Premier League strugglers Blackburn are heading for a financial crisis that threatens the future of the club after their bankers, Barclays, handed them a £10million ultimatum.
Rovers, whose manager Steve Kean was saved from the sack last week only by a personal intervention from club co-owner Anuradha Desai, face a relegation six-pointer at Sunderland in a clash between the teams currently placed 18th and 19th after Wigan’s 2-1 victory at West Bromwich hauled them out of the bottom three.
Kean was heading for the exit last week until Mrs Desai, watching on TV in India, saw four-goal hero Yakubu Aiyegbeni celebrate Blackburn’s 4-2 victory over Swansea by embracing the manager.
Mrs Desai interpreted that as a sign of a united club and vetoed Kean’s sacking. Now Kean’s prospects might actually be helped by the new cash crisis because replacing him could be too expensive.
But his players face having to go without the club paying their wages because of the demand from Barclays, the sponsors of the Premier League.
Ewood park Blackburn
Coaching and scouting departments at Ewood Park were told last week that budget cuts and possible job losses are on the way as the club face the threat of financial meltdown in the New Year.
The crisis is the result of Barclays running out of patience with the failure of Venky’s, the Indian poultry conglomerate who own the club, to honour contractual obligations made when they bought Rovers in November last year.
Barclays say the club must deposit £10m in their account by New Year’s Eve or the bank will refuse to extend the credit needed to pay the players’ wages beyond January.
Mrs Desai, the matriarch of the Rao family who own Venky’s, is adamant that they will not pay the money, believing Blackburn can fund themselves without fresh cash from India.
She has the final say at Rovers and if her stance on funding is maintained, the club’s overdraft at Barclays, currently around £6m, could burst beyond its agreed limit on January 23, when wages totalling £4m-5m are due to be paid.
The club could then face meltdown within a month. If the overdraft limit is exceeded and there is no sign of a cash injection, Barclays can stop funding the club, which could then technically become insolvent.
Barclays and Mrs Desai both declined to comment.
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Blackburn Rovers have rubbished claims that the club is heading for a financial crisis and that the players’ and staff wages are in danger.
A national newspaper on Sunday reported that the club were facing a financial meltdown due to a £10m cash demand from Barclays Bank.
A Venky’s spokesperson told the Lancashire Telegraph on Sunday evening there was no truth to suggestions of a financial crisis and that they enjoyed a good relationship with the bank.
Rovers yesterday issued an official statement to reiterate a reassurance to supporters that the claims were false.
The statement, on behalf of finance director Karen Silk, said: “There was a report last weekend that Blackburn Rovers is heading for a financial crisis and facing a financial meltdown – and that the players’ and staff wages are in danger.
“We strongly refute this story. There is no financial crisis, and, there is absolutely no danger to the players’ and staff wages.
“Amongst all professional football clubs, finances are regularly assessed and re-assessed during the season based on performance, income and costs, and at Blackburn Rovers this is no different.
“Barclays Bank and Blackburn Rovers have enjoyed a long relationship over many years and are currently in constructive dialogue about how the bank, along with the owners, can support the club for many years to come.”