[Archived] Rovers Accounts Review

[Bobby G]

Do we have any indication of the transfer fees paid and received over this period? I am getting the feeling too that someone like Santa Cruz or Warnock was sold for less than we thought so.

I am also curious to know how much we actually were paid for Hughes team and how much we had to pay Paul Ince's.

[I_saw_Batty_score]

It is possible to work out what money Rovers got for Bentley and what did go to Arsenal? I guess there is too many unknowns to enable anyone without inside knowledge to calcualte this.

Would be nice to know.

I think Rovers have to look for those sort of deals in the future - certainly buying old players past their peak isn't very appealing.

[Hughesy]

Someone on here needs to win the Euro Millions or something and 'give' the club £10m or something!

[only2garners]

That wasn't my understanding of what John said at all otg. My understanding was that he said we were currently operating a stategy of selling players to plug the hole in the operating budget caused by the wage bill being so high.

When the next round of improved TV money came in he hoped to be able to move back to not having to sell players and being a trading club as opposed to a selling club. After that as time went on he expected the constant upward presure on wages would probably eventually put us back to the position where we are now.

You're right Rev. I went back to check my notes. Must be my age...

[PAFELL]

If all those happened after 30 June, then we got £8.8m for Warnock but I think Givet pre-dated the year end in which case we got £5.3m for him. The £4.6m will be the net from ins and outs. I had Chimbonda at over £2m by the way so that would change the number again and didn't we spend a bit on signing some very young players as well?

The relevant period to match is 1 July 2008 to 30 June 2009, not this summer. I might have missed some but that means RSC, Brad and Bentley out; Robo, Grella, Diouf, Andrews and Givet in plus payments to Arsenal for Bentley and Ince et al for getting sacked (they get wrapped up in the trading account whereas Chelsea treat sacking payments as non-recurrent extraordinary items... every year!)

Do spurs still owe Rovers money for Bentley - or was it all paid upfront?

[philipl]

It is clearly being paid in stages for the accounts to be accurate. And there are numerous reports indicating there were contingencies as well lifting the amount from £15m to £17m. It appears one contingent payment was triggered when Bentley finally made his 20th appearance last month.

[Exiled in Toronto]

Wages up 6.4 million while media revenue down 5.8 million - so much for the correlation between wages and position Williams harps on about.

I am truly shocked by the wages number; we simply cannot afford to p!ss the entire Sky bonanza into the pockets of an ageing squad, but that seems to be what has happened. Firstly, we cannot afford it, and secondly, it makes the deadwood unsellable - Matteo/Gray all over again. Still, at least no-one has pinched Roberts on a Bosman...

I suppose when the financial year ended, it could have been argued the senior staff increase was an investment in pushing on this year; if so, we have been diddled. How have we benefited from a 14% increase in headcount?

I'm not sure I understand why everyone seems to think we are the best run club in the world when both wages and headcount are spiralling to no discernable benefit.

[Hughesy]

It is clearly being paid in stages for the accounts to be accurate. And there are numerous reports indicating there were contingencies as well lifting the amount from £15m to £17m. It appears one contingent payment was triggered when Bentley finally made his 20th appearance last month.

I said Id heard there was a clause based on that final appearance - maybe it was true afterall

[SIMON GARNERS 194]

I am truly shocked by the wages number; we simply cannot afford to p!ss the entire Sky bonanza into the pockets of an ageing squad.

You forgot to add the word 'mediocre' to ageing squad too.Makes the recent spell of dull football even more infuriating.

20% player wage increase FFS!

[FourLaneBlue]

It is worth reiterating the point the Walker Trust made when stopping their annual subventions of £3m gifts and £3m loans. The numbers in the Premier League have grown so large that these amounts no longer make any material difference to the club's situation. I think that is worth bearing in mind in relation to the relegation question- in a lower division such amounts would make a material difference.

An extra 3million a year would do very nicely thank you. To say "these amounts no longer make any material difference to the club's situation"...eh? Having an extra, bankable £3million coming in every year would do us very nicely thank you. Don't we bank on finishing at a certain place or above in the league? How many of those places are needed for £3million? Surely with that coming in yearly we wouldn't have had to sell Warnock to balance the wages so urgently?

[FourLaneBlue]

Wages up from £39.7m to £46.1m. Incidentally senior football players and management increased from 70 to 84 so Sam got some of his huge staff into Ewood, majiball.

Does this include the staff over the course of the year or only at one moment in time? In other words...were Ince and some of his still on the rota at that time?

How can the wages jump up so much when we were also getting some big earners off the books as well?

[Seedstral]

After reading this i think a few Allardyce doubters need a reality check!! For 1 JW said when he took over last season that if we did go down Sam was the man to bring us back up thankfully that never happened. To sack him and all his backroom staff would cost us millions that we haven't got in pay offs and realistically who would we get to replace him. Yes everyone goes on about Hughes but due to the fact that he wasn't a failure at City and everyone feels sorry for him i think another big job is just around the corner for him and he will see Rovers as a backward step. Is there a better manager out there at the moment to do a job on a shoestring budget i think not if there is i cant wait for your replies remember Bolton sacked their manager yeserday and yet no one on that favourites list stand out for me and there is also no clear favourite and being realistic they will be the same candidates if Big Sam goes and i can guarantee not 1 of them will on your wish list. We are what we are and we are where we are for a reason and be grateful for Premier League football as your wish for a new manager might just fail to live up to your expecations and then you'll be back to square 1 again berating everyone week in week out hoping that a top quality manager can take us to the next level. In other words dream on as for the foreseeable future it is never going to happen.

[PAFELL]

It is clearly being paid in stages for the accounts to be accurate. And there are numerous reports indicating there were contingencies as well lifting the amount from £15m to £17m. It appears one contingent payment was triggered when Bentley finally made his 20th appearance last month.

Is it possible to work out how much more they owe for Bentley? wondering if what they owe could go towards any attempt to get him back to Rovers + a small fee?

[Hughesy]

The wage figure could indeed be skewed by Ince & co - I heard some pretty big nasty figures being required to pay the likes of Knox & Mathias off - hopefully not true.

The £3m as FLB would be more than welcome - its the equivelant to 3 1/2 places higher in the league and that lumped together with say the £2m sale of Andrews could buy us a new midfielder!

It would be great to try and get back Bentley - but I dont know if he would come back. Its a shame because surely there is business to be done there - considering he is on around 50k a week at Spurs and not even playing.

As for our High wages - we have a number of HIGH earners who dont even really play that often - Reid & Zurab being the obvious 2 who we wouldnt even miss if they left and their wages would cover the wages needed for Bentley!!

[Paul]

Wages up from £39.7m to £46.1m. Incidentally senior football players and management increased from 70 to 84 so Sam got some of his huge staff into Ewood, majiball.

bazzanotsogreat - could you pop the fiver you owe me in the nearest chairty box. Cheers

[Bazzanotsogreat]

bazzanotsogreat - could you pop the fiver you owe me in the nearest chairty box. Cheers

Paul our disagreement was in reference to to the previous years accounts- go check the posting dates- I will have that fiver

[Paul]

You'll need to check last year's accounts as well - they increased as predicted by myself. It's OK I was only pulling your leg

[AndyNeil]

if anybody wants a PDF of the 2009 Year End Accounts, e-mail me at: [email protected]

COYB

I've e-mailed out the Accounts to those who requested a copy ... if anybody else requires a copy, just drop me an e-mail to the above address.

COYB

[Bazzanotsogreat]

You'll need to check last year's accounts as well - they increased as predicted by myself. It's OK I was only pulling your leg

You predicted that wages for the previous financial year would be over 40 million- but I wont hold it against you (lol)- Have a great new year!-

PS Buy yourself a drink with that Fiver

[FourLaneBlue]

Am I the onlt one who still cannot quite understand how the wage bill could have increased so much in a year?

[Steve Moss]

Am I the onlt one who still cannot quite understand how the wage bill could have increased so much in a year?

Paying off Ince and Co., while at the same time as paying for Sam and Co.?

[JAL]

Am I the onlt one who still cannot quite understand how the wage bill could have increased so much in a year?

Think you might be on the right lines, along with Hughsey, that the club were paying TWO management teams and not just the one that is in charge FLB.

[FourLaneBlue]

That does make sense but what I would like to know is, after that has been taken into account, if we have otherwise made savings in our wage budget? The very hasty sacking of Ince and Crew hopefully being a one-off six-month experiment. After all...well was the last time that we had a permanent manager in charge for as short a period as time as that? Certainly not as far back as I can remember. In fact it was just under six months!

[Alan75]

That does make sense but what I would like to know is, after that has been taken into account, if we have otherwise made savings in our wage budget? The very hasty sacking of Ince and Crew hopefully being a one-off six-month experiment. After all...well was the last time that we had a permanent manager in charge for as short a period as time as that? Certainly not as far back as I can remember. In fact it was just under six months!

Jim Iley

[philipl]

Third and final instalment.

Answering questions-

Wages need to be seen against the context of a 17% increase in Prem wages which I believe was what the bosses of the 20 clubs shelled out in total between them last season. So a 20% increase is barely keeping ahead of the Joneses.

Let's look at specifics and as I have commented before, Rovers' 2007/8 wages figure was reduced by not having to pay Sparky and the taffs for one month probably saving over £300k (Sparky was reported to be on £2.25m so divide by 12 and add 10% for Employer's ERNI and that is a £200k saving on just him). So the correct base figure for 2007/8, assuming having a management team is the club's norm, was a bit over £40m.

Ince came in on about £1.5m if I remembered reading correctly but yes there were some hairy rumours about what the two dinosaurs he brought with him were earning. That was probably a saving over 6 months of perhaps £300k compared with Sparky but Sam I believe is on more than Sparky was and the additional top flight coaches and mind readers will not be being paid with fresh air either. I guess over the season, the cost of management excluding sacking compensation is up by over £500K.

Roque signed a new contract summer 2008 in case nobody noticed- £1.5m additional costs for him.

Yes Brad and Bentley were high earners but I would be amazed if Robo and Grella are on any less.

Then we brought in Messrs Diouf and Givet in January- add £1m each for half a season from those two.

So we are up to about £44m without discussing any increases for the other 50 or so individuals who make up the first team players and management cohort and there were quite a few contract renewals in 2007/8 which would impact 2008/9 as well as contract renewals during the course of last season.

One final point on wages, the £46.1m figure includes wages related costs- National Insurance being the largest additional item. With footballers now paying 50% in tax, I wouldn't be surprised if Rovers are not writing cheques to the value of nearly £20m to the Government in the current season.

Transfer fee payment terms are made very difficult to work out because managerial change costs are included in the player trading account. So how much got paid to Ince and when is impossible to calculate from the accounts and with so many transfer fees being undisclosed, there is an enormous amount of guesswork involved when it comes to estimating specifics. But it is fair to say any payments to Ince probably ended when he got the MK Dons job but I don't know if he took Archie Knox et al with him.

I think it is also fair to say that the best working assumption on transfer payments these days is that all fees get spread in equal instalments over the length of the players' contracts. So assume 25% per year for both incomings and outgoings. This get further complicated by contingencies including sell-on clauses.

We know that Arsenal got/are getting 40% of the profit Rovers made/are making on selling Bentley and that probably extends to the performance-related bit which would/might one day raise the fee from £15m to £17m. As Arsenal would get paid first from cash received from Spurs, Rovers probably are only just beginning to see clear net cash from the Bentley sale which was one of the reasons I was so passionately opposed to his sale. I bet Bentley wishes he'd stayed at Rovers as well!

The Rovers accounts note 25 explains what Contingent Liabilities are:

"Under the terms of certain contracts for the purchase of players' registrations, future payments may be due, depenedent upon the success of the team and/or the individual players. Similar terms exist in contracts for sales of players' registrations.

"Liabilities are recognised once the payment becomes probable rather than possible in relation to playing appearance and team performances. The maximum potential liability for amounts due to football clubs and other third parties for first team players is £5.4m (2008-£3.9m)."

That is a significant amount, probably being kept in the realms of the possible rather than probable by Rovers playing rubbish football at the moment! It probably includes quite a big number which would become due if all Rovers' transferred in Academy youngsters become first team footballers.

It must be stressed that accounting rules require only contingent liabilities to be disclosed and contingent assets are not shown except the £24.9m contingent asset from tax losses- the theoretical amount of tax the club will not pay if it keeps on being profitable based on the allowances for losses made in previous years. The contingent assets arising from clauses on players transferred out of the club (including selling on fees for all the youngsters the club has transferred out over the years) can only be guessed at by people reading the accounts.

Now, anyone still reading at this point will have seen my reference to the club "keeping on being profitable". To be honest this is where accounts and the non-accountant reader part company. Yes, Rovers have made book profits in the last two seasons but this is only after adding in the player trading account which is itself the product of player transfer fee amortisation. To illustrate amortisation, we paid £4m for Vince Grella and gave him a 4 year contract so Vince is amortised at the rate of £1m per year in the player trading account. If we sell Vince for £1m this year, the club would record a loss of £2m on him as £1m would already have been charged to the player trading account last year. Apply that principle across all the Rovers' playing squad and you end up with numbers in the accounts which are true and fair to accountants but pretty meaningless to the ordinary fan. No account is taken of whether the player was 38 (as Brad was when Villa bought him) or 18 as the same accounting rules apply. For what it is worth, Rovers made an accounting profit of £19m on player disposals in 2008/9 although transfer fees earned for RSC, Brad and Bentley and others were much more than £19m.

It is for this reason that football clubs are required to disclose what the directors consider to be a fair value of the playing staff at the year end. At 30 June 2009, the directors of Rovers valued the playing staff at the club at £47m (this is going to be fun seeing how certain posters work out how that number was arrived at). Most significantly, the equivalent number when Sparky was at Rovers was over £60m.

To wrap up, the best thing I can do is reproduce the key performance indicators from Tom Finn's Business Review:

From right to left the numbers are 2008/9 - 2007/8 - 2006/7 - 2005/6 - 2004/5. All figures are £m except the last 4 for obvious reasons!

Turnover 50.9 - 56.4 - 43.4 - 43.4 - 41.3

Wages 46.1 - 39.7 - 36.7 - 33.4 - 31.3

Other costs 11.3 - 10.1 - 9.9 - 9.4 - 9.0

Operating p/l (6.5)- 6.6 - (3.3)- 0.6 - 1.0 Negative numbers mean losses

Interest cost 0.8 - 1.6 - 1.0 - 0.7 - 0.5

Profit/(loss) (7.3)- 5.0 - (4.3)- (0.1)- 0.5

Player trades 10.9 - (2.0)- 0.9 - (6.8)- (5.5) Negative numbers mean net investment

Bottom line 3.6 - 3.0 - (3.4)- (6.9)- (5.0)

Cash movement (1.3)- 2.3 - (7.2)- 0 - 5.1

Net debt 20.3 - 16.9 - 20.1 - 13.8 - 27.8

League Place 15th- 7th - 10th - 6th - 15th

Attendance 23481- 23917- 21262- 21015- 22294

Wage/Turnover 90.6%- 70.4%- 84.8%- 77.0%- 75.8%

Live TV games 11 - 14 - 10 - 11 - 12