Blackburn Rovers chairman answers critics over transfer cash

The Rovers chairman has spoken exclusively to the Lancashire Telegraph about a busy last few months at Ewood Park and explained why all the money raised in transfers this summer was not available to Sam Allardyce for signings.

Williams revealed the £5million difference between Stephen Warnock’s sale and Pascal Chimbonda’s purchase has been used to support the wage bill, after failed attempts to reduce it by 10%.

He also said:

* The guaranteed fee from Manchester City for Roque Santa Cruz was £15million, before add ons, and a large chunk of this was used to plug a £7.5m loss against budget for last season.

* The Walker Trust are unlikely to provide new funding as the search for new owners continues.

ANDY CRYER: John, I’d like to talk to you about how you feel Rovers have fared on and off the pitch during the summer.

Let’s start with off the pitch. The club has for some time been at the forefront of affordable football. You reduced season ticket prices again this year. Has it worked?

JOHN WILLIAMS: In a word, yes. Our strategy is clearly based on price/volume.

Season tickets are up from 14,000 to 18,500 (19,000 like for like if you factor in likely half-season ticket sales).

So, we’re talking upwards of 30 per cent. A great result during difficult economic times.

Income will be like for like very similar but in terms of taking back Ewood and the improved atmosphere we’ve got a result.

Now it’s about finding the right balance between home/away match day support using price promotion where appropriate to top up. I think average gates of 25,000 are on the cards.

AC: Turning to matters on the pitch, are you feeling confident for the season ahead?

JW: I think we’ll do well. I recognise we’re in a results business and so far one point from three games is disappointing having played well especially versus Sunderland.

If we continue to perform well and can stay clear of injuries we will have a decent season.

AC: How would you judge Rovers’ performance in the transfer window? Was it a good one?

JW: I believe it has been successful overall but only time will tell.

The fact is that since Sam’s arrival, we’ve had close to 10 in and 10 out.

That is considerable upheaval by any standards and it will certainly take time for things to gel.

There is new blood in all playing departments and a well balanced squad with genuine competition all over the pitch.

We’ve got a great balance of age and experience, got more pacey midfield options, excellent back four options and a potentially exciting strike force.

We’ve been able to do this and balance the books which is essential with no new money coming in from the top.

AC: John, you say balance the books, but most fans see sales exceeding purchases. Can you explain in more detail?

JW: I’ll have a go.

Last season 08/09 we started, as always, with a close to break-even budget (before transfers) based on finishing ninth and a wage bill of circa £44m.

Ninth was two places below the previous season’s finish and £44m a 10per cent increase in wages.

These measures were necessary, we thought, to give the new and relatively inexperienced manager (Paul Ince) a good financial foothold given that there was only a very limited transfer pot, but we didn’t have to sell (so ‘even’ trading was the plan for players and the Bentley and Friedel monies were used to fund incoming transfers).

Prior to 08/09 we had kept a very tight rein on our wage bill, we’ve had to.

In the five years 03/04–07/08 it grew by just 6per cent (CAGR) against a Premier League average close to double that.

At the end of the season we finished 15th (not beating West Brom cost us £1.5m but we couldn’t complain, Sam had done a great job).

Wages had increased to £46m plus, this mainly due to the unbudgeted arrivals of Dioufy, Gael Givet and new football management.

There was also a drop in TV games against budget and overall a combined circa £7.5m loss against plan.

This is the gap that had to be plugged from the Santa Cruz deal.

Incidentally the guaranteed money in this deal is £15m; other figures quoted include contingency payments.

For years we have stretched ourselves budgeting a league finish above that suggested by the wage bill.

You know I’m a great believer in the parity between club wage bills and league position.

This year we took a more pragmatic approach to our mantra of break-even, a 13th place finish would support circa £41m annual wage bill (which we believe will be the 13th highest) and therefore we needed to get £5m off the wages - a figure which has been bandied about for some time.

We have failed to do this. We felt in conjunction with Sam that to remain competitive we needed to follow the one in, one out plan.

And not surprisingly wages are running very similar year on year.

So we have filled the resulting £5m hole with the difference in transfer fees between Stephen and Pascal.

In summary, the maths works as follows: Money in from transfers £26m, money out including agents fees, levies etc. £13.5m, headcount like for like and wages like for like.

Where has the 12.5m gone? £7.5m has gone to last year’s P&L as explained (wages, TV games and league finish) and £5m to support this season’s wage bill.

I suppose the most sobering thing about this is that even if we stretch ourselves to achieve break-even at operating level that still leaves nothing for player acquisition. So trading is the name of the game.

I’m not entirely comfortable about funding wages from transfer fees but developing players, buying low and selling high has, by necessity, become part of our business.

AC: How long is this level of wage bill sustainable?

JW: With wage bills rising all around us it has to be sustainable if we are to remain competitive.

The problem is that yesterday’s £20k per week is today’s £30k per week. It is never ending.

You can be sure that when our big players move on they almost without exception get bigger wages.

The fact is in comparative terms we are sliding down the wages league despite our too-high spend.

The good news is that next year sees the start of a new TV cycle which we hope will increase turnover to help sustain wages at their current level.

That will mean we can return to the status of a trading rather than selling club.

But it is always going to be a stretch. We know it’s really a turnover problem, if wages were at what most observers deem to be an appropriate level of turnover we would need to add another £20m to the top line.

To put that into perspective, this year’s total ticket revenue (season ticket sales and match day home & away sales) is £7m.

The fact is that every available penny goes on football.

We have lots of calls on our cash, running a 65 acre estate over 3 sites is in itself expensive, but football comes first. All this having been said I still want wages to come down and will work with Sam to exploit every opportunity that presents itself.

AC: There is a lot of talk about debt in the PL, are you comfortable with Rovers debt levels?

JW: I wouldn’t say comfortable, but it is manageable and there is nothing wrong with debt as a source of funding.

We are fortunate to have an excellent working relationship with our bank which has been built up independent of our owners over a number of years.

I believe they trust us to make responsible decisions.

They have not asked for debt reduction despite the credit crunch and we have certainly not offered it.

We are pushing our overdraft levels to the limit because we are trying to win football matches.

Of course in the medium to long term debt reduction would be desirable, perhaps even sensible, but this is not currently on the agenda.

AC: Any news on the sale?

JW: Nothing concrete, but everyone knows suitable new ownership with new money coming into the club would be the answer.

Work in progress I’m afraid is all I can report.

AC: Will the trust provide new funding in the meantime?

JW: Unlikely, but never say never. In fairness to them and contrary to some uninformed opinion, they are not taking money out either.

There is an agreement to repay a small fixed-term loan but they have agreed to fund an important strategic land acquisition for us.

Our relationship with the trustees remains good. To be fair, they have never interfered, they know the lack of funding is a source of frustration for the board but we just have to get on with it.

I do get depressed at times when I see the spending power of the clubs with big fan bases and / or wealthy owners putting in money.

But they’re not better than us, they don’t work any harder, they just have more money.

Many of them I know look with envy at our achievements on and off the field over recent years.

And they certainly don’t have a greater ambition than us.

Indeed my greatest fear is not that we haven’t stretched ourselves enough, it’s that we have stretched ourselves too far.

Some of our fans I know for sure feel the same frustrations, but lack of finance is nothing to be ashamed of.

We should in fact be proud to be supporting a big club in a small town.

We deserve to be in this league, it’s no fluke.

AC: John, have you got a prediction for the season?

JW: To aim high without risking the financial health of the club, but not to be too disappointed if we don’t make it.

We’ve got an excellent squad in my opinion, easily capable of mid-table and I would dearly love to win the FA Cup.

We are starting our longest stay in the top flight since 1936, not too bad for the town club in the land of the giants.

AC: And finally John, are you still in favour of the transfer window system?

JW: Yes. I would do away with January altogether and close the summer window before the first fixture, but it’s difficult to harmonize across Europe though.