Boycott Or Not?

[Tomphil2]

2 hours ago, oldjamfan1 said:

Raya another, I'm sure there are more. Phillips?

Yep its been the jewel in the crown and the only success of the Venky reign and i'm sure at times some people have wanted rid of it but wouldn't dare.

I think it fits their ethos though as breeding and growing things is in their nature of the core business, as is young cheap staff !

Financially its more than washed its face but not sure in football terms they've made best use of a lot of the assets its produced.

[wilsdenrover]

1 hour ago, Mashed Potatoes said:

I'm afraid you are misinterpreting this. Indian residents will be treated on "their" overseas income and losses as you state. But the losses of the football club are not losses of an Indian resident - they are losses of a UK resident,the football club. For Venkys in India a tax loss only crystallises if/when they dispose of the UK company through which they are injecting cash in to the football club - but that loss will be a capital loss which under Indian tax law can only be offset against capital profits, not trading profits. 

If it doesn’t count, how do UK earnings ever count as a loss for an Indian resident?

[Tomphil2]

Again....VH group funds VLL loses so that on the company accounts will go in the expenses column and be draining some operating profit/income in India.

Ergo overall it's keeping the tax bill down a bit for the parent company.

[aletheia]

3 hours ago, M_B said:

If someone had enough will and enough money to buy Rovers and Venkys were willing sellers,

So that's 3 conditions. There may well be people out their with the will  (so one condition perhaps satisfied) but once the Raos slap a huge (unreasonable) figure on the asking price and do not want to sell then seems we are stuck with them.

[Mashed Potatoes]

58 minutes ago, wilsdenrover said:

If it doesn’t count, how do UK earnings ever count as a loss for an Indian resident?

They count if an Indian resident is trading in the UK its own right, usually through a branch. But that is not happening with us.

Edited 3 hours ago by Mashed Potatoes
word omitted

[Mashed Potatoes]

11 minutes ago, aletheia said:

So that's 3 conditions. There may well be people out their with the will  (so one condition perhaps satisfied) but once the Raos slap a huge (unreasonable) figure on the asking price and do not want to sell then seems we are stuck with them.

 

13 minutes ago, Tomphil2 said:

Again....VH group funds VLL loses so that on the company accounts will go in the expenses column and be draining some operating profit/income in India.

Ergo overall it's keeping the tax bill down a bit for the parent company.

It only goes in the expenses column if the investment is written down. But 2 points :

1. That assumes the writedown is an allowable deduction for Indian tax purposes. I don't know.

2. Last time I looked at the VLL accounts there was a statement along the lines that the directors of that company believed the investment in the football club -equity and debt - was worth what VLL had put in. In that case I don't see how the Indian holding company could claim a writedown.

[Dreams of 1995]

Masher is right on this one chaps. Remember going down this rabbit hole myself one night

[RevidgeBlue]

1 minute ago, Dreams of 1995 said:

Masher is right on this one chaps. Remember going down this rabbit hole myself one night

If that's correct and If they're not getting any form of tax relief whatsoever elsewhere from their ownership of the Club, that makes their continued presence even more inexplicable doesn't it?

[Tomphil2]

I'd say if there are any loopholes these lot will be in them and through them in a jiffy via their whizzkid accountants.

I don't want to be stereotyping but ducking and diving and knowing every avenue where money is concerned is in the very DNA of Indian business culture.

Also there does remain the real possibility they have that much annual disposable income that they just aren't that bothered but have simply fallen out of love with their English baby.

And it's family...... us !

[Dreams of 1995]

25 minutes ago, RevidgeBlue said:

If that's correct and If they're not getting any form of tax relief whatsoever elsewhere from their ownership of the Club, that makes their continued presence even more inexplicable doesn't it?

It’s always been a confusing thing for me

I think the reality is that we are just another part of a much larger portfolio to them. They don’t know anything about football. It is a hobby turned liability. A liability that they are happy to keep

Whilst they won’t necessarily offset tax what they do is loan. Those loans then sit as an asset on the Venkys book. So all £150m they have here is book value for VH Group. They can write off those loans whenever they wish. The existence of the loans is what will drive buyers away as any sensible purchase price requires Venkys to either waive the loans or turn to equity - the buyer will never, ever want the equity option. Nor will they want to pay Venkys 150m. Nor will Venkys want an instant -150m hit on their balance sheet 

It is all accounting. Owning rovers doesn’t make the Venkys richer. In their group accounts, the loans are wiped out - as a group company cannot own a debt to themselves. One day the Venkys will have to waive the loans and that loss will then materialise on a group level. If you start to see Venkys wind the debt down, that is a sure fire way to know they are approaching time to leave. I don’t believe there is an appetite for them to waive the book value of the loans because they would have done it by now to improve Rovers position. The higher the loan debt, the worst our net asset position is

This is why folk who keep saying Venkys pay the bills just aren’t understanding accounting. Those losses will forever remain. The only way they’d be paying it is if they actually donated the cash. By subsidising the club with loans they are basically delaying having to admit they have lost money

Sounds quite apt considering this is Venkys. Proactivity is not their mantra 

Edited 2 hours ago by Dreams of 1995

[aletheia]

MP, given that you are clearly very knowledgeable in these matters:

1 Why are they (the Raos, one or all) still here (presuming the club is theirs to sell) given that they appear to have no interest.

2 Under what circumstances would the Raos sell? Do you have any potential figures here?

3 Do you believe that the continued ownership by the Raos is a help or a hindrance to the progress of Blackburn Rovers?

This is presuming that they are in control and not some puppet of other agencies.

[JBiz]

2 minutes ago, aletheia said:

MP, given that you are clearly very knowledgeable in these matters:

1 Why are they (the Raos, one or all) still here (presuming the club is theirs to sell) given that they appear to have no interest.

 

2 Under what circumstances would the Raos sell? Do you have any potential figures here?

 

3 Do you believe that the continued ownership by the Raos is a help or a hindrance to the progress of Blackburn Rovers?

This is presuming that they are in control and not some puppet of other agencies.

 

I know you didn’t ask me, but;

 

1. Dreams hit the nail on the head with this - we’re just a portfolio business, in their portfolio of hundreds of businesses - I would imagine it’s the equivalent to one of us losing £20 down the settee, or forgetting to sell something you don’t use, that’s been sat in the garage collecting dust. 

2. Again -this is difficult to guess without knowing them. I would argue that we’re easier to sell in the top division however.

3. I think anyone with a semblance of basic brain function would say hindrance

[aletheia]

Ah dreams, thanks, very useful post.

Could you clarify for me -not the best at finances.

1 Is the 150m increasing at all year on year?

2 I get that they will have to eventually write off that loan, I get that you say they won't want to do it all at once. Could you explain how we see that they are 'winding it down'?

3. What could precipitate them writing it down? Could they just keep this going indefinitely? 

 

 

[aletheia]

JBiz -edit thanks for the reply

On 2, you would think then that active measures would be taken to achieve that top division. That doesn't seem to be on the agenda given statements by RG and actions of the hierarchy.

edit again

Indeed, on 3 but just seeing if MP would agree with us 😉 

Edited 2 hours ago by aletheia

[Tomphil2]

8 minutes ago, aletheia said:

Ah dreams, thanks, very useful post.

Could you clarify for me -not the best at finances.

1 Is the 150m increasing at all year on year?

2 I get that they will have to eventually write off that loan, I get that you say they won't want to do it all at once. Could you explain how we see that they are 'winding it down'?

3. What could precipitate them writing it down? Could they just keep this going indefinitely? 

 

 

Might be wrong but i assume it's if they start converting big loans into equity?

 

[aletheia]

Sorry Tom still none the wiser -needs to be basic for me 🙂 

[Tomphil2]

8 minutes ago, aletheia said:

Sorry Tom still none the wiser -needs to be basic for me 🙂 

Basically means you don't owe us that anymore but we've added to the value of the club so we'd want more for it.

Not that they'd get it obviously but it's just a way of writing debt off.

[JBiz]

35 minutes ago, aletheia said:

JBiz -edit thanks for the reply

On 2, you would think then that active measures would be taken to achieve that top division. That doesn't seem to be on the agenda given statements by RG and actions of the hierarchy.

edit again

Indeed, on 3 but just seeing if MP would agree with us 😉 

You could say they are putting active measures in place, but failing badly because the hierarchy have zero acumen or care for the job at hand, and they view the club as one of their “£20 down the back of the sofa” portfolio business, thus not bothered!

I do know though, that anyone with a sense of financial responsibility, interest and care for an asset of community interest and value beyond money, and with a sense of pride in their actions and the impact they have on others would’ve never put Blackburn Rovers in this situation.

[Mashed Potatoes]

52 minutes ago, aletheia said:

MP, given that you are clearly very knowledgeable in these matters:

1 Why are they (the Raos, one or all) still here (presuming the club is theirs to sell) given that they appear to have no interest.

 

2 Under what circumstances would the Raos sell? Do you have any potential figures here?

 

3 Do you believe that the continued ownership by the Raos is a help or a hindrance to the progress of Blackburn Rovers?

This is presuming that they are in control and not some puppet of other agencies.

 

Thank you for the complement. To answer your questions :

1. I don't know; if I had to guess I would say they do not like to accept defeat. I don't think there is any evidence that there is anything untoward at the club to hide.

2. The most likely circumstances for a sale are likely to be some kind of pressure from within India. My guess is that the price they would be looking for if they are not forced sellers is way in excess of what  purchasers would be looking to pay.

3. After 15 years of ownership the only area of the club that is not markedly worse than before is The Academy. Therefore you would have to conclude that their continued ownership is a hindrance. I believe they are in full control of the club and  don't believe that they are puppets of any outside agencies. I believe they do want the club to succeed but lack the skills to achieve that ; I don't think there is any evidence that they have deliberately engineered relegations.

[Drunx2002]

Soooo, this being the boycott thread and all.... 

Is there a plan for phase 2? I've had a quick look through here and the protest ideas and none the wiser? 

[RevidgeBlue]

1 hour ago, Dreams of 1995 said:

It’s always been a confusing thing for me

I think the reality is that we are just another part of a much larger portfolio to them. They don’t know anything about football. It is a hobby turned liability. A liability that they are happy to keep

Whilst they won’t necessarily offset tax what they do is loan. Those loans then sit as an asset on the Venkys book. So all £150m they have here is book value for VH Group. They can write off those loans whenever they wish. The existence of the loans is what will drive buyers away as any sensible purchase price requires Venkys to either waive the loans or turn to equity - the buyer will never, ever want the equity option. Nor will they want to pay Venkys 150m. Nor will Venkys want an instant -150m hit on their balance sheet 

It is all accounting. Owning rovers doesn’t make the Venkys richer. In their group accounts, the loans are wiped out - as a group company cannot own a debt to themselves. One day the Venkys will have to waive the loans and that loss will then materialise on a group level. If you start to see Venkys wind the debt down, that is a sure fire way to know they are approaching time to leave. I don’t believe there is an appetite for them to waive the book value of the loans because they would have done it by now to improve Rovers position. The higher the loan debt, the worst our net asset position is

This is why folk who keep saying Venkys pay the bills just aren’t understanding accounting. Those losses will forever remain. The only way they’d be paying it is if they actually donated the cash. By subsidising the club with loans they are basically delaying having to admit they have lost money

Sounds quite apt considering this is Venkys. Proactivity is not their mantra 

Ah, thanks. That actually rings a bell with a post Herbie made a while ago.

So to summarise, there's no benefit whatsoever to them holding on but they're trying to delay the fateful day for as long as possible whereby they have to admit (for accounting purposes) they've dumped nearly a quarter of a billion pounds on Balackburn Rovers as it would affect the value of the group as a whole?

The problem with that is whilst they might try and conceal it or pretend it isnt happening, surely in reality the debt is only increasing and if they're trying to conceal it or put it off, surely finances do matter a great deal and the debt isn't irrelevant to them at all?

[Hasta]

20 minutes ago, Mashed Potatoes said:

3. After 15 years of ownership the only area of the club that is not markedly worse than before is The Academy. Therefore you would have to conclude that their continued ownership is a hindrance. I believe they are in full control of the club and  don't believe that they are puppets of any outside agencies. I believe they do want the club to succeed but lack the skills to achieve that ; I don't think there is any evidence that they have deliberately engineered relegations.

But are unable to see that almost everybody they ever put in to run the club has been incompetent. After the Shebby Singh era they should have employed the best person to run the club, give them a set budget and let them get on with it without interference. The problem is they knew nothing of the football landscape, wouldn’t have any clue how to interview for that role and their only ‘trusted’ people had already put Kean in charge and lost them millions.

In Pasha, they feel they have a safe pair of hands who won’t screw them over as they had done to them in the past. And as he cuts costs they are happy. And again, they have no understanding of football so are unaware how the club is currently heading backwards in terms of infrastructure, player quality and reputation.

Thats my view on it anyway.

Edited 1 hour ago by Hasta

[RevidgeBlue]

9 minutes ago, Drunx2002 said:

Soooo, this being the boycott thread and all.... 

Is there a plan for phase 2? I've had a quick look through here and the protest ideas and none the wiser? 

That's what I want to know as well.

For me there should have been plans for different types of protest  for each of the next 2 home games lined up weeks ago.

Can't just have one stab at a boycott and leave it for a month or two. It has to be constant.

[Dreams of 1995]

1 hour ago, aletheia said:

Ah dreams, thanks, very useful post.

Could you clarify for me -not the best at finances.

1 Is the 150m increasing at all year on year?

2 I get that they will have to eventually write off that loan, I get that you say they won't want to do it all at once. Could you explain how we see that they are 'winding it down'?

3. What could precipitate them writing it down? Could they just keep this going indefinitely? 

 

1 - hard to say. Venkys last wrote off around £20m a few seasons ago. That could have been for a variety of reasons but the consequence improved Rovers. It is likely that debt will go up but last year Venkys gifted 4.5m in share capital but we then took out less friendly debt in the form of 13m in bank overdrafts. Without seeing how Venkys plan to subside losses this year it’s difficult to answer this. Signs point to them being unwilling or unable to loan anymore though. This will become even worse on relegation, where directors loans are forbidden from offsetting P&S, which means we rely on direct goodwill or we cut more

2 - We would start seeing periodic conversions of loans (debt) to equity. This will reduce the clubs debt but show back in VLL / VHG as a loss. This is when their loss ‘becomes real’.

3 - They technically can keep it going forever. But they won’t. The parent group will have financial rules for ‘debt wipe off’ in order to show a more true picture. I don’t know what that period is for Venkys but at some point “group” has to accept a loss has happened. 
I also think the EFL requires them to write off after a period to show the model is not unsustainable. I don’t know those rules though but I bet they exist 

Edited 1 hour ago by Dreams of 1995

[Dreams of 1995]

27 minutes ago, Mashed Potatoes said:

 

3. After 15 years of ownership the only area of the club that is not markedly worse than before is The Academy. Therefore you would have to conclude that their continued ownership is a hindrance. I believe they are in full control of the club and  don't believe that they are puppets of any outside agencies. I believe they do want the club to succeed but lack the skills to achieve that ; I don't think there is any evidence that they have deliberately engineered relegations.

I disagree with this Masher

I think the Vs are cold, hard business people who will not do a thing which doesn’t benefit them.

There are several ‘add backs’ in P&S rules. They are basically things which sit outside the P&S calc. They are - charity contributions, women’s football, academy’s and investment infrastructure (although depreciation can be used on this)

I believe the Venkys only fund the academy because it is the only “add back” which can substantially reduce their yearly contributions, through player sales, which sit in the “book” as 100% profit. They show no willing to spend on women’s football (it’s not too expensive) and community outreach / infrastructure is non existent. The only add back they actually care about is the one which benefits them

Edited 1 hour ago by Dreams of 1995