[Archived] Our Debt

[Paul]

Sorry, I should really start off by addressing all forum members with "this is aimed at everyone except Paul".

Unless I quote you directly or aim it directly at you then what on earth are you fretting about?

I'm not fretting about anything. You mentioned it twice while discussing an alternate view of the owners' spending. I merely pointed out I'm not one of the hysterical MBers who accuse them over asset stripping.

I do actually believe that they took us on because they could buy us very cheaply and use us as a marketing tool for their worldwide exploits. And their worldwide exploits could in turn market us. With the huge Premier League audience in Asia there is certainly some merit in that idea.

That is, if we remain Premier League

Yes I'm sure you're correct about that.

[Paul]

This is my view too. Some of the money may have been poorly spent and poor decisions may have been made, but I don't see any evidence of asset stripping.

Again didn't even mention asset stripping

Unless philip and Paul are suggesting that the club has taken out 2 seperate loans, used them to finance their player wages and acquisitions and have pocketed the money earned off Jones and Kalinic? If that is the case then where are these accounts that they've seen proving this? If we have 2 unpaid loans out against the club, and neither has been paid with the Kalinic/Jones money then that would be disastrous for the club and any relevant information should be made public knowledge.

Again I didn't mention anything of the sort. At purchase Venky's took on loan No1, the club's pre-existing overdraft which was previously secured against the club's assets. In late December 2010 Venky's (technically it was the club which did this) secured loan No 2 against the worldwide media rights for season 2010/11. No need for any accounts to prove anything because what you state is not what Philip and I have posted. The level of misinterpretation on here is astonishing at times. What actually happened i.e. taking on the pre-existing overdraft is covered by the Sale Agreement / Announcement and the second loan is registered at Company House - if you like to PM me with an e-mail address I can send you the documents.

If this isn't the case though, then I don't see how it is of any concern at all? Surely a company paying off their loans with player sales isn't shocking in the least. How else do people expect them to pay off the club's debts? You don't buy something as an investment if you don't expect to have some financial gain from it. We weren't bought by billionaire owners looking for a new toy to play with. We were bought by a company looking to use the club for marketing purposes, while keeping the club sustainable.

So if the sale of the club's prime assets - Phil Jones for one - is acceptable how are we to be sustainable whilst used as a marketing tool? Secondly are you truly happy your club is now just a marketing tool.

Yes, I'm afraid we have been bought by very rich people, not billionaires, as a new toy to play with. That's what the so called marketing plan is all about, raising the Rao profile in India while forgetting all about the Blackburn Rovers profile in Lancashire.

While asking people to point out where you'd said it. Which you haven't. So I told you the answer to your question.

[des]

I do not know if the club is in more debt or less but on sky sports it showed that on this window we made 10 million pounds so if we are in debt, some of the debt should of gone down

[True Blue & White]

Can i just ask, who has accused Venky's of being asset strippers anyway?

[Miker]

Obviously I'm not happy for the club to be used as a marketing tool. If we lived in HappyHappyLand then football clubs would be football clubs and not businesses. We don't though and the club is very much a business and is run like one.

Yes, Jones was sold. For the same money we have bought how many players? Vukcevic, Petrovic, Yakubu, Goodwillie, and Dann. Do you really think that's terrible? We sold 1 player and bought 5 good young players in his place. If they are not simply pocketing the money and are re-investing it in the squad then they are performing very shrewd business. We are a trading club, and we have been acting as one throughout Venky's ownership. I don't see any evidence to the contrary.

I have the Company House documents. What is so unusual about taking out loans? The question is whether or not we're repaying the debts at the club or not. You don't have evidence one way or the other because the accounts for Venky's time in charge haven't been made public yet. By December we'll be able to see where our debt stands and what our finances look like and we can then judge for real.

[Mattyblue]

Indeed Miker, we are still a trading club like we were under The Trust.

Venky's get plenty out of owning a PL football club whilst putting in very little (if any) of their own capital. Great bit of business from their perspective.

[Paul]

Obviously I'm not happy for the club to be used as a marketing tool. If we lived in HappyHappyLand then football clubs would be football clubs and not businesses. We don't though and the club is very much a business and is run like one.

Of Course I quite agree but it was a previously successful business run by people who the fans trusted. I'm not sure that description could currently be applied to Blackburn Rovers

Yes, Jones was sold. For the same money we have bought how many players? Vukcevic, Petrovic, Yakubu, Goodwillie, and Dann. Do you really think that's terrible? We sold 1 player and bought 5 good young players in his place. If they are not simply pocketing the money and are re-investing it in the squad then they are performing very shrewd business. We are a trading club, and we have been acting as one throughout Venky's ownership. I don't see any evidence to the contrary.

We sold a 19 year old local academy player who is widely recognised as a future England centre-half and perhaps captain, who today John Terry acknowledged as a direct threat to his own position in the current England squad and might even replace him in the coming weeks. I'm not entirely convinced this was a great move and there is little doubt this sale was planned from before Christmas with the money eventually being used to pay debts which did not need to be incurred in the first place.

On the other hand I agree as a trading club we do have to sell players in order to continue to mainatin the squad

I have the Company House documents. What is so unusual about taking out loans? The question is whether or not we're repaying the debts at the club or not. You don't have evidence one way or the other because the accounts for Venky's time in charge haven't been made public yet. By December we'll be able to see where our debt stands and what our finances look like and we can then judge for real.

Obviously there is nothing unusual in taking out loans. What is unusual is for new owners to make a series of promises at the time of purchase and to renege on those within weeks. The club ran quite happily without the second loan for many years yet as a result of Venky's action it became necessary within weeks of their purchase. While I don't have direct evidence it is common knowledge in Blackburn and a much wider community that Barclays insisted the second loan be repaid and the Jones and Kalinic money was used to do this. I appreciate you are a great distance away and may not realise how widely known such things are, this happened whether or not there are published accounts to prove it.

Time and again people have argued Venky's actions are normal practice. It's true some individual actions are normal business practice, the difficulty is when taken as a whole their actions are far outside of what most would consider normal practice. Football is not a normal business and when set against a football background many of their actions prove even stranger.

[Miker]

Ok I'll take this slow. Our accounts at the time of purchase show that we had an existing ~£15m debt that was to be paid within the year ie. By June 2011. Has this debt been paid?

[67splitscreen]

Ok I'll take this slow. Our accounts at the time of purchase show that we had an existing ~£15m debt that was to be paid within the year ie. By June 2011. Has this debt been paid?

Philip says it was transferred to the Raos as part of the sale.????

[Pedro]

I can't believe that anyone can suggest that the club willingly sold Phil Jones in a way of "asset stripping". Jones wanted out, he wanted to further his career plain and simple. Yes we and he support Blackburn Rovers but they are not in the same stratosphere as Man Utd which is the biggest club in the land - by miles. If they come knocking do you say no thanks to guaranteed trophies, international recognition, fame, fortune and the best place for any player to develop into a world class footballer? Not unless you are Alan Shearer you don't.

In regards to the loans, it is common sense business and very tax efficient to borrow money against assets rather than potentially pay a massive percentage in tax on any profits. That is all the club have done and I personally would've saved my two quid delving into this non-conspiracy. In terms of Barclays, you would have to have your head filled with expanding foam to not recognise that they have had to reign themselves right in. They are making thousands redundant and are having to restructure due to the economic crisis, stagnant housing market and the reimbursment of the PPI money.

[BuckyRover]

I can't believe that anyone can suggest that the club willingly sold Phil Jones in a way of "asset stripping". Jones wanted out, he wanted to further his career plain and simple. Yes we and he support Blackburn Rovers but they are not in the same stratosphere as Man Utd which is the biggest club in the land - by miles. If they come knocking do you say no thanks to guaranteed trophies, international recognition, fame, fortune and the best place for any player to develop into a world class footballer? Not unless you are Alan Shearer you don't.

In regards to the loans, it is common sense business and very tax efficient to borrow money against assets rather than potentially pay a massive percentage in tax on any profits. That is all the club have done and I personally would've saved my two quid delving into this non-conspiracy. In terms of Barclays, you would have to have your head filled with expanding foam to not recognise that they have had to reign themselves right in. They are making thousands redundant and are having to restructure due to the economic crisis, stagnant housing market and the reimbursment of the PPI money.

You need to wind your neck in. Phillipl has said that what they have done is bad.

He's seen the documents

[Paul]

Ok I'll take this slow. Our accounts at the time of purchase show that we had an existing ~£15m debt that was to be paid within the year ie. By June 2011. Has this debt been paid?

If you are addressing that to me Miker IMV it was transferred to Venky';s London at the time of the purchase, what the conditions are we don't know. It is the second loan facility, taken in December and due for repayment in June (on the basis it was secured specifically against the 2010/11 TV money) that has been repaid, supposedly with the Phil Jones / Kalinic money.

[Miker]

If you are addressing that to me Miker IMV it was transferred to Venky';s London at the time of the purchase, what the conditions are we don't know. It is the second loan facility, taken in December and due for repayment in June (on the basis it was secured specifically against the 2010/11 TV money) that has been repaid, supposedly with the Phil Jones / Kalinic money.

But the accounts from Company House clearly show that there is an existing debt associated with the club that has to be paid "within 1 year". Since the accounts are dated 30/06/2010, my assumption is that they would have had to be paid by 30/06/2011. The existing debt that was required to be paid, seems to be around the same value of the Phil Jones transfer and the amount claimed by nicko to have been called in by the bank. It would make sense to me that it was this debt that was called in, as the accounts clearly show that it would be called in by the bank and there's nothing unusual with that at all.

The mortgage document taken out against the Sky Sports money doesn't specify the sum taken out or when it should be repaid by. Given it was taken out only late December 2010, it seems a crazy assumption to me that it would have to be paid within 6 months in June. That's way too small a loan period by any standards. If it was secured against the Sky money, wouldn't that just mean that if the loan wasn't repaid in time then it would be paid off using the incoming Sky money? I don't see why it HAD to be paid by the Jones/Kalinic money. Even if it was, it just means that the loan has been repaid and the Sky money would not have to go towards repaying that loan.

I don't see what Venky's are doing wrong here, other than bring us in line with the incoming UEFA Fair Play regulations and wasting money on a lot of very stupid decisions made. However, they're not the first owners to waste money on stupid, useless things and they won't be the last. It's not just football club owners that throw money into a hole, but virtually any business. This doesn't make them exempt from criticism, but it doesn't necessarily make them special or hideously worse than anyone else.

[chocky]

Why are people still going on about jones leaving? He wanted to go and from what has come out the club did all they could to keep him. What can anyone really do when s player wants move.

[thenodrog]

We sold a 19 year old local academy player who is widely recognised as a future England centre-half and perhaps captain, who today John Terry acknowledged as a direct threat to his own position in the current England squad and might even replace him in the coming weeks. I'm not entirely convinced this was a great move and there is little doubt this sale was planned from before Christmas with the money eventually being used to pay debts which did not need to be incurred in the first place.

On the other hand I agree as a trading club we do have to sell players in order to continue to mainatin the squad

Inevitable that he would go but I think we all hoped that he would stay for another 12 / 18 months become an England regular and maximised his value. In that time I expect we could easily have sold him for twice as much. On the other hand the sick issue within our football is that if he had stayed at BRFC John Terry wouldn't be worrying about being displaced enough to publically say so.

[Miker]

Why are people still going on about jones leaving? He wanted to go and from what has come out the club did all they could to keep him. What can anyone really do when s player wants move.

Exactly. Something I missed out on in my post (it was a bit off topic). Both Jones and Kalinic wanted out, so we sold them and for decent fees.

[AndyC]

Why are people still going on about jones leaving? He wanted to go and from what has come out the club did all they could to keep him. What can anyone really do when s player wants move.

Reinvest ALL of the money - that would be a start.

Then actually SPEND some money on transfers like they PROMISED.

Instead, we're in the position where we have only invested PART of the money from player sales, as they clearly need the rest of the cash to shore up the finances after spanking it on agents fees, pay offs and getting ZERO revenue for our club sponsorship.

Inevitable that he would go but I think we all hoped that he would stay for another 12 / 18 months become an England regular and maximised his value. In that time I expect we could easily have sold him for twice as much. On the other hand the sick issue within our football is that if he had stayed at BRFC John Terry wouldn't be worrying about being displaced enough to publically say so.

to be fair - he will progress better as a player for man u, playing in the champions league under fergie and his coaches, rather than playing for kean.

But i do agree with your first point - As a 'Rovers' fan, he could have given us another season. There's just never any loyalty in football anymore.

[thenodrog]

to be fair - he will progress better as a player for man u, playing in the champions league under fergie and his coaches, rather than playing for kean.

imo that is the professionalism that Mark Hughes brought to the club which we have since lost.

[AndyC]

imo that is the professionalism that Mark Hughes brought to the club which we have since lost.

agree with that.

players were willing to come to the club. because they knew the level of coaching was on a par with the top clubs in Europe.

[John]

imo that is the professionalism that Mark Hughes brought to the club which we have since lost.

Mark Hughes and also his backroom staff (which he delegated a lot of his work too). All of his staff had the highest qualifications too.

High standards set, throughout the club, along with a buring ambition/desire to win.

Ah, those were the days.

[phili]

But the accounts from Company House clearly show that there is an existing debt associated with the club that has to be paid "within 1 year". Since the accounts are dated 30/06/2010, my assumption is that they would have had to be paid by 30/06/2011. The existing debt that was required to be paid, seems to be around the same value of the Phil Jones transfer and the amount claimed by nicko to have been called in by the bank. It would make sense to me that it was this debt that was called in, as the accounts clearly show that it would be called in by the bank and there's nothing unusual with that at all.

The mortgage document taken out against the Sky Sports money doesn't specify the sum taken out or when it should be repaid by. Given it was taken out only late December 2010, it seems a crazy assumption to me that it would have to be paid within 6 months in June. That's way too small a loan period by any standards. If it was secured against the Sky money, wouldn't that just mean that if the loan wasn't repaid in time then it would be paid off using the incoming Sky money? I don't see why it HAD to be paid by the Jones/Kalinic money. Even if it was, it just means that the loan has been repaid and the Sky money would not have to go towards repaying that loan.

I don't see what Venky's are doing wrong here, other than bring us in line with the incoming UEFA Fair Play regulations and wasting money on a lot of very stupid decisions made. However, they're not the first owners to waste money on stupid, useless things and they won't be the last. It's not just football club owners that throw money into a hole, but virtually any business. This doesn't make them exempt from criticism, but it doesn't necessarily make them special or hideously worse than anyone else.

It is more that on the 30th of june there were loans (mortgage or overdraft) of 33-35m secured against the assets of Blackburn Rovers. Now as of right now nobody knows exactly how much debt is secured against the assets of the club. There are lots of theories etc and both facilities are still present at companies house, so one could assume both debts are still in place.

Venkys have admitted there were bank issues etc and once those were sorted signings were made. How they have solved those (whether through issuing debentures for Venkys plc for example, or injected their own funds into the club) or if they increased our debt levels etc we do not know and we do not know how they funded the summer transfers.

It must be said that none of this is an issue in itself, however it is more of a worry in that we no longer have a trust to fall back on and our debt levels are twice as high as they were under the trust. I think the issues are more the secrecy around club finances. It is very reminiscent of Portsmouth under Guydamak, everyone assumed he was rich when in reality it was all debt taken out by the club etc.

[Pedro]

You need to wind your neck in. Phillipl has said that what they have done is bad.

He's seen the documents

Hmmm, you seem a lovely, level headed boy.

I say post the docs up here then or email them to me so we can judge for ourselves because it sounds like a lot of scaremongery to me and I don't buy the "The things I've seen etc." lines that were being spoken about (mainly by Glen's blog the other week).

[Veevs]

Reinvest ALL of the money - that would be a start.

Then actually SPEND some money on transfers like they PROMISED.

Instead, we're in the position where we have only invested PART of the money from player sales, as they clearly need the rest of the cash to shore up the finances after spanking it on agents fees, pay offs and getting ZERO revenue for our club sponsorship.

to be fair - he will progress better as a player for man u, playing in the champions league under fergie and his coaches, rather than playing for kean.

But i do agree with your first point - As a 'Rovers' fan, he could have given us another season. There's just never any loyalty in football anymore.

Don't like the comment on Loyalty.. Blackburn might be his club but the lad was given the chance to get medals very early in his career, gain vital european experience (playing against some of the best forwards in the game), learn from highly experienced players like Vidic and Ferdinand, improve with some of the best trained and most respected coaches in the league, potentially build a defensive partnership with another young lad that may soon form Englands central defensive partnership and work with a manager we might not like but have to respect in SAF... etc etc in his position I would also of jumped at the chance even if it mean't leaving the club I support especially with Kean in charge, Venkys at the helm and the club looking like it was more likely to be battling relegation than for Europe.

Do agree on the fact we needed to invest the money.. then again would you throw more money at Kean especially when it's now come out that he is on his last legs and has had question marks over his head since March.. ?

Not sure I am looking forward to seeing the next set of company reports when they get made public..

[den]

Picked this up from the comments column of the LT:

As a Shareholder, I have just received the annual report and financial statements. Here are some extracts.

"Rovers enjoyed a decent start to the campaign until October when inconsistency and uncertainty lead to Sam Allardyce leaving the club"

"The club must preserve its Premier League status. The town and the borough are reliant on the club as a focal part of the community and this is never lost on the owners or the board"

"The club is establishing strong links with the local community including the local council, community leaders and Blackburn College."

"The biggest risk to the business would flow from relegation from the Premier League. The board has looked to mitigate this risk by incorporating clauses in players contracts thatwould lead to significant reductions in player salaries in the event of relegation."

Year ending 30/6/2011

Loss £18.6m (2010 £1.9m)

Bank loan and overdraft £21.1m (2010 £14.3m)

Auditor remuneration £54k (2010 £34k)

Anyone confirm this is legit?

[OJRovers]

Yes, those figures are correct.

Not had full change to analyse the figures, but looks like the debt has increased a fair bit, transfer costs (agents, fees etc) sound massive. Does not include the Scott Dann / Yak expenditure either.

Full analysis to follow....