Herbie6590

1. Distress sale of the highest wage earners 2. Relegation clauses inserted into contracts to reduce wages/bonuses 3. Redundancies of non-playing staff 4. Sale of fixed assets (ground, training ground) 5. Securitisation of future season ticket revenue ...all of these have been tried at various times by various clubs...

Don’t forget FFP rules inhibit what owners can put in. It’s a t/o related formula in the Championship so with low crowds & low sponsorship we are always going to be struggling.

They absolutely aren’t, but how many potential suitors with the required financial clout are out there to take this on ?

We got relegated & lost TV money. So if Venky’s go, we have to find a new owner willing to cover weekly cash flow deficits or eliminate those deficits. Only two ways to eliminate- increase t/o (profit) or reduce costs to make good £300k per week. Venkys out means an alternative is required.

Accrington Stanley make a profit

Aren’t these tailored ads which reflect your search history ? ?

I agree totally, it’s of their own making, they are effectively paying a tax on their own naivety but my comment was relating to what we would need from a new owner. A new owner would either have to decide whether to reduce costs to breakeven, fund the difference or somehow persuade fans to contribute £300k per week. Realistically, the only viable source for £300k per week is Premier League TV money....

They are not taking money out...they are moving it around their group companies. It’s the corporate equivalent of moving money between a cheque account and a savings account. It’s a transfer.

The only external debt is the overdraft which costs us £400k p.a. - Venky’s don’t charge interest on their debt. The losses that they fund are the running costs of the club (in other words wages). Any new owner would still have to decide between funding that £17m gap themselves, reducing costs by that amount or increasing turnover (& profit) sufficient to bring in roughly £17m pa.

What about the bit where the new owners put in £17m per annum ?

It’s not inconceivable; it’s often used when a parent company buys a service on behalf of the group & cross charges the subsidiary. It’s not material in the great scheme of things.

Why ? Group companies move around cash all the time & charge inter company fees for services provided. It’s really not at all unusual. Ultimately Venky’s own both companies, they’re just moving money around their own business ?‍♂️

Looks like some kind of “management fee” or similar...nothing sinister IMHO

Forget it....found ‘em ?

Jim - where are those Op Ex numbers from....struggling to find them if you can help....??

I’m not recognising the numbers that are quoted....if someone can point me to the section in the accounts I’ll have a go...

The overdraft is just £11m & that will largely be to ensure payments go through the bank a/c smoothly. The rest of the debt is intra-Group so there’s nothing to pay off. They borrow it from themselves. The club runs at a loss. Unless someone covers those losses we go bust. Venky’s are subsidising Blackburn Rovers to the tune of £336k net per week. A new owner would have to cut costs by that amount, stump up the same subsidy or increase turnover by that amount to keep us in business.

I agree, I didn’t understand their motives on Day 1 & nothing that has happened subsequently has shed any light on this. One thing is certain, it’s been an expensive hobby...

To all intents & purposes, they are the same thing, VLL is essentially just a holding company.

Correct. The shareholding is what is sold...at an agreed price...which is based on the value perceived by the buyer.

If I was Venkys head of marketing I doubt that I would ever have suggested what they have done as being a positive way of improving their profile TBH. What they haven’t done (yet...) at least is walk away. But common sense suggests that there must come a point where they say enough is enough. The acid test of their integrity is what form that might take....orderly or anarchic ?

This is not so, interest payable to the bank is clearly dependent upon borrowings. You reduce the borrowings, you reduce the amount of interest payable. Interest payable has reduced dramatically (roughly two thirds) so in a stable interest rate environment, average borrowings must have reduced similarly. Venkys have reduced external debt & funded more themselves interest free, that’s why the bill has reduced. Funds from player sales are part of income. They are shown in the accounts. Venkys fund our losses from their funds, I’m not quite sure how you arrive at the conclusion that they “don’t appear to pump money in to reduce external debt” when the numbers point to exactly the opposite ? BTW, I say this every time the accounts are updated...I am no Venkys apologist but if we are going to criticise them, let’s do it based on facts because it makes for a valid argument.

The short answer is it depends....which countries, what tax legislation & cooperation agreements are in place & to a lesser extent how good their accountants are. Simplistically, subsidiaries making losses offset those losses to reduce the parent company tax bill. This is normal practice for multi national companies and is why accountancy firms have teams dedicated to optimising this for their clients...at a price.

Who in ?

Interest paid has reduced by two thirds in the last two years from £1.5m to £400k reflecting reduced dependency on external borrowing