Rovers' finances

[Stuart]

43 minutes ago, Biz said:

Not sure what I’ve done to the quote function but the point I was making is you casually missed wages - the main reason why we ended up in so much debt, and continue to require funding.

The irony of the last sentence, we’d be long since gone if it wasn’t for “share capital”!

Wages haven’t dropped to perceived levels if we are having to find an extra £15m.

On average for a 20-man squad, that’s subsidiarising wages to the tune of £14k per week. (That’s not the player wages, it’s the extra we can’t afford out of the club turnover!)

Incredible really. If we are now at reduced levels then we are screwed without PL or a rich benefactor (not a rich lender).

[tomphil]

Quote

 

Just who is on that wage bill besides football people always remains a matter of interest but it might explain why it always remains perhaps a million or two higher than it might need to be.

[RoverCanada]

No real surprises. Big losses, but more 'manageable' than before. As long as Venky's are fine with £10-15m losses per year going forward, and they appear to be comfortable with that (and not the £30-40m losses of yesteryear...), we'll keep treading water as is...

Have a long flight today, so might give the accounts a read-through and will see if I can pick out anything of interest.

Note these accounts are up to March 2018 as they're for Venky's London Limited, not the Rovers accounts that cover up to June, I think. So I think this will still include a couple months of our last year in the Championship. So all the numbers may be slightly deflated a bit. (Someone can correct me if I'm wrong on that!)

2 hours ago, JHRover said:

Big point being that the wage bill was significantly lower than the previous year and I expect now resembles the sort of level we should be at in the Championship.

It will never look much better than above at this level unless we get promoted or find a few players to sell off every couple of years to cover it (which likely prevents promotion from happening). That's a fact of life Venkys or not, sadly that is the way the Championship has gone and continues to go, and we like everyone else need wealthy owners injecting money. That's as much credit as I will give Venkys - every year they seem to be content to find money under the mattress to keep things going.

Another interesting point was that our revenues in that year dropped by £6 million due to a decrease in TV income, yet still stood at £10.1 million (£2.8 million on matchday, £2.8 million from media and £4.4 million from commercial). By comparison the previous year Sheffield United had revenues of £10.6 million (so 'only' £500,000 more than ours in League One despite significantly higher numbers through the turnstiles each week - perhaps demonstrates the ever decreasing importance of attendances). Bolton's that year in League One was £30.8 million. Not sure how that figure was so high as I don't think they were getting parachute cash by then.

Yeah, noticed our commercial revenue stayed constant at £4.4m. It's actually stayed relatively constant at around £5m since our Championship days. I can't remember the details at the moment, but I recall reading somewhere that Venky's have been propping up our commercial revenue too, presumably via self-sponsorship, as far as you're allowed to do that.

What year are you referring to Bolton having £30.8m in turnover? Their accounts say £8.3m of turnover when they were in League One in 16/17: https://www.bwfc.co.uk/siteassets/documents/bwfc-football-and-athletic-company-limited_2016-17-accounts.pdf

34 minutes ago, Stuart said:

Wages haven’t dropped to perceived levels if we are having to find an extra £15m.

On average for a 20-man squad, that’s subsidiarising wages to the tune of £14k per week. (That’s not the player wages, it’s the extra we can’t afford out of the club turnover!)

Incredible really. If we are now at reduced levels then we are screwed without PL or a rich benefactor (not a rich lender).

Note the £15.7m covers wages, social security, and pensions for all Rovers staff, including admin, grounds crew, etc. So would need to make some assumptions to work out what our squad's weekly wage was last year.

One bit I noticed on first skim is our playing and management staff dropped from 143 to 128. I think that includes the academy too. That's been on a gradual decline for some time now.

Edited December 18, 2018 by RoverCanada

[Stuart]

31 minutes ago, RoverCanada said:

Note the £15.7m covers wages, social security, and pensions for all Rovers staff, including admin, grounds crew, etc. So would need to make some assumptions to work out what our squad's weekly wage was last year.

One bit I noticed on first skim is our playing and management staff dropped from 143 to 128. I think that includes the academy too. That's been on a gradual decline for some time now.

It was for comparison purposes but player wages wil comfortably blow the rest of the staff out of the water.

[RoverCanada]

25 minutes ago, Stuart said:

It was for comparison purposes but player wages wil comfortably blow the rest of the staff out of the water.

Obviously, but we're nowhere near an average player wage of £14,000/wk, and player wages would be anyone's point of reference. (I may have misread what you meant by 'subsidiarising'...)

There's 96 admin/grounds crew/commercial staff. I think directors compensation is £150k. Assume the rest of the staff's total costs are £30k each. So that's £3m.

128 players and management staff. Let's say 25 are senior players. Maybe £1m total for Mowbray and all his key staff? Remaining 90 are coaches, trainees, u-23s... let's say £15k each, depending on how full-time the coaches and staff are, what we're paying youth players.. So that's £1.4m.

That leaves £9.9m for those 25 senior players. Works out to £7.9/wk. High by L1 standards, and clearly still leads to fairly high losses, but suggests we may have finally cut our cloth on the player front. And that's a fair bit lower than the Championship where average wages are starting to approach £15-20k/wk.

If you're advocating for more cuts to our behind-the-scenes staff or liquidating the academy, I'd be interested to hear it.

[Stuart]

26 minutes ago, RoverCanada said:

Obviously, but we're nowhere near an average player wage of £14,000/wk, and player wages would be anyone's point of reference. (I may have misread what you meant by 'subsidiarising'...)

There's 96 admin/grounds crew/commercial staff. I think directors compensation is £150k. Assume the rest of the staff's total costs are £30k each. So that's £3m.

128 players and management staff. Let's say 25 are senior players. Maybe £1m total for Mowbray and all his key staff? Remaining 90 are coaches, trainees, u-23s... let's say £15k each, depending on how full-time the coaches and staff are, what we're paying youth players.. So that's £1.4m.

That leaves £9.9m for those 25 senior players. Works out to £7.9/wk. High by L1 standards, and clearly still leads to fairly high losses, but suggests we may have finally cut our cloth on the player front. And that's a fair bit lower than the Championship where average wages are starting to approach £15-20k/wk.

If you're advocating for more cuts to our behind-the-scenes staff or liquidating the academy, I'd be interested to hear it.

But even on that basis. This still isn’t what you are paying them. It’s the delta between what they get paid and what the club can afford. We are miles away from being a going concern. We are the Venkys subsidy away from breaking even!

[RoverCanada]

10 minutes ago, Stuart said:

But even on that basis. This still isn’t what you are paying them. It’s the delta between what they get paid and what the club can afford. We are miles away from being a going concern. We are the Venkys subsidy away from breaking even!

Can't disagree, but that's par for the course for football, particularly the Championship. Show me a team trying to break below the PL and I'll show you a team getting relegated  We're just "lucky" to have owners like Venky's who are willing/able to eat the £10-15m/year losses. Where that leads 5-10 years from now... certainly an interesting question!

The £7.9/wk figure suggests as a benchmarking exercise that we're not too out of line anymore after our financial horrorshows in our first few years in the Championship. Our financial situation is never going to look "good", but that's the case for every Championship club. I'll take the positive that we've recovered from a yearly financial disaster to merely being a yearly financial blackhole

[Bigdoggsteel]

3 hours ago, Biz said:

Not sure what I’ve done to the quote function but the point I was making is you casually missed wages - the main reason why we ended up in so much debt, and continue to require funding.

The irony of the last sentence, we’d be long since gone if it wasn’t for “share capital”!

Their mess, all they are doing is paying for it. Ya, they could have decided not to pay it and let us go bust, or whatever, but if they had have done that a few years ago. We could actually be in a better position now. 

Anyways, luckily we have Mowbray at the helm now. 

[Stuart]

3 minutes ago, RoverCanada said:

Can't disagree, but that's par for the course for football, particularly the Championship. Show me a team trying to break below the PL and I'll show you a team getting relegated  We're just "lucky" to have owners like Venky's who are willing/able to eat the £10-15m/year losses. Where that leads 5-10 years from now... certainly an interesting question!

The £7.9/wk figure suggests as a benchmarking exercise that we're not too out of line anymore after our financial horrorshows in our first few years in the Championship. Our financial situation is never going to look "good", but that's the case for every Championship club. I'll take the positive that we've recovered from a yearly financial disaster to merely being a yearly financial blackhole

It’s impossible to compare us with other clubs. We are currently in a state of suspended reality. Our turnover was only £10m and without increasing our attendances our growth is extremely limited. (Attendances have barely increased despite (relatively speaking) our most successful season in about 15 years).

Wages may be comparable to our competitors but they are still unaffordable for BRFC. Promotion remains the only  long term hope of salvation without becoming a NewCo.

[RoverCanada]

19 minutes ago, Stuart said:

It’s impossible to compare us with other clubs. We are currently in a state of suspended reality. Our turnover was only £10m and without increasing our attendances our growth is extremely limited. (Attendances have barely increased despite (relatively speaking) our most successful season in about 15 years).

Wages may be comparable to our competitors but they are still unaffordable for BRFC. Promotion remains the only  long term hope of salvation without becoming a NewCo.

Turnover should be back up to about £17-18m this year with Championship TV money. Attendance is up about 12% this year, but, yes, that would need to go much higher to make a difference. TV money is what really matters...

Plenty of clubs non-promotion-payment-receiving clubs in our situation. No such club is sustainable and at least reasonably competitive at this level without occasional major player sales (which makes the latter more difficult!). We already had one round of that with the Duffy, Hanley, Rhodes, etc. sales. Probably a sad reality that Dack will be the next one sooner than we'd like. And not to open up a whole other debate, but that's probably the strategy with the Brereton signing.

But of course agreed that promotion would change all of that quite quickly!

[Stuart]

14 minutes ago, RoverCanada said:

Turnover should be back up to about £17-18m this year with Championship TV money. Attendance is up about 12% this year, but, yes, that would need to go much higher to make a difference. TV money is what really matters...

Plenty of clubs non-promotion-payment-receiving clubs in our situation. No such club is sustainable and at least reasonably competitive at this level without occasional major player sales (which makes the latter more difficult!). We already had one round of that with the Duffy, Hanley, Rhodes, etc. sales. Probably a sad reality that Dack will be the next one sooner than we'd like. And not to open up a whole other debate, but that's probably the strategy with the Brereton signing.

But of course agreed that promotion would change all of that quite quickly!

I honestly think you are downplaying the precariousness of our situation. Even selling Dack for an unlikely £25m wouldn’t dent our debt - and if at least half wasn’t re-used for players there would be a backlash. Under the Trust the model was as you described. Sell a big player every two years. Under these plonkers that looks like a pipedream.

And our attendances are more like 1% up, not 12%. Barely a flicker - and especially disappointing for a club that had some momentum to lead to good sales but Waggott gone down the route of making fans a necessary evil than a customer for the club to go out and win over. Almost every day there is a Facebook ad, or Tweet attacking the commitment of fans. Hardly a great way to increase revenue.

https://www.lancashiretelegraph.co.uk/news/17305012.venkys-london-results-rovers-losses-double-with-relegation/

[Mattyblue]

Home support is up by about 1300/1500 on the first half of last season, couple that with generally larger away followings and the average crowd will probably end up around 14/15,000 which will bring in some extra income.

But in reality it is all buttons in comparison to TV income. 

The club will never, ever ‘wash its own face’  outside the PL. Well it could, but it would not be with the league position or infrastructure the club currently enjoys.

 

[Bigdoggsteel]

Finances aren't really anything for us to worry about while Venkys are footing the bill. They have gotten themselves into such a financial hole here, that they either get out of it via promotion or take the hit on everything put in so far along with the debt. No one will take that debt on. 

They are prisoners of their own shoddy ownership 

[Stuart]

1 minute ago, Bigdoggsteel said:

Finances aren't really anything for us to worry about while Venkys are footing the bill. They have gotten themselves into such a financial hole here, that they either get out of it via promotion or take the hit on everything put in so far along with the debt. No one will take that debt on. 

They are prisoners of their own shoddy ownership 

As are we.

[JBiz]

1 hour ago, Bigdoggsteel said:

Their mess, all they are doing is paying for it. Ya, they could have decided not to pay it and let us go bust, or whatever, but if they had have done that a few years ago. We could actually be in a better position now. 

Anyways, luckily we have Mowbray at the helm now. 

Yes it is their mess, but I don’t simply prescribe to the idea that we’d be in a better position now if they’d simply said enough is enough.

It might be hard to accept, but like JHR - the only mild positive I can give for the Rao’s is their readiness to pay bills the club can’t cover on it own. Bolton sold their training ground, Portsmouth and Coventry ended up with changing or poor fixed owners and many others including huge city clubs like Manchester United are completely directed by businessmen and commercial  income.

As you say - the finance is all owed to the parent, not a bank so it’s ultimatley the owners responsibility since even selling our entire squad, capital land and facilities wouldn’t get near to their total loss.

 

Edited December 18, 2018 by Biz

[Bigdoggsteel]

33 minutes ago, Stuart said:

As are we.

Indeed 

[Bigdoggsteel]

Just now, Biz said:

Yes it is their mess, but I don’t simply prescribe to the idea that we’d be in a better position now if they’d simply said enough is enough.

It might be hard to accept, but like JHR - the only mild positive I can give for the Rao’s is their readiness to pay bills the club can’t cover on it own. Bolton sold their training ground, Portsmouth and Coventry ended up with changing or poor fixed owners and many others including huge city clubs Luke Manchester United are completely directed by commercial income.

As you say - the finance is all owed to the parent, not a bank so it’s ultimatley the owners responsibility since even selling our entire squad, capital land and facilities wouldn’t get near to their total loss.

 

Depends on when they left I suppose. I have no doubt if they left the second we got relegated from the Premier league, the new owners would have come in and sacked Kean. The squad we had under Mick McCarthy(who was available at the time) or pretty much anyone decent ,would have been there or thereabouts near the top. 

The longer they stayed here, the more dependent on them we became. Culminating in the shambolic season (before Mowbray) where we went down to League 1. 

After all they have done PM (pre-Mowbray) , if they attempted to sell the training ground there would be a mass boycott and protests. It would be the final straw for those on the fence I would think. 

[SIMON GARNERS 194]

We continue to be a financial car crash losing money hand over fist.Barring promotion nothing is going to improve our situation greatly.

Our future in the hands of the Loons from Pune...OH BE JOYFUL!

Edited December 18, 2018 by SIMON GARNERS 194

[perthblue02]

5 hours ago, Bigdoggsteel said:

Finances aren't really anything for us to worry about while Venkys are footing the bill. They have gotten themselves into such a financial hole here, that they either get out of it via promotion or take the hit on everything put in so far along with the debt. No one will take that debt on. 

They are prisoners of their own shoddy ownership 

But think of the accolades, apparently the 15.2 million deficit from last season is a League 1 record . Always nice to be the best and we beat Wigan to something

Sunderland might give it a right good this year though

Edited December 18, 2018 by perthblue02

[RoverCanada]

19 hours ago, Stuart said:

I honestly think you are downplaying the precariousness of our situation. Even selling Dack for an unlikely £25m wouldn’t dent our debt - and if at least half wasn’t re-used for players there would be a backlash. Under the Trust the model was as you described. Sell a big player every two years. Under these plonkers that looks like a pipedream.

And our attendances are more like 1% up, not 12%. Barely a flicker - and especially disappointing for a club that had some momentum to lead to good sales but Waggott gone down the route of making fans a necessary evil than a customer for the club to go out and win over. Almost every day there is a Facebook ad, or Tweet attacking the commitment of fans. Hardly a great way to increase revenue.

https://www.lancashiretelegraph.co.uk/news/17305012.venkys-london-results-rovers-losses-double-with-relegation/

Essentially, everything I've written, or that anybody writes, about our financial situation must be prefaced with "As long as Venky's are willing and able to cover our losses...", and I totally understand if someone can't read past that. My point is that doesn't make us all that different from many other football clubs who are operating under a similar model.

I was referring to attendance this year, which is currently averaging 14,351, or 12% up on 12,832 last year. All things being equal, we're then back to £3.3m of matchday revenue. Actually kind of impressive we managed the same attendance in League 1 vs our last year in the Championship! But hardly enough to make a major difference to our finances.

13 hours ago, perthblue02 said:

But think of the accolades, apparently the 15.2 million deficit from last season is a League 1 record . Always nice to be the best and we beat Wigan to something

Sunderland might give it a right good this year though

Crazy bit with Sunderland is they're only in their second year of parachute payments, so they're getting £35m from that alone this year! Then another £14m next season.

Quick google says their players' wage bill is down to £11m, plus £5m owed to Djilobodji and Ndong (however that worked out in the end...) and other staff compensation. So probably depends on what costs they've had to incur on write downs.

Edited December 19, 2018 by RoverCanada

[JHRover]

Of course every consideration of our finances has to be prefaced with the assumption that Venkys are able and willing to cover losses. I reckon all but 2-3 Championship clubs are in the same boat. Forest, Derby and Sheffield Wed having 20-30,000 crowds doesn't stop them being dependent on their benefactors. Infact Sheffield Wed are in bother with FFP and struggling in the league despite being blessed with significant support and a big city behind them. All because their benefactor came along and spent too much too quickly. Aston Villa's owners have thrown fortunes in since the summer just to meet overheads. Without that investment they'd be knackered. Their 30000 gates wouldn't count for anything, except perhaps making their club more attractive to new owners.

One or two exceptions like Bolton who are limping through a painful existence of struggling to pay the bills each month (rumoured to have taken out a loan to pay November and December wages).

Apply the same principle to most Premier League clubs who are utterly dependent on Sky cash and without which they'd be in serious trouble. All ok as long as they survive in the Premier League or have an owner to cover losses if they get relegated but not if they don't.

Selling the training ground would create a lot of trouble and if nothing else would be a lengthy and complicated process. In the scheme of things given the annual overheads and losses the money they would raise by selling it would be a drop in the ocean. I can only see such a thing happening if they were stripping the club bare and raising whatever cash they could by selling assets - like we saw at Bolton when they sold their training ground and car parks to raise quick cash.

It wouldn't surprise me however to see more references to combining the academy and training grounds into one site, both for efficiency and to save some cash. It does make sense for everyone to be on one site rather than split across two, however I doubt either site at Brockhall is big enough to cope with both the senior squad and academy given the demands of having Category A status. To combine it would either need a reduction from Category A down to a smaller scale academy operation or a relocation to a new purpose built site elsewhere.

 

[Herbie6590]

Another terrific Swiss Ramble thread on Twitter today....given our & Bolton’s experience....makes for sobering reading...

[Herbie6590]

More detail here....

[Bigdoggsteel]

7 minutes ago, Herbie6590 said:

More detail here....

I really hope Villa don't go up this year. What they are doing is just taking the piss. 

[tomphil]

So the money is getting washed in the Championship these days instead of the Prem ... ?