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Just now, The Axe said:

And if you need specific confirmation. "There is no concept of tax grouping rules in Indian Tax Law and therefore there is no relief for losses of overseas subsidiaries."

So, assuming they haven’t got around this somehow (through use of parent/subsidiary companies) then there is no reason for them to continue pumping money in.

How long can they continue to powder their nose to save face?

It’s promotion or bust in slow motion.

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If only they had tuned up on day one and told John Williams and Tom Finn that they were going to invest £250 million pounds over the next 7 years (in addition to all the TV income) and charged them wi

Stuart is right.  This is like what happened with Bolton, we are not in debt to any financial institution but we are in debt to Venky's and if they decide to recall that debt then we will be in big tr

It would have been cheaper to keep Allardyce 

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55 minutes ago, The Axe said:

And if you need specific confirmation. "There is no concept of tax grouping rules in Indian Tax Law and therefore there is no relief for losses of overseas subsidiaries."

Thanks for that - which again begs the question why they continue to pump millions in? It could be just be as simple as a) they can afford it and b) the lure of once again owning a Prem club and all the money, kudos and business opportunities that provides is greater than the reality of losing millions every year.

This of course brings us back to why Mowbray keeps preaching to them the need for a 'slow build'. He is right in some respects but anyone who thinks Venkys will be happy to finish 4th bottom may be in for a shock. They want/need promotion and Mowbray knows that. He will be feeling the pressure at the moment. 

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Just now, darrenrover said:

The VH Group has subsidiaries worldwide, including Switzerland. There's no way that our losses aren't tax beneficial somehow.

This keeps being repeated but no one has yet said how. The only quote that is specific (from the Axe above) clearly states the opposite. 

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Just now, blueboy3333 said:

Thanks for that - which again begs the question why they continue to pump millions in? It could be just be as simple as a) they can afford it and b) the lure of once again owning a Prem club and all the money, kudos and business opportunities that provides is greater than the reality of losing millions every year.

This of course brings us back to why Mowbray keeps preaching to them the need for a 'slow build'. He is right in some respects but anyone who thinks Venkys will be happy to finish 4th bottom may be in for a shock. They want/need promotion and Mowbray knows that. He will be feeling the pressure at the moment. 

Explaining Venky's motives is always difficult but the best I can come up with is this. Mrs D paid 23 million to keep her brothers away from the main business. She thought that it would cost only 4 million a year to keep going, which would be compensated for savings in their advertising budget. It may be that although the connection is no good for the fried chicken market in the main business, poultry, poultry vaccines owning an English club still has some prestige and hence still reduces the advertising budget. 

For the rest. I've been a chartered accountant for well over fifty years and you get a feel for a business run by an accountant and the Rovers have had all the signs of this for some time. Which leads me to believe its Mr Desai is calling the shots. Now almost certainly he would like to extricate them but he's not going to do an Eddie Davis. I think Brockhall has been preventing them moving on. The covenants are basically not enforceable but it would be a brave planner who stood up in an enquiry and stated why he had ignored them when he gave planning permission. So its an obstacle, just don't know how big. I would forget a real attempt to get back to the Premiership. Too big an investment required and too uncertain, not really how accountants' think. I think they are just waiting for a day when they have several cashable assets which they will then use to pay back some of the loan account and see if anyone is willing to pay for the club.

Just my views. They have no claim to be worth any more than anyone else's.

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7 hours ago, Herbie6590 said:

It’s debt to the extent that it demonstrates how much we are overspending compared to income, but it’s not debt like your mortgage or credit card bill. It’s more akin to borrowing off your parents. It’s debt, but all parties accept the reality...they’ll not ask for repayment & you’ll never be able to afford to repay ?

Yes that works at the moment.  What if the owners wanted some money back though? Their best bet might be to call in the debt, sell everything and just take what they can get for it and leave the club bankrupt. I think the current status quo is likely to continue for now but who knows what the future holds.

 

 

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Listening to Radio 5 today about FFP.  If we have a similar season this year to last we’ll be struggling to get under the £39m over 3 years loss target either next year or particularly the year after.  Assuming our income will go up with more TV money but the outgoings will be much more than last year with new signings.  If so we’ll need to make big savings (how?) or sell Bradley Dack to balance the books.  

 

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1 hour ago, The Axe said:

Explaining Venky's motives is always difficult but the best I can come up with is this. Mrs D paid 23 million to keep her brothers away from the main business. She thought that it would cost only 4 million a year to keep going, which would be compensated for savings in their advertising budget. It may be that although the connection is no good for the fried chicken market in the main business, poultry, poultry vaccines owning an English club still has some prestige and hence still reduces the advertising budget. 

For the rest. I've been a chartered accountant for well over fifty years and you get a feel for a business run by an accountant and the Rovers have had all the signs of this for some time. Which leads me to believe its Mr Desai is calling the shots. Now almost certainly he would like to extricate them but he's not going to do an Eddie Davis. I think Brockhall has been preventing them moving on. The covenants are basically not enforceable but it would be a brave planner who stood up in an enquiry and stated why he had ignored them when he gave planning permission. So its an obstacle, just don't know how big. I would forget a real attempt to get back to the Premiership. Too big an investment required and too uncertain, not really how accountants' think. I think they are just waiting for a day when they have several cashable assets which they will then use to pay back some of the loan account and see if anyone is willing to pay for the club.

Just my views. They have no claim to be worth any more than anyone else's.

Nice summary...thanks for picking me up on the India issue, never come across that before TBH but there’s always an exception to prove a rule ??

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Just now, McClarky said:

Listening to Radio 5 today about FFP.  If we have a similar season this year to last we’ll be struggling to get under the £39m over 3 years loss target either next year or particularly the year after.  Assuming our income will go up with more TV money but the outgoings will be much more than last year with new signings.  If so we’ll need to make big savings (how?) or sell Bradley Dack to balance the books.  

 

What are the last 3 years losses? 

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Just now, McClarky said:

Listening to Radio 5 today about FFP.  If we have a similar season this year to last we’ll be struggling to get under the £39m over 3 years loss target either next year or particularly the year after.  Assuming our income will go up with more TV money but the outgoings will be much more than last year with new signings.  If so we’ll need to make big savings (how?) or sell Bradley Dack to balance the books.  

 

Indeed & this is the conundrum that Waggott & Cheston have to contend with...chase the dream & succeed like Wolves or fail like Sheff Weds/Villa, or accept our place, develop & trade young players, pick up some free transfers & so on...we are back to the standard Rovers 1970’s/80’s business model. 

The added complexity now is that every year 3 clubs come down with parachute payments which dwarfs our income. Andy Holt at Stanley has a similar challenge albeit on a smaller scheme but his view is to build a sustainable business which operates a football club. Rovers effectively need to do something similar as FFP makes cheque book ownership much more difficult/risky.

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Just now, blueboy3333 said:

What are the last 3 years losses? 

The losses can be seen in a/cs at Companies House but those accounting numbers are then adjusted for FFP calculations, so you can’t just take the numbers from the a/cs & add them up. Certain transactions are allowed/disallowed to ensure (allegedly) a common standard.

This stops Venky’s from circumventing the rules by paying say, £100m for a Venky’s shirt sponsorship deal. That would be a disallowed transaction as it would have obviously have been inflated above market value. Now if you can explain how Man City manage to do it, we might have a path through FFP !!!

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7 minutes ago, McClarky said:

Yes that works at the moment.  What if the owners wanted some money back though? Their best bet might be to call in the debt, sell everything and just take what they can get for it and leave the club bankrupt. I think the current status quo is likely to continue for now but who knows what the future holds.

 

 

Covered higher up in  the thread...essentially, yes, it’s a possibility. So using my analogy, it would be like falling out with your mum & dad & them asking for their money back meaning you have to sell the car you’ve just bought & accept that you’re riding a bike for a while...☹️

2ACC3785-815C-4044-A311-5018C0F92F1F.jpeg

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Just now, McClarky said:

Listening to Radio 5 today about FFP.  If we have a similar season this year to last we’ll be struggling to get under the £39m over 3 years loss target either next year or particularly the year after.  Assuming our income will go up with more TV money but the outgoings will be much more than last year with new signings.  If so we’ll need to make big savings (how?) or sell Bradley Dack to balance the books.  

We had losses of £1.5m in 15/16, £3.8m in 16/17, and £16.8m last year. So £22.1m, which was well within the £39m limit. We can incur £19m in losses this year without breaking FFP (although that would make keeping in line in 19/20 difficult!). Add that we can exclude maybe £3m of academy/community-related expenditures from the FFP calculation, and we're probably fine for FFP in the short-run, and a Dack sale is our 'ace in the hole' if need be. (Also not sure how League One and the Championship interact with FFP as League One has different rules...?)

Will be interesting to see what our financial situation is this year. No real sales recently to top up losses...

My guess/hunch is Venky's have begrudgingly accepted treating Rovers as a £13m/year punt on maybe getting Premier League football again someday. Obviously questions can be asked as to how committed/competent they are at doing so, but excluding this recent poor run, Mowbray and co. have had us running fairly competently for a couple years now.

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Would FFP also not just apply to the clubs own accounts and not it's holding company ?  They won't be much different obviously but there'll probably some daylight one way or another.

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Just now, tomphil said:

Would FFP also not just apply to the clubs own accounts and not it's holding company ?  They won't be much different obviously but there'll probably some daylight one way or another.

The FFP calculation is based on the football club but “related transactions” are excluded to ensure as far as possible a “like for like” comparison between clubs. This means that spending £1m on a top accountant might be a better investment than a centre forward.... modern football. ?‍♂️

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My guess is it'll end up a 50/50 toss between investing a bit more and trying to move on another notch or staying as we are with minimal summer activity and trying to grow the team another 6-12 months then cash in on it again to plug the financial holes etc.

Depends on who shouts loud enough and long enough to have their advice taken on board although if we are being run by accountants option B will be the favourite.

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Just now, MCMC1875 said:

Shirt's too pale and socks are wrong colour but he's  probably better than Jason Lowe or Keith Andrews.

Who isn't? Everywhere Lowe goes clubs should adopt "why does it only rain on me" as their anthem. Misery magnet. Of course that's pretty much what UEFA have acted as past few years and they were hardly a fine, upstanding organisation prior. Whoever came up with FUP as far as I'm concerned is a sick perverse masochist.

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13 hours ago, McClarky said:

Listening to Radio 5 today about FFP.  If we have a similar season this year to last we’ll be struggling to get under the £39m over 3 years loss target either next year or particularly the year after.  Assuming our income will go up with more TV money but the outgoings will be much more than last year with new signings.  If so we’ll need to make big savings (how?) or sell Bradley Dack to balance the books.  

 

Not certain but I believe this will be our 1st year under these rules. Certainly last seasons loss was allowed in league 1. If we were in a position where Dack had to be sold to balance the books, i think as fans we would have to understand.

However a number of our out goings are excempt from the FFP - and I think this seasons loss will be much smaller depends how much Brereton and Armstrong cost.

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On 21/03/2019 at 08:43, cesus said:

Jeepers!!

£187 in wages for every £100 of income.

Venkys have “spent” over a quarter of a billion quid. £108m in loans and £147m in shares ... madness!

Football is crazy!

I received flak when I gave £250m as the rough number last year.

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To understand the management of a business, you have to look at where they spend and don’t spend money over time.

After relegation from the Prem, we signed a “experienced” players on long contracts and high wages, such as Murphy, Etihu, Best, and pretty much none since then - lesson learned.

The Academy gets £3m every year without a quibble, whereas coaching staff are, wherever possible, promoted from within.

There seems to be a limitless transfer budget for young, English attacking players - Rhodes, Rudy, Brereton, Armstrong, Chapman - and yet nothing at all for foreign talent (Portugeezers hangover?) and experienced defenders.

There’s no question in my mind the club is being run to minimize long, expensive commitments to wages on players and staff and to maximize the chance of capital gains on player trading, bought or homegrown. I can well imagine this strategy came from the two lots of consultants and won’t be changing soon in response to a run of bad results on the field.

That being the case, Johno won’t be taking over the first team anytime soon - he makes the club a lot of money where he is - and our best bet to stiffen the back line will be a modern-day John McNamee, Kevin Moran or Tony Gale, if such players still exist today.

Mowbray’s kudos with his bosses for winning promotion got largely spent on rewarding Mulgrew, Williams and Evans, so there’s next to no chance their contracts will be dumped. We are still far from a normal football club.

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Just now, Exiled in Toronto said:

To understand the management of a business, you have to look at where they spend and don’t spend money over time.

After relegation from the Prem, we signed a “experienced” players on long contracts and high wages, such as Murphy, Etihu, Best, and pretty much none since then - lesson learned.

The Academy gets £3m every year without a quibble, whereas coaching staff are, wherever possible, promoted from within.

There seems to be a limitless transfer budget for young, English attacking players - Rhodes, Rudy, Brereton, Armstrong, Chapman - and yet nothing at all for foreign talent (Portugeezers hangover?) and experienced defenders.

There’s no question in my mind the club is being run to minimize long, expensive commitments to wages on players and staff and to maximize the chance of capital gains on player trading, bought or homegrown. I can well imagine this strategy came from the two lots of consultants and won’t be changing soon in response to a run of bad results on the field.

That being the case, Johno won’t be taking over the first team anytime soon - he makes the club a lot of money where he is - and our best bet to stiffen the back line will be a modern-day John McNamee, Kevin Moran or Tony Gale, if such players still exist today.

Mowbray’s kudos with his bosses for winning promotion got largely spent on rewarding Mulgrew, Williams and Evans, so there’s next to no chance their contracts will be dumped. We are still far from a normal football club.

On one side we've got the routine of dipping into other clubs academies hoping to pick up a bargain and sell on for a profit. Davenport and Hart were two examples of this. I'm not convinced by any stretch of the imagination that either of those signings were made by the manager. My reasoning for that is the lack of first team opportunities for either. It is quite obvious to anyone that Hart is nowhere near good enough for what we need and yet he was signed last season and handed a new contract in January, Who was responsible for that?

I don't think it is beyond the scale of believability that Brereton was another one of those signings. It's clear that Mowbray hasn't trusted him in the team from the word go.

I accept we are still far from being a normal club. This concerns me going into an important summer. A normal club would already know its budget for the next 12 months and would have a head of recruitment and manager working away now on targets to they could strengthen even on limited funds. I've no faith such a thing is happening here. It seems nothing happens until the summit meeting when Madame takes stock of the last 12 months and decides on her next step. By which time we're playing catch up.

We still don't know who takes precedence in the hierarchy at the club.

Looking at the deals done last summer it is clear that Armstrong was Mowbray's man, and Chapman in January. Both conveniently fit into the young British likely to grow in value model. In terms of Brereton and Davenport I'm not convinced. Reed and Rodwell low risk - short term deals that were probably Mowbray's but approved due to lack of commitment required by the club financially. I imagine Soton are heavily subsidising Reed's presence here as they see the value in him playing in the Championship every week and we're probably so far off numbers wise Mowbray knows there isn't a cat in hell's chance on that front.

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