[Archived] Summer Spending

[Baz]

I too think there are more questions now than before.

JW talks only about the past 12 months and mentions the fact that they had to levy money to bring in Givet and Diouf, yet at the end of the previous transfer window we were "keeping our powder dry" and not only that but we were explained to that the money from letting Matty Derbyshire go out on loan was to cover the extra wages and fees for Givet and Diouf.

If we are setting a budget based on prize money for finishing 13th then what happened to those seasons where we finished higher? Was the extra money available to the manager or was it used to pay debts or wages?

The plan of having to sell major assets every summer in order to break even also is such bad financial practice that I cant even consider it to be a plan, or that anyone with any sense would accept it as such. What happens in Roques knee had failed a medical at city? What was covering the hole in the budget then?

I accept that we may as a club have to sell assets at times (and some are contractual), but I cant see what has changed in the last 2 seasons (given our wages have risen only 6%) that means suddenly we have to sell c.£15m-£20m each summer to begin to break even.

I dont know the facts, and doubt I ever will but like I said theres more questions than answers...

It seems the clock is ticking on Premier League football unless a rich benefactor comes our way

[Tris]

I too think there are more questions now than before.

JW talks only about the past 12 months and mentions the fact that they had to levy money to bring in Givet and Diouf, yet at the end of the previous transfer window we were "keeping our powder dry" and not only that but we were explained to that the money from letting Matty Derbyshire go out on loan was to cover the extra wages and fees for Givet and Diouf.

I'm sure the keeping the powder dry comment never came from anyone at the club. It was always an assumption of people posting on here. Derbyshire was probably on ~10-20 grand per week. I believe that Diouf and Givet combined are on around 80-90 grand.

If we are setting a budget based on prize money for finishing 13th then what happened to those seasons where we finished higher? Was the extra money available to the manager or was it used to pay debts or wages?

Check the article again - the previous budget assumed a 9th place finish (after we finished 7th the previous season). The previous accounts are published, and there is no evidence of cash being taken out. There is no evidence that transfer income has ever been used to pay wages in recent times (ie since before Jack Walker was involved) - prior to the Warnock sale.

The plan of having to sell major assets every summer in order to break even also is such bad financial practice that I cant even consider it to be a plan, or that anyone with any sense would accept it as such. What happens in Roques knee had failed a medical at city? What was covering the hole in the budget then?

Lots of posters have already dealt with this. It's a much wider question ... and the status quo can't be sustained. What else can the board do this year though? They have paid back last year - and then basically backed the Salgado transfer on the say-so of the manager. That alone must be costing at least 50% of the 5 million shortfall funded by the Warnock sale. Think - better tax rates in Spain, the current EUR/GBP exchange rate, and the wage he would have been on at Real Madrid. Salgado really needs to earn his wedge this season, otherwise it's a dreadful mistake to have signed him even on a free.

I accept that we may as a club have to sell assets at times (and some are contractual), but I cant see what has changed in the last 2 seasons (given our wages have risen only 6%) that means suddenly we have to sell c.£15m-£20m each summer to begin to break even.

I dont know the facts, and doubt I ever will but like I said theres more questions than answers...

It seems the clock is ticking on Premier League football unless a rich benefactor comes our way

I don't agree with this. The club is soundly managed, and rides the peaks and troughs with more success than any equivalent small club.

The only thing a rich benefactor brings in is an extension of the law of percentages - more money is wasted for proportionately less success. Leaving us right in the mire. Read what "lancashire" has posted a few posts up from here - very wise words and probably 99% correct.

[Steve Moss]

Sorry, was referring to other sports, especially baseball, which doesn't have a cap. The Oakland A's (my team) and Florida Marlins were who I was thinking of.

Florida has twice broken up a championship team and were still able to win or at least compete within a few seasons after.

That makes more sense. Sorry about the confusion.

[Stuart]

That's interesting...

I have a hunch on this. I (and I am only guessing here) reckon that if Rovers are relegated the Walker Trust will be obliged to reinvest in the club to get us promoted back to the Premiership and thus want to avoid this at all costs. I think this might be a condition of Jacks Will.

And..

It is obvious that the Walkers cannot compete with the likes of Chelsea or Man City or many of the new football club owners for that matter, and are treading water so to speak till the money dries up in the Premiership. It is bound to happen sooner or later. Maybe when that day arrives we will then start to see proper investment by the Walkers, until then we will just have to get by.

I can't see that The Trust are behaving like an organisation determined to keep the club in the Premier League at all costs.

My hunch is that the club is an albatross for The Trust and the terms laid down by Jack are making it difficult for them to drop the club like the stone they view it.

They have become neglecting parents to a demanding child, now that the novelty has worn off following a forced adoption.

[Mr. E]

These are just some thoughts:

- Please can that JW article be pinned somewhere within this site. We will undoubtedly need to re-read it before the January window opens!

- The villains of the PL are the people we are all avidly wanting for Rovers: Rich new owners.

- Rovers have maintained the Rovers wage structure at a CAGR of 6% over the past several years but clubs like Portsmouth and West Ham exploded their wages by 100% in a SINGLE SEASON. Sunderland must have increased their wages by at least 25% this season, Man City by 100% over two seasons and even Villa have probably upped their wages by greater than 50% since Deadly Doug sold out.

- In the face of that, it is a prisoner's dilemma, particularly when over time, performance on the field has tracked expenditure on wages and not on transfers in pretty well every league ever studied everywhere.

- Rovers had and have no option but to follow the wages up or else our existing players will not sign new contracts and will all become Bosmans, never mind attracting new players in.

- Older supporters fear Rovers will suffer the fate we suffered in the '60s and that has to be a possibility

- But there are huge differences

- In the 'mid '60s, Rovers were in every respect a third division outfit sitting in the first division with a depleted and in key areas severely ageing team

- In the late noughts, Rovers are in every respect a Premier League outfit from top to bottom in every respect except one

- There seems to be a maximum of £5m a year that the club can extract from its fan base/local community in gate money. All credit to the club for going for 20,000 paying £250 a year rather than 10,000 paying £500 a year but there is an immutable amount that the Rovers fan base will pay to come through the gates.

- That contrasts with gate money of £60m a year that Arsenal or Man U take and £20m+ that all of the other top ten clubs take in through the gates.

- But being a PL club, all other aspects of the Rovers are raking in PL moneys (I said PL not Big 4) and set against all other leagues in the world that gives Rovers a competitive edge in attracting and retaining players

- There is a risk that edge will now be eroded because other Leagues except Germany and France only need to be 60% as rich as the PL to be able to deliver the same take home pay to a player as the PL can- 60%+ of Rovers £44m wages is going to the Government don't forget (ERNI and PAYE). The complete collapse of the SPL as a source of competitive football clubs is a case in point.

- Effectively, Rovers are in a limbo world. So long as we retain Premier League management, we have the resources not only to stay up but to make an Ince-up of an appointment and still stay in the PL. But there is little prospect of us staying in European qualification level on a consistent basis unless we repeatedly appoint genius management on the football side.

- One thought on the ownership side. There has not been one sensible realistic suggestion of a new owner for Blackburn Rovers made on here I have seen since I joined this messageboard.

And that is very hard to do. Hughes left us for dead, and the chances of anyone somehow maintaining our European push were extremely small. Clubs like Newcastle and Spurs for years spent huge amounts of money, brought in a new and improved manager every other month and achieved almost nothing until maybe Spurs season now. We hit an unbelievable jackpot with Souness and Hughes, two great managers in a row that at least got us close to the Champions League. It would have bordered on the absurd if somehow Ince managed the same as well.

So what can you do when we can not only not keep our players, but can't keep the managers? It gets very difficult. And this is why BFS isn't exactly the right choice either. He was good as an emergency manager to keep us up, but as soon as someone waves a bigger paycheck under his nose he'll be off, and whatever we have managed to achieve up to that point will go down the drain again. There is no way we can elevate ourselves above this level with players and managers constantly leaving. We need stability and consistency, but the problem is that rarely exists in football anymore.

[philipl]

We had a Manager in Hughes who pulled the trick off of repeated Euro qualification (plus a 7th place in a screwball year when 7th didn't gain a place in Europe).

We now have a Manager who did the same thing in an equivalent club at Bolton.

At the risk of upsetting people, I would suggest Owen Coyle would be well capable of steering the present squad into Europe were he at Ewood.

On a side note, Flybe are one of several airlines that have signed up to have a look at BMI. If Lufthansa do sell and Flybe are the preferred bidder, the Walker Trust will need all their financial power with none of it dripping off into Rovers to pull off that coup.

[Stuart]

We had a Manager in Hughes who pulled the trick off of repeated Euro qualification (plus a 7th place in a screwball year when 7th didn't gain a place in Europe).

We now have a Manager who did the same thing in an equivalent club at Bolton.

At the risk of upsetting people, I would suggest Owen Coyle would be well capable of steering the present squad into Europe were he at Ewood.

On a side note, Flybe are one of several airlines that have signed up to have a look at BMI. If Lufthansa do sell and Flybe are the preferred bidder, the Walker Trust will need all their financial power with none of it dripping off into Rovers to pull off that coup.

Hurray for The Trust. I really hope they pull it off.

[Parsonblue]

On a side note, Flybe are one of several airlines that have signed up to have a look at BMI. If Lufthansa do sell and Flybe are the preferred bidder, the Walker Trust will need all their financial power with none of it dripping off into Rovers to pull off that coup.

I think that is something that many people forget. Blackburn Rovers is not the only business that the Trust are looking after. Jack had several other interests apart from the Rovers and so the Trust have to ensure that they maintain and build all parts of the business.

Indeed, the football side is probably the one area of the business that pouring money into becomes a pointless exercise as the Trust simply don't have enough cash to compete with the new wealthy owners that have arrived in the Premier League. I suspect the brief they have given John Williams is simply to keep the club in the Premier League while keeping costs as low as possible. With other business interests demanding money from the Trust it would seem to be a logical business decision.

[thenodrog]

Maybe when that day arrives we will then start to see proper investment by the Walkers, until then we will just have to get by.

'Proper investment'? You mean a fabulously wealthy benefactor with a death wish.

I take it you are too young to rem the old Ewood and the 3rd Div etc?

And that is very hard to do. Hughes left us for dead, and the chances of anyone somehow maintaining our European push were extremely small. Clubs like Newcastle and Spurs for years spent huge amounts of money, brought in a new and improved manager every other month and achieved almost nothing until maybe Spurs season now. We hit an unbelievable jackpot with Souness and Hughes, two great managers in a row that at least got us close to the Champions League. It would have bordered on the absurd if somehow Ince managed the same as well.

So what can you do when we can not only not keep our players, but can't keep the managers? It gets very difficult. And this is why BFS isn't exactly the right choice either. He was good as an emergency manager to keep us up, but as soon as someone waves a bigger paycheck under his nose he'll be off, and whatever we have managed to achieve up to that point will go down the drain again. There is no way we can elevate ourselves above this level with players and managers constantly leaving. We need stability and consistency, but the problem is that rarely exists in football anymore.

Real Madrid seem to be the only club in the entire world with that capability.

btw 'Hughes left us for dead'........... Dead? But with 50m worth of talent that wasn't around when he came.

[Hughesy]

We have the best manager that suits our needs (wheeling and dealing and not massive amounts of cash to splash).

The job for Rovers is to back him where they can (as they have), and let him build the empire bit by bit.

The next hard step is his replacement in a couple of years - we MUST NOT appoint another Donkey like Ince - That set us back 2+ years!

[Big Fat Sam]

Real Madrid seem to be the only club in the entire world with that capability.

I wonder if the Queen fancies a football club.

[thenodrog]

One team I remember it happening to is Coventry and their striker situation. They replaced with and sold Dublin, Huckerby, Whelan, Bellamy and Keane before running out of finding regular goal scorers. They went down and look at them now.

We are not alone. Somewhere between 40-50 clubs have played in the Prem.

I wonder if the Queen fancies a football club.

Apparently the club whose results she looks for first is WHU.

[lancashire]

I can't see that The Trust are behaving like an organisation determined to keep the club in the Premier League at all costs.

My hunch is that the club is an albatross for The Trust and the terms laid down by Jack are making it difficult for them to drop the club like the stone they view it.

They have become neglecting parents to a demanding child, now that the novelty has worn off following a forced adoption.

I mean that by the fact that Rovers IS in the Premiership, the Walker Trust is not obliged to invest in its survival and as a result they are neglecting it, big time. Only if the club was to be relegated then the conditions of Jacks Will would come into effect and they would be forced to invest.

[Stuart]

Apparently the club whose results she looks for first is WHU.

I thought she was, by default, a (Royal) Arsenal fan...?

[lancashire]

.

[den]

I mean that by the fact that Rovers IS in the Premiership, the Walker Trust is not obliged to invest in its survival and as a result they are neglecting it, big time. Only if the club was to be relegated then the conditions of Jacks Will would come into effect and they would be forced to invest.

So why have they been investing since Jack died - apart from the past couple of seasons?

[lancashire]

So why have they been investing since Jack died - apart from the past couple of seasons?

Good point.

I think that The Walkers would like to invest in the club but it is not finincially viable now. I quoted zaccaius earlier who said that "rovers are 7th in line, of all walkers business' to receive any financial support." As a result of the current climate and the fact that Rovers are still a Premiership club the Walkers have other more important assets as of right now.

But perhaps if we are relegated then the conditions of Jacks will come into effect and the Walkers will be forced to invest and this is one of the reasons why they want to sell us.

P.s all this is hearsay of course.

[Hughesy]

Hopefully the Walkers buy BMI and make it a massive success - giving them lots more of spare cash - and here's hoping they send some our way!!

[American]

I wonder if the Queen fancies a football club.

Doesn't Sir Elton already own Watford?

[Mr. E]

'Proper investment'? You mean a fabulously wealthy benefactor with a death wish.

I take it you are too young to rem the old Ewood and the 3rd Div etc?

Real Madrid seem to be the only club in the entire world with that capability.

btw 'Hughes left us for dead'........... Dead? But with 50m worth of talent that wasn't around when he came.

Real Madrid are pretty much the opposite of this. They buy superstars and change managers before the new one can see his office, but the thing is they have so much money and buy such good players that nothing else much matters.

In the premiership, Arsenal and Everton are two successful clubs that like us are not immune to losing their top players, but have very good long-term managers that provide stability to their clubs.

A lot of eastern European clubs can also be taken as a model, particularly when you see how far they are reaching in Euro completions. They have squads that on paper look infinitely times weaker than their western opponents, but with discipline and a firm manager manage to overcome them. The Croatian national team and Bilic are another example of this.

[daveoftherovers]

I wonder if the Queen fancies a football club.

Or The Vatican?

Or just go like Big Club and get run by dodgy cartels (Allegedly LOL)

[daveoftherovers]

I thought it was an excellent article by John Williams and one that spells out quite clearly the financial situation at Ewood Park.

I think Tris has covered all the main points very well in his post.

I think the most telling statement for me was towards the end of the interview when John was asked for his prediction for this season. "To aim high without risking the financial health of the club, but not to be too disappointed if we don't make it." He suggests mid-table and a good Cup run would be a decent outcome. I think his point that we are now embarking upon our longest run in the top flight since 1936 is well made. Talk of continually challenging for a top seven place is simply not realistic anymore. Yes, there may be seasons when be overachieve and other clubs underachieve to enable us to clinch a European spot, but I would suggest that those seasons are not going to be a regular occurance.

The fact that the club have been unable to reduce the wage bill merely underlines how difficult it is for a club like the Rovers to operate in the Premier League.

When you look at what has happened at Leeds, Southampton, Norwich, Charlton and Newcastle in the past, and what is happening at Portsmouth at the moment, I think we are very fortunate to have a chairman who, while still harbouring ambitions on the field, is also aware of his greater responsibility which is to ensure the long term financial future of the football club.

Bob on that man! TOTALLY agree, Prudence, but not using the NY or City of London method(s)

[MCMC1875]

I thought it was an excellent article by John Williams and one that spells out quite clearly the financial situation at Ewood Park.

I think Tris has covered all the main points very well in his post.

I think the most telling statement for me was towards the end of the interview when John was asked for his prediction for this season. "To aim high without risking the financial health of the club, but not to be too disappointed if we don't make it." He suggests mid-table and a good Cup run would be a decent outcome. I think his point that we are now embarking upon our longest run in the top flight since 1936 is well made. Talk of continually challenging for a top seven place is simply not realistic anymore. Yes, there may be seasons when be overachieve and other clubs underachieve to enable us to clinch a European spot, but I would suggest that those seasons are not going to be a regular occurance.

The fact that the club have been unable to reduce the wage bill merely underlines how difficult it is for a club like the Rovers to operate in the Premier League.

When you look at what has happened at Leeds, Southampton, Norwich, Charlton and Newcastle in the past, and what is happening at Portsmouth at the moment, I think we are very fortunate to have a chairman who, while still harbouring ambitions on the field, is also aware of his greater responsibility which is to ensure the long term financial future of the football club.

History in the making and JW will be remembered for this.

[Big Fat Sam]

Doesn't Sir Elton already own Watford?

[Miker]

Finally read the John Williams article on the LT. Very impressed with the way he has come across (as everyone else is).

To me it just sounds like if we can keep a 41 million dollar wage bill going then we can be a successful trading club as long as we finish around 13th spot each season. This would mean that we would have to sell someone next season to lower the wage bill, but if we finish 10th and get more TV revenue we might not have to. Personally, I wouldn't worry about our club being in trouble, between John Walker and Sam we have a strong management of the club and I trust them to keep the club out of trouble. Our team, while not filled with superstars, is quite strong and has plenty of depth, so I think a finish of around 11th is pefectly realistic. I would be very happy if we finished 11th and gave ourselves room to progress next season.

It's not quite doom and gloom yet, with responsible management, we don't have to worry about our club turning into Newcastle.