Our external debt is at least predictable though, it’s secured against future income. I’m not saying it’s a good thing, but it’s not like we’ve borrowed against next years premier league money and then been relegated. We know what is due when and against what, it’s not suddenly going to be called in out of the blue. That said it’s kind of irrelevant to the original points being made which was more about the model and Moogs dislike over it. He wants players bought for Watford and Watford only, what better comparison than Bournemouth. They don’t buy players and loan them out, all the players they buy are purely to further the Bournemouth team, every player they buy comes straight into their squad, which is his preferred scenario. They came up with us and got relegated with us, they operate his preferred model and the Pozzos have theirs, the big difference being the Bournemouth owners net worth is approximately 100x that of the Pozzos, yet they’ve still ended up in the exact same situation as us after five years. Who has what debt and who it is owed to is largely irrelevant to that fact.
Just out of interest, what kind of ownership do the bedwetters want? It'd be lovely if we had a sugar daddy, but in the absence of one, what other options do we have?
I think if the Pozzos could just stop making the same stupid mistakes over and over, people would be happy with them.
Your first point is not correct. We have loans not only against income but also against our playing assets and ground. Who debt is owed to and what it is secured against is very relevant. The idea Pozzo’s outdated model has put us in a good spot financially is utter fantasy.
I thought we had borrowed against TV money, then parachute payments, plus future player sale revenue. Presumably that debt is also secured against something, my mortgage is based on my income but still secured on my house. Either way it is still irrelevant to the Watford Vs Bournemouth comparison, in terms of where their model has got them vs the Pozzos model. The discussion wasn’t really about debt, more about how we have to engage in player trading to compete which involves buying and selling more players than Watford can house. That is in comparison to Bournemouth who instead by comparison were bank rolled by their owner who is a (billionaire) and still ended up in the same place.
Nope. We have borrowed specifically against transfer fees owed. We have also specifically borrowed against assets against another lender. We also specifically borrowed against premier league prize money. There is no revenue stream or asset the owner hasn’t borrowed against. So it’s kind of relevant in the assessment of whether he has done a great job with this fantastic model. This is all as at latest accounts and everything will have deteriorated.
What he needs to learn in some league, somewhere, is how to turn up to training every day, work his arse off. Stay late and keep working on his game, then come out every game and play hard for the full 90. We need every point. We can't afford to run him out there until he hows that. If it's another year wasted, he's the one who's wasting it. I fear you will be right though.
Yes can’t see it staying the same as we presumably paid a fair whack to sack Gracia and QSF management teams plus significantly reduced league prize money. Imagine there will be COVID provisions as well.
If we can vote on it I'd like either Kim Jong Un, or an ancient Mesopotamian deity who sits in the GT surrounded by dozens of chanting Sumerian virgins wearing not very much.
Where have I said we're in fine shape financially? Also, it's a decent discussion for once, do you really need to lower the tone with condescension?
To be fair - what it is secured against is largely irrelevant - it is real and exists Yes had they assumed P:L survival and borrowed and spent it all then the chasm would be vast and overwhelming But it is almost certain that in the event of a default against a borrowing covenant then other events trigger - we don't know of course but relegation could be one such event and forecast debt repayment from free cash flow {EBITDA) will be one - We don't know but getting the high wages off the books was almost certainly driven by the need to stay inside the terms of the debt instrument
Hope so. £25m for two players who never played for us meaning (hopefully) we get to keep Sarr, Hughes and Pedro.
Or £25 million for 2 players with high potential, who, had we kept and integrated into the team, would either: 1) be worth much more money and playing for us (personally I enjoy watching the best possible players actually play for Watford) 2) have been sold for double the price, with Watford still as a Premier League team (in part because LS and PE had been integrated last season) I can see both sides of the argument, but it's really not difficult to understand why some dislike the model.
You’re right I should keep my tone in check. It’s just frustrating reading gibberish about how the Pozzo model has put us in a good spot when he has destroyed our balance sheet with his poor management and external lending. And this picture will have got a lot worse in the subsequent 15 months. The only reason we haven’t sold as many players for high fees as Bournemouth is because nobody wanted them. Whether that is due to injury/length of contract/outrageous wage/complete lack of interest.
If we had stayed up they very likely would’ve been integrated into the team and benefited Watford directly rather than indirectly, just like Richarlison, Sarr and Pedro, who rather coincidentally didn’t have work permit issues. As it is we were relegated and they didn’t want to stay, so we made £25m out of them which will still directly help Watford as we’ll very likely keep Sarr and possibly a couple of other valuable first team players, players who have actually performed for Watford, not players who have only performed in your hopes and dreams. It does rather seem you prefer hopes and dreams over actual tangible things? You’d rather just never sign these players in the first place and be poorer overall because they get eulogised in your head into being our next John Barnes. At this point I’d like to caveat my post and say I’m not interested into entering into another tedious debate about our debt and balance sheet, this discussion is about how the Pozzos attempt to compete via player trading, vs simply buying players who can slot straight into the Watford squad only, aka Bournemouth.
Is it an outdated model if Chelsea and Man City have started doing the same thing in the last 10 years?
Chelsea have been doing it for years have they not? De Bruyne barely played for them, neither did Ake. At times in the past they have had 50/60 players on their books, most of which never ended up playing for them or benefiting their first team directly.
Outdated model is the wrong phrase. Bad post on my part. What I mean is we no longer have an edge because as you say the big clubs do the same thing so in my view the benefits of it have been eroded.
This is certainly a fair take. I think there's an argument to be made that it peaked around the time (2011) when Sanchez left Udinese. They've never really hit the heights since, although Watford's financial muscle as a PL club meant they were still able to turn some very healthy looking profits on players.
It'll make nasty reading for sure. I suspect the next round of yearly accounts for every club in football is going to very eye-opening/sobering indeed. Ours more so because of the borrowing that went on before the pandemic.
The bit I have struggled to get my head around in recent months is how people still admit to having blind faith in the owner because he's earned it over time but that we were always likely to go down at some point - without realising he has borrowed against EVERYTHING. Clearly he didn't think we were always likely to go down and banked the house on it? This 'always likely to go down at some stage' line isn't compatible with the actions of the owner.
Well in the last 15 months we've made around €45m on 3 players who never started for us. Also in recent years made £30m profit on Ricky about £15m on Doucs £20m on Ighalo. If we keep Sarr long enough we should make £20-30m profit. Right now we have some really talented youngsters like Ngakia Wilmot Quina TDB and JP. Id be surprised if we sell them for less than £50m combined in the future and it could be way more. The problem last season wasn't the scouting (apart from the Dawson debacle) It was the atrocious decsion making, the failure of leadership on and off the pitch, the disastrous team mentality, the farcical 'rebranding', and the failure to resolve the weaknesses in the squad.
You are only looking at the success stories here though and ignoring the money spent on the likes of Penaranda, Success, Oulare, Sinclair etc. If you buy five players for an average of £10m, it doesn't matter if you sell one for £50m if the other three are still on your books stealing a living. There are also other costs associated with running these systems - scouting, lawyers fees etc. We are probably slightly in the green through the system, but I am not sure it is fair to talk about the profits on the likes of Suarez, Richarlison etc without talking about the losses on Success, Penaranda etc. Agree with most of the rest of what you have said (except the re-branding which was utterly irrelevant).
I really don’t see the issue people have with ‘borrowing against everything’. We’ve borrowed against future sales and future revenue, so what? Surely that’s a sensible way to run a football club? Running a football club isn’t like running a normal business, it’s not about posting the largest possible profit is it? The point really is to post no profit at all and invest as much as possible into the playing staff and club infrastructure.
We have borrowed against more than that. I accept that it’s a bit different in football and you borrow more than the usual business - that’s not the issue. But Gino has gone above and beyond. We’ve borrowed too much and against every asset. Not every club does that. And the ones that have, generally end up in huge financial difficulty. Sure, some have wriggled free by being successful on the pitch and fingers crossed we can do that - but if we aren’t, fans should be in no illusion as to why we end up in a mess. Borrowing to the level the owner has clearly hasn’t been done with the belief that ‘we will go down eventually’ - it’s been done with the theory that we would remain in the PL for a long time to come. That didn’t happen, the owner was asleep at the wheel so is wide open for criticism. Some fans want to suspend that belief or suspend their criticism of the owner in the hope that success comes quickly to prevent the looming problem - but others feel it’s just and right to criticise now for even putting us in the position. Neither side are completely right or completely wrong. But it shouldn’t be painted that what Gino has done is the norm or the same as what others do. It isn’t. @Jumbolina has correctly been stressing this all summer. Where I have sympathy for the owner is that he is obviously trying to service the debt whilst still giving the manager some talent to work with. But this summer will be pleasant compared to next year unless we go up.
The Sinclair purchase was a joke. He'd already lost form a year before we bought him. It was a big mistake. Success was Pozzo owned and Udinese bought Bertie P for about £600k before selling him to us. Oulare was bought via an agent Gino had a close relationship with. On paper it looks like Watford lost £30m in those 4 deals, the reality for the Pozzo group is very different. The Pozzos take money out of the club when they think it's appropriate but they can also put money in too, like they did last time we were in the champo. People talk about us being mortgaged up to the hilt but money is cheap at the moment and the Pozzos have their fingers in a lot of pies. As Moog has mentioned, Watford is a platform for Gino from which to operate but thats not a bad thing in itself. Its given us a play off final, 2 cup semis, a cup final, a promotion and 5 years in the prem. The model is far from perfect but it looks like Gino is gonna do all he can to get us back in the prem.
Oulare and Sinclair were outright failures in both over estimating their ability and their ceiling. Penaranda and Success were players who had a very high ceiling, with the latter starting here with an extremely promising first Season under Mazzarri and it all just... fell away. It doesn't detract from your point about them being ultimately wasted investments and that it ends up eating up what true profit we should be making off Doucoure, Richarlison etc but they did have a lot of promise and for whatever reason it just never took off. We have been guilty of mismanaging them over the years but they are equally guilty of ******* their promise up the wall.
