[Archived] Trustees Crisis Meeting

[stuwilky]

OK, here's a question. I honestly do not know the answer, and I know I'm being very simplistic, but -

If the goal of the Trust is to keep Rovers self-sufficient then -

a. Why doesn't 100% of transfer fees received get given to the manager for strengthening (as surely the trust fund deals with everything else, this should be clear profit)?

and b. Where instead does the money that we make off selling players (Bentley for example) go?

Blackburn Rovers does not make a profit on trading before transfers. Any surplus balances the trading loss out.

That answers both questions.

It does however answer what the trusts ongoing obligations are regarding BRFC - that of course cannt be answered.

[T4E]

Blackburn Rovers does not make a profit on trading before transfers. Any surplus balances the trading loss out.

That answers both questions.

It does however answer what the trusts ongoing obligations are regarding BRFC - that of course cannt be answered.

Thanks Stu.

OK, so where does the "fund" bit come in to it? So far the trustees sound like accountants, not funders of the football club.

[philipl]

Actually, the next Rovers accounts will show a profit on trading before transfers. A pretty big one thanks to the leap in Sky money at the start of 2007/8.

[T4E]

So my first questions still need answers then?

[stuwilky]

So my first questions still need answers then?

Or it could be balancing off the multimillion pounds losses in each of the previous years?

[T4E]

I was under the impression that was done a while back and we were brought back on an even keel?

Does anyone have any firm answers? I thought Philip would be more involved in this that he has been.

[philipl]

I have been- all the answers are in this thread already insofar as I know anything...

[T4E]

I just meant I was expecting you to tell me all the reasons we don't get to spend our transfer profits in their entirity. I guess we just dont know the answer to that one.

[philipl]

I just meant I was expecting you to tell me all the reasons we don't get to spend our transfer profits in their entirity. I guess we just dont know the answer to that one.

For starters between 15% and 20% disappears to players and agents.

Then the rest is explained by the overdraft situation in all probability.

http://www.brfcs.co.uk/mb/index.php?s=&amp...st&p=703304

http://www.brfcs.co.uk/mb/index.php?s=&amp...st&p=703396

http://www.brfcs.co.uk/mb/index.php?s=&amp...st&p=701884

[The Prof.]

Actually, the next Rovers accounts will show a profit on trading before transfers. A pretty big one thanks to the leap in Sky money at the start of 2007/8.

Which makes me think that sell Roque - if

a. that hasn't already been done £15m

b. If anyone will have him

add a couple of others if anyones worth anything. should net £10m (???)

Sell some of the property assets.

top the -£3m pa subsidy - say for 3 years = £9ml

-£15m the squad will need to keep up or come back

- Selling the club fee and hassle

+ this years profit

AND YOU HAVE MORE THAN THE NET £40m YOU WANTED FOR THE CLUB ANYWAY! JOB DONE - NO WORK! TRUSTEES COME AWAY SMILING BY DOING ZILCH

AND YOU STILL OWN THE FIXED ASSETS SO ANOTHER FUTURE £60m for land etc when the price goes up- BRILLIANT

- IT SMELLS BUT IS A NO BRAINER FINANCIALLY.

[philipl]

You are confusing profit with cash.

The profit as I have explained has already been consumed by the £21m overdraft repayment.

I also now have reasons to change my mind from the position of believing RSC was as good as gone to now thinking he will still be with the Rovers in February.

The assets which are suggested should be sold are unlikely to be sellable for any sort of decent price quickly into what is a falling if not a totally collapsing market.

[Wing Wizard Windy Miller]

Not sure if this has been covered before, but what is the trustee position re funding in the Championship - ie last time we went down the club maintained the wage structure etc for the 2 seasons we were down, to maximise the chances of coming back up?

I wonder if there were any instructions re a 1/2 year subsidy by the trust to give us a fighting chance.

Could this be the reason that the trustees haven't been pouring money into the club - instead concentrating on a worst case scenario (eg INCE!)???

Just wondered if Philip or anyone could shed any light.

[The Prof.]

You are confusing profit with cash.

The profit as I have explained has already been consumed by the £21m overdraft repayment.

I also now have reasons to change my mind from the position of believing RSC was as good as gone to now thinking he will still be with the Rovers in February.

The assets which are suggested should be sold are unlikely to be sellable for any sort of decent price quickly into what is a falling if not a totally collapsing market.

Okay - missed the overdraft re-payment. In that case is in not still conceivable that by doing nothing the net effect over time would be far more err... cost effective than continuously bailing Rovers out. Even without the overdraft repayment and without the sale of RSC the best financial option by a long way is to let the club settle in the Championship.

Just paying the overdraft of suggests a business with a much lower revenue stream does'nt it? Alternatively you'd re-structure the debt and spend to keep us up.

The Fixed Asset valuation situation is not really an item as the trust can keep them until the price rises as they are not looking to raise capital with it. The fact is it's still there and I would suspect much easier to realise without the premiership glare of publicity.

The other odd thing is the unwillingness to sell eg. Zurab, or ship people our but not play people when the wage bill is quite high.

[philipl]

I think it is safe to say that relegation would be a nightmare for the Trustees.

[American]

I would think a number of our players would have relegation clauses in their contracts that will lower some of the salary.

I only speculate this because it was one of the reasons McBride signed with Fulham instead of us, we were making him have the clause, they weren't.

[philipl]

I would think a number of our players would have relegation clauses in their contracts that will lower some of the salary.

I only speculate this because it was one of the reasons McBride signed with Fulham instead of us, we were making him have the clause, they weren't.

Mc Bride is some time ago isn't he?

[American]

Yes, and likely the beginning of us being financially forward thinking. You say that Williams is so great because he plans ahead. Are you saying now he didn't plan ahead for the day we might get relegated?

[allanncd]

I fail to see why relegation would be a financial nightmare. The following would be easily offloaded to Prem clubs so a contract setlement is unlikely to be required (athough the fees are problematical)

Robinson

Samba

Warnock

Emerton

Pedersen

Santa Cruz

Derbyshire

The following have expired contracts at the end of this season or are on loan

Tugay

Moekpeona

Brown

Ooijer

Villaneuva

Simpson

That leaves

Bunn (probably low wages)

Nelsen

Kisz

Olsson(lowish wages)

Andrews (lowish wages?)

Grella

Vogel (one year left on contract)

Dunn(one year on contract)

Roberts

McCarthy

Reid (an insurance claim cannot be far off)

In other words a maximum of 8 players on high wages and a couple of these with a year to run can be bought out. Dunn might even be taken by another club as he is not that bad, fitness permitting.

Given that there will be fees received for the first list of players (at least £20m net of commissions etc) and a parachute payment of c£10m for 2 seasons I just do not buy the disaster scenario but perhaps those better-informed can enlighten us.

[LeChuck]

I fail to see why relegation would be a financial nightmare.

I hope (for your sake) that was ironic.

[allanncd]

Not ironic at all. Yes it would be a footballing disaster but as my calculations show it is very unlikely the Trustees would have to put funds into the club. Yes the net asset value of the company would be much less than it is today but a going concern business should not be valued by reference to its assets unless this is a substantially higher figure than a multiple of its profits. As I have previously explained on another thread Rovers have little profit-earning potential even as a Prem club (just look at recent accounts even in seasons with a top half finish). The Trustees should have had an asking price of only about about £20m for the club even with its Prem status "secure" (if there is any such state for a club of Rovers size). The true measure of their loss is therefore about £20m as they could sell a debt-free club in the Championship for a nominal amount (even the supporters might have a whip round to buy it!). I can't say I feel sorry for the Trustees as it is their greed that has put them in this situation.

[stuwilky]

I wish I knew someone greedy who had given me tens of millions of pounds over the last 8 years.

[American]

Ah, but they just took it all back.

AND IT'S NOT THEIR MONEY.

[stuwilky]

Ah, but they just took it all back.

All of it it?

Any of it?

[philipl]

Obviously alancd was needed in the boardrooms at Leicester, Charlton, Ipswich, Southampton....

Over to you alancd, losing more than 50% of your income one year to the next is not a disaster. Pull the other one.

[BrianPotter]

Not ironic at all. Yes it would be a footballing disaster but as my calculations show it is very unlikely the Trustees would have to put funds into the club. Yes the net asset value of the company would be much less than it is today but a going concern business should not be valued by reference to its assets unless this is a substantially higher figure than a multiple of its profits. As I have previously explained on another thread Rovers have little profit-earning potential even as a Prem club (just look at recent accounts even in seasons with a top half finish). The Trustees should have had an asking price of only about about £20m for the club even with its Prem status "secure" (if there is any such state for a club of Rovers size). The true measure of their loss is therefore about £20m as they could sell a debt-free club in the Championship for a nominal amount (even the supporters might have a whip round to buy it!). I can't say I feel sorry for the Trustees as it is their greed that has put them in this situation.

Go back and have a look at the accounts for the period when we were relegated last time. I think you will be very surprised to see just how much relegation cost us, and had those losses not been covered by the trustees then our beloved rovers would have gone into adminsistration.