Club finances - Annual Report - £31.6m loss

Discussion in 'The Hornets' Nest - Watford Chat' started by hornetboy1, Feb 14, 2019.

  1. The undeniable truth

    The undeniable truth Squad Player

    A good question. I'm not sure exactly how the FFP rules operate. Maybe our match day, commercial and "cash for end league positions" are lower ....might partly explain ?
  2. wfcmoog

    wfcmoog Tinpot

    I haven't read the thread, but where has all the money gone!!!????!!!
  3. The undeniable truth

    The undeniable truth Squad Player

    Gray and Oulare....and the Mafia.
    RookeryDad likes this.
  4. It's the interesting bit for me, I'd like to see the annual report for the holding company before forming a view on the health of the club. Watford pays interest on the loan, the bigger the loan the more money flows up.

    EDIT: although I see there is yet another company 30 Diversify Sport Investment SL where the cash will ultimately flow too and from.
    Last edited: Feb 14, 2019
  5. ITK platypus

    ITK platypus Reservist

    It is what it is.

    If it becomes too expensive for us to compete at this level we will have to graciously slide away. These owners won't lead us to financial ruin.

    Having said that the model has always been to bridge the P/L gap with player sales and we have done that with Richarlison. The plan of course is to continue to do this for as long as we can or till we get more investment.

    The Pozzos have so far proved they know how to execute their strategy so I have no concerns with these accounts.
  6. Muggins_77

    Muggins_77 Academy Graduate

    Clearly we need to build a bigger stadium with 90% of the seating for the corporate mob, a new steak house stand and fine no shows... we’ll make the Forbes richlist in no time!
  7. CaveManHornet

    CaveManHornet Reservist

    Villa, Sunderland, Blackpool, Portsmouth, QPR and Hull are a few I can name from the of the top of my head that have suffered pretty badly since being relegated from the Prem. Fortunately for most of those, their owners had enough money to inject into the club to keep it afloat. Sunderland on the other hand had an owner that wouldn't invest any more money into players and they struggled as a result on and off the pitch
  8. Forzainglese

    Forzainglese Reservist

    Yes. It is all very well throwing money at your trophy club, but you need football nous as well as money. cf Everton/Watford. Watford's business model, I presume, is based on the Pozzos and their far-reaching network being better at this than the majority of others. Eg They found Richie for less money and sold him for more. It's all very well saying Ramsay is to be paid £300k a week and we can't compete with that, but is he really worth that?
    ITK platypus likes this.
  9. Forzainglese

    Forzainglese Reservist

    The Prem is probably a bubble, a bit like 16th century tulips or booming-busting 90's dot-coms. It relies on being perceived by a huge tranche of people as the go-to and fashionable place for exciting football. The majority of those people know next to nothing about football and are not very committed to it. Once fashion decides it's not all it's cracked up to be (rightly or wrongly) it's in danger and there could be some massive financial hits taken and rats jumping ship. Nevertheless, there will probably be some phoenixes who rise from the ashes. (Mixed metaphors, I suppose.)
  10. We hate 48

    We hate 48 Reservist

    FFP in the PL only applies to those competing in Europe i believe
    antlane likes this.
  11. Bwood_Horn

    Bwood_Horn Squad Player

    So 'us' next season then?

    EDIT: Just to make clear - this £31M figure doesn't include the money from Everton: Richarlison's fee and Ssssssssliva's 'compo'?
  12. We hate 48

    We hate 48 Reservist

    Correct-the sale was in the current financial year which started on 1/7/18-if we sold for £45m then after deducting the cost of the purchase -£12m ? and any sell on % that Fulminese may have had, our profit will be the difference when the accounts are published this time next year
    Bwood_Horn likes this.
  13. Bwood_Horn

    Bwood_Horn Squad Player

    Sorry to sound thick - and the Sssssssssssssliva compo?
  14. Could be worse - we could have lost £37m in the Championship - as QPR just have*

    * £20m FFP but still...
  15. We hate 48

    We hate 48 Reservist

    If last years report by the holding company is anything to go by, its virtually a mirror image of the clubs.Hornets Investment (HI) have borrowed from a unrelated third party XXIII Capital ltd who were charging 6% above Libor -in turn HI have on lent that money to the club so they pay interest to HI and HI then have to pay that out.

    As security for the loan to HI the lender has a charge over all the assets the club has-players and ground. I cannot see any leakage into that Pozzo owned vehicle Diversify Sport Investment SL -based in Spain and owned by Gino
  16. We hate 48

    We hate 48 Reservist

    The accounts do not show any compo paid to anyone
  17. The undeniable truth

    The undeniable truth Squad Player

    6% above libor is pretty onerous !
  18. Jumbolina

    Jumbolina First Team

    Pozzo extracting at Libor + 600. Happy days.
    The undeniable truth likes this.
  19. EnjoytheGame

    EnjoytheGame Academy Graduate

    I also thought that piece in the FT was interesting, not just for its content but for the fact it was in the FT. An interesting place for Duxbury to go into detail about the club's model.

    (However, the FT is not part of The Times group. The FT is owned by Nikkei now (having been sold by long-term owners Pearson a few years back). The Times is solidly part of Murdoch's stable.)
  20. We hate 48

    We hate 48 Reservist

    I don’t think the Pozzos have any relationship with XXIII Capital - it looks quite separate and does this type of financing presumably relying on the value of the players as it’s real security
  21. a19tgg

    a19tgg Reservist

    We know we’ll have a guaranteed £20m for Lukbakio and then whatever we get for Doucoure, so we’ll be fine for at least a couple of seasons.

    Wether we can keep pulling rabbits out of the hat remains to be seen. Southampton always seemed to do it season after season, but it’s caught up with them lately.
  22. The undeniable truth

    The undeniable truth Squad Player long as we don't want to buy anyone new.....
  23. Jumbolina

    Jumbolina First Team

    Fair. But why wash it through Pozzo holdings? Why not WFC borrow direct at Libor + 600?

    Separate question - What is spread Pozzo is charging on non XXIII loans?
  24. We hate 48

    We hate 48 Reservist

    On the first point i dont know-i do recall Duxbury being quoted At Your Place the other week that "the club has no debt-the holding company has the debt"-maybe the structure holds him to say that and some fans swallow it whole !!

    On the second Hornets Investments (HI) 2018 accounts are not out yet but last year the Pozzo holding company above that had lent HI £4.4m at 2.5% all in-a very cheap rate.
    Last edited: Feb 14, 2019
    Jumbolina likes this.
  25. Pob

    Pob Academy Graduate

    I think I agree with hornetsgags.

    I don’t find this alarming at all because 9f the assets thing. What these figures fail to take into account is the value of the players we have acquired in this and previous periods some of whom will inevitably be sold. Even setting aside the obvious Doucoure there’s talk of £20m plus for Lukebakio, Cucho and many others who I don’t even know their names without referring back to Oxhey’s posts. Even Quina would be sold for lots more than the million we paid. Plus potentially £20m for Pereya or Gerald D(can’t spell his surname at the moment despite numerous attempts ) .

    Some of those figures also probably reflect infrastructure investment.

    I’m happy with the club “model” and prefer what we’ve got going on compared to other clubs. I just hope we carry on spending to accumulate in the transfer market and enjoy the associated on the field benefits. We’re doing alright.
    RookeryDad likes this.
  26. RookeryDad

    RookeryDad Squad Player

    Similar in that respect to fine wine. No revenue stream, just an asset with perceived value built on prestige & scarcity.

    The key to wine appreciation is the shift in supply & demand. A finite amount is made, consumption reduces supply & maturation improves the quality. Hence prices go up.

    With footie clubs there is no analogous upward spiral. Peak value comes with peak league position.
  27. RookeryDad

    RookeryDad Squad Player

  28. RookeryDad

    RookeryDad Squad Player

    Compo for Sssssilva.
  29. RookeryDad

    RookeryDad Squad Player

    Metaphor maelstrom!
  30. Forzainglese

    Forzainglese Reservist

    But it's My Metaphor Maelstrom (And All Alliteration).
  31. Teide1

    Teide1 Squad Player

    Owning a football club in the premier is a little bit like owing lots of rental properties on mortgages you don't get the real benefit until you sell the properties pay off the mortgages and keep the difference!

    The debt services the higher running costs of the more expensive infrastructure you wouldn't have had in the the first place without the debt!
  32. Diamond

    Diamond Squad Player

    Maybe if the players hadn't been on the beach in January we'd have earned a few more £millions from league position. Ask Troy about that.
  33. hornetboy1

    hornetboy1 First Team

  34. Happy bunny

    Happy bunny Cheered up a bit

    We should discount the FT being part of The Times stable because it isn't
  35. Burnsy

    Burnsy Squad Player

    Fair point as someone has already pointed out. My mistake.

    The bulk of my point still stands however that I don’t think it’s by accident that Duxbury offered that particular paper an insight to the inner workings of the club.

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