[Archived] Rovers £54.5m in debt.

[awhom111]

"Based on the current rules if we are not promoted, we will have a transfer embargo starting on January 1st, 2014."

Why does Shelfy think it's 2015?

It is 2015. I miscorrected when trying to fix the font. I edited it to the right year. Sorry.

[Stuart]

No worries. I was thinking, heck that's soon!

[MrT]

How some folk still try and defend them is beyond all comprehension to me.

They must be on the payroll.

[Parsonblue]

I can't help but feel the argument that our previous debt of £20m puts the current debt of at least £55m could provide false comfort.

Three years ago Blackburn Rovers was an entirely different animal. I won't bother listing all the positives we had then but in a nutshell £20m debt for a PL club with a valuable squad was not an issue. Today £55m and growing represents an almost insurmountable problem and huge threat to our club's existence. No perspective in that.

Completely agree Paul. There is simply no comparison between the stewardship of John Williams under the Trust and the various folk that Venky's have put in place. The debt is rising and I don't believe the owners have a clue how to reduce it. To allow the wage/turnover situation to get to the point that it has shows that they have no idea how to run this particular business. The debt is a millstone that will continually drag the club down. The owners may say they will continue to support us financially but, then again, these are the same owners who assured shareholders on the takeover that there would be no changes to the management structure. I find no comfort in trying to compare the present financial position with that under the Trust. Comparing the figures merely indicates just how far we have fallen from being a well run and well respected club to the shambles we now are under Venky's.

[Bucksrover]

Really gone through a range of emotions with all this - anger that we are in this mess, sadness for the club that it's future is in serious doubt - especially for those who rely on it for a living. One of the toughest emotions to deal with due to the uncertainty is the hope that the dire situation could be turned around. If we managed to get promoted, and moved towards a policy of buying young, developing and selling a player or 2 like we used to then the club could survive. But there is a big 'if' in there.

I feel Bowyer's time in charge so far has seen an effort to move towards a sustainably run club. Givet, Pederson, Murphy and a list of random Portuguese players who, for different reasons would have contributed very little this season have been moved on in favour of younger players who have energy, drive and maybe even a re-sale value. But, as was mentioned above there are still expensive shackles in place such as big contracts for players like Etuhu which will see us paying him over £4.3 million until he is 34 and probably offering next to nothing as a player.

Because of the small fan-base the Blackburn business model was always a precarious one which may not have the ability to right itself at a level above League 1.

As I put on most threads I think the only thing supporters can do is go to matches and cheer on the team - for a few reasons - firstly, although gate receipts may be a drop in the ocean financially it is contribution and will also (as others have mentioned) make us more attractive to potential buyers as a going concern, also - attending matches and cheering on our young team improves our chances of promotion. The last reason I would suggest fans attend is that, whether the current crop are good enough for promotion or not, they are putting on a standard of football that we are unlikely to see again unless something spectacular happens on the financial side.

[longsiders1882]

Spending £8m on a striker in this league is ridiculous so I agree with that.

I will point out one fact about those down the road and one they cannot deny is the season they went up under Coyle they went Kean or bust, they couldn't afford to keep up with transfer payments (Eagles & Eckersley) and were about to be hit with a transfer embargo, they went balls out and it paid off. They pocketed the vast majority of the profits of the premiership money after paying off creditors (mainly directors) and that has reaped stability. They found stability when football was at its least stable, good luck to them & well planned, but and it's a massive but Burnley could be nearly finished now had things not gone their way.

Not an entirely accurate summation. The situation was nowhere near what you face. We had already been hit with the embargo by the way. Had we not gone up then we would have faced quite a fire sale but the club wasn't in any real danger. Our situation arose because the main financial backers business went t**s up with the property and banking crash and dried up our funds. Had we not gone up it would not have been pretty but we had enough players to sell sell and of course most of the debt was to directors so there was no value for them in closing the business and, perhaps more importantly, they were Burnley fans to a man!

As for pocketing the PL money, I wish. The directors loans etc were repaid and then pretty much the rest was wasted on ridiculous wages, don't forget not long ago a few on here were incredulous at our 8 Million loss last year! Whatever is happening this season it has taken a lot of pain to get here and I'm not convinced our finances are as rosy as some seem to think.

[yoda]

4. They are writing the losses off because they will be tax deductible.

how much profit do you have to make to be able to write off 54 million quid?

[den]

I can't help but feel the argument that our previous debt of £20m puts the current debt of at least £55m could provide false comfort.

Three years ago Blackburn Rovers was an entirely different animal. I won't bother listing all the positives we had then but in a nutshell £20m debt for a PL club with a valuable squad was not an issue. Today £55m and growing represents an almost insurmountable problem and huge threat to our club's existence. No perspective in that.

I remember John Williams saying that a small amount of debt was acceptable, in fact it was advantageous. The difference between that situation then, and the situation now, is that under JW and the trustees the debt was controlled. There isn't really any way a debt of £54.5m and rising - for a championship club can be considered to be "controlled". Isn't that the difference between us and Bolton as well?

[perthblue02]

-Can anyone figure out which players are included in the transfer fees that we owe over the course of this season? I just cannot figure out how to get what I would suspect to added up to such a big figure.

Perhaps those fees and future fees include nice little earners for certain people who set up a nice future revenue stream for themselves and maybe a syndicate of associates linked to players coming into and moving out of the club ?

Imagine the money that could bring considering some of the strange in out transfers in the last three years, plus if you were that way inclined imagine the insider knowledge and the killing that could be made with a transfer betting syndicate (quite popular in off shore places and the Indian and Asian continents)

Still I can not imagine Mrs D, her hubby and clueless having anything to do with that and as Blingy was the driving force of the family regarding the takeover and friends with salt of the earth FA approved Agent think we can count him out as well

[den]

http://www.lancashiretelegraph.co.uk/news/blackburn/10782518._/?

[Gav]

I remember John Williams saying that a small amount of debt was acceptable, in fact it was advantageous. The difference between that situation then, and the situation now, is that under JW and the trustees the debt was controlled. There isn't really any way a debt of £54.5m and rising - for a championship club can be considered to be "controlled". Isn't that the difference between us and Bolton as well?

I can recall the new 'regime' coming out in the press stating the clubs financial affairs were in a ‘mess’ when they arrived and couldn’t be sustained at those current levels. A premiership club in the position you found us in actually had no problem at all servicing such a small debt, yet another mistake to add to the long list of ‘bad advice’ or more likely ‘incompetence’ you’ve treated us to.

4 years on you’ve managed to turn a very manageable loss under John Williams stewardship into what can only be described as financial meltdown, with the very real possibility that the state bank of Indian will be pulling the plug on the out of control overdraft you’ve managed to run up. I can hear you now blaming the old regime for high earners and big contracts, but if you hadn’t put that idiot Kean into the job we’d never have been in this position in the first place with high earners and big contracts being paid by sky money, no problem.

In my opinion what you’ve done is criminal, you should all be jailed, but sadly that won’t happen, but I hope this venture into football hurts your family business just like its going to hurt generations of Blackburn Rovers fans to come. Do the right thing and leave the club now , let the fans and real football people pick up the pieces, you’re completely out of your depth and not wanted anywhere near Blackburn the town and its still very proud football club.

[OJRovers]

Assuming that Silk handed her notice in, the accounts show that Agnew walked away with a £223k 'compensation' package. Why work when you can engineer your own exit just like Kean and still get paid.

[tomphil]

Im sure the only reason Shelf is still here is because they don't want to shell out again. I bet he's desperate to bail out with his pay off.

[thenodrog]

Well if they are "completely necessary" they would have to stay forever with ever-mounting debts. Since they won't it doesn't seem much of a strategy.

And before you pat yourself on the back once more "for hating the sight and actions of the Venkys from the start", is there any Indian owners you would have given a chance to?

Obviously like you I don't know who would qualify but to generalise the answer is probably not. Same with just about every foreign owner. BRFC can not be in their soul and can only ever be of novelty value for such like. A fashion accessory for the nouveau riche to show off with. All these Johnny Foreigners have simply brought rampant inflation to football in this country. It's prob accurate to say that if Abromovich at Chelsea and the Arabs at City decide to pull out then those clubs will go bust shortly after.

[den]

The only "good news" that I can see, is that £36m of the debt is interest free and owed to the owners with no repayment deadline. On the other hand, that debt must be growing daily.

The question is - do they want that money back? I don't know the answer to that, but the noises from Shaw lately seem to suggest that he's concerned. By the way, wasn't it only very recently that Shaw told the fans that the club had NO debt?

[tomphil]

It was Singh who used to run around telling everyone the club had no debt. Maybe he just meant external debt. It would be interesting to know where Venkys get the cash to pour in seeing as a lot of people with contacts in India seemed to think they weren't cash rich. Investors maybe ? If so they'll want some back you would think. Standing back and looking it still looks dodgy when money gets poured in from somewhere via India then along the way cash constantly flows back out the club via endless compen payments, agents fees and unreal player contracts pushing the club to the brink yet those at the top have let it all happen that way from the very start. No wonder people draw their own conclusions !

[DE.]

It was Singh who used to run around telling everyone the club had no debt. Maybe he just meant external debt. It would be interesting to know where Venkys get the cash to pour in seeing as a lot of people with contacts in India seemed to think they weren't cash rich. Investors maybe ? If so they'll want some back you would think. Standing back and looking it still looks dodgy when money gets poured in from somewhere via India then along the way cash constantly flows back out the club via endless compen payments, agents fees and unreal player contracts pushing the club to the brink yet those at the stop have let it all happen that way from the very start. No wonder people draw their own conclusions !

It will almost certainly be bank loans - the only question is whether their debt is secured against the club's assets or Venky's other assets.

[AndyNeil]

It was Singh who used to run around telling everyone the club had no debt. Maybe he just meant external debt. It would be interesting to know where Venkys get the cash to pour in seeing as a lot of people with contacts in India seemed to think they weren't cash rich. Investors maybe ? If so they'll want some back you would think. Standing back and looking it still looks dodgy when money gets poured in from somewhere via India then along the way cash constantly flows back out the club via endless compen payments, agents fees and unreal player contracts pushing the club to the brink yet those at the top have let it all happen that way from the very start. No wonder people draw their own conclusions !

I'm pretty sure that the loans/overdraft which keep the club afloat are drawn against the value of land that Balaji has in and around Pune - the value of which is supposed to skyrocketing.

If that is true, then they wouldn't actually be putting any of their own cash into the business - just decreasing the pace at which the asset over in India is increasing.

[darrenrover]

It will almost certainly be bank loans - the only question is whether their debt is secured against the club's assets or Venky's other assets.

I would guess it's pretty certain that the bank debt is secured against Indian based assets. I think Philipl eluded to that in the podcast.

One major worry for me whenever administration is mentioned as a get out and a 'let's get it over and done with' solution, is that football related debts do not get written off but need to be taken on and honoured by any Phoenix. When consideration is given to outstanding transfer fees and ongoing contractual obligations, what could that figure be?

They are despised and derided by us all but Theno was bang on the money IMO when he stated that now without them, liquidation would loom. In fact with the ludicrous potential fines for FFP almost doubling any trading loss, where the hell would one start aligned to future revenue streams?

[DavidMailsTightPerm]

To be honest - for this season - (in the absence of a rich Sheik with more money than he knows what to do with) we are possibly best sticking with the Venky's. At the moment they are letting Bowyer get on with it - and just picking up the tab for our increasing debts.

TBH - the mess they have created - we are goosed if we don't go up - so maybe better to just get behind the team, hope for the best - and then see where we are at the end of the season.

[OJRovers]

Comparing the Venkys London Limited accounts at March-13, with the BRFC accounts at June-13, the inter-company debt to VLL has grown by £6m (from £31m to £37m). This essentially backs up that the club are losing £2m a month in cash.

On top of the £2m operational loss each month, there is also £14m to find to pay for for transfers over the next 2 years, I can't think who this is? Rhodes, Marshall?

Unless Venkys are willing to put in c.£50m-£60m over the next 2 years, we're basically finished.

[darrenrover]

To be honest - for this season - (in the absence of a rich Sheik with more money than he knows what to do with) we are possibly best sticking with the Venky's. At the moment they are letting Bowyer get on with it - and just picking up the tab for our increasing debts.

TBH - the mess they have created - we are goosed if we don't go up - so maybe better to just get behind the team, hope for the best - and then see where we are at the end of the season.

Reluctantly totally agree DMTP.

Some miraculous turn of good fortune may see us manage to secure promotion this year and save us from likely oblivion. What really sticks in the crow is that it would also give our intrepid owners a 'get out of jail free card'.

Still, let's get behind GB and the lads for the remainder of the season and see where it takes us. They alone deserve our unequivocal support IMO.

[Bucksrover]

So, taking what other people have said - 30 million of the 54 is owed to Venky's at 0% interest. If so then it may not be as bad as I first thought because I am pretty sure we had 24 million of debt when they bought us.

Looking forward to the Brighton thread starting up - nice to talk about starting line-ups and match predictions rather than balance sheets.

[den]

So, taking what other people have said - 30 million of the 54 is owed to Venky's at 0% interest. If so then it may not be as bad as I first thought because I am pretty sure we had 24 million of debt when they bought us.

Looking forward to the Brighton thread starting up - nice to talk about starting line-ups and match predictions rather than balance sheets.

Nice to see someone happy with the finances.😀

[AndyNeil]

So, taking what other people have said - 30 million of the 54 is owed to Venky's at 0% interest. If so then it may not be as bad as I first thought because I am pretty sure we had 24 million of debt when they bought us.

Looking forward to the Brighton thread starting up - nice to talk about starting line-ups and match predictions rather than balance sheets.

Debt of £24m was circa 40% of our turnover when we were a Premier League club however our debt now stands at circa 200% of our turnover...