Blackburn Rovers’ financial results for 2018/19 covered “a season of consolidation for Tony Mowbray’s men”, as the club finished 15th in the Championship, having secured automatic promotion from League One the previous year. Some thoughts in the following thread #Rovers
#Rovers loss widened by £1.4m from £16.8m to £18.2m, despite revenue increasing by £7.7m (86%) from £9.0m to £16.7m following promotion, as operating expenses grew £8.6m and profit on player sales fell £0.5m to £0.6m. 
Main reason for #Rovers £7.7m revenue growth was the higher TV deal in the Championship, which meant broadcasting almost quadrupled, rising £5.5m from £1.9m to £7.4m. There was also good growth in commercial, up £1.2m (28%) to £5.5m, and match day, up £1.0m (35%) to £3.7m.
However, #Rovers revenue growth was more than offset by the cost of competing in a higher division, as wages rose £5.6m (34%) from £16.8m to £22.4m, player amortisation nearly tripled from £0.8m to £2.2m and other expenses increased by £1.5m (20%) to £9.1m.
Excluding these property sales, only 5 clubs were profitable in the Championship with the highest profits of £11m posted by Bristol City and Brentford. On this basis, #Rovers £18m loss was “only” 10th highest in the division.
Since Venky’s arrival in Nov 2010, #Rovers have only once made a profit – in 2012 when last in the Premier League (boosted by £23m player sales). In that period, they lost £151m, some achievement considering they had 2 seasons in top flight followed by 4 with parachute payments.
The relatively small losses in 2016 and 2017 were due to decent profits from player sales (annual average £13m), while #Rovers only made around £1m here in the last two years. This season is not much better, as it only includes David Raya’s £3m sale to Brentford.
In fairness, things have improved since the awful £42m record loss in 2014, which included £10m of exceptional items (player value impairment and onerous contracts), while #Rovers actually made a £7m loss on player sales (third year in four this activity lost money).
#Rovers EBITDA (Earnings Before Interest, Depreciation and Amortisation), which strips out player sales and non-cash items to give underlying profitability, was flat at minus £15m. This is obviously not great, though is better than the £(23)m recorded in 2013.
#Rovers £16.7m revenue is £1.8m (8%) higher than the last time they were in the Championship 2 years ago. It has dropped £38m (69%) since relegation from the Premier League. In the first four years they benefited from £55m parachute payments, but they lost this advantage in 2017.
#Rovers financial challenge is highlighted by the fact that their £17m revenue was fifth lowest in the Championship, only above Brentford £15m, Rotherham £14m, Preston £14m and Wigan £12m. For some perspective, this was less than a quarter of WBA and Stoke City (both £71m).
If parachute payments were excluded, #Rovers would have the 19th highest revenue in the Championship, though the top club’s revenue would drop from £71m to £49m (Leeds United). That said, this would still be nearly three times as much as Blackburn’s £17m.
#Rovers broadcasting income rose £5.5m from £1.9m to £7.4m, due to better TV deal in the Championship, including Premier League solidarity payment £4.6m and EFL central distribution £2.5m. The huge TV money in the top flight (£97m to £152m) explains why so many clubs spend big.
#Rovers match day revenue rose £1.0m (35%) to £3.7m, even though there were two fewer home cup games, as average attendance was up from 12,832 to 14,508 and ticket prices were raised. Despite the growth, this was still one of the smallest match day incomes in the Championship.
#Rovers average attendance was up to 14,508 following promotion, though crowds held up well in League One, actually showing a small increase to 12,832. That said, this is nearly 11,000 less than the 25,427 achieved in the Premier League in 2009/10 when Blackburn finished 10th.
In 2018/19 10Bet replaced Dafabet as #Rovers shirt sponsor in a 3-year deal, while Umbro has been the kit supplier since 2016 (5-year deal). From 2019/20 the club has had a back-of-the-shirt deal with Watson Ramsbottom Solicitors.
#Rovers wages increased £5.6m (34%) from £16.8m to £22.4m, as promotion “required the club to invest in the squad in order to be competitive.” For perspective, only £0.4m (2%) higher than last time in Championship two years ago. Wages more than halved since Premier League days.
#Rovers wages to turnover ratio fell from 187% to 134%, which was also better than 147% when last in Championship two years ago. It’s still far from ideal, but is the norm in this division, where 14 clubs are above 100%, much worse than UEFA’s recommended 70% upper limit.
#Rovers total directors remuneration increased from £282k to £570k, which was 6th highest in the Championship, though a fair way below Reading £1.5m. The payment for the highest paid director almost doubled from £156k to £320k.
#Rovers player amortisation, the annual charge to write-down transfer fees over the life of a player’s contract, rose £1.5m to £2.2m, though this has fallen from £10m in 2013, the first year in the Championship following relegation, reflecting limited investment in the squad.
#Rovers have had minimal transfer spend in last 5 years of £13m, partly due to previous FFP transfer embargo, compared to £64m in preceding 5 years. Sales also down, but still £16m net sales since 2014. 2019/20 buys include Stuart Downing, Sam Gallagher and Bradley Johnson.
#Rovers debt increased from £121m to £142m, which is £121m higher than the £21m that Venky’s inherited. In 2010. The majority £127m is owed to the owners, up £18m from previous year’s £109m, though there is also a £15m bank overdraft (guaranteed by Venky’s), up £3m.
Most Championship debt is provided interest-free by owners, which is the case with Venky’s loans. However, #Rovers interest still increased from £425k to £495k, due to paying 2.65% over LIBOR on the overdraft. Only 2 clubs paid more than £1m: Hull City £2.4m & Bristol City £1.0m.
#Rovers outstanding payments on transfer fees increased from £1.4m to £5.7m, but Blackburn were in turn owed £1.1m by other clubs, leaving £4.6m net payables. Contingent liabilities, potential payments based on success of the team or players, were up to £3.9m.
Even after adding back non-cash items such as player amortisation & depreciation, #Rovers made a £17m cash loss from operating activities, then spent £4m (net) on players, £0.5m interest and £0.3m capex. This was largely funded by £18m additional loans from Venky’s.
As a consequence, #Rovers overdraft increased by £3m, leaving cash at bank of just £0.3m, one of the lowest in the Championship. In fact, 15 clubs in this division had less than £2m cash in the bank, so this was not exceptional (though not a great buffer in the current shutdown).
Since Venky’s bought the club, they have been #Rovers only real source of funds. The club has been heavily reliant on the owners to cover £126m operating losses in the last 9 years. Also spent £6m on interest payments, but only £4m invested in infrastructure.
#Rovers said they were FFP compliant in 2018/19. Calculation is complicated by the season in League One, but total losses are just within FFP £39m limit for Championship 3-year monitoring period, even before deducting allowable expenses for academy, community and infrastructure.
#Rovers first team squad, along with executives and senior financial management, have agreed to defer between a third and a half of their salaries for three months (April to June) in reaction to the financial challenges posed by the COVID-19 pandemic.
#Rovers focus is “to retain our status in a very competitive Championship”, but they were outperforming (sitting in 10th) before the season paused. It’s good that fans have something to cheer, as Venky’s tenure has been fairly disastrous, despite providing substantial funding.
