[Archived] Credit Crunch To Hit Football?

[Anti-Dingle-Brigade]

I'd agree that some people are not attending because we are not winning. Every club has glory seekers. I doubt that 2000 people left because of the PERFORMANCES alone though. I think we would have dropped, Hughes or no Hughes either way, but that's just my opinion.

[philipl]

Pompey- no offers to buy the club. Most of the players out of contract next summer which means they can start negotiating in January.

This is another fire sale.

[Athlete]

Yeah cause last season they weren't on the decline either, it's all because of PI and his terrible quality of football.

totally agree how many goals have we scored at home ????? the fare in the 2nd half V Sunderland served up by PI's boys was abysmal and won't reattract any fans in a great hurry !

[dingles staying down 4ever]

After the credit crunch, now comes the tax man

http://news.bbc.co.uk/1/hi/uk/7741859.stm

[philipl]

David Moyes has admitted that Everton have no money available to spend in January. (Sunday Express)

Yet another club not spending in the next window.

[thenodrog]

The only positive with falling gates in light of the fact that we reduced our ST prices 2 years ago is that we are'nt losing as much revenue as our rivals.

A superb gesture by the club of course but it's time to recognise the fact that ticket prices do not affect attendance figures as much as many on here thought a couple of years ago.

I suggested at the time that cheaper tickets simply devalue the product and quickly become the 'norm' and that should the club attempt to put them back to the level they were at 3 years ago would lose more sales than if they had left well alone.

[Exiled in Toronto]

I'd agree that some people are not attending because we are not winning. Every club has glory seekers. I doubt that 2000 people left because of the PERFORMANCES alone though. I think we would have dropped, Hughes or no Hughes either way, but that's just my opinion.

I would think increasing the walk-on prices by 10% and also the dramatic declines in consumer spending being reported everywhere might be contributing more to the gates decline than a mass, unspoken protest at Ince.

[den]

The only positive with falling gates in light of the fact that we reduced our ST prices 2 years ago is that we are'nt losing as much revenue as our rivals.

A superb gesture by the club of course but it's time to recognise the fact that ticket prices do not affect attendance figures as much as many on here thought a couple of years ago.

I suggested at the time that cheaper tickets simply devalue the product and quickly become the 'norm' and that should the club attempt to put them back to the level they were at 3 years ago would lose more sales than if they had left well alone.

Good points Gord.

Bottom line is, - they wont come down to Ewood for free, if the product's not right.

[American]

It's been shown that the quality of the product doesn't necessarily translate into better attendances.

[gumboots]

It's been shown that the quality of the product doesn't necessarily translate into better attendances.

Listened to Simon Jordan of Palace onthe radio the other day. Don't like the guy but he said there is a level below which you cannot reduce ticket prices. If you gave them away free you would still not fill the ground because people would think the product must be rubbish (probably true at Rovers atm) and therefore would not turn up. also said it's a myth that people spend more on drinks etc if you put your prices down. Still not everyone buys and those who do don't buy significantly more. If you give people a cheap product they expect everything else to be cheap in relation to it and when they see stadium drinks prices and prices for merchandise they then start complaining that it's all to expensive and don't buy.

[philipl]

Sunderland the latest club affected.

Keane has been told he has to trim his 36 (!) man squad and that he has to sell to buy.

[PAFELL]

Sunderland the latest club affected.

Keane has been told he has to trim his 36 (!) man squad and that he has to sell to buy.

Where did you hear that? If Rovers are in a healthy financial situation, they maybe able to pick up some decent players in a fire sale, if other clubs are also affected.

Is it known how the trusties are managing in the current financial situation?

[philipl]

Sunderland are in the BBC gossip column lifted from one of the papers- not in the least bit surprised given the way the Irish economy is tanking at present for the money men over there.

To the question about the Trust-

As they were sitting on assets which were estimated by the Sunday Times to be valued in the region of £700m then it is totally inevitable that the Walker Trust has taken a significant hit in terms of seeing the paper valuation getting hammered.

However, the key at present is cash and I always got the impression that the Trust maintained a healthy balance of cash or near-cash and so I doubt they are suffering any liquidity problems whatsoever.

Also as a Trust, I would be very surprised if they directly were involved in any significant highly leveraged borrowings. I think their "gambling" money (all portfolios of that size will have a proportion- say 10 to 15%- which is in high risk, very high return areas) is primarily in the form of their own venture capital trust which invests in high tech and innovative start-ups/SMEs. Some of those companies will be highly leveraged and the rate of failure increased but hardly a threat to the Trust.

The main investments are in established companies and property- the latter of course is seeing a down turn but we are talking 30% rather than the 50%+ in share values across the board. Quite a lot of the property is in and around Blackburn so might be hard to let and rental incomes could be falling reducing cash inflows.

Of course the really large investment is Flybe but that is so disproportionately large within the portfolio as a result of the airline's success so the imbalance is in the category of "nice problem to have".

Flybe had already re-structured their fleet to have just about the most fuel efficient in the skies BEFORE fuel prices went bersek. Provided they are not hedged at some enormous number, the fall in fuel costs will massively outweigh the difficulty in getting passengers and so although there have been rumours about Flybe's viability (apart from Ryanair and Lufthansa, which airline hasn't been subject to such rumours?) I believe Flybe is actually very well positioned. It doesn't have a cash mountain because it had been restructuring and investing but it was profitable in the second quarter as oil prices were peaking which is something hardly any other airline was.

So the Trust is financially probably just about the soundest owner in the Premier League apart from ADUG and Randy Lerner perhaps- I bet Abramovich's worth has shrunk by well over 50% for instance with his exposure to Russian assets which have collapsed in value by over 70% on average.

Financially, as will be seen when the accounts are produced, Rovers are in the best health since the nineteenth century in terms of a stand alone business not needing a bankrolling investor.

This is the utter frustration of having made such a disastrous appointment in Ince as even without Trust largesse, Rovers are in a position to take serious advantage of this credit crunch as club after club sheds players and shrinks its wage bill.

Rovers wouldn't grow their wage bill- but we only need to standstill to move ahead relative to perhaps 50% of the other Premier League clubs.

I find it inconceivable that the Trust will stand idly by and not step-in to force the issue if the current league position persists for any length of time. As a Trust, they simply cannot let a threat of a minimum £40m hit (and that is if we bounce back quickly) to one of their assets fester without it being addressed; they would be in breach of their fiduciary duties as Trustees and I am writing that without making any comment about what Jack's Will might tell them to do.

[Hughesy]

Dont think Sunderland have any money problems, think its just the fact they have spent mega money on crap, and the board are starting to tighten their belts due to the massive squad size of average players.

[Wild Irish Rover]

I find it inconceivable that the Trust will stand idly by and not step-in to force the issue if the current league position persists for any length of time. As a Trust, they simply cannot let a threat of a minimum £40m hit (and that is if we bounce back quickly) to one of their assets fester without it being addressed; they would be in breach of their fiduciary duties as Trustees and I am writing that without making any comment about what Jack's Will might tell them to do.

Excellent post Philip - people do forget that there is a business behind Blackburn Rovers and that the antics on the playing field must also be seen in that context, which does pave the way for the Trust to step in and cull heads when the business is threatened.

[Hughesy]

Boro to subsidise fans

Fans money not needed

[American]

But if you compare it to last season, it isn't that huge of a hit. The company had debt before, it has none now. It is quite possible they don't look at the club as self sustainable with a Premiership budget, but do with a Championship budget.

[Hughesy]

Rovers reduce ticket prices

In line with VAT

[ABBEY]

Rovers reduce ticket prices

In line with VAT

i bet my direct debit doesnt drop!

[PAFELL]

Sunderland are in the BBC gossip column lifted from one of the papers- not in the least bit surprised given the way the Irish economy is tanking at present for the money men over there.

To the question about the Trust-

As they were sitting on assets which were estimated by the Sunday Times to be valued in the region of £700m then it is totally inevitable that the Walker Trust has taken a significant hit in terms of seeing the paper valuation getting hammered.

However, the key at present is cash and I always got the impression that the Trust maintained a healthy balance of cash or near-cash and so I doubt they are suffering any liquidity problems whatsoever.

Also as a Trust, I would be very surprised if they directly were involved in any significant highly leveraged borrowings. I think their "gambling" money (all portfolios of that size will have a proportion- say 10 to 15%- which is in high risk, very high return areas) is primarily in the form of their own venture capital trust which invests in high tech and innovative start-ups/SMEs. Some of those companies will be highly leveraged and the rate of failure increased but hardly a threat to the Trust.

The main investments are in established companies and property- the latter of course is seeing a down turn but we are talking 30% rather than the 50%+ in share values across the board. Quite a lot of the property is in and around Blackburn so might be hard to let and rental incomes could be falling reducing cash inflows.

Of course the really large investment is Flybe but that is so disproportionately large within the portfolio as a result of the airline's success so the imbalance is in the category of "nice problem to have".

Flybe had already re-structured their fleet to have just about the most fuel efficient in the skies BEFORE fuel prices went bersek. Provided they are not hedged at some enormous number, the fall in fuel costs will massively outweigh the difficulty in getting passengers and so although there have been rumours about Flybe's viability (apart from Ryanair and Lufthansa, which airline hasn't been subject to such rumours?) I believe Flybe is actually very well positioned. It doesn't have a cash mountain because it had been restructuring and investing but it was profitable in the second quarter as oil prices were peaking which is something hardly any other airline was.

So the Trust is financially probably just about the soundest owner in the Premier League apart from ADUG and Randy Lerner perhaps- I bet Abramovich's worth has shrunk by well over 50% for instance with his exposure to Russian assets which have collapsed in value by over 70% on average.

Financially, as will be seen when the accounts are produced, Rovers are in the best health since the nineteenth century in terms of a stand alone business not needing a bankrolling investor.

This is the utter frustration of having made such a disastrous appointment in Ince as even without Trust largesse, Rovers are in a position to take serious advantage of this credit crunch as club after club sheds players and shrinks its wage bill.

Rovers wouldn't grow their wage bill- but we only need to standstill to move ahead relative to perhaps 50% of the other Premier League clubs.

I find it inconceivable that the Trust will stand idly by and not step-in to force the issue if the current league position persists for any length of time. As a Trust, they simply cannot let a threat of a minimum £40m hit (and that is if we bounce back quickly) to one of their assets fester without it being addressed; they would be in breach of their fiduciary duties as Trustees and I am writing that without making any comment about what Jack's Will might tell them to do.

Who, if any, are the trusties accountable too? I ask because we never hear from them - either good or bad. I believe they have somebody on the board. I suggest it would be good if they had a public figure to discuss various issues - can supporters request this? After all if Rovers supporters stopped going to games - then the club and the trust would suffer. Somebody on the supporters forum could bring this up - any answer would be interesting to hear.

[Hughesy]

i bet my direct debit doesnt drop!

They are not dropping prices that have been paid pre December 1st. Which is fair. The club should be applauded for this move.

[only2garners]

Who, if any, are the trusties accountable too? I ask because we never hear from them - either good or bad. I believe they have somebody on the board. I suggest it would be good if they had a public figure to discuss various issues - can supporters request this? After all if Rovers supporters stopped going to games - then the club and the trust would suffer. Somebody on the supporters forum could bring this up - any answer would be interesting to hear.

The trustees will be accountable solely to the Trust and its rules, as laid down by Jack. Whilst they have a rep on the Rovers Board I assume that John Williams will be the public face.

[philipl]

But if you compare it to last season, it isn't that huge of a hit. The company had debt before, it has none now. It is quite possible they don't look at the club as self sustainable with a Premiership budget, but do with a Championship budget.

I can tell you without a scintilla of doubt that you can totally discount that speculation.

The Trustees see Rovers as self-sustainable in the Prem- why do you think they took a break in making contributions?

I doubt they see any model as sustainable outside the Premier League.

[Paul]

i bet my direct debit doesnt drop!

You purchased your ST before on or before 30th November so the VAT rate would be 17.5%. The new 15% rate applies from midnight on 1st December.

[Hughesy]

West Ham & Pompey feeling the pinch.

West Ham striker Dean Ashton will be sold in the January transfer window, with the Hammers desperate to raise funds in light of the Carlos Tevez saga. (Daily Mirror)

West Ham suffer new Tevez setback

Other players set to be shown the door at Upton Park include Nigel Quashie, Lee Bowyer, Luis Boa Morte, Calum Davenport, Danny Gabbidon and Jonathan Spector. (Mirror)

Portsmouth are the latest club to be affected by the credit crunch after the flight company the club use went bust. The south-coast side were forced to charter a 70-seater aircraft to Germany and arrived in Braunschweig late ahead of Thursday's Uefa Cup game against Wolfsburg. (Daily Mirror)

Portsmouth themselves are also feeling the pinch and can only afford to book their players into a £65-a-night Premier Inn for their trip to Germany. (Daily Star)