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Oct 26, 2010

Rovers hoping new owners don't come home to roost

The last time that Blackburn Rovers were taken over, they were Premier League champions within five years. Jack Walker's millions brought a 1995 league title which would otherwise have been unthinkable and, although the success didn't last through subsequent years, Rovers' memories of new ownership are mostly positive.

Of course that means that expectations for potential buyers is high. Now Venkateshwara Hatcheries (VH) group, the Indian company that has made its name in poultry farming and pharmaceuticals, has made an offer. Their annual turnover is £1 billion with a profit of £118 million, according to their 2009-10 annual report - a sign of the changing times in football club ownership as they look to become the first Indian company to acquire a Premier League team.

But, as with many foreign takeovers, there is more than one company involved. In this case: Venky's (formed five years after VH). Claiming that it has been transformed from "a backyard activity into an organised, promising industry, ranking amongst the best in the world", VH will hope to do the same to Blackburn; although considerable investment will be needed to achieve that aim.

Venky's was ranked by Forbes business magazine as 67th in the 100 best global small companies in 2000 and is now run by the daughter of founder Dr B.V Rao, Anuradha Desai, after he died in 1996. Desai is among the wealthiest women in India, but is evidently a grounded individual as she was quoted as saying that her wealth made her feel ''responsible towards society and to the people who depend on our organisation - be it poultry farmers, shareholders or our employees".

Indeed, Desai's statement on the £46 million approach for Blackburn was made in a similar vein as she paid close attention to the ''many shared values and ambitions" of the two parties, while Mr. B.Venkatesh Rao (Venky's joint managing director) in an interview with CNBC-TV18 claimed: ''It's one of the very prestigious, oldest and very well run clubs. Whatever the loopholes are or whatever it is, we are there to set it up and we are looking very positive.''

It is no secret that Indian companies have been looking to buy into the wealth of the Premier League in recent years. But why? In August, Rovers met with Bahrain-based Indian businessman Ahsan Ali Syed's company over a proposed takeover, making headlines with rumours of a £100 million transfer budget and talk of David Beckham's arrival at Ewood Park. Initially talking of the club's potential for ''productive growth'', Syed's interest has cooled with allegations from a BBC investigation claiming that he has left large unpaid debts in the UK.

Mumbai's owner of the Qubic Sports and Entertainment group, Saurin Shah, has also revealed his interest in the club; targeting a cultural assimilation when he said: ''There are many Indian and Pakistani people in Lancashire. So the interest is natural." Shah, whose uncle is deputy chairman of cricket's IPL, was perhaps the first to spot the potential of Blackburn for the Indian market, but may now be forced to accept that Venky's has slipped ahead of him in the race.

As an investment, Blackburn appears a good one compared to others available. An established Premier League side for 16 of its 18 seasons (with a two-year absence around the millennium), £27 million seems a decent price and, with £19 million of debt to cover, new owners could find themselves turning a profit after some initial spending. Turnover of around £60 million does not compare to the big boys but, financially, the club are run on similar lines to Fulham, who proved attractive enough for Mohamed Al Fayed.

For VH, the chance is there to expand their reach across Europe, and Asia, with a takeover deal. The Premier League's global appeal brings with it new business, new sponsorship and, while Blackburn will never be as popular as Manchester United, Arsenal or Liverpool, new media attention.

For the club, the chance to secure their long-term future is too good to turn down. Having been up for sale for years now, Blackburn's need for investment is more apparent than ever before. Having hit the heady heights of 6th place in 2005-06 and 7th in 2007-08, they have slipped to 15th and 10th placed finishes in the previous two years and currently lie in 17th after picking up just nine points from nine games.

Reports have suggested that sports agency Kentaro are involved in VH's bid and, as they have a deal with Jerome Anderson's renowned Sport Entertainment and Media Group which could see a new avenue for young players getting their chance in Europe, the future looks bright.

Key in this regard is the acquisition of new players in the January transfer window. Big-money deals totalling around £8.5 million for Alan Shearer and Chris Sutton - both were individually British transfer records, Shearer first then Sutton - turned the tide in the early 90s but, as manager Sam Allardyce proved with Bolton, he does not need a big budget to achieve success. Rovers will need strengthening, certainly, but any chance of the kind of "kamikaze spending" seen by Manchester City will be a long way off.

Of course the big worry for fans of Blackburn is one that may be familiar to Liverpool fans: that their suitors will treat the deal as purely an ''investment''. The Walker takeover saw a Blackburn man buy into a club that was not in a perilous financial position. Now the situation is very different and the debate over foreign ownership will continue if steps are not taken to ensure that the club remains the focus of the takeover, rather than the ''investment''.

Thus far in the Premier League, the only club to break the stronghold of Manchester United, Arsenal and Chelsea is Blackburn. While City may fancy their chances of being the next to upset the established order off the back of their own multi-million foreign takeover, in the next five years Rovers' fans will hope that they can reclaim similar ambition.

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