[Archived] Venky's willing to sell?

[deryck guyler's spoon]

There seems to be a bit of a "Ashley Ward effect" happening here. People are commending energy spent running down blind alleys because at least it is a show of commitment. There seems to be an admirable amount of effort going into formulating these contingencies but if they simply aren't feasible what's the point? I'm probably in the minority who thinks work for work's sake is not a good use of time or emotion. People would argue that it's better than doing nothing but it's arguably worse.

When times are desperate, we draw comfort in the Ashley Wards because they've given it their all, and criticise the Nathan Blakes because they appeared not to care. The fact is - both are as useless as each other.

If you do nothing you'll achieve nothing. Try something and something might happen.

[Tom]

What's your solution then?

In fairness the lack of an alternative suggestion doesn't automatically make this one more feasible.

[Daniel Louis Grabko (Dan)]

10mill is nowhere near enough money. I live in sussex, as do one or two on here. A clubdown here came up from league one last season, now in the championship. They have no debt. You would not be able to buy that club for 10mill. So what makes you or others think they could get the club for 10mill?

The whole plan is dependant on

1/ Relegation

2/ Venkys willing to sell the club cheaply, for as little as 10mill - which is unlikely.

3/ 10,000 fans putting in £1000. als0 unlikley. Not because of not wanting too, but unable to do so.

4/ Bank going along with an idea that has never been done before - not in this current financial climate

5/ Fit and proper test set by the the prem / football league - are they going to test the whole supporters.

6/ Lawyers would have a field day putting such plan together - costs a lot more than 10mill.

If the plan was for an amature club, then yes very possible. But not for a proffessional club.

1/ - Agreed! Nobody wants to see the club relegated, and I for one would would love to see this all fade away as a bad memory starting with a hard fought blood and tears win at the Etihad stadium this week!

2/ - What other club do you see being sold for £23m in the Premiership? Would you or anyone else claim that the Club, even as it is now, as a Premier League Club, has not been significantly devalued in the ensuing period since the Venkys' takeover? Aside from Venkys wanting to gain back the exact price they paid - assuming they were willing to sell, they would never get that same valuation. There are a lot of things that go into valuation. If you are referring to Brighton, that is not a fair comparison. They may be in the Championship, but they have an owner who spent £93m of his own money to build them a new stadium and clear their bank debt. As of 2010 (I haven't seen their latest accounts) they still owed Tony Bloom the better part of £17m. That fact alone would make them more expensive, because for Bloom to sell he would most likely require that debt to be repaid. Not only that but they have a much denser population to draw on and the potential there is incredible. New stadium, free of of bank debt (but with plenty to the owner), large market, good manager, on the up and up, etc. It's not an apples to apples comparison.

3/ Fair enough statement, you are very entitled to that opinion!

4/ Again, fair enough, that's your opinion and you're entitled to it. Nobody can say for sure what that situation is until one talks to the bank.

5/ I answered this question in the post you quoted. Is there some reason you didn't acknowledge that?

6/ Are you referring to something in particular? The setting up of the supporters' organization (already exists)? Or of the handling of the fund itself (escrow accounts held in suspension is really common)?

I fully accept that you don't see the plan as feasible due to not accepting that point 1 is a 60/40 (3 from 5) scenario right now, and point 2 as your personal opinion, and I agree it is a difficult goal to reach. I personally believe, having looked at the scenario from all angles, that 3 is possible depending on what the accounts look like at the end of this season, and Venkys attitude towards the Club. Point 4 neither you nor I can effectively argue more than anecdotally. However, I feel the your last two points have no basis and are just there to make your list longer, respectfully.

I actually believe that this sort of arrangement is actually more feasible for a professional club, because it allows for building a budget around existing sources of turnover, not dependent upon recurring injections of capital that would be required at a club with no other sources of income.

Anyway, PAFELL, as said I fully respect your views! Maybe I am being way off base and overly optimistic, and I know that having objectivity in such a matter that lies so close to the heart is very difficult either way. But I think we need some sort of optimism around here, that if the worst happens we could find a way out that gives us a club to support!

[gumboots]

So, you'll sit back and do nothing? Right?

Not what he said, i don't think. Like most of us he'll probably back something that has a chance of success but this plan as it stands does not seem viable to many of us and, although we may appreciate the effort put in, we don't see the point if it's probably not going to work. The Raos aren't talking to anyone at the moment as far as we know and, since any kind of plan to buy is dependent on their, at some point, being willing to sell, it seems pretty much a nonstarter on those grounds alone. I don't condemn the plan out of hand, but would need a lot of convincing and I certainly don't have the cash to put in £1000 myself - I'm too busy trying to get out of debt before my husband retires this summer to have any spare cash lying around and if i had it would go to my family or my church first - Rovers would come a poor third after those 2.

[Daniel Louis Grabko (Dan)]

In fairness the lack of an alternative suggestion doesn't automatically make this one more feasible.

True statement, can't disagree with your logic there!

[Tom]

Don't you know gumboots its only half of a Holiday!

That comment in the LT didn't sit right with me to be honest it seemed a bit presumptuous really.

[dave birch]

In fairness the lack of an alternative suggestion doesn't automatically make this one more feasible.

The point I'm trying to make is, if you want to deride what someone is trying to do, don't do it without putting up an alternative plan.

It's the easiest thing in the world to put something down.

As I said, "can't wont try", if you don't try to do something, you'll never achieve anything.

[Daniel Louis Grabko (Dan)]

Not what he said, i don't think. Like most of us he'll probably back something that has a chance of success but this plan as it stands does not seem viable to many of us and, although we may appreciate the effort put in, we don't see the point if it's probably not going to work. The Raos aren't talking to anyone at the moment as far as we know and, since any kind of plan to buy is dependent on their, at some point, being willing to sell, it seems pretty much a nonstarter on those grounds alone. I don't condemn the plan out of hand, but would need a lot of convincing and I certainly don't have the cash to put in £1000 myself - I'm too busy trying to get out of debt before my husband retires this summer to have any spare cash lying around and if i had it would go to my family or my church first - Rovers would come a poor third after those 2.

Gumboots, I agree with this sentiment. Most people are not early adopters, if I can use a merchandising analogy here. If 1 or 2 thousand people signed up almost immediately when the thing was actually launched, I feel that momentum could be gained and people would start to believe it was possible, and a sort of snowballing effect could happen. It is very much about perception in many many cases.

Of course you are right that for anything at all to happen on any front, Venkys need to be willing to talk. I also appreciate your priorities with your money - they are spot on.

Don't you know gumboots its only half of a Holiday!

That comment in the LT didn't sit right with me to be honest it seemed a bit presumptuous really.

I agree with you Tom. It wasn't really a good thing to say - and depending on what is meant in the British vernacular by holiday (does that mean an overseas vacation?) he may be factually correct, but it definitely comes off as being disconnected. I know that is not Wayne's intention, but understand the reaction completely.

[dave birch]

Not what he said, i don't think. Like most of us he'll probably back something that has a chance of success but this plan as it stands does not seem viable to many of us and, although we may appreciate the effort put in, we don't see the point if it's probably not going to work. The Raos aren't talking to anyone at the moment as far as we know and, since any kind of plan to buy is dependent on their, at some point, being willing to sell, it seems pretty much a nonstarter on those grounds alone. I don't condemn the plan out of hand, but would need a lot of convincing and I certainly don't have the cash to put in £1000 myself - I'm too busy trying to get out of debt before my husband retires this summer to have any spare cash lying around and if i had it would go to my family or my church first - Rovers would come a poor third after those 2.

When you can point to any "Investment" (for that is what is being asked of us) and be convinced that it has a chance of success, let me know. Because, with any "Investment" there is an element of risk, even putting your money in the bank has an element of risk, however small.

Of course, this is a risk, and a big one at that. It's also a contingency, one that might have to come to fruition, but if it does, then it wont be just the Rovers that benefit, it will be the town (albeit to a lesser extent than now).

So don't run down the proposal yet, it may be the best offer for the Rovers in the future.

[Daniel Louis Grabko (Dan)]

Unless mis-management can be established, then all bets are off!

True! But in practice this is harder than it seems, as we have seen in many cases with football clubs that have gone into administration recently.

[gumboots]

Don't you know gumboots its only half of a Holiday!

That comment in the LT didn't sit right with me to be honest it seemed a bit presumptuous really.

Actually it is half of what I'm about to pay for holidays for myself, my husband, my daughter and grandkids, and anyone lese who goes to use our mobile home in France between april and October this year. That's the kind of holiday budget we work to. And we've worked incredibly hard and long to get to the situation where we can own something that can be used like that. We know we are fortunate and there are many for whom holidays just don't happen at all, and there will probably be many more this year.

[Stuart]

In fairness the lack of an alternative suggestion doesn't automatically make this one more feasible.

But it does make it more feasible than the alternative.

[Paul]

Dan question for you. Puting yourself in the Raos shoes for a moment - this isn't a punishment. You own an asset which has declined dramatically in value, and may get worse, plus you have managed a project which has been an abject failure for 15 months. One way and another its cost a lot of money. The club is relegated and other than a fan based consortium, offering between £0 - £10m, there are no buyers. The fan based consortium are pretty much the same people who have made your life a misery for most of the 15 months.

On the plus side, from Venky's perspective, you have a squad valued at perhaps £40m, club assets of perhaps £20-30m all of which could be turned into real cash. On the minus side the bank is owed at least £21m

Playing devil's advocate here - which looks the more attractive? Sell or break up and dispose?

[bellamy11]

If you do nothing you'll achieve nothing. Try something and something might happen.

Both statements are true. But you have to look at the situation rationally. While the chances of achieving something when doing nothing is 0%, in this particular example, the chances of achieving what has been set out and it working in the medium/long-term is probably about 0.1%. Technically better than nothing, but to say "well in that case it's worth a shot" is hopelessly optimistic/romantic. From the looks of things, Dan is running himself into the ground with this proposal and it's just too fundamentally flawed for it to be worth his sacrifices.

Let's face it, drog's Lancashire United has more chance of long-term success. When comparing the likelihood of success of "doing nothing" compared to "trying something", the odds are still pretty much the same - we have more chance of finding another wealthy backer (good or bad) than the fan ownership model working long-term.

I also fundamentally object to the idea that you cannot express reservations about something without suggesting something better. I do not have the solution - sorry. I really wish I did. I don't have the money spare to buy the club (or even buy a £1,000 share), nor do I have the financial acumen to put together a coherent business plan. I'm not going to go down the "we all have an opinion and this is mine" route because people overuse it and it gets peoples backs up, but from the conversations I have read thusfar I just do not think the proposal as it stands can get off the ground. It can't even get close. Hell, it probably can't even get a million miles away.

Not having an alternative is not fiddling whilst Rome burns. If anything, having a plan which doesn't work is rearranging deck chairs on the Titanic. You can apply an aphorism to anything and sound clever. Anyone who does anything deserves credit, but as I said before - if it just isn't going to work, then what's the justification?

For the record, I'm aware that to some this will appear to be potshot at Dan (anyone else involved), but from the outside looking in, he appears to be a very reasonable, extremely nice and well-meaning guy. We could do with more. But that surely doesn't mean I or anybody else has to come up with the magic bullet solution before being allowed to say that this just won't get off the ground.

[Daniel Louis Grabko (Dan)]

Dan question for you. Puting yourself in the Raos shoes for a moment - this isn't a punishment. You own an asset which has declined dramatically in value, and may get worse, plus you have managed a project which has been an abject failure for 15 months. One way and another its cost a lot of money. The club is relegated and other than a fan based consortium, offering between £0 - £10m, there are no buyers. The fan based consortium are pretty much the same people who have made your life a misery for most of the 15 months.

On the plus side, from Venky's perspective, you have a squad valued at perhaps £40m, club assets of perhaps £20-30m all of which could be turned into real cash. On the minus side the bank is owed at least £21m

Playing devil's advocate here - which looks the more attractive? Sell or break up and dispose?

Well, here's my take, feel free to disagree:

First the £20-30m (Actually about £36m on the accounts) you refer to is not accessible to them, as Brockhall and Ewood Park are prohibited from being sold or developed for anything other than their current use by covenants signed by Venkys in the purchase agreement to buy the Club. Thank you Walker Trust for that!

Second, the entire senior playing squad's value on the accounts is booked at just under £14m. This is of course much lower than its true value, and under normal operating circumstances it is possible that they might realize that £40m figure you quote. However, in the scenario we are talking about, they would be lucky to realize half that in what would amount to a fire sale of players.

As you say there are two options, sell or liquidate what you can and then sell. If they liquidated and then sold or let the Club go into administration, they would have a very bad PR nightmare on their hands, the likes of which cannot even be compared to anything to date. Their reputation would be destroyed and their pride shattered - I honestly think that this would only be considered as a very last resort if no buyers could be found. On the other hand, selling the Club to the supporters allows you to escape in a face-saving manner - there are several ways it could be spun by them to paint themselves as philanthropists giving the club back to the community, for example. They could also possibly negotiate non-cash incentives, such as advantageous advertising terms, that would allow them to build on this marketing ploy of making them good guys.

At some stage they have to think about cutting their losses instead of trying gain back their investment. I think it has already pretty much dawned on them this they won't be doing that. They have much bigger business conglomerate to think about than just Rovers, and for that reason alone I don't think they would just attempt to cut and run with whatever they could. In addition to that, I don't think Barclays would allow any of those player sales funds to leave the country once they got an inkling of what was going on. It may be that Venkys only way out is to find a buyer willing to take the Club off their hands for the price of assumption of the debt.

Before I get ridiculed for that statement, try to digest what I have written. The only assets that could be liquidated are the players, and Barclays will have a hawk's eye on that situation at all times. In the event of a fire sale, they may barely raise enough to pay off a £21m debt (if it is indeed still that high). What do they have left then? A stadium and training facilities that they cannot do anything with. It is not an attractive proposition if in the end you also destroy whatever marketing advantage you got out of the whole deal in the first place, which is negligible at best.

If someone can paint me a more attractive picture for Venkys liquidating instead of cutting their losses in accepting a cut price bid from a loyal and dedicated new owner, then please educate me, I am open to being totally wrong and way off base!

[Paul]

No I wouldn't ridicule it and I think it's a reasonable response, it's pretty much how I see things. The only point I'm unsure about is Ewood. I know Brockhall is protected, there are some who say Venkys only lease, not own, Brockhall. I hadn't realised Ewood was covered by a covenant, are you sure about that?

[DE.]

Dan question for you. Puting yourself in the Raos shoes for a moment - this isn't a punishment. You own an asset which has declined dramatically in value, and may get worse, plus you have managed a project which has been an abject failure for 15 months. One way and another its cost a lot of money. The club is relegated and other than a fan based consortium, offering between £0 - £10m, there are no buyers. The fan based consortium are pretty much the same people who have made your life a misery for most of the 15 months.

On the plus side, from Venky's perspective, you have a squad valued at perhaps £40m, club assets of perhaps £20-30m all of which could be turned into real cash. On the minus side the bank is owed at least £21m

Playing devil's advocate here - which looks the more attractive? Sell or break up and dispose?

Initially option 2 would look more attractive, but if the after-effects of breaking up and disposing the club were considerably worse than option 1 (bad worldwide publicitly (well, more than usual), militant fans turning their attention to your brand in an attempt to destroy it, shareholder confidence dropping, etc) ... maybe you'd re-look at option 1.

Venky's are in many ways between a rock and a hard place at this point. A terrible situation which is mainly of their own making.

[broadsword]

I think we can be sure that Venky's will find a way to walk away quids up.

Did they even use their own money to buy Rovers? Wasn't the purchase completed through Venky's (London) Ltd? So, if they used borrowed money to purchase the club, the loans would be on that holding company. If they wanted out and didn't want to find a buyer, they could let us die of neglect and let Venky's London be liquidated. And nothing would come back to them.

As one of my indian colleagues would put it: "Correct me if I am wrong sir".

They won't sell, because of pure stubbornness and pride. And I think it will be their little retribution for the grief we've caused them. And they certainly won't start putting their own cash into the club, god forbid! So, given that scenario, that would be Rovers as a premiership entity is a dead man walking.

[Miker]

The point I'm trying to make is, if you want to deride what someone is trying to do, don't do it without putting up an alternative plan.

It's the easiest thing in the world to put something down.

As I said, "can't wont try", if you don't try to do something, you'll never achieve anything.

Personally I think Daniel deserves to be commended for his efforts rather than criticized for them, even though I, like several others, don't think it's a feasible idea in any way.

However, I hate to see time wasted. I am seeing a lot of people's efforts wasted on actions that will not be successful. People who, in my opinion, are quite clever, have their hearts in the right place and could achieve quite a lot.

There are so many more pressing issues in the world, in our countries, in our towns and in our lives that I doubt this should be classified as anywhere near top priority. All of this effort could actually be put to better use to improve your community, at a time when negative impact is expected on the town should relegation occur. BRAG could do something positive for the town in an effort to minimize that impact should it occur, and it would be time and effort well spent. That would be my alternative.

Before undertaking a project you have to assess its feasibility and potential impact. I see this latest initiative, as well as other efforts as predominantly wasteful and it is a great shame.

We all love the club, we all worry about things we love and want what's best for them and will try and ensure we are successful in our efforts. So I can't fault anyone for their actions or motives, but it remains my opinion that those efforts are being misplaced.

[Sparky Marky]

Agreed. It just won't happen...simple.

[bellamy11]

Personally I think Daniel deserves to be commended for his efforts rather than criticized for them, even though I, like several others, don't think it's a feasible idea in any way.

However, I hate to see time wasted. I am seeing a lot of people's efforts wasted on actions that will not be successful. People who, in my opinion, are quite clever, have their hearts in the right place and could achieve quite a lot.

There are so many more pressing issues in the world, in our countries, in our towns and in our lives that I doubt this should be classified as anywhere near top priority. All of this effort could actually be put to better use to improve your community, at a time when negative impact is expected on the town should relegation occur. BRAG could do something positive for the town in an effort to minimize that impact should it occur, and it would be time and effort well spent. That would be my alternative.

Before undertaking a project you have to assess its feasibility and potential impact. I see this latest initiative, as well as other efforts as predominantly wasteful and it is a great shame.

We all love the club, we all worry about things we love and want what's best for them and will try and ensure we are successful in our efforts. So I can't fault anyone for their actions or motives, but it remains my opinion that those efforts are being misplaced.

I think you've summed up my views in a far more succinct way than I have done.

[Daniel Louis Grabko (Dan)]

I think we can be sure that Venky's will find a way to walk away quids up.

Did they even use their own money to buy Rovers? Wasn't the purchase completed through Venky's (London) Ltd? So, if they used borrowed money to purchase the club, the loans would be on that holding company. If they wanted out and didn't want to find a buyer, they could let us die of neglect and let Venky's London be liquidated. And nothing would come back to them.

As one of my indian colleagues would put it: "Correct me if I am wrong sir".

They won't sell, because of pure stubbornness and pride. And I think it will be their little retribution for the grief we've caused them. And they certainly won't start putting their own cash into the club, god forbid! So, given that scenario, that would be Rovers as a premiership entity is a dead man walking.

With respect, I think that is a biased, but understandable view. From a purely business standpoint, that is not only a nightmare for us, but also for them. Not only would it create bad PR but they would have a hard time trying to come in again and do business anywhere in western Europe with a reputation like that. I think that the pride factor would more likely work in favor of them trying to avoid that scenario, instead of driving them to realize it. I also cannot verify the status of Venkys London Ltd's capital situation. I know it is publicly available via Companies House and it is actually pretty stupid of me not to have a copy of that, I admit. I'll put that on my to do list. However, even if they did use borrowed money to purchase the Club, that wouldn't touch the Rovers PLC, but you are right in that it could be a factor in them not wanting to take a cut price if they intended to cover VL Ltd's possible debts with any sale.

We actually have the advantage of VH Group being a real deal business entity and not someone like Syed who could just "disappear". They are a publicly traded company on a global scale and have to take that into consideration as well as their duties to their shareholders to protect the reputation and goodwill of the company to help maintain and grow EPS and other ROI measures. So while technically such a scenario as you describe could come about, "something" would come back to them, just not in monetary debt form, like extremely limited future business opportunities in the European marketplace, for example.

[Miker]

The amount of capital listed under Venky's London was roughly 40m as far as I remember.

[Daniel Louis Grabko (Dan)]

No I wouldn't ridicule it and I think it's a reasonable response, it's pretty much how I see things. The only point I'm unsure about is Ewood. I know Brockhall is protected, there are some who say Venkys only lease, not own, Brockhall. I hadn't realised Ewood was covered by a covenant, are you sure about that?

99% sure on that, Paul. I know I have the documentation here somewhere where I read it, but can't find it at the moment, so I can't give you my reference, unfortunately. I know the offer document contains reference to contractual agreements entered into to not move Rovers from Ewood Park, but there is more that I can't find right now.

[Steve Moss]

In fairness the lack of an alternative suggestion doesn't automatically make this one more feasible.

It's easy to criticize, being constructive is far more difficult.