Revealed: How Blackburn have collapsed into chaos

From Venky's bizarre notion that £3m a year could keep Rovers competitive, to the dismantling of the board – not to mention Steve Kean's absurd 14-hour trips to India, where Mrs Desai pulls the strings, 'The Independent' tells all

Ian Herbert,David Fearnhead
Thursday 19 January 2012 01:00

Blackburn Rovers' Indian owners further dismantled the club yesterday, with the departure of their commercial director diminishing an already emasculated Ewood Park boardroom which evidently lacks any power to find a route out of the current financial calamity.

The removal of Simon Williams, son of the former chairman John Williams – who resigned last February – had been planned for some time by owners who have not replaced his father, nor former managing director Tom Finn, who left last May after 15 years at the club. The frustrations felt by both men and former finance director Martin Goodman, who left in August, was revealed earlier this week in a letter from all three, protesting 12 months ago at the way the board was being marginalised.

As Williams departed, the club's prime playing asset – captain Christopher Samba – yesterday arrived late for training, 48 hours after putting in a transfer request that the club's owners, Venky's, have rejected. It also emerged yesterday that Venky's have brought in Joao Souza – manager of their Brazilian division, Venky's do Brasil Ltda – who played a role in last year's attempt to buy Ronaldinho, to help land manager Steve Kean some players in the remainder of the transfer window. It is unclear whether Rovers have any money to spend, considering that their bankers, Barclays, told the Indians that they must deposit £10 million in the club's account or risk no extension of credit to pay the players' wages beyond this month.

A sense of how the club has collapsed into chaos has been provided by financier Ian Battersby, one of the few people with links to the club to have been granted an audience with Anuradha Desai, the matriarch of the Rao family who control Venky's. Battersby's detailed account to The Independent of his trip to the family base at Pune, 70 miles south-east of Mumbai, reveals that Desai was convinced that an annual working capital injection of £3m to £5m would be enough to run Rovers, while enhancing the Venky's chicken processing brand in the west. "They thought the initial down-payment [£23m] to buy the club was essentially 'job done'," Battersby said. "With an annual working capital injection of £3m to £5m alongside astute player trading, they [thought] they could get on and expand their brand."

The £10m demand from Barclays relates to an agreement reached when the club was taken over in 2010, that specific capital sums would be invested at certain times, which still does not appear to have happened. Though Barclays have said they cannot gamble on extending credit, they are also understood to have advised Rovers that cashing in on Samba could transmit the message that the club are a selling outfit, thus causing a reduction in the value of other assets – including players.

Battersby, whose three-hour meeting with Desai came at the invitation of co-owner Balaji Rao following an introduction after the 4-3 win over Arsenal on 17 September, rejected the notion that the Raos were deliberately out to asset-strip the club. He has painted a picture of Desai as an individual with a desire to make things work. She demonstrated a detailed awareness, for example, of job losses at BAE Systems in Lancashire and a Blackburn community street project in which midfielder David Dunn had been involved. But that does not make up for the mistaken notion that Rovers could be run on a shoestring virtually from Pune, with the Ewood Park management almost entirely out of the picture.

"Balaji said that I should come to India and explain to 'Madam' all that I had articulated to him – at which point we all knew that it was Mrs Desai who was the decision maker," Battersby said. It became clear to the financier, an ardent Rovers supporter, that the club were expected to operate in the same way as all 170 Venky's Group subsidiaries – with one business head (Kean) who reports directly to the Venky's board. This explains the once-monthly trips to Pune that Kean has been willing to undertake – with a 10-hour flight from London to Mumbai and four-hour onward road trip to Pune.

"The notion of a board executing the owners' plans on a day-to-day basis is a complete anathema to them and many of our problems flow from that," Battersby added. "To think the owners require the manager to undertake that journey for a meeting and return same day is an absurdity. Apart from his responsibilities being with team preparations, it is both unsustainable and unnecessary. What's wrong with video conferencing?"

Battersby and his business partner, Ian Currie, made this point forcefully to Desai and though Vineeth Rao was appointed to the Ewood board as a UK "middle man", the power vacuum at the club has grown.

In the circumstances, Battersby believes Kean has taken undue abuse. "The amount of vitriol has alienated the club from the wider football community and it's meant that few are sympathetic of the club's plight," he said. "It's a soap opera which has drowned out the more serious questions needing to be asked about the ruining of a football club."

Battersby emailed Desai on Christmas Eve laying out three options – commit £20m to Premier League survival this month, prepare to rebuild from the Championship next season or plan an orderly exit. He has received no response. It is believed that a favourable bid for the club might be considered, though there is no sense that Rovers are up for sale. "Certainly the cash now required to save Blackburn is at a level they never contemplated and you can easily envisage family disunity at having to gamble £20m or more to one subsidiary in a corner of north-west England," Battersby said. "With local opinion so much against them now, would you be rushing to write a cheque?"

Why financial plan is unlikely to bridge gap

The family behind Venky's hope to run Blackburn Rovers with an annual capital injection of less than £5m, but Blackburn's most recent set of figures suggest that is an unlikely proposition.

Blackburn posted a pre-tax loss of £18.6m for the year ending 30 June 2011, nearly 10 times the £1.9m figure of the previous year. The loss was made up of £4.8m before player trading and £13.8m lost from player trading, admittedly before the £16.5m from Manchester United for Phil Jones.

Blackburn's wage bill was £49.9m, up from £47.4m the previous season and £46.1m the year before that. This meant that it was a worrying 86.6 per cent of their annual turnover of £57.6m. The club's net debt rose from £21m to £26.3m last season.

Jack Pitt-Brooke

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