We are in a financial mess. We had already borrowed against the money due from our placement in the Premier league for 2019/20. I would be surprised if we haven't already borrowed against the parachute money for this season. We have hit the Iceberg, high earning players are running for the lifeboats, the Captain (Gino) knows it is sinking. We owe over millions. There will not be any money left from players sold to invest in new players..
That doesn't make it insolvent. Dividends are paid on operating profits not total liabilities. If you take out a bank loan for £20,000 with £250 per month repayments, just because you might win the lottery does not mean the bank can demand you repay the balance immediately, you can continue to make the £250 per month repayments until the finance is cleared. Same applies for a business loan. None of us know the terms of any finance arrangements but I'd just suggest there is no more basis to make a negative assumption than a positive one.
That's rubbish. Dividends can only be paid if you have positive distributable reserves in your accounts. It's nothing to do with "operating profit". Having more liabilities than assets is a very concerning situation particularly when you don't really know the true cash value of your assets. Add to that that your revenues will drop by >£50m in the coming year and it becomes pretty alarming and needs action. None of us know the detailed cash flow projections and just how much cash needs to be raised to remain solvent nor the current status of transfer negotiations and the strength of hand in each. Gino and Scott certainly will. Maybe the plan was to sell TD, Welbeck, Pereyra, GD and Doucs and keep Sarr, Suarez, Hughes, and Estupian? Maybe we've had no offers for the first 4 and had to accept less than we expected for the 5th, and are now moving on to considering selling those they had wanted to keep? With the loss of tv revenues and zero gate receipts maybe the situation is a hell of a lot more grave than we realise? I hate to sound alarmist but the most important thing is not that we get promoted this season, it's that we are able to remain solvent if we don't.
You say potato I sat potahto. Positive distributable cash reserves come from.... making a profit, selling off part of a business, selling stock, realising an investment etc. Yes we can get pedantic about the detailed rules but frankly I have a life so crack on if you want. The key point is it has nothing to do with total liabilities. This is all subjective opinion, and to be honest a bit of a rant. WH48 just asked a question, which if I recall was how could Gino (the person) get cash out of the club if he wished, and the answer remains either through wage, a bonus, a dividend, or at the time a part of or all of the club is sold.
The key is really to change as many players as possible from Premiership contracts to Championship contracts. Not easily done but it’s really the equivalent of the Manager having to form a team and hopefully get promoted with whatever’s left! Be it three right backs and no left backs that’s his problem! obviously this is only done by replacing our current players with cheaper alternatives
Agreed-i was incorrect-we just have negative equity. As long as we can pay our bills then we are not insolvent
The irony is that the players that want “ away “ are those responsible for getting us in this situation in the first place!
Finger in the air numbers, because we don't know the financials: Last years revenue might have been perhaps £140m-ish? Lets assume for now we broke even. This year the TV revenue is 55%, so revenue may be £80m-ish? The club needs to create ~£60m in extra revenue, or reduce costs by ~£60m, or (because player sales do both) a combination of both. Doucs ~£20m Estupinan ~£15m Del ~£25m Could do it...
I don't get why people think this may be club lead, it may be the same players who downed tools over the unpaid bonuses last season.
If we can move on Deeney and or Gray, the wages of Doucoure Delefeou and Deeney/Gray, plus whatever relegation clauses have clicked in, would probably cover match day revenue.
Good point. This is very true. I remember listening to an episode of The Ornstein and Chapman Podcast last season and David Ornstein suggested that Pozzo had had interest from an unnamed third party with regards to investment or a possible takeover of Watford FC. I wonder if they're still interested? If so, it wouldn't surprise me if Pozzo is beginning to strip the club of its prize assets before he sells. Whatever you're selling, it makes the most sense to sell when your stock is high (i.e. in the PL) and not after relegation so this would be an odd business decision from Pozzo. However, odd decisions have been made for 18 months now so I wouldn't be surprised if he's considering selling up. This is all hypothetical of couse, but as Markoa$ said, the same thing happened at Granada.
I can't recall but someone did say that a bid for the club was dependent on Watford staying up, which is why absolute panic set in towards the end of the season. Personally, I'd hope that it would Jiang Lizhang. We wouldn't be lucky enough though.
Interesting. I hadn't read this. Personally I would be very uncomfortable with Chinese ownership and I would have to seriously ask myself as to whether or not I would be be willing to spend my money at the club.
There were rumours in January 2020 that Gino had two bids lined up for the club. One was based on Premier league survival, the other one from a consortium who would hope to pick the club up on the cheap. Looking at the squad on Friday night, it seems as if Ivic has been told that this is all you have. The rest they want/would like to sell. Looks just like the Pozzo Plan when selling. We just have to wait and see ..
So really a fire sale will be good if we get rid of players that either don't want to stay or people want to leave.
They have/are taking for absolute mugs this summer. Selling Suarez and Estupian after everything put out by the club is just hilarious. Suarez has never scored a top flight goal and never got capped for Colombia. If Jefferson Lerma can play in the championship after 20 international caps and a world cup, we can tell the **** to play or not be paid.
Remember when all we had to worry about was Giraldi lurking round the training ground and changing room.
While our bunch of babies cry about having to play in the Championship, Lerma says, "The only thing that is clear to me is that I have a contract with Bournemouth, I continue to work with them, and I will surely start the season playing with the team." www.bournemouthecho.co.uk/sport/18713609 Has a single one of our lot come close to that? Sarr maybe...
Lema probably cares about playing for them .. Likes of Suarez and Pervis probably didn't know where Watford was on a map. Do we know Capoue and Welbeck want to leave for sure ?
The fact they were on the "not fit to play for the first team" list......I think you can draw your own conclusion.
No...because we've told the players they can follow their heart. If they want out, they can go. It's crazy to put that thought into the minds of players. We should have said, you are all under contract, you are all vital, we're keeping you all. Of course a few would have kicked back and those few you let go. When you let them all do their own thing.....what do you expect will happen.....yes, exactly what is happening. 17 players not available for the first game and we're left with having to put the likes of Sinclair on the bench. It's forgivable really. As I mentioned in another thread, the fact we won is the only reason there is not full meltdown with the fans. That result, rather than performance, has pacified a lot of supporters. Make no mistake, we go weak and lose to Weds or Luton or both, the feeling from fans will be very different for sure.
For those making comparisons to Granada - Did the Pozzo's ship in players from Udinese before pulling out? Seem's a little silly to give us players who sure, haven't set the world a light, but could still amount to something - If they shipped in a load of 30+ year olds then cool, you can say they're getting them of Udinese payroll - but Sierralta and Perica are approaching the supposed prime time of their careers, and could still have their values increase with a few decent seasons.
Our relegation season would’ve cost us about £30m (league placing payments, merit payments, Covid) compared to our cup final season on it’s own. It’s quite possible we would’ve had to have sold someone like Sarr to balance the books, even if relegation had been scrapped, in the same way we sold Richarlison. We can only survive though player trading as it is, the premiership money isn’t enough on its own as every other premier league club has it, but every other premier league club (in the vast majority of cases) has richer owners and a bigger ground. So we’re at a disadvantage to the majority of prem clubs before we do anything anyway. Chuck in relegation and another £60m deficit and what is happening is just the cold hard reality of the situation. There is no magic money tree, We can’t just ignore a near £100m deficit over two seasons, we can’t just borrow more and put the problem off. We have to sell players even when in the premier league to compete, so even with an immediate bounce back, a £60-£90m black hole would have to be financed somehow in the same way premier league seasons had to be financed by doing the same.
Surely the value of the club is only worth what’s its worth on the day when the contracts to sell go through, Therefore lets assume it’s worth a hypothetical 100mil, if we sell players for 20mil, it’s true value is 80million. Is that not correct?
Not an accountant are you ? I know where profits come from. Doesn't matter. If liabilities exceed assets you have negative net assets - if so you can't have distributable reserves so can't pay a dividend. It's to prevent business owners draining a company when the company owes more than assets it owns. Doesn't matter if you just made a profit of £100m.
