Venkys - Welcome or Not?

[tomphil]

Just standing back and looking at it how much actually out of pocket could they be termed to be ?

When they bought the club it cost c23 million and had a 16 million bank debt and 3 million loan from the Walker Trust on the books, also I think in the terms of sale there was to be 10 million invested immediately for the 'betterment' of the club.

They themselves indicated investment of 5 mill per window would be forthcoming so 10 mill per season which is probably what the parent company was comfortably prepared to 'lose' in the books.

So in the 8 years nearly they've been here that's 80 million they were prepared for plus the original purchase price etc which all comes in at around 129 million.

Is that not near or roundabout the figure on the VLL share capital books ?

Edited May 18, 2018 by tomphil

[lraC]

42 minutes ago, RoverCanada said:

You mentioned in a previous that the sums had been done before and there's ultimately some unexplained hole somewhere in the accounts. Could you point me to the analysis you're referring to?

I think you may be referring to this.  The big hole is there for us all to see. None stranger than those signed by us and nearly all had the same agent, who of course worked for free, slept at the training ground and had the place rocking so much, it nearly fell over!!!

As you will note their is no mention of unexplained hole in the accounts. What I meant by the hole was that Agents had "earned" a lot of money from players transactions, both in an out. As you will see from the link below, it looks like some of this was excessive. Also cast your mind back to Ruben Rochina and the fee paid for him and the commission paid. That money paid out, has created a hole in the finances of the club, as this money could have been spent in a better way. imagine for example if Mowbray was suddenly given the £3.5 million, mentioned below, to spend this summer.

https://www.telegraph.co.uk/sport/football/teams/blackburn-rovers/10290996/Blackburn-Rovers-were-biggest-spenders-on-agents-fees-in-the-Championship-last-season-despite-underperforming.html

[JHRover]

It really does take some getting your head around, when you factor in how much money has come into the club since they arrived.

They came in mid-way through the 2010-11 season. Took the club on for an absolute bargain with minimal external debt. Despite best efforts to end our stay in the top league at the first attempt through swinging a wrecking ball at the squad and employing Kean as manager they still benefitted from a further 18 months of Premier League income during which time they also sold Phil Jones for a huge sum, along with a few others (Samba?) for multi-million fees. Despite the dodgy dealings at that time all those coming in amounted to less than fees received.

Then they had 4 years worth of parachute money to get through, and as soon as that money dried up embarked on a selling spree during which they received in excess of £30 million through player sales which was way more than any fees going out in the opposite direction on players. Also between 2013 and 2018 the sum total of transfer fees paid out must come to about 3 or 4 million at the very most. Conway, Cairney, Gestede, Evans, Marshall, Steele - maybe a couple of million together at most - Williams, Dack, Samuel - another 1 million on top. Spread over 5 years that is a small outlay on fees for any club in the 2nd division (with the exception of bankrupt Bolton and maybe Ipswich I can't think of another club that has been in the Championship for 4+ of the last 5 or 6 years and spent less on players than that.

Yet despite all those sales and despite 2 years of an embargo and minimal spending on players we're still supposedly haemorrhaging money every year.

18 months of Premier League cash, 4 years of parachute money, £50 million+ of player sales, 2 years of an embargo and minimal spending on anything else since then and yet they've lost £250 million? That certainly doesn't add up to me.

[lraC]

Just now, JHRover said:

It really does take some getting your head around, when you factor in how much money has come into the club since they arrived.

They came in mid-way through the 2010-11 season. Took the club on for an absolute bargain with minimal external debt. Despite best efforts to end our stay in the top league at the first attempt through swinging a wrecking ball at the squad and employing Kean as manager they still benefitted from a further 18 months of Premier League income during which time they also sold Phil Jones for a huge sum, along with a few others (Samba?) for multi-million fees. Despite the dodgy dealings at that time all those coming in amounted to less than fees received.

Then they had 4 years worth of parachute money to get through, and as soon as that money dried up embarked on a selling spree during which they received in excess of £30 million through player sales which was way more than any fees going out in the opposite direction on players. Also between 2013 and 2018 the sum total of transfer fees paid out must come to about 3 or 4 million at the very most. Conway, Cairney, Gestede, Evans, Marshall, Steele - maybe a couple of million together at most - Williams, Dack, Samuel - another 1 million on top. Spread over 5 years that is a small outlay on fees for any club in the 2nd division (with the exception of bankrupt Bolton and maybe Ipswich I can't think of another club that has been in the Championship for 4+ of the last 5 or 6 years and spent less on players than that.

Yet despite all those sales and despite 2 years of an embargo and minimal spending on players we're still supposedly haemorrhaging money every year.

18 months of Premier League cash, 4 years of parachute money, £50 million+ of player sales, 2 years of an embargo and minimal spending on anything else since then and yet they've lost £250 million? That certainly doesn't add up to me.

Nicely summed up that and I agree with all of that. Don't forget the bonus in one manager's contract, based on league one seasons. What foresight that was!

[tomphil]

Money has seemingly gone 'through' the club from the very top in India as well as all it's own income however generated. For whatever multiple reasons a lot of that money has been literally haemorrhaged funding it seems to be done in a certain way that suits the parent company and that's why and the only reason why it's been allowed to continue.

Pouring 200 million down a black hole for no reason would bring most multi million pound companies and wealthy families to their knees. That hasn't happened here at all it's all part of a bigger picture although obviously it hasn't run smooth and plenty cash will have been just burned but the overall picture will be nowhere near as dramatic as it looks.

Remember they ( & whoever else ) bought a football club that needed about 5 mill per season putting in just to wash it's face so they knew the score and were obviously prepared to plug those gaps they didn't rescue the club from admin or similar. They can only really be termed massively out of pocket if they bought the club intending for it to pay it's own way and cost them nowt or indeed to pull it to bits and make a quick profit before punting the remains on.

They bought something that needed funding and mostly that's what they've done, because that's what suits. Quite where and why some of that money goes after it leaves India is the key, we'll never find out though because the clubs a business tool and that business is conducted under cloak and dagger in another country.

Edited May 18, 2018 by tomphil

[lraC]

Just as a reminder, Premier league money and parachute money since Venkys arrived has been in the region of £130 Million. Sales of Phil Jones, Samba, Nzonzi and Gael Givet alone total £38 Million too.

[arbitro]

4 minutes ago, lraC said:

Just as a reminder, Premier league money and parachute money since Venkys arrived has been in the region of £130 Million. Sales of Phil Jones, Samba, Nzonzi and Gael Givet alone total £38 Million too.

Hoillet, Kalanic and Martin Olsson too.

[PLJPB]

21 hours ago, Herbie6590 said:

It’s a lot more than that - as at June 17 a/cs nearer £250m.

Could I ask where this £250m figure is coming from? 

The BRFC accounts to 30/6/17 show £94.8m owing to the Parent Company (Venkys London Limited). They also show £146.9m share capital. But £134m of this share capital was already in place before Venkys bought the club. Therefore I calculate their total investment to be £94.8 + 146.9 -134 = around £ 108m.

The Venkys London Accounts show that at 30/6/17 the total share capital was £132m. I cannot find any evidence that the Raos have put any money directly into BRFC - it has all gone through VLL therefore their maximum investment must be the £132m VLL share capital. I'm not sure what the difference between the 108 and the 132 is but maybe its the £23m they actually paid for the club.

In summary, my understanding of the published accounts is that all the funding for BRFC has gone via Venkys London Limited and since at 30/6/17 it had £132m share capital, this £132m is the maximum they had put in at that date.

[Crimpshrine]

As an earlier post suggests, I know nothing about company accounts. My repeated question, which maybe someone could answer, is where in the accounts are the outgoings itemised.  The accounts keep declaring more losses each year but I don't see any detail anywhere. That is why I question whether Venky's really have poured in £250m. where has the money gone?

Share value wise, Venky's companies worldwide are at an all time high - up 1600% in two years.

They are paying off their corporate debts at a rapid rate while their net worth is high - see the graph on the web page link below. 

So why is Rovers debt continuing to grow?  It doesn't fit with Venky's other companies. Why is there so little money in the bank with a stated overdraft of £13m ?

I am very worried that when their stock is not so high we will be in real trouble.

https://simplywall.st/stocks/in/food-beverage-tobacco/nse-venkys/venkys-india-shares/news/are-venkys-india-limiteds-nsevenkys-interest-costs-too-high/

[Bigdoggsteel]

Just now, PLJPB said:

Could I ask where this £250m figure is coming from? 

The BRFC accounts to 30/6/17 show £94.8m owing to the Parent Company (Venkys London Limited). They also show £146.9m share capital. But £134m of this share capital was already in place before Venkys bought the club. Therefore I calculate their total investment to be £94.8 + 146.9 -134 = around £ 108m.

The Venkys London Accounts show that at 30/6/17 the total share capital was £132m. I cannot find any evidence that the Raos have put any money directly into BRFC - it has all gone through VLL therefore their maximum investment must be the £132m VLL share capital. I'm not sure what the difference between the 108 and the 132 is but maybe its the £23m they actually paid for the club.

In summary, my understanding of the published accounts is that all the funding for BRFC has gone via Venkys London Limited and since at 30/6/17 it had £132m share capital, this £132m is the maximum they had put in at that date.

 

Just now, Crimpshrine said:

As an earlier post suggests, I know nothing about company accounts. My repeated question, which maybe someone could answer, is where in the accounts are the outgoings itemised.  The accounts keep declaring more losses each year but I don't see any detail anywhere. That is why I question whether Venky's really have poured in £250m. where has the money gone?

Share value wise, Venky's companies worldwide are at an all time high - up 1600% in two years.

They are paying off their corporate debts at a rapid rate while their net worth is high - see the graph on the web page link below. 

So why is Rovers debt continuing to grow?  It doesn't fit with Venky's other companies. Why is there so little money in the bank with a stated overdraft of £13m ?

I am very worried that when their stock is not so high we will be in real trouble.

https://simplywall.st/stocks/in/food-beverage-tobacco/nse-venkys/venkys-india-shares/news/are-venkys-india-limiteds-nsevenkys-interest-costs-too-high/

An episode of the podcast a few weeks back explains this in clear language. Worth a listen 

[RoverCanada]

2 hours ago, JHRover said:

It really does take some getting your head around, when you factor in how much money has come into the club since they arrived.

They came in mid-way through the 2010-11 season. Took the club on for an absolute bargain with minimal external debt. Despite best efforts to end our stay in the top league at the first attempt through swinging a wrecking ball at the squad and employing Kean as manager they still benefitted from a further 18 months of Premier League income during which time they also sold Phil Jones for a huge sum, along with a few others (Samba?) for multi-million fees. Despite the dodgy dealings at that time all those coming in amounted to less than fees received.

Then they had 4 years worth of parachute money to get through, and as soon as that money dried up embarked on a selling spree during which they received in excess of £30 million through player sales which was way more than any fees going out in the opposite direction on players. Also between 2013 and 2018 the sum total of transfer fees paid out must come to about 3 or 4 million at the very most. Conway, Cairney, Gestede, Evans, Marshall, Steele - maybe a couple of million together at most - Williams, Dack, Samuel - another 1 million on top. Spread over 5 years that is a small outlay on fees for any club in the 2nd division (with the exception of bankrupt Bolton and maybe Ipswich I can't think of another club that has been in the Championship for 4+ of the last 5 or 6 years and spent less on players than that.

Yet despite all those sales and despite 2 years of an embargo and minimal spending on players we're still supposedly haemorrhaging money every year.

18 months of Premier League cash, 4 years of parachute money, £50 million+ of player sales, 2 years of an embargo and minimal spending on anything else since then and yet they've lost £250 million? That certainly doesn't add up to me.

Well, even in our last year in the PL we weren't all that profitable, with a profit of £4m on the back of $14m profit in player sales. We actually lost £19m in 2010/11. As has been well-covered, we dropped out of the PL at the worst possible time. Our revenue then was only £54m compared to the lower PL clubs earning £120m these days. Parachute payments help, but they weren't as lucrative for us as they are now. (Off the top of my head, I think they were about £40m over 4 years for us, while the first year of parachute payments is currently £40m!)

It all sounds like quite big money adding up the parachute money, player sales, etc., but you can easily tell the same story in the other direction adding up our outlays since 10/11. £245m in wages and salaries, £88m in other expenses. Intangible fixed asset trading has been a net loss of about £5m over those years. Accounting losses of about £115m.

Perhaps there's a story to tell within those numbers and I'd of course be keen to read evidence of specific wrongdoing. I don't doubt there were overpayments to agents sprinkled throughout, Venky's stooges enjoying oversized salaries, etc.

I'd have to listen to that BRFCS podcast again regarding the split between share capital Venky's has pumped in and debts, and how that adds up to over £200m... I recall the general story is that share capital is the most efficient way to cover ongoing expenses going forward rather than taking on further loans. Our interest payments have fallen accordingly recently.

All I'm saying is given our specific circumstances and how common huge losses are across football, I'm personally not all that surprised by how much Venky's have ultimately had to pump into the club, whether in cash, share capital, or debt.

While we're still a loss-maker, like pretty much every football club, all signs point to our cost structure finally being reset to a reasonable level (while still having relatively high expenses for a Championship/League One club due to Ewood, Brockhall, etc.). Hence, I suspect Venky's are perfectly happy to continue to hang on and incur losses that are manageable to them now (unlike the 12/13 - 13/14 £70m loss horrorshow), and maintain some perhaps vain hope that we'll scrape out a promotion some year.

Edited May 18, 2018 by RoverCanada

[tomphil]

Edited May 18, 2018 by tomphil

[tomphil]

If the above is correct there's been a monumental reduction in players wages for last season.

[lraC]

Tumbling out of the premier league is seen as a financial disaster and when a club is heading that way, understandably you more often that not, see a change of manager. Even Leicester did the unthinkable and sacked Ranieri, the season after he completed, what was probably the biggest miracle ever in English football. Venkys surely knew of the consequences of this happening, but gladly sat back, whilst Kean took us from the top half to a last game shoot out in the first year and completed the job in the second year. This was with a complete novice, who they were paying ridiculous sums of money. Even after the relegation he survived and was never sacked he resigned. Given how much he cost the club, why was this allowed to happen?

[Bigdoggsteel]

9 minutes ago, tomphil said:

That can't be right..can it?? 

[tomphil]

Just now, Bigdoggsteel said:

That can't be right..can it?? 

Well it is from twitter via a Bury fan so I doubt it's gospel i'm trying to find the source.

[Stuart]

14 minutes ago, tomphil said:

If the above is correct there's been a monumental reduction in players wages for last season.

Also even more kudos to Shrewsbury.

Doubt it’s true though, we’d need to have some extremely low paid players to offset our few higher earners.

[Craigyboy]

Scunthorpe town (9) never heard of them lol ? 

[Bigdoggsteel]

Just now, tomphil said:

Well it is from twitter via a Bury fan so I doubt it's gospel i'm trying to find the source.

Ya, I reckon some of our bigger earners would bring the average up higher than that, unless the under 23s are included, but in that case I wouldn't imagine Charltomn would be ahead of us either way. 

Whats the average wage for a player in League 1? I thought 3-4 grand or am I going too high? 

[tomphil]

Just now, Stuart said:

Also even more kudos to Shrewsbury.

Doubt it’s true though, we’d need to have some extremely low paid players to offset our few higher earners.

Didn't Mowbray say the playing staff budget was down to about 8.5 last season ?  Quite a big playing staff still for league one as well.

[JacknOry]

If thats true, i knew Shresbury puched above their weight but an average weekly wage of a grand?

[Bigdoggsteel]

Just now, JacknOry said:

If thats true, i knew Shresbury puched above their weight but an average weekly wage of a grand?

That seems low. League of Ireland players are almost on that...

[tomphil]

Just now, Bigdoggsteel said:

Ya, I reckon some of our bigger earners would bring the average up higher than that, unless the under 23s are included, but in that case I wouldn't imagine Charltomn would be ahead of us either way. 

Whats the average wage for a player in League 1? I thought 3-4 grand or am I going too high? 

A lot of squads in that league contain youth players, loans etc so I reckon 3 to 4 grand is top end for average clubs.

Not confident it's right but worth bearing in mind a lot of clubs in league 1 have absolutely no means to pay big wages they just get by on their own income/overdraft etc so food for thought maybe.

Edited May 18, 2018 by tomphil

[JacknOry]

I also assumed our wage bill would be highest in the league considering we had five of the leagues highest earners in our squad. That Powell of theirs is probably on fair whack though.

[Bigdoggsteel]

  

 

T