[Archived] What Happened To Our Money?

[Big Fat Sam]

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.

Surely the data protection act covers this? Send in a link to the bank so they set there dogs on him.

[Al]

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.

Yes we owed £10.5mil + £3.5mil bank loan not payable for over 12 months but where do you get your outflow number from? If it is a guess I dispute it. The Bentley sale came in the year to June 2009 and My feel would be for a cash break even. I would have thought that the bank would be comfortable with that sort of figure from a company that can guarantee income of £40 mil from Sky.

No it is the trustees who want to minimise their investment in Rovers and who care little about the team.

[Jan]

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?

They foreclose. Then you have to pay back ALL your borrowings at once. Do you have the SLIGHTEST clue about life??

[deryck guyler's spoon]

They foreclose. Then you have to pay back ALL your borrowings at once. Do you have the SLIGHTEST clue about life??

I dont have the slightest clue as to why you find it necessary to be so rude so often.

[philipl]

Bentley sale might well have generated negligible cash in the last financial year. 40% of the profit on sale was going to Arsenal then a minimum of 10% (15% probably) of the £15m (the £17m was never reached as Bentley flopped totally) inevitably went in agent's and player cuts.

Wages jumping from £39.5m to £46m is a figure the club has disclosed and prize money falling by £9m is a number Sky/Premier League have disclosed.

Net cost on Robbo/Friedel, transfer fees for Grella, Andrews and Diouff are known figures as are the E2m spent on Villanueva and £1m on Givet during 08/9.

Hughes left in June 2008 so the £5m cash settlement went into the 07/8 numbers and the £14m overdraft was AFTER receiving the cash from City. Ince was on a three or four year contract worth £1.75m per year and two of his useless mates had to be fired as well.

Put that lot together and if the overdraft ONLY increased to £20m, the club played a blinder.

[Billy Castell]

I dont have the slightest clue as to why you find it necessary to be so rude so often.

It's because she has a misguided sense of her own superiority over anyone who disagrees with her on this site. She may be like the other Jan I know and a is a rude, aggressive and annoying person in the real world too. Don't take it pesonally Derek, I think she comes on here half the time to get all the anger out and insult people who won't come round and give her a slap.

[Atty]

Yes we owed £10.5mil + £3.5mil bank loan not payable for over 12 months but where do you get your outflow number from? If it is a guess I dispute it. The Bentley sale came in the year to June 2009 and My feel would be for a cash break even. I would have thought that the bank would be comfortable with that sort of figure from a company that can guarantee income of £40 mil from Sky.

No it is the trustees who want to minimise their investment in Rovers and who care little about the team.

Can I ask a question why do we include the players wages in the total cost of the transfer?

I thought we have a transfer budget and a wage budget?

We can not carry on selling our best players and giving SAM tiny amount to replace them with and expect him to perform miracles.

So now we have repaid the bank back from the rocky money, any more player sales all the money from the sale will be given to Sam to spend on players. If that does not happen serious questions need to be asked at what the hell is going on.

[Jan]

I dont have the slightest clue as to why you find it necessary to be so rude so often.

Oh I am SO sorry. I just thought that everyone would understand that if you owed money to a bank on an overdraft, they can demand repayment at any time. Or maybe there are 2 or 3 people who don't!

[Amo]

We can not carry on selling our best players and giving SAM tiny amount to replace them with and expect him to perform miracles.

Hughes set the precedent for that, and now they think they can still get away it. That's my view, anyway.

[Atty]

Hughes set the precedent for that, and now they think they can still get away it. That's my view, anyway.

And mine

Also are we going to get to a point where we have sold all our salable players and the manager has not found any young players that have come through in which we can sell for big money, where does that leave us ?

Do we need to sell a player every summer for a transfer budget ?

what would of happened if we had not sold rocky ?

Would the bank still wanted there money back ?

Ive sent these questions into the club by the contact us page on the website and still not got a reply but they managed to send me a email about payment for my season ticket tho.

[mark]

Oh I am SO sorry. I just thought that everyone would understand that if you owed money to a bank on an overdraft, they can demand repayment at any time. Or maybe there are 2 or 3 people who don't!

Regretably, we're not all as knowledgable as your good self, Jan.

[doctorryan]

................Ive sent these questions into the club by the contact us page on the website and still not got a reply but they managed to send me a email about payment for my season ticket tho.

So go back two pages and use the address I left in Post #76.

[TimmyJimmy]

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.

Thanks Al, I'll keep that in mind

The point I was trying to make is that if you just add up the value of the contracts/sales you have made during the year and net off the incremental cost you may feel its been a good year but it's a totally nonsensical approach to life and you'll get a nasty shock when you look at the year end accounts. You cannot overlook the other costs of doing business whether it's the cost of wages/NI/interest/fees/commissions/stationery/bog paper or whatever it may be. Everything adds and what seem like small numbers at first quickly become large numbers.

For Rovers you cannot simply count the transfer fees in and net the transfer fees out and say we have a ton of cash left over (not you as in YOU but as in several posters on this thread).

Count up the numbers of posts that run with this arguement, we got X for him and only paid Y for him therefore we MUST have funds left over.

The Trustees are culpable and certainly guilty of not putting funds into the club but I certainly don't believe they are guilty of taking funds out.

Bottom line - listen to someone like Philipl and Hughsey who have a handle on the real numbers and don't be swayed by the guys with the schoolyard maths.

[PAFELL]

Bentley sale might well have generated negligible cash in the last financial year. 40% of the profit on sale was going to Arsenal then a minimum of 10% (15% probably) of the £15m (the £17m was never reached as Bentley flopped totally) inevitably went in agent's and player cuts.

Wages jumping from £39.5m to £46m is a figure the club has disclosed and prize money falling by £9m is a number Sky/Premier League have disclosed.

Net cost on Robbo/Friedel, transfer fees for Grella, Andrews and Diouff are known figures as are the E2m spent on Villanueva and £1m on Givet during 08/9.

Hughes left in June 2008 so the £5m cash settlement went into the 07/8 numbers and the £14m overdraft was AFTER receiving the cash from City. Ince was on a three or four year contract worth £1.75m per year and two of his useless mates had to be fired as well.

Put that lot together and if the overdraft ONLY increased to £20m, the club played a blinder.

Ok lets say Rovers now owe £20m - with the sale of RSC etc, other players leaving - which was more than who came into the club so less wages going out. If Rovers have a good league position this season - season ticket sales higher / sky etc. They could be out of debt at the end of this season.

I presume the trustees still do not put anything into the club.

Oh I am SO sorry. I just thought that everyone would understand that if you owed money to a bank on an overdraft, they can demand repayment at any time. Or maybe there are 2 or 3 people who don't!

Common business practice - take out an overdraft, you must pay it when it is required. Failure to do so brings added interest, on interest etc. As you say, you would have thought this was common knowledge.

Surely the data protection act covers this? Send in a link to the bank so they set there dogs on him.

I think somebody said the person was a dingle - Send the dogs on him - bit cruel on the dog in my view.

[Al]

Bentley sale might well have generated negligible cash in the last financial year. 40% of the profit on sale was going to Arsenal then a minimum of 10% (15% probably) of the £15m (the £17m was never reached as Bentley flopped totally) inevitably went in agent's and player cuts.

Wages jumping from £39.5m to £46m is a figure the club has disclosed and prize money falling by £9m is a number Sky/Premier League have disclosed.

Net cost on Robbo/Friedel, transfer fees for Grella, Andrews and Diouff are known figures as are the E2m spent on Villanueva and £1m on Givet during 08/9.

Hughes left in June 2008 so the £5m cash settlement went into the 07/8 numbers and the £14m overdraft was AFTER receiving the cash from City. Ince was on a three or four year contract worth £1.75m per year and two of his useless mates had to be fired as well.

Put that lot together and if the overdraft ONLY increased to £20m, the club played a blinder.

You are twisting the figures. If Arsenal got 40% of the profit and the agent 10% then at least £8mil came to Rovers. When did Rovers disclose the wages increase? The 2008 accounts showed a profit of £9mil so provided everything remained the same (and transfer fees were at least break even) the £9mil prize money loss was negated. The Hughes £5mil possibly went into P&L as a prepayment but if you think City paid the cash without taking the normal 30 days you are delusional which negates the Ince money.

The truth is you have no idea what the current cash position is and neither do I. Stop trying to B/S people. You are not the only accountant on this board and I'll warrant you are in the profession, preparing other people's annual accounts, rather than in the real world of trying to keep a company afloat in industry.

[philipl]

You are twisting the figures. If Arsenal got 40% of the profit and the agent 10% then at least £8mil came to Rovers. When did Rovers disclose the wages increase? The 2008 accounts showed a profit of £9mil so provided everything remained the same (and transfer fees were at least break even) the £9mil prize money loss was negated. The Hughes £5mil possibly went into P&L as a prepayment but if you think City paid the cash without taking the normal 30 days you are delusional which negates the Ince money.

The truth is you have no idea what the current cash position is and neither do I. Stop trying to B/S people. You are not the only accountant on this board and I'll warrant you are in the profession, preparing other people's annual accounts, rather than in the real world of trying to keep a company afloat in industry.

Now you are being silly Al.

Your conjecture is also very wide of the mark as I have managed manufacturng units, floated a company on the stock exchange and employed hundreds of people and no I don't do other people's accounts. These days I am a freelance consutant which fortunately gives me time to look after a very sick mother and unfortunately time to spend on this MB when she is sleeping!

You clean forgot what was happenng in June 2008- at the time City came in for Hughes, Thaksin had not completed his disposal of City. So Rovers made getting the £4.8m compensation placed in escrow a precondition for allowing City to talk because had Thaksin not sold City, they were going bust. So City took Hughes and Rovers took the cash (all of it) in June 2008.

They would have been naive to do otherwise, agreed?

2008 accounts are for the year to 30 June 2007- the overdraft was reduced to £14m by the CASH effect of the £9m profit which including the Hughes compensation. Remember cash and profit are different aimals.

Year to 30 June 2008:

Bentley flogged for £15m. I am told that 50% (£7.5m) was paid cash at the time of sale. If that is true then from the £7.5m, £2.2m went to player and agent (15% of £15m) and £4.8m (40% of the profit £15m-£3m) went to Arsenal. So the cash benefit to Rovers when the deal was done was £7.5m less £7m or £0.5m.

The £46m on wages was reported as a John Williams quote in the LT.

The £9m reduction in prize money seems to be accepted as a fact by you.

Taking those two items together amounts to a £15m worsening in the club's cash position. I am guessing the £46m hides the Ince compensation payments as the club overshot its wages budget by £3m last season. I also suspect the balance of the Bentley money came in before the financial year end as I can see that would be the only way the bank overdraft could have been kept down to about £20m. That SECOND £7.5m would of course have gone entirely to Rovers.

[Al]

Now you are being silly Al.

Your conjecture is also very wide of the mark as I have managed manufacturng units, floated a company on the stock exchange and employed hundreds of people and no I don't do other people's accounts. These days I am a freelance consutant which fortunately gives me time to look after a very sick mother and unfortunately time to spend on this MB when she is sleeping!

You clean forgot what was happenng in June 2008- at the time City came in for Hughes, Thaksin had not completed his disposal of City. So Rovers made getting the £4.8m compensation placed in escrow a precondition for allowing City to talk because had Thaksin not sold City, they were going bust. So City took Hughes and Rovers took the cash (all of it) in June 2008.

They would have been naive to do otherwise, agreed?

2008 accounts are for the year to 30 June 2007- the overdraft was reduced to £14m by the CASH effect of the £9m profit which including the Hughes compensation. Remember cash and profit are different aimals.

Year to 30 June 2008:

Bentley flogged for £15m. I am told that 50% (£7.5m) was paid cash at the time of sale. If that is true then from the £7.5m, £2.2m went to player and agent (15% of £15m) and £4.8m (40% of the profit £15m-£3m) went to Arsenal. So the cash benefit to Rovers when the deal was done was £7.5m less £7m or £0.5m.

The £46m on wages was reported as a John Williams quote in the LT.

The £9m reduction in prize money seems to be accepted as a fact by you.

Taking those two items together amounts to a £15m worsening in the club's cash position. I am guessing the £46m hides the Ince compensation payments as the club overshot its wages budget by £3m last season. I also suspect the balance of the Bentley money came in before the financial year end as I can see that would be the only way the bank overdraft could have been kept down to about £20m. That SECOND £7.5m would of course have gone entirely to Rovers.

I too have managed manufacturing units and been involved in floating a company on the stock exchange.

Cash in escrow is NOT cash in the bank. It is cash in a 3rd party's bank.

If what you say about Bentley is true then there was another £7.5mil still to come which has either been banked since or is still to come very shortly. (OK you have mentioned that.)

I know the difference between cash and profit but my point is that if we made a similar profit in 2009 (before the prize money reduction) as in 2008 there would be a similar cash effect in 2009 which would offset the £9mil reduction in prize money. (Rather clumsily worded but I'm sure you understand the point.)

The £5mil in escrow + £9k offset cover the £14mil.

Look Philip I think we have taken up enough space on here with this discussion. If you want to take it any further perhaps we can do it by PM.

[Anti Euro Smiths Fan]

We all know without investment Blackburn will get relegated. I think we'll be safe this year but we're on the slide

It's difficult to argue with that. In the long-term, whether it's in three, four or five years time, I fear you are right in your assessment that we're facing the grim prospect of relegation in the future.

Guys we have a poor team, and even poorer squad

Absolutely. I think we'll probably get away with it this season, because there are at least three poorer teams than us in the Premier League. However a lack of investment is in danger of killing our football club and without sufficient transfer expenditure to compete with teams like Stoke, we are facing a bleak future with almost inevitable relegation before too many seasons to come.

Fans may argue that we should enjoy being in the Premier League while it lasts, because it won't last forever. However it's hugely disappointing that we've gone from being a team which finished 7th in the 2007/08 season, just narrowly missing out on a place in Europe, to a team now which frankly looks a million miles away from competing in Europe and where the extent of our ambition seems to be to finish 17th.

In the space of less than two years we've gone from being a team looking to finish in the top 6 to a poor team where survival appears to be the main aim and where the Rovers hierarchy are happy to finish 17th as long as they don't have to fork out money in the transfer market.

Bring on the transfer window when Sam will be given 50p and a packet of crisps to turn it all around.

50p?? You're being too optimstic there Bob. We haven't got two brass pennies to rub together.

In the summer I would have been delighted with net expenditure of 50p. Instead Rovers spent minus £18 million, gaining approximately £30 million from the sales of players like Santa Cruz, Warnock, Derbyshire and others, yet spending only around £12m of the £30m gained.

Before the start of each summer, some of the optimistic Rovers fans post that maybe this year the Rovers board and trustees will loosen the purse strings just a little bit and at least give the manager a couple of million quid to spend on top of sales. But each year it's the same old story. In the words of Sam Allardyce himself we're a selling club now.

We sell our best players, which is irritating enough, but when Rovers are not even able or willing to allow the manager to spend all of the money gained in sales, it becomes more than just mildly irritating. By being so tight with the pennies, the Jersey boys are putting our Premier League survival and our long-term future at severe risk.

Sadly Sam blew £6million on a player who is a million miles away from being a premiership footballer.

Out of the transfer budget of minus £18 million that Sam had to spend in the summer, I do think Allardyce made mistakes and I don't absolve the 'Expert' from all of the blame for our current results this season. At the moment Kalinic and Salgado haven't exactly set the world alight and one could certainly argue that Sam didn't spend the minus £18m he had in the right areas on the pitch.

Big Sam thinks he's an "expert". But he isn't infallible. He makes mistakes. However, the current Rovers policy of selling our best players and not properly investing that money in replacements who are as good as the players who have left will almost certainly lead to relegation before too many seasons to come.

These are worrying times. The club is being run on a shoestring and we are being left behind by our rivals. (By rivals I'm not thinking about the likes of Man United, Chelsea and Man City because we all know we can't compete with those teams in the transfer market.)

We are being left behind by some of the smaller teams in the Premier League like Fulham, Stoke and Sunderland, who are all spending much more money than us. We have a poor unattractive squad severely lacking in creativity. The cost of tickets has come down, but the product on the pitch is often unattractive to watch.

Jersey airline Flybe, owned by the Walker Trust, has splashed out $2 billion in new aircraft in recent years. (See the link here)

If only the Jersey Boys were able to give Rovers just 1% of that money - $20 million - it would make a big difference. But the Jersey Boys have been looking to sell the club for quite some time and are clearly not interested in providing the type of transfer funds which will enable us to compete with the likes of Fulham, Stoke and Sunderland.

[1864roverite]

Rovers Board have shown have been prudent during a very difficult financial period and have almost ensured that the club will not have any consideerable or unmanageable debts.

In view of this, I suspect that funds will be released for Sam to make investment on the playing side whilst he also is allowed to sell some more dead wood.

The new contract for Samba guarantees a huge fee incoming shouldhe be sold that in turns ensures further funding for Rovers making new signings. Add that to the impending fee when Bentley turns out for Spurs on Wednesday at manpoo and there might just be a little tidy sum of dosh available for Sam.

[Amo]

Big Sam thinks he's an "expert". But he isn't infallible. He makes mistakes. However, the current Rovers policy of selling our best players and not properly investing that money in replacements who are as good as the players who have left will almost certainly lead to relegation before too many seasons to come.

Sorry to digress, but wasn't the "expert" comment taken WAAAAAAAY out of hand? It wasn't Sam professing his impeccable record as a manager, but rather a small reminder to the fans who was being paid to manage the first team?

[Steve Moss]

Rovers Board have shown have been prudent during a very difficult financial period and have almost ensured that the club will not have any consideerable or unmanageable debts.

In view of this, I suspect that funds will be released for Sam to make investment on the playing side whilst he also is allowed to sellsome more dead wood.

The new contract for Samba guarantees a huge fee incoming shouldhe be sold that in turns ensures further funding for Rovers making new signings. Add that to the impending fee when Bentley turns out for Spurs on Wednesday at manpoo and there might just be a little tidy sum of dosh available for Sam.

If I were the board, "allowed" would be changed to "required". Sell Hoilett, EHD, MGP, Roberts, McCarthy, and Reid. If he does that, which has the happy consequence of reducing the wage bill even if we get nothing from the sales themselves, then the Bentley monies and whatever else the board cares to kick in should be given to Sam. In one move we would have both investment in the squad and have stemmed the annual financial bloodletting.

[only2garners]

I don't want to get the more excitable members on this board too energised but the Independent is reporting today that Flybe has announced plans for a public listing, which they hope will raise c£300m. As the Walker Trust owns 69% of Flybe this would bring them a considerable cash windfall.

[Al]

If I were the board, "allowed" would be changed to "required". Sell Hoilett, EHD, MGP, Roberts, McCarthy, and Reid. If he does that, which has the happy consequence of reducing the wage bill even if we get nothing from the sales themselves, then the Bentley monies and whatever else the board cares to kick in should be given to Sam. In one move we would have both investment in the squad and have stemmed the annual financial bloodletting.

You are on the right lines but Hoilett is a good prospect and should be kept. The obvious one to sell is the inept Andrews whilst he is still a current international and his reputation exceeds his ability. We should get a couple of mil for him but only if we do it before he is found out.

[Al]

I don't want to get the more excitable members on this board too energised but the Independent is reporting today that Flybe has announced plans for a public listing, which they hope will raise c£300m. As the Walker Trust owns 69% of Flybe this would bring them a considerable cash windfall.

I'm pretty sure that not much will funnel our way.

[Sandiway Blue]

I don't want to get the more excitable members on this board too energised but the Independent is reporting today that Flybe has announced plans for a public listing, which they hope will raise c£300m. As the Walker Trust owns 69% of Flybe this would bring them a considerable cash windfall.

Just a shame that the Walker trust has no interest whatsoever in Blackburn Rovers