[Archived] Blackburn Rovers Accounts 2008

[dingles staying down 4ever]

I for one am grateful for having explained what the Walker trust have been doing these past years. To be honest, like many on here, I have been complacent with regards to the Walker trust, mainly through ignorance.

Rovers do need money to boost their income, so I am surprised that they reduced ticket prices or kept them as they were when everybody else was putting them up. I wonder if Rovers supporters would be happy for an increase in ticket prices to 'help' the club.

No surprise really. rovers had to do something to get increase bums on seats and increase match day takings. It is better to have 25,000 paying say £20 than 19000 paying £25. In the short term keeping prices low does work, but then it becomes the norm and local people don't see it as a good deal especially when the team is not performing. The initial increase starts to ebb away. So what do Rovers do next is the question. It is either cut prices again with the aim of recatching those who have drifted or hike the prices and tax those remain loyal.

Even then that get even more complicated if relegation rears its ugly head.

[PAFELL]

Shares are the way by which a company is owned. If you are a shareholder you are entitled to a dividend in the company if a profit is made and the directors say that one can be paid. This is very rare in football clubs.

However, in theory, a non-interest paying loan which has no repayment date is better than shares as in the first case, the loan is permanent but in the second, dividends can be paid.

Thanks Jan

[RoversSG]

(and by the way, of all owners Abramovich is actually one of the more likely to ever see a profit on his investment).

Hi Eddie, not trying to pick a fight but how is he ever going to see a profit? He has probably put in more than 500m into Chelsea and no-one would every buy Chelsea at that price now. The only he will ever sell at more than 500m is to invest another 500m and make Chelsea a global brand like Man U.

If he's not going to sell, i don't think he will ever see a profit. Even assuming Chelsea somehow break even in the next FY, they will probably have to make like 50m profit every season for the next 10 years for him to make a profit and that is not counting inflation and discounted cash flow.

[American]

Chelsea would easily sell for more than that. They are becoming a global brand (I've seen their shirts everywhere I go), and they have valuable land in London. The only way he doesn't get more than that is if he is stupid and tries to sell in this economy.

[Eddie]

Plus, if he doesn't care about the club, he could always sell of their land in Cobham and make a huge amount of money and do some redevelopment and Stamford Bridge and also make a killing on apartments. I think he'll be ok either way. Let me know when he has less than a billion left and we can start a relief fund.

[philipl]

Now Chelsea has run up a £700m tab for Abramovich, he's getting into the area where he might not make a return.

But the club's freehold real estate is probably worth something like £350m even in this market.

[mattyboy6000]

Perhaps you could enlighten us as to what is factualy incorrect matty.

ever heard of google

Phil, are you discussing £s or %s. I'd be very suprised if you could demonstrate that the amount invested by jack was exceeded by the trust. in fact i'd go as far as to suggest such an idea is ludicrous. but prove me wrong, if you can.

-"-

[iamarover]

ever heard of google

-"-

Alternatively write to the Trust and tell them what you think of their performance. Rovers go down. Jack dies. Rovers lose over £30m, yes £30m in the season they go up. Technically Rovers were bankrupt. So the Trust not only writes this gargantuan sum off, they then proceed to write off the loans - yes loans - Jack made to the club to bankroll Dalglish. £110 million. So they have spent roughly a grand for every man, woman and child in the town of Blackburn and asked for nothing back. Nothing. Not even salaries. No bonuses. No dividends. Staggering isn't it?

I thought this sorted it for you. MY dad is a shareholder so it is there in blue and white over the last few years. Jack loaned the money. The Trust wrote it off. The fact that they have varied the terms of investment - sometimes donating money, sometimes loaning it (well once) - indicate that there was no clear instruction from Jack, just an interpretation of his wishes. So Philip is 110 million times right. Best to let this go Matty.

[JAL]

How can Rovers wage bill go up by £6m + yet the standard of football on the pitch go alarmingly down ?

[stuwilky]

ever heard of google

Yes. They are a rather large internet based company. Glenn likes Google.

However their relevance to this thread is precisely zero.

I ask again, what was posted that was "wrong"?

Now Chelsea has run up a £700m tab for Abramovich, he's getting into the area where he might not make a return.

But the club's freehold real estate is probably worth something like £350m even in this market.

Interestingly he has also converted £370m into share capital.

Makes the eyes water.

[BrianPotter]

ever heard of google

-"-

Try companies house, the figures are much more reliable

Jack died 17th Aug 2000, rovers were promoted back to the prem at the end of the 2000/01 season, which was after Jacks death.

Official figures taken from audited accounts:

1999/2000 - £19.5m Loss

2000/2001 - £31m Loss (during this period the trustees also converted £62m in previous interest free loans to share capital, effectivley writing it off)

2001/2002 - £11m Loss

2002/2003 - £12m Loss

2003/2004 - £5.1m Loss (during this period the trustees capitalised a further £14m in previous interest free loans, effectivley writing them off)

2004/2005 - £5.1m Loss (during this period the trustees made an interest free loan with no set repayment terms to the club of £17m in addition to the £3m donation)

2005/2006 - £6.9m Loss (during this period the trustees capitalised another £14m in previous interest free loans, it also states that a further £79m of loans made to the club will be converted during the 2006/07 period).

During the above period there were no payments (dividends or otherwise made by the club to the trust)

I rest my case, how anybody who after looking at the above can question what the Trustees have done for the club beggars belief.

[thenodrog]

I rest my case, how anybody who after looking at the above can question what the Trustees have done for the club beggars belief.

Beggar belief or not many will still whinge and whine fit to bust.......... The same ones who will complain loudest and longest of any when ST prices are put up. Just the way it is with some inward thinking folk.

[BrianPotter]

Beggar belief or not many will still whinge and whine fit to bust.......... The same ones who will complain loudest and longest of any when ST prices are put up. Just the way it is with some inward thinking folk.

I know, looking at the above figures in the cold light of day it just makes you wonder what peoples expectations are. Any business minded person reading the above figures would be horrified.

[Blackburn Ender]

Aside from the Walkers, do any really wealthy Blackburn people, or Rovers supporters, actually exist?

The only one I can think of is Duncan Lofthouse, MD of Fleetwood-based Fisherman's Friend, who I believe is a Rovers fan.

The Lofthouse family was estimated to be worth £165m in the 2008 Sunday Times Rich List.

But are there any more?

[philipl]

Try companies house, the figures are much more reliable

Jack died 17th Aug 2000, rovers were promoted back to the prem at the end of the 2000/01 season, which was after Jacks death.

Official figures taken from audited accounts:

1999/2000 - £19.5m Loss

2000/2001 - £31m Loss (during this period the trustees also converted £62m in previous interest free loans to share capital, effectivley writing it off)

2001/2002 - £11m Loss

2002/2003 - £12m Loss

2003/2004 - £5.1m Loss (during this period the trustees capitalised a further £14m in previous interest free loans, effectivley writing them off)

2004/2005 - £5.1m Loss (during this period the trustees made an interest free loan with no set repayment terms to the club of £17m in addition to the £3m donation)

2005/2006 - £6.9m Loss (during this period the trustees capitalised another £14m in previous interest free loans, it also states that a further £79m of loans made to the club will be converted during the 2006/07 period).

During the above period there were no payments (dividends or otherwise made by the club to the trust)

I rest my case, how anybody who after looking at the above can question what the Trustees have done for the club beggars belief.

Thank you for that Brian.

The total losses under-written by the Trustees are £71m since Jack died or £90m since Jack became seriously ill.

The total investment in Rovers is £134m of which £133m has been made by Jack Walker and the Trust. Even if you take the dividing point as the date of Jack's death then it is £62m of book losses during Jack's life time and £71m during the time the Trust did not have Jack around (the last two seasons even each other out).

I have been thinking very carefully about what to write in my usual analysis and it will be posted tonight.

[doctorryan]

Phil - quick question: How much of the £133m was actually spent before Jack died but only converted from debt to shares following his death? In other words: Ewood, Brockhall and pre-2000 player purchases are nice, but not the doing of the Trustees. I want to know how much real cash the Trustees have put in since July 1, 2001.

[philipl]

In cash terms it is pretty even between the two.

Everyone forgets that Jack undertook a dis-investment through sales of players over a two season period in the late '90s.

Shearer £15m, Sutton £10m, Batty, LeSaux and Berg £5m each and so on.

It is churlish to say this but that lead to spending of about £30m on players who were absolutely rank and £50m losses through two seasons outside the Premier League.

I still look back on Jack not buying Zidane, Dugarry and Roberto Baggio for a combined £15m in the summer we were Champions and then Sven turning us down as being decisions that eventually cost the Walkers- and Rovers of course- £50m net at the very least. Of course hindsight is a wonderful thing.

[broadsword]

Aside from the Walkers, do any really wealthy Blackburn people, or Rovers supporters, actually exist?

The only one I can think of is Duncan Lofthouse, MD of Fleetwood-based Fisherman's Friend, who I believe is a Rovers fan.

The Lofthouse family was estimated to be worth £165m in the 2008 Sunday Times Rich List.

But are there any more?

Blimey 165 mill, crazy to think it, but he wouldn't have change to buy a pack of Fishermen's Friends after buying the club and running it for a few seasons.

[doctorryan]

I would assume the late 90s disinvestment was accounted for in the £133m number. Are you saying the Trust handed over £65m to £67m in cash in the 7 years (post-promotion) accounts are available to view for debts and player purchases incurred strictly during that time period? Debts incurred for actions committed before July 1, 2001 but left on the club's books until afterwards would not count in the answer.

[thenodrog]

I still look back on Jack not buying Zidane, Dugarry and Roberto Baggio for a combined £15m in the summer we were Champions and then Sven turning us down as being decisions that eventually cost the Walkers- and Rovers of course- £50m net at the very least. Of course hindsight is a wonderful thing.

The first two for 9m would have suited me! Baggio would only have been warming the bench.

[philipl]

You'd have to go to the source and application of funds for each year but broadly speaking over the time periods we are talking about losses=cash.

There is negligible depreciation on the club's land and buildings (2% per annum) so that is hardly inflating the loss figures during the period of the Trust's sole custodianship since August 2000.

However, apart from the initial £25m subsciption for shares which by agreement swamped the pre-existing sub £1m issued share capital giving Jack the controlling interest through the Trust's holding company- Rosedale Investments (the Trust has ecxisted since 1987 I believe), all Jack's injections were in the form of convertible preference shares which ranked as debt.

The Trust converted all those shares and the interest free loans it itself made into ordinary share capital.

There is an additional amount I had forgotten about. Each year until the recent new Sky deal, both Jack and the Trust made a £3m donation on top which came into the accounts as commercial income.

So the £133m is topped up by an additional £45m of annual donations from the Jack Walker and the Walker Trust which further offset losses- in other words, cumulative losses in the Rovers books which currently stand at £111m would have been £156m but for those £3m donations each year.

Yes the £133m is after all acquisitions and sales.

[broadsword]

Sorry, I might have completely got this wrong, but are you saying that the club has an operating loss of £133m since 2001?

[philipl]

No I am saying the Walker Trust and Jack walker have invested £133m in share capital and £45m in donations since 1991.

Of that £178m in total, the Trust has absorbed £71m in losses and donated £18m since Jack died or in reality £90m and £21m respectively whilst they have been running the club taking into account Jack's illness.

[BrianPotter]

In cash terms it is pretty even between the two.

Everyone forgets that Jack undertook a dis-investment through sales of players over a two season period in the late '90s.

Shearer £15m, Sutton £10m, Batty, LeSaux and Berg £5m each and so on.

It is churlish to say this but that lead to spending of about £30m on players who were absolutely rank and £50m losses through two seasons outside the Premier League.

I still look back on Jack not buying Zidane, Dugarry and Roberto Baggio for a combined £15m in the summer we were Champions and then Sven turning us down as being decisions that eventually cost the Walkers- and Rovers of course- £50m net at the very least. Of course hindsight is a wonderful thing.

Fully agree with you there Phil, I've often said when discussing Rovers development since winning the title that we really missed the boat during the close season we were champions. I honestly beleive that had we invested in those players during that summer it would have cost the Walker family a lot less in the long run - I also think Rovers would be a much bigger club than we are now. Like you say, hindsight is a a great thing but its a real shame that we missed the opportunity to build on the title success.

Reading back through those figures really is a sobering thought, and in all honesty it is easy to see why there is little interest in a takevoer. Most potential investors wouldnt need to go any further than reading the last few years accounts to work out buying Rovers is not an investment. Just to keep the club standing still they would have to at least match the support provided by the Walkers, with no chance of ever getting their money back, let alone making a return on their investment.

[doctorryan]

So £178m in total cash donations and share capital since Jack took over, with £18m in donations coming after July 1, 2001. So I'll guess again Phil and you can correct me if I'm wrong. Around £50m in new debt was incurred by the club between July 1, 2001 and June 30, 2008 which was covered by the Trust. This number does not include any debt currently owed to banks. Is that correct? Sorry to be a pest.