[Archived] Why Do We Have No Money

[T4E]

All will be revealed when I do the accounts review

Oooh, I can't wait.

[Paul]

Posted this on another thread and was not given a answer.

if finishing bottom off the premier is worth 30million this season,how come we havw no money?

All will become very clear when Rovers publish the accounts for the financial year ended June 2007. The following though is already public knowledge and will explain a little, I hope. Regret to say I cannot find the 2006 figures but the following may help (don't think 2006 was much different.

For this season (Rovers financial year ending June 2008) the minimum Sky income is £30m.

In the season 2004/05 (financial year ended June 2005) Rovers received £21.4m in Sky money.

Therefore the increase from last season (assuming the 05/06 money is similar to the 04/05 money) is ONLY £8.6m. We don't suddenly have £30m we have £8.6m more than before. From this deduct the £1m the club put into STs, the £3m the trust is NOT giving to the club this year and Roque Santa Cruz at £3.75m. That totals £7.75m which leaves us with £850,000 - that doesn't by a third choice reserse striker these days.

On top of the £30m minimum there is place money, which I think is £1m per place. So 10th gets an extra £10m. If Rovers finish 10th we get another £10m - the club may chose to spend that, they may not. Why might they chose not to spend it? Wages have spiralled throughout the PL and the club have had a stated policy of investing in players and resisting transfer approaches - it costs more money to keep these players at Ewood, let alone buy more.

I think the one thing people forget is we already had £21.4m per season and so £30m is great but it's only an increase of £8m or so - half of Anelka without paying him a day's wages!!!!

[Paul]

Right, there's a substantial discrepancy here.

My understanding was that for the last four or five years the Trustees have donated an entirely discretionary 3m p.a. to the Club.

That's true. It's in the accounts

Some people on here are now saying that the Trustees have withdrawn their usual 3m p.a. because they feel no need to carry on doing so with the new TV money.

I can't actually see that being the case.

It's true

On the other hand philip claims they're donating 6m p.a. I think that's wrong as well.

Which is it?

They do on average. It doesn't always show as a lump of money, it's converted loans etc. If you look back on page 2 of the MB you'll see the relevant threads. All the info is on page 1 of each that is why I brought them back up a couple of weeks ago.

[Mr. E]

Well then I suppose it mostly comes down to the owners. Most Prem clubs have billionaires who give them tens of millions every transfer window. That's pretty much why Citeh and the Hammers aren't in their usual place near the foot of the table. Heck, even Derby seem to be making a lot more buys.

I don't know. On one hand you see, sadly, how important money is, but on the other I don't want us to get bought by some American or whoever that can't point out Blackburn on the map.

Personally I think there should be a limit as to how much each club can spend. I'm not just saying this to give us more of a chance, but it would do a lot of good to the game. The ridiculous prices on players (and maybe tickets) would go down, and managers will actually have to make a good team with what they have instead of turning to the next "superstar".

[Paul]

Wages will be anywere between 34-37 million ( including staff etc)

...errrr excuse me. When I posted this remark you poo-pooed it.

[JAL]

The target for Rovers short term must be to attract a home crowd of at least 22-23k but more importantly they must be paying at least £150 plus per person per season.

Is that realistic, i dont think so with the amount of no hopers and hangers on in this region if we could only manage a paltry 24k for a semi final on a glorious sunday in Manchester the future doesnt look great especially with this country's impending recession and the global credit crunch.

[philipl]

Well then I suppose it mostly comes down to the owners. Most Prem clubs have billionaires who give them tens of millions every transfer window. That's pretty much why Citeh and the Hammers aren't in their usual place near the foot of the table. Heck, even Derby seem to be making a lot more buys.

I don't know. On one hand you see, sadly, how important money is, but on the other I don't want us to get bought by some American or whoever that can't point out Blackburn on the map.

Personally I think there should be a limit as to how much each club can spend. I'm not just saying this to give us more of a chance, but it would do a lot of good to the game. The ridiculous prices on players (and maybe tickets) would go down, and managers will actually have to make a good team with what they have instead of turning to the next "superstar".

Most clubs don't have billionaires.

But they do have at least £10m more coming through the turnstiles every year than we do. That is the difference that is biting us now.

[Bazzanotsogreat]

All will become very clear when Rovers publish the accounts for the financial year ended June 2007. The following though is already public knowledge and will explain a little, I hope. Regret to say I cannot find the 2006 figures but the following may help (don't think 2006 was much different.

For this season (Rovers financial year ending June 2008) the minimum Sky income is £30m.

In the season 2004/05 (financial year ended June 2005) Rovers received £21.4m in Sky money.

Therefore the increase from last season (assuming the 05/06 money is similar to the 04/05 money) is ONLY £8.6m. We don't suddenly have £30m we have £8.6m more than before. From this deduct the £1m the club put into STs, the £3m the trust is NOT giving to the club this year and Roque Santa Cruz at £3.75m. That totals £7.75m which leaves us with £850,000 - that doesn't by a third choice reserse striker these days.

On top of the £30m minimum there is place money, which I think is £1m per place. So 10th gets an extra £10m. If Rovers finish 10th we get another £10m - the club may chose to spend that, they may not. Why might they chose not to spend it? Wages have spiralled throughout the PL and the club have had a stated policy of investing in players and resisting transfer approaches - it costs more money to keep these players at Ewood, let alone buy more.

I think the one thing people forget is we already had £21.4m per season and so £30m is great but it's only an increase of £8m or so - half of Anelka without paying him a day's wages!!!!

Again Paul your figures are skewed to suit your blind defence of the trust.

Answer me this name another premiership club that has give their manager a virtual 0 transfer budget for three consecutive seasons.

The figures for a tenth place finish for the 07-8 season will be 40 million, not 30. The bottom placed club is guaranteed 30 million. With top position acquiring a whopping 50 million

I understand you are slanting you figures from an accounting perspective, but unfortunately the football season and most importantly transfer window doesn’t coincide with Rovers accounting year. Whether you like t or not (as it undermines your argument) rovers turnover for the 07/08 season will be 50 million plus. And the wage budget will not go up 10 million in a full accountancy year.

Paul I have a question for you, don’t take this the wrong way it is a genuine attempt to try and see things fro your perspective

Are you connected to any member of the trustees, or a member of the Blackburn board?

Im trying to understand why you defending the indefensible?, without ,money to spend this club will spiral down toward relegation it’s a harsh world is the premiership .I too would like to think a manager hasn’t got to spend millions to be competitive but to think that is outdated and simply naïve.

[Bazzanotsogreat]

...errrr excuse me. When I posted this remark you poo-pooed it.

No paul you stated that the vast majorityof the EXTRA 15 million will be swallowed up by wages, which is nonesense. I believe that an extra couple of million as an increase in realistic not a 25% jump as you indicated in previous posts.

Payroll costs have been around the 33-37m figure for past three/four seasons have they not?

[LeftWinger]

Paul does explain that we'll get an extra 10m if we finished 10th - and explains why we might not be spending that - and that is to keep players such as Samba, Bentley etc here.

[Bazzanotsogreat]

Paul does explain that we'll get an extra 10m if we finished 10th - and explains why we might not be spending that - and that is to keep players such as Samba, Bentley etc here.

Paul quotes the 04/05 Tv revenue figures which were around 20 million ish, Figures for a mid-table finish this season are 20 million more than that figure.

If Bentley, Samba and Nelsen were given 15 k wages more, that is still less that an extra 2 million in annual wage budget.

[Blackpool_Rover]

Well personally i think we should get back to basics....according to the poll on here 14 people still havent recieved their season tickets...ridiculous...Williams out!

[LeftWinger]

If Bentley, Samba and Nelsen were given 15 k wages more, that is still less that an extra 2 million in annual wage budget.

If they were given 15k each extra - then thats well over 2m. I'm sure others have had contracts improved too.

It's frustrating - but if we had the money - we'd spend it.

[Bazzanotsogreat]

If they were given 15k each extra - then thats well over 2m. I'm sure others have had contracts improved too.

It's frustrating - but if we had the money - we'd spend it.

That is a rather naive comment imo

So you believe that the extra 10-15 million will be swallowed by wages?, if so sack mr williams

[LeftWinger]

That is a rather naive comment imo

So you believe that the extra 10-15 million will be swallowed by wages?, if so sack mr williams

I don't know the exact figures. Have we been breaking even? That extra 10m might be getting us to break even - nothing more.

[Paul]

Paul quotes the 04/05 Tv revenue figures which were around 20 million ish, Figures for a mid-table finish this season are 20 million more than that figure.

If Bentley, Samba and Nelsen were given 15 k wages more, that is still less that an extra 2 million in annual wage budget.

I don't do "ish" when I'm quoting figures from published company accounts. The TV revenues (mainly Sky) were £21.4m in the year ending June 05. They will have been similar in the YE June 06. Your estimate on wages is in the region I was suggesting for the last season and you poured scorn on it.

[BrianPotter]

I have a very limited but pretty reliable insight into The Jack Walker Settlement through a business associate who has links with Rathbones. Bear in mind his knowledge is limited to the Trust, he doesn't know a great deal about Blackburn Rovers.

I was discussing the Rovers situation with him yesterday in light of the recent Hughes to Newcastle rumours. Here are a few intersting points that he made:

The Trust Withdrawing the £3m donation:

As far as he understood the £3m is still available for the club. It was stated that the Trustees felt there was CURRENTLY no need for ADDITIONAL invesment. The emphasis being on the words currently and additional.

The Trust Support for the Club and Financing:

This is a complicated one to put down in a few words, but here goes.

The problem the Trustees and Utlimatley the Club has is that when the deeds of the Trust were put into place it made what was considered sufficient provision to support the club for the forseable future, providing additional income and funding for transfers. What the Trust did not allow for was the financial explosion in the football sector. The original structure for supporting the club is simply not making the impact it was intended to do due to the huge rise in transfer fees and wages over the past 6 or 7 years. Jack Walkers plan was always for the club to be self sufficient where by any additional money provided by the Trustees would give them an advantageous position.

The Trustees want to sell the club to enable it to move forward. They will only consider selling the club to an entity that would put it in a better position than it is currently - this factor is also related to the Deeds of The Trust (but my source didnt know any more on that).

They are not in a position to provide the club with year on year investment that would make us competetive at the highest level in the transfer market, hence the need for outside investment.

There is currently money available for transfers, each case would be judged on its individual merits and if it was agreed the deal suited the club money would be released by the Trustees. However, the major stumbling block is the wage bill. Whilst money can be made available for transfer fees, the wages of any signing must be covered by the clubs income - and the fact that any significant addition to the squad could increase our wage bill by up to £2-£3m a year is a major issue. The wage bill, as we know is currently an area that the club are concerned about and its currently taking up too high a percentage of income. In basic terms as I understand it there is not a major problem in funding transfer fees - the problem is that there is no "headroom" on the wage bill to take on extra players.

Money put into the club by the Trust:

On a final but very significant note, anyone questioning the support of the Trust over the years should bear this in mind. When Rovers were relegated the impact on the accounts was lethal, an operating loss of nigh on £50m in just two years. This would be enough to send most clubs under, however Rovers continued to operate normally, holding onto most of their players and paying premier league wages whilst in the champsionship, as well as remaining active in the transfer market. What enabled them to do this? Just stop an think logically for a minute, a £50m black hole in two years is a frighteningly serious situation, and if it wasnt for the Trust plugging this black hole Rovers could well have gone pop. Couple this with the interest free non-repayable loans and other donations, operating losses in other years that are written off by the Trust, the actual amount of money they have has put into Rovers is staggering.

Hopefully this will help people understand the ins outs of things.

[Paul]

Bazzanotsogreat:

Again Paul your figures are skewed to suit your blind defence of the trust.

I couldn't give a monkey's about the trust, as far as I'm concerned they are of no relevance to me at at all. For the simple reason I can never hope to influence their view of the club. All I do is read the published accounts, listen to what people say and the comment on it. None of what I have posted in here is defending the trust, it is simply my view.

Answer me this name another premiership club that has give their manager a virtual 0 transfer budget for three consecutive seasons.

That isn't the question we are discussing. I doubt there is another PL club with a zero budget- but then we don't have a zero budget either. It's just very, very small. The Rovers invested in players last season in anticipation prics would spiral. prices have spiralled

The figures for a tenth place finish for the 07-8 season will be 40 million, not 30. The bottom placed club is guaranteed 30 million. With top position acquiring a whopping 50 million

Would you please read what I said. I said it is £30m minimum per club plus £1m per place, which if Rovers finish 10th gives us £40m

I understand you are slanting you figures from an accounting perspective, but unfortunately the football season and most importantly transfer window doesn’t coincide with Rovers accounting year. Whether you like t or not (as it undermines your argument) rovers turnover for the 07/08 season will be 50 million plus. And the wage budget will not go up 10 million in a full accountancy year.

That is rubbish. Ask yourself why Rovers accounting year ends June? I'll spell it out for you it's so it inlcudes the whole of the relevant season. Rovers get Sky money from August 07 to May 08 which will be in the finacial year ending June 08. I have never stated the wage bill will increase by £10m. What I have said is the wage bill will increase by several milliuons, perhaps as much as £10m from the last published accounts - which at the time I posted would be the accounts for the year ending June 06. So by June 08 the wage bill (the current season) will have increased by several millions.

Paul I have a question for you, don’t take this the wrong way it is a genuine attempt to try and see things fro your perspective

Are you connected to any member of the trustees, or a member of the Blackburn board?

Im trying to understand why you defending the indefensible?, without ,money to spend this club will spiral down toward relegation it’s a harsh world is the premiership .I too would like to think a manager hasn’t got to spend millions to be competitive but to think that is outdated and simply naïve.

I am just a season ticket holder who reads the published accounts. I know accountants who read them and explain what they mean to lay people (that's me). I have absolutely no connection to the club other than attending matches. I repeat I am not defending the club I am explaining my understanding of the facts and figures. I'm not skewing or slanting anything, while you are not taking the trouble to read what I have written. Before you continue to criticise me I wish you would do me the simple courtesy of READING. It's blindingly obvious you have not taken the time to read the club accounts and are happy to comment on an "ish" basis.

[stuwilky]

I understand you are slanting you figures from an accounting perspective, but unfortunately the football season and most importantly transfer window doesn’t coincide with Rovers accounting year. Whether you like t or not (as it undermines your argument) rovers turnover for the 07/08 season will be 50 million plus. And the wage budget will not go up 10 million in a full accountancy year.

Rovers accounts run Summer - Summer

Sounds pretty much like the football season to me.....

They are published in December to shareholders, and usually be the end of January for the period ending June the year prior.

The figures out next week will be relating to the season that finished last summer. But excluding most of our summer player trading.

[Paul]

The Trust Withdrawing the £3m donation:

As far as he understood the £3m is still available for the club. It was stated that the Trustees felt there was CURRENTLY no need for ADDITIONAL invesment. The emphasis being on the words currently and additional.

Thank you Brian. I'v ebeen trying to get people to understand those two words for some weeks. It's nice to see it come from elsewhere. Plus thanks for the rest which is very interesting reading.

[philipl]

That is a rather naive comment imo

So you believe that the extra 10-15 million will be swallowed by wages?, if so sack mr williams

Why not try reading what has been written already? The answers are all logically laid out in this thread.

Then come back and apologise for adopting an unnecessary tone.

[Scotty]

It's threads like these that make me love this messageboard. I can't think of another supporters messageboard where so much "inside" knowledge is divulged. Thank you to those who have contributed.

Bazzanotsogreat - Paul explained the situation perfectly. You didn't read his explanation and chose instead to question him based on your own perceptions. As usual, you're talking out of your arse.

[American]

Why not try reading what has been written already? The answers are all logically laid out in this thread.

Then come back and apologise for adopting an unnecessary tone.

Then will you apologize for adopting such a pompous and patronizing tone?

[Hasta]

The original structure for supporting the club is simply not making the impact it was intended to do due to the huge rise in transfer fees and wages over the past 6 or 7 years.

Have transfer fee's really spiralled that much from what Jack knew when he was in control. I know the top end have but at the level that we are shopping at is there that big an increase?

In Jacks era we paid £5.3m for Dailly, £3.4m for Carsley, £4.1m for a relatively unproven Matt Jansen.

Teams like Villa paid £5.6m for Alpay and £9.5m for Angel. Tottenham paid £8.1m for Dean Richards. Others such as £4.5m for Radzinski. £6m for Barmby. £5.5 mi for Igor Biscan. £10m for El Hadj Diouf.

And thats a very quick scout of 2000 - 2002 transfers. Would many of them really cost that much more now?

[doctorryan]

...............When Rovers were relegated the impact on the accounts was lethal, an operating loss of nigh on £50m in just two years.................

I think the number was closer to £60m, but that only adds to Brian's point.