Back in the 1990’s Blackburn Rovers where the Manchester City or Chelsea of the then First Division – 20 years on and they teetering on the precipice of financial regulation and penalty. Where did it all go so wrong?
As the financial reports for the tax year to June 2013 are were published earlier this month, it did not make for good reading for Blackburn Rovers fans. Following relegation and a dismal showing last season, their mood was made no better by the news that a club once renowned for its savvy dealings and operations on a relative shoe-string – once thought to be one of the best run clubs in the English game – was operating well outside of its means.
According to reports, the club currently has a wages to turnover ratio of 136%, meaning that it must find an additional £10m per year just to continue to pay the players and the staff employed by the club – not taking in to account transfers. Although last year the club posted, surprisingly, a profit over the year, this year’s report highlights a £36.5m loss.
When the Venky’s bought the Lancashire club and announced they would be signing big and dipping in to their deep pockets for the likes of Ronaldinho to propel the club to the Champions League within 2 years – many laughed. However, looking back now, they weren’t a million miles off, the only difference being that the money has been spent on a series of mistakes and the backing of bad advice and decisions. I wouldn’t be surprised if the amount spent on average, over the hill players, agents fees, manager and player pay-offs and court cases wasn’t near a magical sum that would bring you a Brazilian Superstar. And I don’t mean Bruno Ribeiro.
Anyone looking at the club 3 years ago would have a seen a club out-performing its town’s status, but doing so because it was so well run. A tight wage structure, a limit on transfer spending, and only spending the money on players deemed worthy of the shirt. Fast forward to the present day and not only are the names in the team relatively un-recognisable, the background staff have all changed, and with them the savvy running of the club. Instead of managing year upon year to pay the bills, with a financial structure which roughly made ends meet (turnover being the same as spending), we have a club trying to recover from nearly spiralling to League 2 and potential administration. It begs the question, where did it all go wrong? The simple answer is the sale of the club to foreign owners with no association or real interest in the club or town – but I think that would be unfair to the owners. They have obviously put their money where their mouths are and as a result shown a commitment, it is what they have spent that money on which has landed them in the current predicament.
1) When they first bought the club, they signed the clubs stars up to new and improved contracts, you would imagine, to fend off interest from other clubs. The likes of Samba, Robinson, Salgado, Roberts and Nelson all received new deals, presumably on more money. Yet a few months down the line they were all sold, probably for nowhere near their value when the Venkys came in. The likes of Salgado, Nelson and Roberts went for nothing and before this, were seemingly not allowed to play for the club. During this time there is a good chance that the clubs wage structure was changed, impacting on the wages to turnover ratio; and combine this with poor performances, which could arguably have been improved had those who were ‘injured’ played , the situation with the league table could have been different – reflecting higher prize money come the end of the season.
2) One of the Venkys first big money actions was to bring Roque Santa Cruz in on loan from Manchester City for six months, at the price of paying his £90k a week from January until May (roughly over a million pounds in wages). The wage structure was well and truly shattered, and to make matters worse, he didn’t even score a single goal, possibly not a single assist at the same time.
3) Following relegation from the Premier League, part of the master plan for immediate redemption was to hire Malaysian football guru Shebby Singh, on a reported £1m-a-year salary. The impact he had was phenomenal: he alienated and insulted one of the longest serving players at the club; backed Steve Kean and his Portuguese scouting network; orchestrated the sacking of at least one manager; and generally just poked his beak in when it wasn’t needed. The best times last season and this season have been when he has been on the other side of the world, unable to meddle in club affairs.
4) The second action following relegation from the top flight was to recruit experienced pros capable of steering a young team back to the Premier League. At the time, I don’t think you will find many Blackburn Rovers fans who were not at least slightly optimistic of the season ahead with Danny Murphy, Nuno Gomes and Dickson Etuhu. However, as the season unfolded the players saw less and less game time, and in the case of Murphy, seemed less and less interested in performing for the club (when news broke last month that he had retired from football I was shocked – I though this had happened 10 months ago). These players again came in on high salaries to help with Steve Kean’s ‘project’ but were unable/unwilling to cope with the physical and mental demands of a long Championship season. Couple this with the large pay-offs Murphy and Gomes have received over this summer just to get them off the books, and you have a double financial hit. It was an almost “gamble or bust strategy” but in the end they got neither and are right back where they started from, perhaps in a worse predicament having spent the money and achieved nothing.
5) Since they bought the club numerous rumours have conspired and progressed in to conspiracy theories – one of the most common, shared and publicised is the role of agents in the running of Blackburn Rovers. Rumours have suggested that certain groups played a large part in the buying of the club and have subsequently been rewarded with business for their players, others argue that they, for a short time, were the ones running the club and making the decisions. Either way, the £3.5m spent on agents fees in the summer running up to their first season in the Championship is atrocious. What is even more worrying is the players that were signed at that time – the only one with any positive impact on the club was Jordan Rhodes, and to be honest, any fee was worthwhile as he single-handedly kept the club in the division last time out. At times, the fees received by agents were significantly more than the fee paid for the player, which in many cases was £0.00p. An untapped market Mr Kean????
6) Perhaps the most significant contributor to the financial situation is the unrest behind the scenes up in the boardroom. Starting with Kean – the man was rewarded for failure. He took the club down a division, decimated gates in the process and alienated lifelong supporters, yet was rewarded with a new contract, which, if had lasted the duration, would have earned him a reported £14.9m, based on a £1m per year standard salary increasing annually depended on performance. The only good thing he did for the club financially was resign, costing the club only £500,000 rather than potential millions. The Venkys are not blameless here though – they passed up multiple options and times to sack him, before offering him a new contract: slander towards Allardyce, poor team performance, loss of fans (gates dropped by 7,500 during his tenure), and drink driving offences – yet they continued to support and reward him to a point where a bond with the lifeblood of the club, its supporters, was nearly broken.
Once Kean had gone, they still did not learn from their mistakes – anyone looking in could see the club needed an experienced manager to either steady the ship or build a team capable of challenging for promotion, but instead they brought in ex-player and fan favourite Henning Berg who was untested at this level and in this country, and then rookie Michael Appleton who had done nothing to suggest he was capable of either of those things. To make matters worse, both were sacked and paid off accordingly (£2.25m for Berg and £500,000 for Appleton) – yet more money that did not need to spent. At least now they seem to be giving Bowyer the chance to do things his way and without interfering or suggesting his position was under consideration. This may be a realisation that things couldn’t continue the way they were, or it may be their only option given the financial situation.
7) The biggest mistake of them all – putting John Williams in a position where he no longer found a use for himself at the club. The man had run the club on solid footing for numerous years and made it one of the most attractive clubs for any manager, as well as the best-case example of how to run a football club. Yet upon buying the club, the Venkys used him for less and less tasks and functions, to the point where he no longer saw a need to be employed by the club. He left and went o Manchester City who subsequently won the league and have curbed their spending – coincidence, I think not.
If Blackburn post a loss of more than £8m by the end of this season, they will be hit with a transfer embargo. If this happens and the club have won promotion, they will be fined considerably. The worry on Blackburn fans minds is that the only way to make the £10-15m extra needed to keep running the club is to sell its prize assets, one in particular, Jordan Rhodes. If that happens, promotion will not happen, and along with it, all the good work undertaken by Bowyer completely forgotten. It is a sticky situation the owners have found themselves in, but it is all their own doing. As a reported billion pound business, you would expect better. Let’s hope they have the business knowledge to avoid the impending sanctions, or at least a contingency to get the club back on its feet.