[Archived] Why Are Venkys Here?

[iamarover]

This trashy web site doesn't feel far off in terms of salaries at the Rovers.

http://www.celebritiesmoney.com/blackburn-rovers-salaries-list/

What looks interesting, though, is that the total salary bill listed is £16.1m for the season. The accounts sthough report a whopping £31m salaries distributed to a scarcely believable 262 people at the club. 262? Really? And what exactly are these people doing? If the web site is right, why would the players represent only half the salary bill at a football club?

The LT has those figures here in case you missed them. 262 ..hmmmm. http://www.thisislancashire.co.uk/sport/13492881.Venky___s_remain_committed_to_Blackburn_Rovers_despite___35_6m_annual_loss/

Let's assume the £16m wage bill is right. Add on the £5m transfer/loan bill. And let's assume the 23 non playing staff listed on the web site - including the kit man - is correct. Then I would assume you are pretty close to the £24m turnover. On those figures Rovers broke even last year as an operating club - but not as a London Venkys Company. Is there something in this? Let's test this theory further based on activity this summer.

With an £8m drop in revenue forecast, the departure of King, Cairney and impending losses of Rhodes and Gestede co incidentally amount to just over £7m in wages. In other words, they are acting just as a prudent club should. The predicted £20m transfer fees for our two forwards would cover replacements you would hope, so on this calculation we are good for this year and next, possibly operating with a small operating surplus.

But why would Venkys overstate the club's losses?. Could it be that Venkys are simply dumping cost - and employees - into Rovers to ensure their own balance sheet analysed on the Indian Stock Exchange figures look better than they actually are? That would support share price and the dividends they pay themselves. And effectively allow them to pay themselves via a loss making London club in a tax advantaged way. Or so it could be alleged. The £28m ostensibly 'pumped in' to the Rovers may actually be a gift of a whole load of employees who contribute nothing to the football club, but everything in terms of an Indian plc share price.

it is the only theory I can think of which is a sensible explanation as to why Indian owners with no physical or even emotional connection to either the game or to our club, would continue to support it.

If this is true, then Venkys do have an exit. At some point Venky's 'write off' the losses which were incurred in India and not in Blackburn. They then sell a club that is now break even with no effective debt, (which it is now on these figures), and walk away at a profit generated by tax friendly salaries and a higher than expected share price in Mumbai. The timing would only be when the need to support the share price no longer exists. Which may be never but may be soon.

A quick look at the Venkys 3 year share price here http://profit.ndtv.com/stock/venkys-_venkeys/chart

shows three spikes in July 13, July 14 and now July 15. At just the time Rovers balance sheet is washed, sorry, released. A coincidence I am sure

Perhaps those celebrity web sites are not so trashy after all.

[yoda]

Pseudo employees !

It's been done before.

ps, when I read the topic title, I was kinda hoping they were in Blackburn

[JBiz]

This thread highlights the potential problems if owners "with no emotional connection" choose to sell us to whoever they fancy.

The trust supposably had a connection yet still found Venkys.

[Rover_Shaun]

So we keep Bowyer out of fear and Venkys out of fear and tumble down the pyramid?

[JHRover]

I also noticed the 260 odd employees with some confusion.

Even if we include all the temporary staff such as match day caterers, stewards etc. that still seems like a staggeringly high number.

All the playing staff, including the Under 21s and younger age groups must only amount to about 60 players maximum. Coaching staff might be another 20odd. Half a dozen groundsmen, maintenance staff, security, admin staff, its a fairly substantial workforce, but even so, 260odd seems to be very high.

As for the question of why are Venkys here, well to me they have three options:

1) Continue as they have been doing these last few years - pour a lot of money in in the hope that promotion will solve their problems overnight whilst still not understanding what is required to achieve that.

2) Sell the club - to do this they would need to give up the £100 million they have put in - even then running costs are too high for there to be much interest.

3) Walk away and see the club put into administration/liquidated - again losing a lot of money and the added shame of bankrupting the club.

This thread highlights the potential problems if owners "with no emotional connection" choose to sell us to whoever they fancy.

The trust supposably had a connection yet still found Venkys.

Important word there being supposedly. Its quite clear that nobody with any interest or duty towards BRFCs wellbeing would ever have even entertained selling the club to such a group of people.

[iamarover]

So we keep Bowyer out of fear and Venkys out of fear and tumble down the pyramid?

We have a choice as club on the first. But not the second. My point is that if they are using the club to fatten their own P&L they are hobbling what is in fact a financially sound football club. No Venkys no FPP and an ability to invest the £20 from Rhodes and Gestede in some proper players. My second point is that if Venkys see us as a financial dustbin rather than a club they support, then we really are finished.

[JBiz]

We?

Firstly- we have no impact on the owners and even if we did, how do "we" pick the owners.

It's not as if fan ownership hadn't been tested - not many people bought into the plan.

Secondly, we are not the people who decide on who replaces bowyer. Who are they? The people this thread is asking about.

[gumboots]

If running costs include people who don't actually work there but are listed on the staff then running costs should plummet if Venkys pull out or have I misunderstood that? Probably. I know nothing about finance

[iamarover]

I also noticed the 260 odd employees with

If running costs include people who don't actually work there but are listed on the staff then running costs should plummet if Venkys pull out or have I misunderstood that? Probably. I know nothing about finance

That is exactly the point. I don't believe the £31m wage bill is all Rovers staff. It just can't be. The players are paid £16m. There has to be outside interference so to speak.

[ABBEY]

This thread highlights the potential problems if owners "with no emotional connection" choose to sell us to whoever they fancy.

The trust supposably had a connection yet still found Venkys.

What did they give at one time , 4 feathers?

[gumboots]

That is exactly the point. I don't believe the £31m wage bill is all Rovers staff. It just can't be. The players are paid £16m. There has to be outside interference so to speak.

Oh good. Perhaps my brain hasn't turned to mush since retirement. However, since I only retired yesterday, that's not necessarily a valid point.

[JHRover]

The website above in relation to salaries must be complete nonsense.

Robbo on £6k a week? Everyone knows he was on at least £30k a week

Cairney on £17k a week and Gestede on £19k a week?

[gumboots]

What did they give at one time , 4 feathers?

White feathers Abbey

[tomphil]

I think the OP is definitely on to something here and it would tally with some of the comments in the Indian business press a while back. There has to be a reason they are happy to sit back and let this farce continue whilst they want the least bother with it as possible. Would also explain the non existent genuine board of directors and the complete do as your told puppets in situ. A real business headed or emotionally involved board wouldn't go along with it continually harming the club.

If you look around the leagues there are various businesses, consortiums etc owning loss making football clubs and seemingly carrying debt yet it gets underwritten and they carry on. There has to be a reason for it. No other firm would carry on like this they'd have cut their losses and taken a hit long ago.

[Exiled in Toronto]

This trashy web site doesn't feel far off in terms of salaries at the Rovers.

http://www.celebritiesmoney.com/blackburn-rovers-salaries-list/

What looks interesting, though, is that the total salary bill listed is £16.1m for the season. The accounts sthough report a whopping £31m salaries distributed to a scarcely believable 262 people at the club. 262? Really? And what exactly are these people doing? If the web site is right, why would the players represent only half the salary bill at a football club?

The LT has those figures here in case you missed them. 262 ..hmmmm. http://www.thisislancashire.co.uk/sport/13492881.Venky___s_remain_committed_to_Blackburn_Rovers_despite___35_6m_annual_loss/

Let's assume the £16m wage bill is right. Add on the £5m transfer/loan bill. And let's assume the 23 non playing staff listed on the web site - including the kit man - is correct. Then I would assume you are pretty close to the £24m turnover. On those figures Rovers broke even last year as an operating club - but not as a London Venkys Company. Is there something in this? Let's test this theory further based on activity this summer.

With an £8m drop in revenue forecast, the departure of King, Cairney and impending losses of Rhodes and Gestede co incidentally amount to just over £7m in wages. In other words, they are acting just as a prudent club should. The predicted £20m transfer fees for our two forwards would cover replacements you would hope, so on this calculation we are good for this year and next, possibly operating with a small operating surplus.

But why would Venkys overstate the club's losses?. Could it be that Venkys are simply dumping cost - and employees - into Rovers to ensure their own balance sheet analysed on the Indian Stock Exchange figures look better than they actually are? That would support share price and the dividends they pay themselves. And effectively allow them to pay themselves via a loss making London club in a tax advantaged way. Or so it could be alleged. The £28m ostensibly 'pumped in' to the Rovers may actually be a gift of a whole load of employees who contribute nothing to the football club, but everything in terms of an Indian plc share price.

it is the only theory I can think of which is a sensible explanation as to why Indian owners with no physical or even emotional connection to either the game or to our club, would continue to support it.

If this is true, then Venkys do have an exit. At some point Venky's 'write off' the losses which were incurred in India and not in Blackburn. They then sell a club that is now break even with no effective debt, (which it is now on these figures), and walk away at a profit generated by tax friendly salaries and a higher than expected share price in Mumbai. The timing would only be when the need to support the share price no longer exists. Which may be never but may be soon.

A quick look at the Venkys 3 year share price here http://profit.ndtv.com/stock/venkys-_venkeys/chart

shows three spikes in July 13, July 14 and now July 15. At just the time Rovers balance sheet is washed, sorry, released. A coincidence I am sure

Perhaps those celebrity web sites are not so trashy after all.

I think you are misunderstanding their corporate structure. The Venky's on the Indian stock exchange is a subsidiary, as is Venky's London, of their privately-owen holding company, VH pvt Ltd. They are substantial shareholders in Venky's and, of course run it, but any advantage in writing off profits accrues only at the VH level, which they own entirely.

[SIMON GARNERS 194]

They must look at the ever increasing debt level and indeed wonder...

WHY ARE WE HERE? :crazy:

[Iceman]

Business normally over state expenses , to cover big losses. Eg if a company has a 1 million budget, and they exceed by 1 million in terms of over expenditure then that is a loss . but it normally gets planned before a financial year starts, and they forecast more to cover those losses. If they expecting a 2mill loss, but come in at 1mill over, then it doesn't look too bad.

So Venkys surely have fictitiously added numbers, that are projected to be high, but come in lower and it looks good on paper, but in theory its not.

The income to expenses ratio, is a huge concern though. Any company that generates that big a losses, would fold quite quickly as its not ideal to be paying big money, without generating a big return on that investment

[tomphil]

Could they be stacking money over here somehow to maybe start their enterprise in England as was one of their plans ? Money going in at the top in India and being bled out over here by various means ? No idea if or how it would work or be feasible though.

[Iceman]

It would be easier for them, to just use their own money to start businesses in the UK. They would have money stashed, for various projects anyway, and budgeted for without the need for money generated by Rovers to be used.

[DanielMB]

Wouldn't it be nice if Venkys would actually talk to the fans?

[ABBEY]

Be even nicer if they clucked off

Dodgy dealings (allegedly ) & bad press could cause a Ratners effect if certain alleged things made them lose face in India ?

[Athlete]

There's something afoot and always has been all this they're nieve etc were hoodwinked etc by those we shouldn't mention is garbage they know exactly what they're doing..

Venkys out Shaw out Coar out Bowyer out and anyone else taking the P@@@ at the fans expense

[SIMON GARNERS 194]

Selling the Crown Jewels before they exit?

[Iceman]

Selling the Crown Jewels before they exit?

Venkys need to be kicked in the crown jewels

[ABBEY]

Selling the Crown Jewels before they exit?

Now that would be ok