Blackburn Rovers: debt, silence & stagnation

by | Aug 17, 2016

The early stages of the season are probably not the right time to be drawing too many inferences from league tables, but Blackburn Rovers’ position at the bottom of the Football League Championship mirrors increasing disillusionment at the way in which the club is being run at the moment. On the pitch, Rovers’ season couldn’t have started much more inffectively. On the opening day of the season, they were handed a sharp reminder of the amount of work required to be done if the club is to get anywhere near challenging for a return to the Premier League. Three goals down in twenty-five minutes against newly-relegated Norwich City, they ended up losing the match by four goals to one. This was followed by some respite in the form of a League Cup win at Mansfield Town, but a return to league football last weekend brought the return of those familiar inconsistencies. A disjointed performance at newly-promoted Wigan Athletic on Saturday ended in a three-nil defeat.

It’s been six years since Venky’s, an Indian family-run chicken processing company, took ownership of Blackburn Rovers, and four years since the club last played Premier League football. Since Blackburn’s return to the Football League, the club has been largely treading water in the Championship, but over this period of relative tranquility in terms of league positions the club has been haemorrhaging cash left, right and centre. The last set of financial accounts filed at Companies House make for grim reading. The club’s debt was listed as £104.2m, and with anything approaching a return to the Premier League – the only place where this sort of debt could even be considered manageable – looking less likely than at any point since they fell out of it, supporters have become increasingly concerned that a similar fate to that which has befallen local rivals Bolton Wanderers – or perhaps even Blackpool – could be on the horizon for the club.

The club’s financial position may well be even worse than revealed by its last set of financial accounts, as well. These accounts were to the end of the 2014/15 finanancial year so do not take into account last season, and parachute payments from the Premier League following the club’s relegation in 2012, which were worth an estimated £10 million in 2014/15 and 2015/16, have now ended. If the club has been fundamentally unable to balance its books with these in place, argue critics, how on earth earth will it ever be able to do so without them? After all, for the 2014/15 season broadcasting revenues – under which parachute payments can be categorised – made up 73% of the club’s revenue. This over-dependence on television money, more specifically Premier League television money, has been a significant achilles heel for many clubs relegated from the top flight over the years but in Blackburn, a modestly-sized Lancashire town with distinctly finite resources in terms of what can reasonably be leveraged from other potential revenue streams including supporters, this has felt more accentuated than at most.

Since taking ownership of the club in 2010, though, it’s difficult to avoid the conclusion that many of the wounds that the club has suffered have been self-inflicted as opposed to circumstantial. The signs weren’t good when the new owners sacked Sam Allardyce as manager shortly after arriving at the club in 2010 with Blackburn in thirteenth place in the Premier League, a position that all connected with the club would gladly kill for now. This was followed by a break with the club’s previous policy of relative parsimony in the transfer market with the aim of breaking even on the aim of getting close to breaking even on the annual accounts. This policy seems to have been fired from a cannon into the sun under Venky’s, none of which would be too much of a problem had the club not seen such atrocious results from their dealings for much of the owners’ time at the club. Blackburn made a loss on transfer market dealings in three of the first four of Venky’s years in charge of the club. This makes for a toxic mix, especially when combined with suddenly vaporised Premier League television money. 

Of course, there are many questions concerning that turbulent period in the club’s history that have never been satisfactorily answered and perhaps never will be, most critically involving the extent of control held over the club by the agent Jerome Anderson. Anderson claimed to be little more than a consultant helping the new owners of the club to find their feet, but few have ever believed his involvement at Ewood Park to have been as benign as he frequently claimed. The sacking of Allardyce and his replacement with Steve Kean, a client of Anderson who would later settle out of court over derogatory comments made about the man now managing the England team on a video released to YouTube which was viewed more than 600,000 times, raised eyebrows, but not as many as several of the club’s subsequent transfer dealings or the clear-out of senior management that took place early in 2011. Perhaps Venky’s were naive in getting involved with someone with an interest as vested as Anderson’s may have been, but ultimately responsibility for the club’s financial wellbeing rests with its owners and directors and those annual accounts do not paint a pretty picture of the club’s recent past, its present or, with only a little extrapolation required, its future. 

With financial losses such as these, two matters immediately stand out, even if we work to the assumption that the mistakes of the past cannot be undone. Firstly, the only way that the financial losses of the last few years will ever be likely to be addressed will be in the Premier League. The likelihood of somebody stepping in and paying down £104.2m of debt is vanishingly small, particularly if the club is not showing any signs of moving in an upward direction already. Secondly, the club has no option but to wean itself away from this dependence on television money if it is not to return to the Premier League very soon. Considering this, the club clearly needs to work considerably harder on fan engagement, because commercial contracts are likely to be limited in value to the club, for the time being at least and the club is going to need to depend on supporters for revenue without as much television money coming through.

Communication – or a lack thereof – on the part of the club, however, remains a significant thorn in Venkys’ side. In May of this year, two Blackburn supporters, Ian Battersby and Ian Currie, made a proposal for joint owner of the club through their company Seneca Partners, claiming to speak to a club director and a representative of Venky’s UK with a view towards moving to due diligence. They heard nothing back despite repeated requests, only for the club to release a statement a couple of weeks later which said:

We have come across certain media reports that we have received a proposal for joint ownership of the club.

We wish to clarify that there is no truth in these reports. We, the owners of the club, have no intention of selling or diluting our stake in any manner.

We are totally and absolutely committed to supporting the club and endeavour for its advancement in all aspects.

Now, if the owners don’t wish to sell up, that is ultimately their prerogative, although when we consider the state of the company accounts and the extent to which the reputation of the company has been dragged through the mud as a result of their involvement with Blackburn Rovers it becomes difficult to understand why they’re not biting Seneca’s hands off, but to issue a statement suggesting that these claims are false simply doesn’t make any sense, and only lends to the belief of the large number of Blackburn supporters that there may have been more going on behind the scenes at the club over the last five or six years than the owners are prepared to admit. There’s a degree of supposition behind such thoughts, of course, but considering everything it’s easy to see where such ideas come from.

When the club isn’t acting in a manner that – whether rightly or wrongly – is interpreted by supporters as being shifty, it’s buying enough rope to hang itself with. At the end of last season, Blackburn Rovers needed a new manager  and after much deliberation – presumably – the decision reached was that the right man for the job was Owen Coyle. Now Coyle has had some success in the past, but he was also the manager who returned Blackburn’s bitterest rivals Burnley to the Premier League for the first time in thirty-three years in 2009 before jumping ship to go to Bolton a few months later. His past would most likely be largely forgiven if he was to steer the club back to the Premier League at a canter but few would have considered that likely at any stage over the last eighteen months or so, and ultimately Blackburn are left with a manager who has been living on borrowed time with many supporters before a ball was even kicked this season. It’s not to say that Coyle is an incompetent to suggest that he may well have been the wrong choice for this club at this particular time.

This evening, Blackburn Rovers travel to Cardiff City for a league match, bottom of the table and having conceded seven goals in their first two matches of the season. Cardiff isn’t an especially happy club at the moment, either, and many in the division would consider this a match from which a stuttering team could really kick-start its season. We shall see whether this happens or not, but supporters are already planning further protests, a petition has been set up calling on the Football Association to investigate the running of the club which has already received more than four thousand signatures, and some are now talking of boycotting altogether until Venky’s are gone. All in all, this amounts to a very familiar conflation of events and circumstances which will only become more likely to spiral out of all control unless eithere there is a significant change of direction from the owners or said owners walk away from it altogether. As the summer turns to autumn, something is going to need to change very drastically in order to precent some very cold winds indeed blowing through Ewood Park over the course of the months to come.

You can help to support Twohundredpercent by subscribing through Patreon. If you do, we’ll send you a shiny thirty-two page e-magazine at the end of each month, from the end of this month on. You can find out more by clicking here.