Back in May 2017, Blackburn Rovers became
the first Premier League winners to be relegated to the third tier of English football. Their
annual accounts make for similarly difficult reading. The club’s total income was £14.9m, down
32% from the previous year. Wages stood at £22m, down 13%. The club’s loss before
player sales was £13.7m, down 17%. And finally, borrowings stood at £112.8m. The club was
acquired by Venkateshwara Hatcheries in October 2010, and this analysis focuses on finances
under their ownership. It’s also important to note that 2016/17 was the first season
Blackburn did not have the benefit of parachute payments. This table shows how much Rovers benefitted
from being in the Premier League in the first couple of seasons under the Venky’s ownership,
but also how much the club was reliant on parachute payments for the next four seasons. Like all clubs, Blackburn earn their income
from three revenue streams; matchday, broadcasting and commercial. Matchday income in 2016/17
was down 6%, as crowds fell by an average of 1,500 to 12,600 as the club slid to relegation.
This comparatively low level puts them at a disadvantage in the era of FFP when competing
for players. Broadcast income was down 50% to £6.7 million.
This was due to the Rovers’ four-year receipt of parachute payments finishing the previous
season, combined with the club rarely appearing on Sky at Ewood, which is worth £100,000
a match. As a consequence, the club has the second lowest broadcast income total in the
division. The impact of parachute payments for the top six clubs in the chart is very
evident. Norwich earned £7.50 from broadcasting for every £1 earned by Rovers. Commercial income fell only by 3%, which,
given Rovers relative lack of appeal to commercial partners, is probably a reasonable effort.
What is unclear is how much of this is from the club’s holding company Venky’s London
Limited. The accounts do contain a mysterious note tucked away on page 29 showing that Rovers
received £3.7m from the parent company. If this is included in commercial income then
there’s not a lot of money being generated from other commercial relationships. Rovers wages have more than halved since they
were last in the Premier League, but the rate of decrease is not as fast as the clubs fall
in income. Whilst Rovers’ wage bill is towards the
bottom of the scale in the Championship, they are still paying out a lot of money compared
to the club’s income. This graph shows how much the club has been paying out in wages
compared to income. In 2016/17 Rovers paid out £147 in wages for every £100 of income.
This means that the owners were not only subsidising the wages to players, but also paying for
all the other costs incurred by the club too, such as ground maintenance, electricity for
the floodlights and insurance etc. Since the Venky’s took control of the clubThroughout
their tenure, Rovers has earned £228m of income, but spent £248m in wages.
When the Venky’s took over Rovers, the club had debts of £21 million. Since then the
debts have increased nearly every year, and now stand at just under £113 million, and
would have been far higher had it not been for player sales in the last two seasons.The
Venky’s decision-making, to an independent observer, seems baffling. Rovers have been
both relegated and squandered their parachute payments, yet the owners seem happy to underwrite
the losses, which in 2016/17, were averaged at £263,000 per week. Where they go from
here is anyone’s guess.