Pop music write-down widens Venky’s football losses

THE company that owns Blackburn Rovers saw losses widen last year due to fortunes on the pitch and a write-down associated with a pop music venture launched by the American R&B singer Akon.

Recently-filed accounts for Venky’s London show pre-tax losses increased from £27.2m to £36.1m in the year to the end of March.

Revenue was down to £28.6m, from £35.7m, but wages also fell – down to £34.6m from £39.6m, although as a percentage of turnover the spend increased to 121% from 111%.

The bottom line was further dented by a £4.7m loss on player deals, and the company has written down the value of an investment in Akon’s Hitlab.com by £3.4m.

Venky’s London, the UK subsidiary of the Indian poultry business, took a stake in 2011 as Hitlab started focusing on the Indian market. The website acts as a platform for new talent and also offers an X-Factor-style shot at pop success.

In their report the directors did not explain the write-off but said a provision was required for the “full value” after assessing the carrying value of the investment.

In late 2011 leaked emails showed that Venky’s owners were tentatively planning a free pop concert at Ewood Park featuring Akon and Kelly Rowlands but the idea never got off the ground.

The accounts cover the financial year to the end of March but were signed off at the end of July and offer a commentary for the 2013-14 football season. The Championship side finished the season in eighth place, up from 17th but average league attendance fell marginally from 15,000 to 14,900.

In their report the directors said: “The focus of the company’s been for the football club to obtain promotion back to the Premier League. Significant changes were made to the playing squared to reduce ongoing costs, whilst at the same time adding you talent, this enhanced the team’s performance resulting in an 8th place finish and narrowly missing out on a play-off position.”

They added: “The board believes the football club’s success during the 2013-14 playing season gives real encouragement that it has made a significant move forward in achieving its ultimate goal.This momentum will bring with it renewed support from fans, which will in turn boost income streams and carry the club onto greater success.”

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