[Archived] Rovers' accounts for 30 June 2016

[chor808]

Just now, Tom said:

You have to wonder did they really need to run with that article this morning, wouldn't it have been wise to wait just a while?

I would guess they planned it to go out this morning. Then maybe name the new man later today. It is all under the carpet then.

[Dunnfc]

16 minutes ago, cesus said:

The wages here still stagger me, historically since Jack we have been big payers but as squad quality has dropped the wages really don't seem to?! 

 

Could those wage figures still include pay offs? For instance we fired Leon Best off but paid him the remainder of his circa £30k p/w over say 2 years. I just really struggle to see how they are so high in relation to the rest of the league even now.

Refer to Michael Salgado where all players got 80 percent of contracts paid up, we've only just stopped paying Nelsen recently.

salgado even confirmed it was all JEROME ANDERSON too!

[yoda]

Just now, Tom said:

You have to wonder did they really need to run with that article this morning, wouldn't it have been wise to wait just a while?

Getting the reasons out for not employing a "manager" and internal promotion until end of season

[Mercer]

35 minutes ago, Tom said:

You have to wonder did they really need to run with that article this morning, wouldn't it have been wise to wait just a while?

It would.

I think Cheston even as a FD for a business of Rovers' size is so much out of his depth - just a bean counter. 

 

[Brian-Potter]

The LT article doesn't bring anything that we didn't already know from reading the accounts.

I have only had a quick read through the accounts due to work commitments.

From a professional point of view there is nothing in those accounts that I wasn't expecting.

Points to consider on first reading are as follows. I will post more detail when time allows:

The statement about a going concern basis is emphatically strong in its wording about parent company support. This is not to be taken lightly as this now provides a critical part of any company accounts. Indeed I have been working with two companies in the past month who are reliant on external support and we had ensure that their statements were valid. In one case it was stated that there was only a reasonable chance that this company would have sufficient funds to continue trading so Venkys statement indicates they are not planning an exit any time soon and more importantly there is little chance of administration on the horizon.

The financial position over the last 5 years basically reflects football related performance, although worsened to a certain extent by poor decision making the financial plight mirrors that of the one on the pitch.

Although the total debt is astronomical, external debt is only circa £14m, with the rest owed to the parent company. This is key, as unless Venkys are planning on pulling the plug (which I would suggest is not the case) then the amount owed to the parent is not particularly important. The parent company loan is also interest free and with no fixed repayment date.

A key indicator is that the additional external loans included within last years accounts were repaid as agreed on time, this would indicate that there are no serious cash flow problems.

The use of short term funding secured against future revenue is something that is becoming very common in business in general and for me does not indicate financial problems. Most shareholders will always use someone else's money rather than their own whenever they can. Another example I can give is a client with a very high net worth who is cash rich, a business he was involved in needed circa £300k to fund a project, this particular individual could have provided that funding peronsally within a couple of hours, however a finance company was used and the balance repaid over 12 months at a less than competitive interest rate.

My biggest concern is that operating losses are still at dangerous levels, and whilst there is revenue available from player sales to plug this gap (as last year) we can effectively avoid any FFP sanctions, however, for me there is little left to sell which means a return to parent company loans plugging the gap, which in turn will raise FFP issues again.

In summary, the chances of a Venkys exit or admisntration appear slim, however we are in a very difficult position both on and off the pitch, and until things on the pitch improve I cannot see the financial situation improving either.

On a side note, those suggesting the sale of Brockhall, this is pretty much a non starter, there is covenant in place that prevents development of the land for anything other than sports use. Something I believe we have a certain Mr Walker to thank for.

 

 

[Guest]

Just now, Brian-Potter said:

I have only had a quick read through the accounts due to work commitments.

Shelfy? Is that you? 

[47er]

1 hour ago, OJRovers said:

What Magic Mike is conveniently forgetting is that Rovers still have high wages for this division.

This link shows that in 2015 we had the 5th highest wage bill: https://www.insidermedia.com/insider/national/146518-insider-football-finance-championship-wage-bill-tops-500m

£26m for 2016 would easily be top 10 in the Championship. Even if this is down to say £20m for 16/17, this is mid-table for this season.

So all of Cheston's, Bowyer's, Coyle's sob stories about lack of budget is nothing more than lies to cover up the massive drain of money going somewhere out of Ewood.

Look at Sheffield Wednesday and Huddersfield on that list £11m wages vs £35m at Rovers. Granted their wages will be a bit higher this season, but surely well below Rovers still.

Mismanagement of that wage bill is the number 1 mistake at Rovers, yet who has been held responsible for it?

 

 

A fair bit of that wage bill will still be going to players no longer here though. Hudersfield will be spending all theirs on contributors.

In other words we are still grappling with past blunders.

PS  Sorry Cesus and PB---just seen your replies!

[Brian-Potter]

Just now, Phil T said:

Shelfy? Is that you? 

 No, I have been posting on here for years, only now my username has a "-" between it as I couldn't recover my old login details

[Bigdoggsteel]

Just now, 47er said:

A fair bit of that wage bill will still be going to players no longer here though. Hudersfield will be spending all theirs on contributors.

In other words we are still grappling with past blunders.

PS  Sorry Cesus and PB---just seen your replies!

I would love to see the breakdown of our wages. There is no way our current squad is being paid 3X the amount of the Huddersfield team. 

 

It is heartening to hear how low their current wage budget is though. It shows if you do things right, it is possible to compete in this division on a budget. Contrasting to ourselves and Villa, who threw money at it and got nowhere. 

[yoda]

Just now, Bigdoggsteel said:

I would love to see the breakdown of our wages. There is no way our current squad is being paid 3X the amount of the Huddersfield team. 

 

It is heartening to hear how low their current wage budget is though. It shows if you do things right, it is possible to compete in this division on a budget. Contrasting to ourselves and Villa, who threw money at it and got nowhere. 

Er, second from bottom is not competing, its called losing

[Bigdoggsteel]

Just now, yoda said:

Er, second from bottom is not competing, its called losing

Where did I say it was competing?

[yoda]

Just now, Bigdoggsteel said:

Where did I say it was competing?

You didn't,  you said it was possible, except that with our "owners" it is impossible due to a conflict of interest of what a football club is supposed to be.

[RoverCanada]

I'd suspect we're now around or below £20M in wages as the payoffs (hopefully...) are tapering out and after all the exoduses this year. awhom111's detailed post noted our payments for past transfer fell from £2.5M to £2.2M (if I'm reading that right), and is likely falling further. Pg 12 says payments for disposal of intangible assets fell from £4.4M to £3.3M, so presumably that's still falling. That's the number we took a £6.4M hit for in the 2014 accounts.

Operating expenses will likely be falling a bit too and our interest payments may be falling, so all told, I don't think it's accurate to say we need to sell £15M every year from now on to balance the books. It's more like we'll be settling into the £5-£7M yearly loss range (before player trading) that's pretty typical of Championship clubs (setting side whether we actually stay in this division...), with year-to-year variances based on cup runs, player trading, etc. What Venky's now wants to do with such an 'asset' is anyone's guess. If they really are as rich as has been suggested (who knows), i suspect a yearly £5-£7M isn't all that big a deal to them and they give it as much attention as we've seen...

What's frustrating is we're likely still spending above market rates for the likes of Stokes, Graham, and Mulgrew, and wasting money on Brown (I suppose he's doubling as a youth coach...), with little to show for it. Graham and Mulgrew have had their moments, but they're injury-prone and the margin for error is very high when the wage budget is so tight. Plus we've got holdovers like Evans, Conway, Lowe, Henley, etc. who are probably on relatively high wages too. I've read the average wage in the Championship is £10k/week, but that average number masks the major variance between parachute payment receivers (which used to be us!) and the likes of Birmingham, Ipswich, Huddersfield, etc.

We're really still paying for that first year in the Championship when we spent a crazy amount of money (that was apparently paid with loans secured on future parachute payments in the hope of a quick promotion) on Best, Murphy, Etuhu, Gomes... AND THEN we bought Rhodes... The fall from the PL was an obvious financial hit, but we also then spent moronically (likely driven by agents making a nice payday for themselves)

23 minutes ago, Bigdoggsteel said:

I would love to see the breakdown of our wages. There is no way our current squad is being paid 3X the amount of the Huddersfield team. 

It is heartening to hear how low their current wage budget is though. It shows if you do things right, it is possible to compete in this division on a budget. Contrasting to ourselves and Villa, who threw money at it and got nowhere. 

Huddersfield's wages were at £13.3M the past couple years, not 3x... certainly where our wage bill is heading anyway. Also worth noting Huddersfield still lost £7M those two years. Everyone loses money in this division really.

Cheston's not really wrong to say cuts are still needed (unless we're happy with/hoping for Venky's drastically driving up what we 'owe' them), but it's the complete lack of any signal of intent from Venky's that's infuriating.

[tomphil]

Oh to be run like Huddersfield though, a good numerical comparison but that's where it begins and ends. Similar clubs in a lot of ways until you look who's owning and running them and who's employed by them. That's exactly the model we need but it will never be achieved whilst Venkys are here for a multitude of reasons.

[OJRovers]

The question about why wages are so high needs to be asked in the next meeting with the club.

Our squad has maybe 20 senior players (if that), £20million wages means an average of nearly £20k a week!

I bet most opposition managers have a laugh at Bowyer/Coyle moaning about money with that level of wage budget.

Unless the money is being put through the Rovers books but diverted elsewhere.

[blondie]

Just now, OJRovers said:

The question about why wages are so high needs to be asked in the next meeting with the club.

Our squad has maybe 20 senior players (if that), £20million wages means an average of nearly £20k a week!

I bet most opposition managers have a laugh at Bowyer/Coyle moaning about money with that level of wage budget.

Unless the money is being put through the Rovers books but diverted elsewhere.

Over 250 people employed at Rovers.

 

[tomphil]

3 minutes ago, OJRovers said:

The question about why wages are so high needs to be asked in the next meeting with the club.

Our squad has maybe 20 senior players (if that), £20million wages means an average of nearly £20k a week!

I bet most opposition managers have a laugh at Bowyer/Coyle moaning about money with that level of wage budget.

Unless the money is being put through the Rovers books but diverted elsewhere.

Been banging on about that a time or two myself, are they running money through Rovers to elsewhere for other investments ?  Maybe a club is a handy accounting tool if a foreign corporation wanted to invest in other things in England.

[Dunnfc]

Just now, tomphil said:

Been banging on about that a time or two myself, are they running money through Rovers to elsewhere for other investments ?  Maybe a club is a handy accounting tool if a foreign corporation wanted to invest in other things in England.

Or just for extraction to other people in sunnier climates.

[tomphil]

Just now, Dunnfc said:

Or just for extraction to other people in sunnier climates.

I think there's an official reason for owing (part of) the club AND an unofficial one 

[TBTF]

Just now, Dunnfc said:

Or just for extraction to other people in sunnier climates.

The big problem with all of this is what happens to income if we get relegated?? It will be hammered and then we become more reliant on these fools propping it up further. I suspect season ticket sales this summer will plummet to an all time low.

This Club (as many have said on radio, on here, in the papers - the club is screwed as long as these idiots are here. Play around with the numbers all you like but the club dies a slow and painful death in the meantime. Whatever Venkys do now , and I mean whatever, I don't think fans will forgive them.

Its over guys I'm afraid.

[Dunnfc]

Just now, TBTF said:

The big problem with all of this is what happens to income if we get relegated?? It will be hammered and then we become more reliant on these fools propping it up further. I suspect season ticket sales this summer will plummet to an all time low.

This Club (as many have said on radio, on here, in the papers - the club is screwed as long as these idiots are here. Play around with the numbers all you like but the club dies a slow and painful death in the meantime. Whatever Venkys do now , and I mean whatever, I don't think fans will forgive them.

Its over guys I'm afraid.

Clubs been dead a long time. It's a shell standing in existence of where something great once was.

Season tickets will still be 5,000 next year. The bottom hasn't been hit with some as it has with others.

I can't even praise the commercial aspects as those accounts are fluffed from the VLL March to March ones which show commercial costs far lower than competitors in this league.

Just name me one thing Venkys have got right in six years? I'm struggling they are a complete and utter car crash.

[awhom111]

I forgot to post about this yesterday because of Reading, but for those who are experts on this sort of document, is this something we should be paying attention to?

https://beta.companieshouse.gov.uk/company/00053482/filing-history/MzE3MjY2Mzg5MmFkaXF6a2N4/document?format=pdf&download=0

[Stuart]

I must be reading this wrong...

Today Squire Sanders LLP have 75% share of the club?

But the second page say the statement cease to be true as of Monday 03/04?

A law firm who have history of selling football clubs?

http://www.squirepattonboggs.com/en/news/2013/07/squire-sanders-advises-on-the-purchase-of-fulham__

https://www.thelawyer.com/issues/online-january-2015/squire-patton-boggs-advises-on-sheffield-wednesday-sale-to-thai-seafood-businessman/

Dare we...?

[Wing Wizard Windy Miller]

What's this about?  Does it mean that Venkys per se are no longer the 'main shareholder and someone now has 75%?

Or just a name change to Balaji, Jerome or Suhail..

[Glenn]

That's such an interesting find, I've given it it's own thread.