[Archived] What Happened To Our Money?

[TimmyJimmy]

JW, if you get this far in your reading, keep up the good work mate, you're well appreciated.

Serves me right for coming to this thread late as the luminaries made all my points for me (take a bow dj54nna, AggyBlue,J AL, thenodrog). Just remains to add a bit of colour to one of the points.

I have a few businesses and it never ceases to amaze me that 'rule of thumb' accounting is worse than useless. I often look at the big items coming in and the big expenses going out, do a quick bit of arithmetic and plan on buying the next car. I'm always wrong. It's the small 'insignificant' amounts that kill us simply because there are a lot of them so there's a big multiplier. I often think of these items as 'run rate' expenses yet they are the ones that make all the difference to the bottom lines. Thank G*d I have people who know what the are doing and sanity check my wild and whacky ideas.

From the Rovers standpoint I have as much idea as you do about the money and its uses or lack thereof. I suspect though that the drain is going to turn out to be the humdrum stuff of running a business. Adding up transfers in this season and transfers out this season ignores an awful lot cashflow.

In this day and age when things get even more complex like paying for people over several years, sell on clauses, interest on funding, commissions etc then even the biggest headline figures can't be trusted.

My views on the Trustees are well known but I also have to respect the fact that they might know more than me and they are making better business decisions. At the end of the day JW is the guy in charge, the Trustees are the shareholders and they just set the broad targets and leave it to the board to manage the business. If JW cannot see where the money can come from then neither will the banks and so they will not finance wishful purchases. If the Trustees are not putting funds in then JW's only other source is the bank. As said they need persuading and aren't push overs for sentiment about the club.

Concerning the investment bankers managing the sale of the club, I know something of this world too and as said by others their benefit is largely from what you don't see i.e. they have weeded out a lot of unsavory investors and wannabes. Success can be measured in many ways and one should take a balanced view.

My view is that JW and the board are doing the optimum job with what they've got to play with. Long may it continue. Sam wants more, we want more, but hey ho let's keep it real and leave those decisions to the chaps who have their necks on the block.

To the Jersey Boys - come on guys give us a break you know it feels good to have a success in the family. The money won't be coming back but have a bit of fun and spend a bit, life's too short to be a bean counter every day. Feel the adrenaline

[philipl]

There are such things as accounts so none of this is hidden in the way people are trying to pretend.

Correcting two misperceptions:

Until two seasons ago Rovers were paying at around the top 75 percentile in terms of PL wages. That got batered by the West Ham/Pompey round of wage inflaton so Rovers are probably in the third quartile now.

There is a bank squeeze on lending. Liverpool, West Ham and Pompey have had their bank debt called in and Liverpool only refinanced after one of the owners sold his stake in an NHL franchise. I would think that a pretty high proportion of businesses in the north west whose bank overdraft facility represented 40% of turnover have had their facilities cut- Rovers are no different no doubt.

The BBC recently ran an erroneous article saying that only City hadn't had a reality check on spending in this transfer window. However, there will be a lot of clubs likely to end this summer on what is to all practical intents a net zero or net negative transfer figure: Arsenal, Spurs, Villa, Man U, Rovers, Wigan, Pompey, West Ham, Liverpool, Bolton, Everton and although breaking all their transfer records, Burnley when seen in a Premier League context.

[deryck guyler's spoon]

Aye, sell Warnock. Samba too for that matter. It always does the heart good to see The Trust trouser a few quid.

[philipl]

Aye, sell Warnock. Samba too for that matter. It always does the heart good to see The Trust trouser a few quid.

Your heart must be in a bad way as you have NEVER seen the Trust "trouser" anything from Blackburn Rovers.

[deryck guyler's spoon]

Your heart must be in a bad way as you have NEVER seen the Trust "trouser" anything from Blackburn Rovers.

Maybe you're right, you seem to know much more about these things than I. Probably not the place but I felt the need to express my anger, frustration and deep, deep concern at the way the club is being run and it's immediate future gambled with.

I really dont know what has happened to the bulk of the RSC/Derbyshire money but, at a time when the govt. is intructing banks to release credit, giving £10 mill to the bank has to be absolutely ludicrous given what almost happened to us last season.

[Hughesy]

Yawn. WE HAVE DEBTS, SO WE PAY THEM OFF.

Those who don't, eventually fall away and die.

Exactly -see Pompey (close to falling away), Leeds, Sheff Weds, Charlton, Norwich etc - all ex prem clubs, look at them now.

Why are we still claiming the wages budget is STILL full to bursting?

So seven in, eighteen out! We must have made a huge wage saving already without Sam having to go down on bended knee to bring one more in.

Iv been following the wages closely and id say we are currently saving around £5.17m, however the club asked Sam to cut £5m off the bill. That leaves us about £170k a year - which isnt enough for Selgado.

The club need to decide on the following 4 players if they want to make further room - Rigters, Fielding, Gally & Zurab.

[Kelbo]

[

Come on Rev, the club cocked up big style financially with the appointment of Paul ince and his morons.

I'm sure in truth John Williams would be mightly embarrassed by how the club performed financially last summer with all their comings and goings. A Dingle on claretsmad around xmas this year mentioned that Rovers had just borrowed £8m from the bank he was working at.

If a Dingle was stupid enough to post that supposedly £8m borrowing, then I hope he loses his job, I would be so surprised for an employee of a bank was either (1) stupid enough to post it on a public message board and (2) Willing to disregard the terms of his employmwnt by disclosing information of that nature!! My wife cant even make a call to the bank on my behalf, they will only speak to the account holder!!

[Hughesy]

I really dont know what has happened to the bulk of the RSC/Derbyshire money but, at a time when the govt. is intructing banks to release credit, giving £10 mill to the bank has to be absolutely ludicrous given what almost happened to us last season.

They are instructing them to lend to struggling companies or home owners - not to clubs that have just receieved £21m in transfer fees. Surely you can see the sense. If I owed you £20m on an overdraft and then receieved £21m cash - would you not expect to see any of it?!

[deryck guyler's spoon]

They are instructing them to lend to struggling companies or home owners - not to clubs that have just receieved £21m in transfer fees. Surely you can see the sense. If I owed you £20m on an overdraft and then receieved £21m cash - would you not expect to see any of it?!

Not as simple as that and you know it. Rovers are a company as well are they not?

Good use of smileys btw.

ffs.

So Salgado in, Gally out. I could live with that.

Is Salgado not a bit p****d off with being jerked around?

[Hughesy]

Not as simple as that and you know it. Rovers are a company as well are they not?

It is - you have a big debt, you recieve amounts totalling more than that - surely you would want to see some returned as the lender?

[deryck guyler's spoon]

It is - you have a big debt, you recieve amounts totalling more than that - surely you would want to see some returned as the lender?

What you want and what you get are different things. If Rovers say "sorry, you had a good few quid off us last year. We need this cash to ensure our short to mid term turnover (sky money)", or even"you can have £3 mil, we need the rest" what can the bank do?

Why hand over vast amounts of cash that you NEED to someone who dosnt and isn't in a position to demand it?

[j166429]

Is Salgado not a bit p****d off with being jerked around?

What about Rothen as well? They fly him in for two days, show him around the training ground, he goes back to Paris to pack his bags for Blackburn and then PSG don't hear anything more about it. Surely the board knew how much money was available before we started wining and dining Salagado et al.

I find it all very unprofessional!

[deryck guyler's spoon]

What about Rothen as well. They fly him in for two days, show him around the training ground, he goes back to Paris to pack his bags for Blackburn and then PSG don't hear anything more about it. Surely the board knew how much money was available before we started wining and dining Salagado et al.

I find it all very unprofessional!

Exactly why myself and others are fretting about how the club is being run.

[PAFELL]

If a Dingle was stupid enough to post that supposedly £8m borrowing, then I hope he loses his job, I would be so surprised for an employee of a bank was either (1) stupid enough to post it on a public message board and (2) Willing to disregard the terms of his employmwnt by disclosing information of that nature!! My wife cant even make a call to the bank on my behalf, they will only speak to the account holder!!

Totally agree - if what was claimed was true, the person at the bank should be sacked - though in the current climate may get a bonus instead. It may even be a criminal offence to disclose something like that - not certain though. Just an example again from people claiming they know this and that, when they know nothing.

[Al]

They are instructing them to lend to struggling companies or home owners - not to clubs that have just receieved £21m in transfer fees. Surely you can see the sense. If I owed you £20m on an overdraft and then receieved £21m cash - would you not expect to see any of it?!

Judging by the June 2008 accounts I don't believe we owed the bank anything like £20mil. I still believe that the trust is determined to reduce it's investment in Rovers at any cost to the team.

[tonyoz]

What about Rothen as well? They fly him in for two days, show him around the training ground, he goes back to Paris to pack his bags for Blackburn and then PSG don't hear anything more about it. Surely the board knew how much money was available before we started wining and dining Salagado et al.

I find it all very unprofessional!

We only hear the half of it. Sam was very cool when asked about him. Maybe he is just talking himself up - his present club think he is a bit of a pain, don't they?

[j166429]

We only hear the half of it. Sam was very cool when asked about him. Maybe he is just talking himself up - his present club think he is a bit of a pain, don't they?

He could indeed be talking himself up, but why on earth did we even bother showing him around the club?? It's just seems like a complete waste of time and money for everyone involved.

[CrazyIvan]

He could indeed be talking himself up, but why on earth did we even bother showing him around the club?? It's just seems like a complete waste of time and money for everyone involved.

Only half the story... Why give a player the chance to prove he can cut it with a trial, think he might be ok but have other options to look at as well so send him back with the words 'We'll get back to you...'. Sam knows he has a very small amount of money to play with and looking at players is a good thing in the event that someone comes in with a decent offer for a fringe player (like Gally) and he can then go back to a Rothen and get them in. (Salgado is too good to turn down and Big Sam knows that so he's working that offer.) Looking at players and assessing them isn't unprofessional. What they or more likely their agents then come out with in the press is more likely to be a distinctly embellished version of the conversation Rovers had with said player. Do you think Rothen would go home and say 'They said I wasn't good enough...'?

[philipl]

Exactly -see Pompey (close to falling away), Leeds, Sheff Weds, Charlton, Norwich etc - all ex prem clubs, look at them now.

Iv been following the wages closely and id say we are currently saving around £5.17m, however the club asked Sam to cut £5m off the bill. That leaves us about £170k a year - which isnt enough for Selgado.

The club need to decide on the following 4 players if they want to make further room - Rigters, Fielding, Gally & Zurab.

Thanks for that Hughesy but wages are a guestimate when al said and done other than when published such as RSC's £60k a week. Have you added Earnings Related National Iinsurance to your calculatons?

Rigters - no decision to make: he's staying to collect his paycheck under his contract

Zura- no brainer: cannot go to less than four central defenders

Fielding and Gally- noises about Championship bids have gne quiet so out of our hands.

Was a big mistake not to flog Andrews to Fulham when we could IMO. Gally playing CM all game on Saturday would have been a distinct improvement.

[roversmum]

Totally agree - if what was claimed was true, the person at the bank should be sacked - though in the current climate may get a bonus instead. It may even be a criminal offence to disclose something like that - not certain though. Just an example again from people claiming they know this and that, when they know nothing.

As an ex-banker myself, I was horrified to read that. Although it is some years since I was a Bank employee I would still never discuss any matters relating to customers of the time.

To get back to the debt - If I owed a substantial sum of money and received money from the sale of an asset, I would certainly pay off some of the debt. There is money to be saved by doing so, in that your interest fees are reduced. You also do not know what is round the corner at Rovers - eg the Riverside might fall down and you would need to replace it. I understand that some money has been spent on 'building works'; indeed Brockhall and Ewood Park need to be protected, necessary repairs etc cannot be neglected.

[philipl]

Judging by the June 2008 accounts I don't believe we owed the bank anything like £20mil. I still believe that the trust is determined to reduce it's investment in Rovers at any cost to the team.

I believe Rovers had a net cash outflow in the region of £6m to £8m in the year to June 2009. We owed the bank £14m in June 2008 didn't we? Bank interest ratched up last season to well over £1m suggesting we were stretching what the bank could give us.

As for the comments about keeping cash back from the bank, it rather suggests somebody either doesn't have a bank account or is in the happy situation of never ever having run an overdraft.

Companies usually get bound by the bank providing the main overdraft to maintain all their principle banking relationships with them. So when Rovers receive payments the cash HAS to go into the bank who presumably were at liberty to tell the club that the overdraft limit was beng reduced in line with the cash coming in.

We are in a credit crunch and in my discussions with business people, I can hardly think of anyone whose experience with banks in the last twelve months has been anything other than extremely painful. If Government had not intervened, the banking system could easily have collapsed so all this stuff about helping SMEs is in reality window dressing. All the Government support has gone into restoring bank balance sheets to some semblance of sanity and if you read recent comments by the Royal Bank and Lloyds, you will see that those two are only half way to stashing away the minimum amount of cash they need.

[BiggusLaddus]

What you want and what you get are different things. If Rovers say "sorry, you had a good few quid off us last year. We need this cash to ensure our short to mid term turnover (sky money)", or even"you can have £3 mil, we need the rest" what can the bank do?

Why hand over vast amounts of cash that you NEED to someone who dosnt and isn't in a position to demand it?

The bank are probably perfectly entitled to call in the overdraft at any time they like - I know mine is. The overdraft is their money afterall.

[Billy Castell]

In the current climate, sorting out any overdrafts ASAP is probably a good idea for any business. I'd rather we do that then get into a mess like Portsmouth. If their protracted takeover doesn't happen they're in the poo by the sound of things. As are Newcastle, who had better come up this season.

I'd love to spend money on exciting players, but going out on a limb to qualify for Europe may be a real risk.

On Andrews, I'd have sold him for £3m+ if the likes of Dunn and Reid were fit and could play more than 4 games a season. The timing was a bit wrong as we'd be even more exposed if he went and we didn't get someone in quickly.

[Al]

It's the small 'insignificant' amounts that kill us simply because there are a lot of them so there's a big multiplier. I often think of these items as 'run rate' expenses yet they are the ones that make all the difference to the bottom lines.

Just not true. It's a well known accounting rule that if you take the top 20% of the expenses you have 80% of the total costs. That's what you have to watch.

[philipl]

Just not true. It's a well known accounting rule that if you take the top 20% of the expenses you have 80% of the total costs. That's what you have to watch.

At Rovers- one item suffices: wages.