interview last night - only thing i wasnt so sure about was that Williams thinks backing the 39th game is the only way to raise our profile accross the world and doubted that we could raise our own profile. Why can we not?

From what has been said at the Fans Forum I think it is the club view that we only have a limited budget and this isn't really an area in which we can go throwing lots of money at, we have to prioritise in other areas.

[joey_big_nose]

Agree fully with 1).

Do not agree at all with 2). I am surmising just as much as you are but I very much doubt there are any such stipulations in Jack's will. My guess is that the minute the required asking price is reached the Trustees will get shut of the Club five minutes ago.

To be fair to the Trustees, they do have to act ultimately in the interest of Jack's family so they can't really just sell the club for a tenner. Dan Williams did also indicate that the 65m quid being quoted, didn't consist solely of a "purchase price" but was more the overall cost of the deal, including an amount that would have to be spent on players. Nicko also hinted much the same, that the Trustees were looking for a guaranteed initial spend on the team, after that you can't really bind a prospective purchaser any longer.

I'm fairly bemused at the lack of progress for a deal for a relatively debt free Premiership outfit like Rovers when a championship team like Coventry in 38m quids worth of debt can seemingly readily find a buyer but maybe the "requirements" of the Trust also stretch to things like retaining ownership of Ewood and Brockhall and leasing them back out in the same way Jack retained ownership of the Walker Steel site when selling out to British Steel, and this is putting prospective buyers off.

We just don't know.

Everything that has come out of the club makes it sound like the owners are pretty desperate to get out provided whoever comes in actually looks like the can provide more investment than we currently have. I guess the problem is we just aren't getting that type of person interested. ANd it isn't just us. Wigan, Middlesborough and Bolton have the same problem. Gibson cannot afford to keep Boro competitive forever, neither can Whelan with Wigan. The basic problem is the wealth gap between the top four and the rest, and increasingly the big cities and the rest.

The silly money brought into the league by foreing investors has further skewed an economy already pretty battered by Champions league money and much larger gates for a few clubs.

We are going to see an ever more uncompeitive league.

[stuwilky]

To be fair to the Trustees, they do have to act ultimately in the interest of Jack's family ....

Is that the case Simon?

Just wondering how ploughing the what they have done over the last 7 or 8 years is in their benefit?

[RevidgeBlue]

Is that the case Simon?

Just wondering how ploughing the what they have done over the last 7 or 8 years is in their benefit?

The Trustees have a duty under Jack's will to administer all his businesses and the trust fund was set up to assist them in that purpose separate from the family's personal fortune.

As and when any of the businesses are/were sold as thriving going concerns, the family rightly benefit accordingly. I don't think anything the Trustees have done over the last seven or eight years is directly contrary to the family's benefit but I think it was decided quite some time ago, not just in the last twelve months, that BRFC didn't sit comfortably within the overall business portfolio controlled by the Trustees.

[92er]

Everything that has come out of the club makes it sound like the owners are pretty desperate to get out provided whoever comes in actually looks like the can provide more investment than we currently have. I guess the problem is we just aren't getting that type of person interested. ANd it isn't just us. Wigan, Middlesborough and Bolton have the same problem. Gibson cannot afford to keep Boro competitive forever, neither can Whelan with Wigan. The basic problem is the wealth gap between the top four and the rest, and increasingly the big cities and the rest.

The silly money brought into the league by foreing investors has further skewed an economy already pretty battered by Champions league money and much larger gates for a few clubs.

We are going to see an ever more uncompeitive league.

The trustees have been previously quoted as saying they feel they need to bring in an outside investor to take the club to the next level-I'm not sure how desperate they are to sell.

I must say I am somewhat sceptical about the quantity of money foreign investors are bringing in; just about every time you look at a premiership club owned by foreign investors, there are questions about their impact on the club, even including the Villa, who appeared to have a good owner but, according to what I read, didn't do much in the January window because they have a number of players on loan and all their transfer fees will go on those deals, and Portsmouth, who allegedly have been put up for sale so their owner can make money.

[stuwilky]

... but I think it was decided quite some time ago, not just in the last twelve months, that BRFC didn't sit comfortably within the overall business portfolio controlled by the Trustees.

Course it doesn't, it doesnt generate cash it consumes it.

Of course the fact it doesnt sit comfortably doesnt really matter, what is contained in that all secretive trust document and the discretion the trustees have over their interpretation of it!

[philipl]

Sorry Simon, but most of your post is plain wromng and that is based on what has been said publicly bu the club.

The reality is the club says very little so when it does speak, it is worth taking extremely careful note of what is said.

As for other posts, there is no rush to sell and the club will only leave Walker Trust ownership if all the interested parties within the context of the Will see that the club is passing into the hands of someone who can look after the club and its support better than the Trustees are able to.

The Trustees have a duty to do the best by Jack's intentions which includes sensibly doing the best for the Rovers.

If you have a nephew to whom you've been giving £600 a year and on his 16th birthday he gets a part time job giving him £1500 a year, what do you do when you know for sure he's going to be coming to you for one or more of University fees, a car, somewhere to live, girlfriend, wedding, kids of his own, a brush with the law etc.? You cut out the £600 in two steps and save up for the inevitable big hit- that's what the Trustees have done.

[only2garners]

Any news on when the new Season ticket details are to be announced? Im sure in the minutes from the last meeting we were awaiting news on that and the next sponsorship deal some time soon.

Anything in Rovers in America to do with the new Sponsorship?? Disney Channel maybe?!

The Fans' Forum were told to expect an announcement on season ticket prices in February - 10 days left yet then. I would expect there may be something at the Bolton game or sometime next week. The next Fans' Forum is next Tuesday. There were no time promises on the sponsorship deal - they hoped and wanted to get one in place asap but 7 other Premier League clubs were also looking and the club were more concerned to get the right deal than a quick deal.

[joey_big_nose]

If you have a nephew to whom you've been giving £600 a year and on his 16th birthday he gets a part time job giving him £1500 a year, what do you do when you know for sure he's going to be coming to you for one or more of University fees, a car, somewhere to live, girlfriend, wedding, kids of his own, a brush with the law etc.? You cut out the £600 in two steps and save up for the inevitable big hit- that's what the Trustees have done.

Phillipl, the problem I have with your posts is you always cast everything in the best possible light. I am a optimist like you, but just a few weeks ago you were saying that Rovers had the potential to spend big in the window, and that the money coming into the club from transfer fees would set us right. Now with the new report you are saying that altgough things are a little bleak the Trustees are probably saving up to give us loads of money when the time is right and we are desperate.

Whilst I much prefer your glass half full to Rev's glass half empty it would probably be prudent to not hypothesise that the Trust will be there to give us a stack of cash. We just don't know! Its all conjecture.

[stuwilky]

Whilst I much prefer your glass half full to Rev's glass half empty

Rev's glass isn't half empty.....

Its smashed up on the floor in small pieces.... ;-)

[Bazzanotsogreat]

Interesting article on the success of rovers price-cutting scheme. Posters have been pointing out that part of rovers extra 14 million income has been used on this scheme..........

Blackburn Rovers' pioneering We Believe' ticketing promotion to encourage fans back to Ewood Park has been hailed a great success. The radical price reductions introduced just six months ago have already resulted in increased crowds at only a fraction of what was originally forecast.

At this point, just over half way through the season, average gates have increased by almost 2,000 while a game-for-game comparison shows that attendances are up by a very significant 3,100 on last season.

Although the club budgeted £1 million of the latest TV deal for the initiative, the bigger attendances attracted by the promotion mean that it has only had to use £300,000 to win back the fans.

Source- http://www.blackburncitizen.co.uk/

[only2garners]

Interesting article on the success of rovers price-cutting scheme. Posters have been pointing out that part of rovers extra 14 million income has been used on this scheme..........

Source- http://www.blackburncitizen.co.uk/

Alternatively you could just have read the minutes of the Fans' Forum of 14th January where it was reported....

[Bazzanotsogreat]

Alternatively you could just have read the minutes of the Fans' Forum of 14th January where it was reported....

But i didnt, and at a guess a good amount of other posters would not of seen that precise inormation before.....

Evidence of this is since the 14th of Jan, posters are still stating that 1mill of the extra 14 million has been spent on cheaper tickets.