Blackburn post £42 million loss but hope to meet financial fair play rules next season
Blackburn Rovers’ posted a huge £42.1m loss for last season in the accounts revealed this week.
It was reported in the Lancashire Telegraph that the figures were ‘distorted to the tune of £16m’ to give the club a stronger chance of having its transfer embargo lifted.
Rovers will be prevented from paying fees for new players until the summer at least after breaking Financial Fair Play rules that stated Championship clubs could not post more than an £8m loss for last season.
Managing Director Derek Shaw admitted as far back as October 2013 that the club had little chance of dipping below that figure.
Ewood Park bosses therefore included certain provisions in the accounts for the 2013-14 campaign.
The provisions included summer pay-offs to players like Dickson Etuhu who had two years remaining on his reported £36,000-per-week contract.
Shaw says the club’s future annual losses will ‘be a lot less than they are now’ and finance director Mike Cheston has not ruled out meeting the Financial Fair Play requirements for this season.
Rovers will have their transfer embargo lifted at the end of the current 2014-15 campaign if they prove to the Football League they are working toward the maximum permitted loss of £6m.
The club is continuing to pay up to £100,000 per week on Paul Robinson, Bradley Orr, Leon Best and Jordan Slew, players who have no future at Ewood.
Shaw therefore concedes selling prized assets would significantly assist in driving down losses.
But he confirmed Rovers owners Venky’s have no intention on cashing in on the likes of Jordan Rhodes who was the subject of a failed £10m-plus bid from Hull City in the summer.
Shaw said: “We’re working towards getting the embargo lifted every day of the week and as soon as we are in a position to come out of it we will.
“It would be a lot quicker if you were to sell your assets but our owners don’t want to sell assets, our owners want us to get promoted.
“So we won’t be putting many players up for sale, I can assure you.”
Last season turnover increased from £26.9m to £30.4m and wages decreased from £36.6m to £34.5m.
But the club’s pre-tax loss of £42.1m was up £5.6m.
Cheston said: “It’s a big figure because we wanted to provide for as much onerous contracts and what it does mean is those costs are now not in future years, so it gives us a much better chance of achieving FFP.
He added: “In terms of the losses that have just been announced there is reference in the accounts to the fact that we have had to provide for onerous contracts so there’s a lot of future balance of contracts that have been paid out.
“This year’s figures have been distorted to the tune of about £16m.
“The £42m figure does include a lot of future provisions which won’t appear next year and that will go some way toward improving our chances in future years.”
With Rovers’ closing net debt rising to £79.8m Shaw was asked whether promotion is critical this season.
He said: “It’s certainly not life and death but it’s something what everybody wants and it’s certainly something the owners push for and I think you could see that in the last window when they turned down a very good offer for our top goalscorer.”