Why Blackburn Rovers must act quick on finances

AFTER a few false starts, Blackburn Rovers’ ambitious new owners have started to win the Ewood Park faithful around as the club’s new era shows signs of settling down.

A few communication problems may have made their introduction to English football harder than it needed to be but, having seen their small family business grow into Asia’s biggest poultry firm, the Rao family’s business acumen should never have been in doubt.

These skills will never have been needed more either as they face up to their biggest ever challenge – turning Rovers from Premier League also-rans back into genuine contenders.

What was always going to be a daunting task has been made much harder by UEFA’s new Financial Fair Play rules that are set to change the dynamics of football spending forever.

No one should doubt the determination of Venky's to ultimately guide Rovers back to being a top five club.

But, with the new regulations imminent, there will have to be a dramatic transformation off the pitch as well as on it.

When Michel Platini presented his new blueprint for football finances, a requirement for clubs competing in Europe to break even by the summer of 2014 was unveiled.

As was the need for clubs to spend no more than 70 per cent of their annual turnover on wages, leaving chairman throughout Europe needing to change their approach.

For established giants Manchester United and Real Madrid, it is business as usual with their annual turnover dwarfing what comes out of the club.

It may not be so easy for the likes of big-spending Manchester City, whose wages were 107 per cent of their turnover in last year’s accounts, and Rovers will have to overcome similar problems if they are to realise the dreams of Venky’s.

Rovers’ biggest problem, as it has been for years, is trying to balance the books on a small town income.

Wages from the last set of accounts were around 80 per cent of turnover and that doesn’t look to be decreasing any time soon.

Led by chairman John Williams, breaking even was the name of the game under the past regime but that was achieved by selling star assets and keeping spending to a minimum.

Now, with the promise of big-name arrivals, the stakes have suddenly gone up with Venky’s bidding to compete with the game’s big guns once again.

The Rao family are already working hard behind the scenes to increase the funds coming into the company.

Sponsorship, ground naming rights and other commercial ventures are all being discussed and will prove vital in determining the club’s future.

This month has proved to be one of the more exciting transfer windows in recent years for Rovers fans.

Their wage bill has soared after committing to the loan signing of Roque Santa Cruz and Jermaine Jones and, on the field, Rovers have risen to their highest Premier League position for two-and-a-half years.

It is off the field that brings the biggest challenge though and the desire of Venky’s to spread the ‘Rovers brand’ worldwide could yet prove the pathway to success.

With the Walker Trust in charge, it would have been hard to see how the club would have flourished under such guidelines without a boost in revenue.

The same can be said for the club’s new owners but their success in the business world has to be reason for hope.

They knew exactly what they were getting themselves into after all.

‘Fair Play’ facts

* Clubs will have to prove they are not spending more than they earn by 2014 or face being banned from European competition, although owners will be allowed to put in 10 million euros a year provided it is equity rather than a loan. But a club must not spend more than 70 per cent of its turnover on wages.

* UEFA are trying to encourage good financial housekeeping after concerns about the losses made by some of Europe’s top teams.

* Any cash not generated by the club itself is not deemed to be ‘fair play’ and any team financed artificially is spending money it doesn’t have.