The authoritative Swiss Ramble provides authoritative and forensic analysis of club accounts from his Zurich fastness and today it is the turn of Blackburn Rovers.
If you want a low
score on Pointless for naming a Premier League champion, probably choose Blackburn
Rovers. It’s amazing to think that
Indian conglomerate Venky’s have been in charge of this historic club for over
ten years. In their early stewardship
they were an exemplar of getting everything wrong.
Rovers looked as
if they might mount a promotion challenge, but have faded a little
recently. I always enjoyed going there
and it would be good to see them back in the top flight.
A poor profit record
Since Venky’s
arrival in 2010, Rovers have only once made a profit – in 2012 when they were
last in the Premier League (boosted by £23m player sales). Since then, they
have managed to lose £165m in 9 years, despite benefiting from 4 years of
parachute payments.
Their loss
narrowed by £15.3m from £21.9m to £6.6m, mainly due to £13m profit from sale of
training ground. Revenue rose £1.0m (7%) to £14.5m, but profit on player sales
fell £2.5m to £0.6m. Expenses were cut £1.0m (3%), while other operating income
rose £2.7m to £3.3m.
Operating loss (excluding player sales, training ground sale
and interest) reduced from £24m to £20m. This is not too bad in the
Championship, where almost every club posts substantial operating losses, e.g.
Watford £72m and Brentford £53m (hefty promotion bonuses).
The financial
challenge is highlighted by the fact that their £14.5m revenue is firmly in the
bottom half of the Championship, miles below clubs benefiting from parachute
payments, e.g. Cherries £72m, Canaries £57m,
Watford £57m and Cardiff City £55m.
They no longer benefit from parachute payments, having
received £56m in the four years up to 2016. These are so significant that they
make it difficult for others to compete, e.g. in 2019/20 a relegated club
received £42m in year one, £34m in year two and £15m in year three.
Revenue increase was driven by growth in broadcasting, up
£2.1m (31%) from £6.8m to £8.9m, and commercial, up £0.8m (19%) from £4.0m to
£4.8m, which offset the COVID driven reductions in match day, down £1.9m (71%)
from £2.7m to just £0.8m.
Mid-table in terms of
loss
The £7m loss is mid-table in the Championship, much better
than the likes of Bristol City £38m, Reading £36m and Middlesbrough £31m in
2020/21. They did well to restrict the size of their deficit, given that there
was a full year of the pandemic.
That said, the loss
would have been £20m without the £13m profit from selling the Senior training
ground at Brockhall to a company set up by owners Venky’s (£17m sales proceeds
less £4m value in accounts). Cash payment is due by June 2023. The training
ground has been leased back to the football club.
Player sales and
purchases
Profit on player sales decreased from £3.1m to £0.6m, as
prior season included David Raya to Brentford. This is the lowest player
trading profit in the 2020/21 Championship, in stark contrast to the likes of Norwich,
Bournemouth and Watford, who all generated more than £50m.
Rlatively 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 4 years since then. However, this
season will look better, as it will include the £16m sale of Adam Armstrong to
Southampton.
The club only spent £1.6m on player purchases in 2020/21,
mainly Harry Pickering, Thomas Kaminski and Aynsley Pears, though they brought
in some interesting players on loan, especially Harvey Elliott from Liverpool. Spending less than a tenth of Brentford £22m.
Transfer spend has significantly reduced following
relegation from the top flight, exacerbated by an FFP transfer embargo. In
fact, their gross outlay was only £18m in the last 5 years, compared to £40m in
the preceding 5-year period. Expenditure down two years in a row.
Commercial income rose £0.8m (19%) from £4.0m to £4.8m,
which is mid-table in the Championship, sandwiched between Cardiff City £5.6m
and Brentford £4.5m. Less than half the £9.5m they earned in the Premier League
in 2011.
Average
attendance in 2019/20 (for games played with fans) was 13,836, which was firmly
in the bottom half of the Championship. Around half the 25,427 peak that
Blackburn enjoyed in the 2010 Premier League.
Wages
The wage bill
slightly increased from £25.6m to £25.7m, the club’s highest since 2015.
However, for some perspective, this was £11m lower than their first season
following relegation from the Premier League in 2013 (when they had parachute
payments). £26m wage bill was
again in the bottom half of the Championship. In fact, three clubs in the
division paid wages over £30m more than Blackburn: Watford £68m.
The wages to
turnover ratio decreased from 189% to 177%. This is obviously not great, but in
fairness most clubs in the very competitive Championship have unsustainable
ratios well above 100% (four of them over 200%).
Total directors remuneration increased 4% from £496k to
£515k, which is in the top 10 in the Championship. The payment for the highest
paid director also rose from £272k to £292k.
Debt
Debt fell £4m
from £156m to £152m, comprising £130m owed to Venky’s, a £14m bank overdraft
and £8m loan from the EFL. The owner’s debt was down £11m, as £19m additional
loan was more than offset by converting £30m into equity (partly to comply with
FFP). 152m debt was the third
highest in the Championship, only below Stoke City £187m and Cherries £165m. In
fact, they actually had the 10th highest debt in England at the end of the
2020/21 season.
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