A publication of documents revealed Blackburn Rovers have sold their Senior Training Centre at Brockhall to a company named Venkatashwara London Limited, a new branch under the ownership of Venky's London Limited.
Documents listed at the Land Registry outline that the Senior Training Centre was sold for a fee of £16.6 million on June 24 with a lease-back agreement in place.
The land, which had previously been the subject of demolition work under proposed plans to amalgamate Rovers' two training sites into one state-of-the-art complex at the Academy Training Centre, is now under the registered ownership of Venkateshwara London Limited, purchasing from Blackburn Rovers Football & Athletic Club.
Venkateshwara London Limited, a company incorporated two weeks prior to the Brockhall sale, comes under the wing of the VH Group with club owners Anuradha Desai, Venkatesh Rao and Balaji Rao all listed as people of significant control.
Importantly, the Land Registry documents state that all covenants previously in place remain and must be adhered to while Rovers confirmed that both Ewood Park and the Academy Training Centre are unincluded in such deal and remain owned by the club.
Why have Rovers sold the training ground? In essence, to comply with Financial Fair Play. In light of scheduled FFP changes that were set to close the loophole of transferring facilities or stadiums for a cash injection, the club opted to take advantage of that opportunity to invest without compromising their FFP standing.
From a short-term perspective it alleviates Rovers' financial situation in correspondence with Financial Fair Play and could allow for potential transfer spending in the future but from a long-term outlook, a key asset is no longer on the club's balance sheet while complications could arise if Venky's opt to pull the plug in the future.
It's a short-term fix for a long-term sustainability problem that has deteriorated further since the Covid-19 pandemic.
Capable of explaining the situation far better than myself, Kieran Maguire, host of the Price of Football podcast, explained to the BBC: “The training facilities could have been sold for two reasons, one: for necessity of cash, secondly: for Financial Fair Play.
“With regards to a necessity of cash, given that the money has come from one part of the Venky’s empire to pay another, it’s a bit like transferring from your left hand to your right hand, so I don’t think that’s the driving force.
“We have seen quite a few clubs transfer properties in order comply with Financial Fair Play and the rules were relaxed in 2016 and since then we’ve seen Birmingham City, Aston Villa, Reading, Sheffield Wednesday and Derby County all transfer either the stadium or similar facilities to another company controlled by the owner.
“That particular loophole has been closed by the EFL in the last few months, and I suspect that clubs will have been given advanced notice of this and therefore because Blackburn Rovers have lost significant sums under Venky’s they were pretty close to FFP limits and have done this in order to comply with FFP.”
Understandably there have been mixed emotions regarding the sale of the Senior Training Centre, many praising it as a clever way to funnel further investment into the club without compromising their FFP standing while others are conscious of Rovers being stripped of their assets, especially given the redevelopment proposal that came to fruition in February.
A club spokesperson determined the sale of the training ground was part of a restructure at Rovers, taking into account the changes in FFP rules along with the coronavirus pandemic.
If Championship clubs were not losing enough money already, the implications of Covid-19 had wiped matchday revenue and severed other sources of financial income and Rovers' annual losses increased once more for their accounts leading to June 2020, posting a total loss of £21m while their wage to turnover ratio shot up dramatically from 134% to 190% - the second highest in the division.
The sale of the training ground, along with the transfer fee Rovers commanded from Adam Armstrong's departure, will be included in the club's next set of accounts - allaying fears of potential FFP penalties in the coming months - and Maguire feels the Venky's have been assessing all their options in a bid to support the club.
Queried on whether supporters have a right to be concerned about the Senior Training Centre sale, Maguire replied: “No more concerned than they would have been over the tenure of their ownership.
“If we look at what happened in 2020 for every £100 that Rovers brought in they spent £189 on wages, and that shortfall was made up by Venky’s who have put in well over £150m into the club themselves.
“I don’t think Venky’s should be viewed as villains who are extract money from the club, pretty much the opposite, they have continued to underwrite losses, but FFP makes things more difficult for them and I think that was the particular driving force behind this approach they have taken with regards to the training ground.”
Download the LancsLive app for free on iPhone here and Android here.
Don't miss a thing from the club you love! For all the latest updates on Blackburn Rovers, sign up to our free newsletter packed with all the latest news here.