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FEATURES/Cross Border | May 20, 2013 | 15423 views

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
Why Venky's Need to Exit Blackburn Rovers FC
Image: Getty Images
Fans threw live chicken on the field after the club was relegated from the Premier League

W

hen 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.

Correction: This article has been updated with corrections. Blackburn was not a mining town as stated earlier, BRCT is the charitable organisation representing local fans of Blackburn and not BRST.

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Comments (12)
Harshal Desai Dec 25, 2013
After reading this article I was moved to start a game as Blackburn Rovers in Football Manager :) lol

Since Grabko says the club needs an experienced and proven manager, who better than me? :P
John Mcleod May 21, 2013
As almost certainly Blackburn Rovers oldest (and one youngest - my father bought me shares in 1936, when I was eleven years old), I welcome your honest and accurate report on the tragedy (farce?) of the present situation at Ewood Park.
It would seem to be in everybody's interest if the present ownership could be transferred. As one of the original members, way back in the late 1800s, and one if the five English Premier League champions, the Rovers deserve more - and the Venkys could probably be better involved financially elsewhere.
Incidentally, Blackburn is not a Lancashire "small mining town". I'm not sure how it would describe itself today, but in my youth it was probably the largest cotton-weaving town in the world. I can remember when Mahatma Gandhi visited Darwen, a small town adjacent to Blackburn. In all probability, his garment (dhoti?) was probably woven in Blackburn.
Response to John Mcleod:
Shravan May 21, 2013
Dear Mr McLeod,

It is really a honour to have a veteran fan like yourself share your thoughts. I've been to Ewood Park as an away fan and all the Rovers fans I spoke to shared your passion. This was before the Venkys came in, when Sam Allardyce was causing my team (Arsenal) all sorts of problems. I remember Benni McCarthy scoring a last minute screamer to send Rovers through in a cup game. It's really a pity how far the club have fallen since then.

Do you think if the fans bought a controlling stake (say 51%) and brought in new management, that the Venkys could retain a minority stake in the club?

I'm glad you enjoyed the article and I apologise for the mistake - I'm having it rectified.
Response to John Mcleod:
Skeptical May 23, 2013
Gandhi was famous for spinning his own cotton, seeing as how it was one of the pillars of his campaign
Mr Finchy May 20, 2013
"The BRST, which is a charitable organisation representing local fans, had its funding cut by more than half. "

funding by who? BRST is self funded - journo error 3!
Response to Mr Finchy:
Shravan May 20, 2013
Mr Finchy,

You're right, the Blackburn Rovers Community Trust (BRCT) is the organisation I was referring to. The point still stands though - relegation had a lot of external costs too.
Louis May 20, 2013
Mining town? There's one definite journalistic error.

As for Murphy being a 'marquee' player, whilst you could lay that down as opinion, it is my opinion that that is error number two.
Response to Louis:
Shravan May 20, 2013
Hi Louis,

You're right, it should read "former mill town". As for Danny Murphy, well I think any player on his wages in the Championship automatically counts as a 'marquee' player. And let's be honest, he's still a fairly big name.
Franco May 20, 2013
They need to not give up else there brand will have to sleep and come back still memories are lost .that is not possible.Instead get an indian drop shebby start interaction.Fear that people will take over should be removed.fans just want good football from the club they support .if they do not get that when they want to take charge.
Ben May 20, 2013
Venky's out!
Joan@brudenell.uk.com May 20, 2013
Blackburn was a cotton town and not a mining town.
Response to Joan@brudenell.uk.com:
Shravan May 20, 2013
Thanks for pointing out my mistake, it should have read 'former mill town'.
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