Relegation hits Blackburn Rovers hard in the pocket
21 March 2019
Blackburn Rovers post £16.8 million losses before tax for season in League 1.
Losses increase £10 million compared to 2016/17, when the club were relegated from the Championship.
Wage to turnover ratio increased to 187 percent in 2017/18 - a rise from 148 percent.
Relegation from the Championship cost Blackburn Rovers millions of pounds, with the club posting losses before tax of £16.8 million for 2017/18.
The Ewood Park club posted the heavy loss, which amounted to the equivalent of £323,000 a week during their season in League One.
The losses were £10 million wider than the previous year, when Rovers were £3.8 million in the red.
Profit on player trading fell to £300,000 in 2018, compared to a £9.8 million profit in 2017. During 2016/17, Blackburn generated £10 million in transfer fees from the sales of Grant Hanley to Newcastle and Shane Duffy to Brighton.
Drop in sponsorship revenue
The increased losses also came about as turnover fell £5.9 million from £14.9 million to £9 million while in League 1.
Steve Waggott, Blackburn Rovers chief executive officer, explained in the accounts: “Despite relegation to the third tier of English football, ticket revenue and hospitality performed well due to a promotion campaign and the hard work of the commercial team. The main reductions were in monies received from the League and a drop in sponsorship revenue.”
Attendances increased to 12,832, from 12,688 in 2016/17, but due to lower ticket prices, match-day revenues fell £500,000 from £3.3 million in 2017 to £2.8 million in 2018. Media income fell from £6.7 million in 2017 to £1.9 million last season.
Commercial income fell from £4.9 million to £4.3 million - a £600,000 fall in 2018.
The wage bill fell from £22 million in the Championship to £16.8 million in League 1 - a saving of £5.2 million, due to player sales and clauses in player contracts that meant their salaries were lowered following relegation.
However, the wage-to-turnover ratio increased to 187% - a rise from 148% in the previous year.
The club revealed the maximum owed to other clubs - or third parties - was £2.1 million.
Current net liabilities are close to £125 million, while the accounts state that “the amounts due to parent company (V H Group)” are £108.7 million, up from £94.8 million.
The accounts revealed: “The parent company confirmed that as in previous years, it will provide sufficient financing to support the company”. They added: “The amounts owed to the parent undertaking are interest free with no fixed date for repayment.”
Since June 2018, Rovers have entered in to transfer agreements worth a total of £7.6 million. The club revealed the maximum owed to other clubs - or third parties - was £2.1 million.