[Archived] Our Debt

[JAL]

So basically, it sounds like they are using the model employed by The Trust but with worse results, including...

Increased borrowing...

Increased spend on agents...

Reliance on cheap/novice manager...

Limited footballing nouse at board level...

Failure to maximise potential income from sales... (players leaving for free and low release fee clauses)

These people are successful business people, right?

They are creaming money out of the club how you cant say its not successful.

As for the limited footballing nouse at board level why when you're creaming money out of an organisation you want people in place who will not get in the way, they are there to make the smooth transaction of cash out simple as.

[AggyBlue]

Blackburn owners Venky's have given assurances that they will continue to fund the club next season, regardless of which division Rovers find themselves in.

Full story: Lancashire Telegraph

THEY WILL CONTINUE TO FUND!!! I havent seen any of THEIR money put into the club yet!!

They will continue to sell off our better players to fund the club

[Paul]

Blackburn owners Venky's have given assurances that they will continue to fund the club next season, regardless of which division Rovers find themselves in.

I think it's important people understand the intent and purpose of this statement. I haven't got round to reading the accounts yet but I am certain this or a similar assurance will be in the accounts.

When auditors review a company's accounts there is a duty on the auditors to ascertain the true financial status of the company. When a company is loss making, and there is no clear possibility of this changing, the auditors will seek assurances from the directors or owners to ensure future funds will be available to sustain these and further losses.

This is a legal requirement placed on the auditors who must be satisfied it is correct. If the auditors are not satisfied they either sign off the accounts with a written statement declaring their concerns or do not sign them off.

The various headlines we've seen recently have been created from this legal, financial requirement. I cannot find any recent direct quote from the Raos on the matter. The stories linked to the headline are the usual tabloid junk designed to fill column inches, sell newsprint and as such are worthless.

Without such a statement accounts could not be published and filed by Rovers.

Don't be fooled by any of this, there is no comfort for us here.

[bluebruce]

Umm..Nick Harris' article says Rochina's contract was a two year one. Which means it runs out January 2013, in just over a year. Great.

[Stuart]

Someone had better tell Rochina then, he thinks it's 4 years...

[Mike Graham]

They will continue to sell off our better players to fund the club

Agree.

The big test this January will be who we loose not who we sign. I can see us loosing star players like: Hoilett the Toilet; N'Zombi; Robbo the Truth Teller; Sicknote Grella; and Samba the Head of our Tribe.

But don't worry..........Keefe is coming home!

[Ricky]

I could see hoilett being sold, which is bound to happen when he is out of contract in the summer. I'll accept that sale as long as the price is right.

See no reason to sell samba as he has 4 years left on his contract. Be happy to lose Roberts, Grella, Keef. No issue at all with them moving on. All on a decent wage and not playing.

I'd start worrying if we lose any others.

[Hughesy]

I could see hoilett being sold, which is bound to happen when he is out of contract in the summer. I'll accept that sale as long as the price is right.

See no reason to sell samba as he has 4 years left on his contract. Be happy to lose Roberts, Grella, Keef. No issue at all with them moving on. All on a decent wage and not playing.

I'd start worrying if we lose any others.

Agreed on the deadwood you mention.....and also Samba can stay for me too.

Hoilett - im not sure, I reckon a new manager could convince him to stay, if Numbnuts is staying in charge then anything north of £7m should be considered with his contract running down.

[bob fleming]

I could see hoilett being sold

No chance Ricky. He's desperate to sign for us remember? Our experienced, esteemed directors are talking to his family on a daily basis. The fact he's slowly getting into the size of a tumble dryer, keeps getting injured, we're bottom of the league and is managed by a lunatic will have no bearing on Juniors thoughts whatsoever.

Blah, blah, blah, words, spin, bull, etc

[thenodrog]

As far as I understand it, the manager's agent and (former?) advisor to Venkys took a big wedge on the Rochina deal, well over the actual fee paid to Barca.

Jisty I think it was Rochina's agent who was paid the 1.4m and not the chap you are referring to.

..... Mind you who he shared it with is anybody's guess.

[Rovers_786]

I hope there pay the loan off in time the venkys to end this madness.

[Miker]

Question...

The loss on player transfers is broken down as follows:

Amortisation of players' transfer costs: (7,842,998)

(Loss) / Profit on sale of players: (5,896,799)

How can we make a loss on sale of players?? Can anyone clarify this point? I think it's a bit unclear...

Also, as a comparison... this is what we spent in the last few seasons on transfers:

2010/2011:

Formica(fee), Rochina(fee), Jones(loan), Santa Cruz(loan), M Diouf(loan)

Spent 13.6m (although I'm still unsure what that 5.8m is from, as it's not transfer fees).

2009/2010:

Kalinic(fee), N'zonzi(fee), Chimbonda(fee), Di Santo(loan)

Spent 10.3m

2008/2009:

Grella(fee), Robinson(fee), Andrews(fee)

Spent 8m

2007/2008:

Santa Cruz(fee), I can't remember any other significant signings we made that season...

Spent 7.8m

How do people think those figures compare?

[SIMON GARNERS 194]

Very worried about news that the Rao's are seemingly having to go cap in hand to Saudi to finance some cash.

Why are they having to do this and what is this money being possibly secured against?...

[Sparky Marky]

They're having to do this because no British banks will touch them considering the staggering loss we made this year....we've gone from triple A rating to "don't touch with a bargepole " rating in 12 months.

[Rover_Shaun]

Transfer fees in and out are not settled there and then in their entirity. They come in installments don't they?

[SIMON GARNERS 194]

They're having to do this because no British banks will touch them considering the staggering loss we made this year....we've gone from triple A rating to "don't touch with a bargepole " rating in 12 months.

Say no more.

[MarkBRFC71]

(although I'm still unsure what that 5.8m is from, as it's not transfer fees).

Roque and J.Jones's wages .... ?

[Miker]

Transfer fees in and out are not settled there and then in their entirity. They come in installments don't they?

Not sure and not sure how it appears on the accounts. Asking Nick Harris about it now, but it doesn't seem he knows either. Someone with better accounting and finance expertise would be useful right about now...

[Miker]

Roque and J.Jones's wages .... ?

That's not a bad guess actually. Can't be as high as 5m though surely. Even if they were both on 80k/week it would only add up to 4m. I imagine that their wages would have been under the wages & salaries as well, rather than transfera, and the main reason for the increase in the wage bill by 2m.

[imy9]

My maths is not great but I heard Jones on 60k a week that's 3 million a year??

Roque on the same amount at least that's 6 million??

[OJRovers]

Miker - re Losses made on selling players:

If we paid eg £5m (including agents' fees) for a player on a 5 year deal then the cost for this will be split over 5 years, i.e. £1m a year. If this player was sold for £2m after one year then we'd make a £2m 'loss' on disposal of the player, being the difference between the sale price and the 'book value' (£4m).

This year I think we sold Diouf for nothing and Emerton for nothing which will have increased the 'loss', maybe even Chimbonda too. The fees capitalised on appointing Allardyce and sacking mid-contract might also have been released.

All this is independent of wages, and isn't affected by timing of transfer installments etc

When I looked I think the 'Additions' to players in the year was about £6m, which made sense as being Rochina, Formica, the loans and the contract extension fees for Robinson,Nelsen,Roberts etc (which are capitalised in the same way).

[phili]

Miker - re Losses made on selling players:

If we paid eg £5m (including agents' fees) for a player on a 5 year deal then the cost for this will be split over 5 years, i.e. £1m a year. If this player was sold for £2m after one year then we'd make a £2m 'loss' on disposal of the player, being the difference between the sale price and the 'book value' (£4m).

This year I think we sold Diouf for nothing and Emerton for nothing which will have increased the 'loss', maybe even Chimbonda too. The fees capitalised on appointing Allardyce and sacking mid-contract might also have been released.

All this is independent of wages, and isn't affected by timing of transfer installments etc

When I looked I think the 'Additions' to players in the year was about £6m, which made sense as being Rochina, Formica, the loans and the contract extension fees for Robinson,Nelsen,Roberts etc (which are capitalised in the same way).

Emerton and Diouf were both after the 30th of june so will be in next years accounts. Phil jones incoming transfer funds might be in this years account but can't remember the exact date it went through which will be around £8m income when it does.

Emerton had net book values of 0 so would not effect the accounts by too much though ( transfer fees are written off over the length of their initial contract and amoritized as such). Of our experienced players i don't think many have a net book value value attached to them or if they did not a high amount.

I think with amount spent during the summer, reduced commercial income from having no shirt sponsor etc and if we sell several players in January you can see the figures from 1st july 2011 to 3oth June 2012 being something around a £30m loss or thereabouts.

[MarkBRFC71]

That's not a bad guess actually. Can't be as high as 5m though surely. Even if they were both on 80k/week it would only add up to 4m. I imagine that their wages would have been under the wages & salaries as well, rather than transfera, and the main reason for the increase in the wage bill by 2m.

Roque was on at least £90k a week - I know this from a City fan at work. Not sure about Jones though.

Could it be loan fees - sometimes clubs want a small fee for loaning a player?

[roverandout]

i hope the saudi's break both their thumbs if they dont pay the money back!!

[John]

On Sporting Live a couple weeks back, Nick Harris thinks the Rao family understand the financial problems which relegation brings – however, he also thinks they are not FULLY aware of the implications.