Skip to main content

Blackburn Rovers lose £172m under Venky's

The tireless Swiss Ramble has been casting his forensic eye over the 2019/20 accounts of Blackburn Rovers.
The club’s loss widened by £4m from £18m to £22m, as revenue fell £3.2m (19%) from £16.7m to £13.2m, while operating expenses grew £3.6m (10%), partly offset by profit on player sales rising £2.5m to £3.1m and £0.6m government furlough income.

Since Venky’s arrival in 2010, Rovers have only once made a profit – in 2012 when last in the Premier League (boosted by £23m player sales). In this period they have lost £172m, some achievement considering they had two seasons in top flight followed by four with parachute payment.

Debt increased by £14m from £142m to £156m, thanks to another loan from Venky’s, who the club now owe £141m. There is also a £14m bank overdraft (guaranteed by Venky’s) and a £0.6m loan from the EFL.   The £156m debt was the second highest in the Championship, only below Stoke City £187m. In fact, they actually had the 9th highest debt in England at the end of the 2019/20 season, partly because the last time the club’s owners converted debt into equity was back in 2011

Most Championship debt is provided interest-free by owners, which is the case with Venky’s loans. However, interest still increased from £495k to £614k, due to paying 2.65% over LIBOR on the overdraft. Only 5 clubs in this division paid more than £1m interest

Relatively small losses in 2016 and 2017 were due to decent profits from player sales, but they have only made £5m from this activity in the last three years. Performance was no better in 2020/21, as no meaningful sales were made in the season just gone.

The financial challenge is highlighted by the fact that their £13.5m revenue was third lowest in the Championship, only above Preston and Wigan. For some perspective, this was only around a quarter of Fulham £58m, Leeds £54m and WBA £54m.

Although the£22m loss is obviously not great, it is by no means the worst in the Championship. Only three clubs posted a (small) profit in 2019/20, while the largest losses were made by Stoke City £88m.

Revenue has more than halved since their £30.4m peak in the Championship in 2014. It has dropped £41m (75%) since relegation from the Premier League. In the first four years they benefited from £55m parachute payments, but they lost this advantage in 2017

All three revenue streams were lower, mainly due to COVID: commercial dropped £1.5m (27%) from £5.5m to £4.0m; match day fell £1.0m.  Broadcasting remains the most important revenue stream, accounting for 50% of their total revenue, followed by commercial 30% and match day 20%%) from £3.7m to £2.7m; and broadcasting was down £0.6m (8%) from £7.4m to £6.8m.  

Despite the revenue decrease, costs still grew, due to investment in the squad “to be competitive”, as wages rose £3.2m (14%) from £22.4m to £25.6m.   For some perspective, this was £11m lower than their first season following relegation from the Premier League in 2013 (when they had parachute payments).

The wages to turnover ratio increased from 134% to 189%, which was even worse than the 187% in League One two years ago. Most clubs in the Championship have unsustainable wage bills, well over 100% of revenue, but Blackburn’s was the second highest in the division.

Profit on player sales increased from £0.6m to £3.1m, largely from David Raya’s move to Brentford, though this was one of the lowest profits for this activity in the Championship, far below the likes of WBA £29m, Bristol City £26m, Fulham £25m and Brentford £25m.

Transfer spend has significantly reduced following relegation from the top flight, exacerbated by an FFP transfer embargo. In fact, their gross outlay was only £17m in the last five years, compared to £45m in the preceding five-year period. Low expenditure again in 2020/21

 


Comments

Popular posts from this blog

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s...

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000.  The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts.  Money brought in from football has gone up too. Match day ...

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to ...