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May 21, 2013, 11.22 PM IST | Source: Forbes India

Why Venky's need to exit Blackburn Rovers FC

Its move to expand the Venky’s brand in Europe by owning a football club has backfired. Now, fans want to own a sinking Blackburn Rovers

Shravan Bhat/ Forbes India  

When the Pune-based Venkateshwara Hatcheries Group (VH Group), a seller of poultry products, bought Blackburn Rovers Football Club in November 2010 for £23 million, the club was a strong outfit in the English Premier League (EPL). Fans were optimistic that new investment would propel the club to European football championships and enable them to run for the domestic league title once again, much like Russian billionaire Roman Abramovich’s investment did to Chelsea in 2003.

But it won’t be an exaggeration to say that VH Group’s (popularly known as Venky’s) ownership of Blackburn Rovers has been disastrous for both parties. While Venky’s has received bad press (voted by fans as the worst owners in the English league), the club was relegated to the second tier of English football (the Championship which lags the more glamorous EPL in terms of television viewership, sponsorship and revenues) in 2012. It has already seen five managerial changes, declining stadium attendance, and increasing financial losses. And its value has fallen more than 25 percent. In April, local fans acquired a minority stake in the club. And now, they plan to raise capital to turn that into a controlling stake.

WHAT WENT WRONG
Even though Blackburn Rovers, one of the five teams to win the Premier League since its inception in 1992, was a strong side, it was hard to spot the connection between a poultry business from India and a football club in northwest England.

Dan Grabko, finance officer at the Blackburn Rovers Supporters Trust (BRST), says, “The club is the lifeblood of the local and regional community and what has happened to it over the past 30 months is devastating to the area on socio-economic levels.” The club is the heartbeat of the former cotton mill town of Blackburn in Lancashire county. As a result of its relegation to the Championship, the club has lost an estimated £5 million as advertiser spending has fallen. The BRCT, which is a charitable organisation representing local fans, had its funding cut by more than half.

The club’s squad has been chopped. Many experienced Premier League players, some of them talented imports, have been replaced. And now, the team has only two marquee players, Jordan Rhodes and Danny Murphy, in the midst of cut-price youths, non-permanent loanees (players roped in for one season only) and those untried in the English game. Even the marquee players haven’t been a good buy for the club with Murphy well past his prime. “The signing of Danny Murphy for more than £30,000 a week, at the age of 34, is something no Championship club would do. If Venky’s had put experienced English football administrators in place or kept the highly respected ones they inherited, these mistakes would not have been made,” says Grabko.

OPERATIONAL WOES
It’s not that the club doesn’t have money—during FY2012, it made a trading profit of £17 million—it’s just that it has spent it poorly. Former manager Steve Kean revealed that many players had been signed on without consulting him. It was unclear who had roped them in. The club’s board has had three different

directors in the last 30 months. The instability is crippling. Grabko says, “What the club needs is an experienced and proven manager. This is the most important and cost-effective investment that could be made at this point in time.”

One of the most inexplicable appointments was that of Shebby Singh, former Malaysian footballer and TV pundit who was signed on as the club’s global advisor in June 2012. “Blackburn Rovers is the only professional football club in the UK that has a global advisor. Not Manchester United, not Chelsea or Liverpool. I think that speaks for itself,” says Grabko. Fans believe that no candidates were shortlisted and Singh landed the job through his connections with the Rao family (promoters of Venky’s).

Shebby Singh did not respond to Forbes India’s questions.

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