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[Archived] News Article -> Ian Battersby: Ownership And The Venky's

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Following on from his interview with national daily The Independent last week, Ian Battersby talks to BRFCS about club ownership issues. One of very few Rovers fans to have spoken with Venky's chairperson Mrs Desai, financier Battersby discusses his views on the Venky's ownership of the club and the wider implications this has for the health of the game in this country.

"Be under no illusions, our club is dying," says Rovers fan Ian Battersby. "137 years of football heritage has been decimated inside 12 months. It's like watching a slow motion car crash."

It's a view echoed by many of Rovers' supporters. Through his business involvement in football, Battersby knows the inner workings of the game from the inside and says Blackburn's current troubles should send a warning shot across the bow of every professional football club.

"It might be easy to ignore our plight on a national scale, but with current levels of debt at most clubs reaching unsustainable levels, everyone seeks the holy grail of wealthy foreign owners coming to the rescue," says Battersby. He points to other North West clubs such as Bolton and Wigan, who, like the Rovers under Jack Walker, have been bankrolled by local businessmen with a deep connection to their hometown clubs. "The point will come when either they have to write off this debt or seek foreign money to move forward. It can't go on ad infinitum."

Battersby believes the Premier League are culpable in allowing the current trend of foreign ownership to continue without suitable safeguards. He has witnessed first-hand with Venky's ownership of the Rovers just how little prospective owners need to know about the modern game of football, and how weak the fit and proper test actually is.

"We hear an awful lot about the sham that is 'fit and proper'. Evidence of cash in an account on a given day hardly cuts the mustard. This is a major industry we are talking about here — it's worth billions globally and there has to be something akin to licensing of owners. How can someone wing their way into the UK, take ownership of a club and within 12 months destroy a community? The warnings of Portsmouth, Notts County and now Blackburn have to be heeded. If the same had happened at Jaguar or similar, there would have been outrage in the House of Commons and yet we sit and watch this happening. In essence, the Premier League are watching one of their member clubs get savaged and haven't batted an eyelid. It is nonsense."

Battersby and business partner Ian Currie met with the Rao family in Pune in India in October. There they delivered a few home truths about the issues and responsibilities which faced owners — specifically those relating to the Rovers. It was advice that was subsequently ignored. Even the notion of conducting their business almost exclusively from Pune didn't sit well with Battersby.

"It's a farce to expect our manager to travel to Pune and back inside a day for what amounts to a three-hour meeting. Apart from the fact that he needs to be concentrating his efforts on running and preparing the team, the absentee landlord operation is a joke. That's the board's job. They should have their relationship with the manager and then work with the owners to implement the agreed strategy for the club. But we have no board as such and no strategy, so it doesn't look overly promising, does it?"

"Nobody in Blackburn is empowered to do anything and unless you have delegated authority from India, the whole thing grinds to a shuddering halt. There is no appreciation of how dynamic running a Premier League club is. Things can change many times within a day that need decisive action."

However, Battersby says the warning signs were there. "It was quite clear then, and it is ever more clear now, that they have little concept as to what running a Premiership football club entails." Further, he questions whether the deal to sell Rovers to the Venky's Group by the Walker Trust was in the best interests of the club. "It seems to me that 12 months ago everybody sat in a room with all parties wanting the deal to happen for their own reasons. In that scenario maybe many of the 'what ifs' were conveniently overlooked."

He also says the Venky's did not fully comprehend what they were buying into. "I think they thought the initial down-payment of £25m plus responsibility for existing bank debt of £18m to buy the club was essentially 'job done' and, with an annual working capital injection of £3m to £5m alongside astute player trading, they thought they could get on and expand the Venky's brand over here. It's an incredibly naive view."

Blackburn Rovers Football Club is just one of 170 subsidiaries in the Venky's Group. Each has a business head who reports directly to the Venky's board; in Rovers' case, that appears to be Steve Kean. "The notion of a board executing the owners' plans on a day-to-day basis is a complete anathema to them and many of our problems flow from that," states Battersby, pointing out that much of the antipathy the fans have for the new regime is down to the "wall of silence" which has been erected around the club. The misguided response of Venky's was to appoint Vineeth Rao as their UK "middleman", but he has little knowledge of football and even less connection with Blackburn.

"We have a sporting director who nobody would know if they were sat next to him and that's a high-profile job allegedly responsible for player recruitment. We have a deputy chief executive — but no chief executive — whose effectiveness is, in the circumstances in which he operates, negligible. The August window was a real opportunity to get the club on an even keel again after the trauma of Wolves, but when problems with the bank surfaced and a lucrative shirt sponsorship deal failed to materialise, the budget was very badly impacted and these were the first signs of the extent of the cash call on Venky's, something that appears not yet to have been addressed. As fans saw a raft of sub-standard acquisitions – most of which it is now believed were not instigated by the manager – and poor performances, they rounded on the only visible target of the new regime, Steve Kean."

"The last few months have been horrendous. Steve Kean has borne the brunt of everything, in my opinion somewhat unfairly," says Battersby. "As Roy Hodgson said after the home defeat to West Brom, the problems of a club are rarely the fault of one man."

However, Battersby says that Rovers' fans are justifiably angry and frustrated. "We are having to sit and watch our club being torn apart by ineptitude, failed promises and a continuation of nothing happening. Generations of fans are distressed that their heritage is disappearing whilst Venky's sit quietly in India. I understand fellow managers and the LMA uniting behind Kean – you would expect that – but they are passing comment on our club without any real appreciation of what our fans are living through. I bet they barely give it a moment's thought afterwards, because it doesn't mean anything to them."

"The problem is not about individuals anyway, it's about the abject management of the club by the owners. It's all very well Mark Lawrenson et al. throwing out their smug comments, but little old Blackburn means nothing to these people. We are a small-town club and the impact of all this on our community is devastating. The media have the temerity to ask why people like Jack Straw are getting involved. Behave! He is the local MP and he can see immediately where this is heading. This is a much wider problem than merely a football club. This is a whole community and the football club is a central influence on much that happens economically in the area."

Tired of inaction, Battersby e-mailed Mrs Desai again on Christmas Eve and laid out what he saw as the three options available to her:

(1) Commit the required £20m or so to the January window.

(2) Accept you don't have the infrastructure in place now to be able to take that risk and accept that relegation could therefore become reality and plan your assault from the Championship with a proper structure and budget in place.

(3) Plan an orderly exit.

To date, there has been no response. "Venky's, for everyone's sake including their own, need to come forward and explain all that has happened: own up to their mistakes, implicate other parties if necessary so that we can all understand where and how we have ended up here. It will create a storm without doubt, but at least fans can get some sort of handle and appreciation. At the same time, communicate your plan and how you intend to deliver it. All we seek is some openness and honesty."

"What concerns me now, though, is that they seem intent on selling rather than buying and if it ends up involving our best playing assets in January, then they will have us relegated whilst neutralizing their own cash position," says Battersby. "At which point they could throw the keys in and let someone wade through the wreckage. In that scenario, starting life in the Championship with your assets gone and cash flow down the pan, you could really see us continuing our free-fall through the divisions. I don't think asset-stripping was ever their intention, but in the light of the events of the last few months it isn't that far-fetched anymore. Certainly the cash now required to save Blackburn is at a level they never contemplated and you can easily envisage family disunity at having to gamble £20m or more on one subsidiary in a corner of north-west England. With local opinion so much against them now, would you be rushing to write a cheque?"

"Nobody knows with any certainty in which direction the Venky's will eventually decide to take the club, but you would have to be a supreme optimist to think it will be in a positive direction. So if you are a football fan hoping your club finds a wealthy foreign owner to cure your problems, just beware – because if you happen to be located north of Watford, when it all goes wrong nobody will want to listen."

Venky's management of the Rovers has raised a number of broader issues with regard to the corporate governance of Premier League clubs. Battersby suggests that a much more robust approach to ownership needs to be taken by the Premier League. He believes the Premier League need to assess potential applicants as they would a large corporate entity applying for a substantial bank loan, but in his proposed arrangement this assessment would be to obtain a licence. Such assessment would cover the following areas of prospective owners' performance:

Financial strength and track record

Quality and strength of the management team

Experience of delivery in the sector

Feasibility of business plan and strategy

Corporate governance

Accordingly, there would need to be provision for the submission of quarterly or half-yearly accounts in addition to the annual accounts. Thus, the Premier League would meet quarterly or half-yearly to review adherence to an approved business plan and the terms of continuing approval would be against set covenants. If these were not being met, then the licence would be withdrawn.

"In the case of Premier League ownership," says Battersby, "you would envisage being granted a licence to operate initially, assuming you passed the process of in-depth analysis, and this would be renewed annually against 'performance behaviour' or, if there were any cracks appearing, you could have quarterly or half-yearly monitoring. There would have to be powers of withdrawal that owners sign up to at the initial granting of the licence. They might even have the power to impose their own interim administrators if things were going badly wrong."

Whilst this would not be a panacea for the many potential problems involved in owning a professional football club, Battersby believes that having a recognised process and structure in place is a fundamental necessity. Moreover, it would also ensure that well-meaning but ultimately naive owners such as the Venky's would never get far enough down the line of acquiring ownership because they would fail the robust tests put in place.

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