The Players - Disgusting And Spineless - Let Them Know

We do well, I praise. We do poorly, I criticise.
It's really that simple.
PS I had to google "High Sparrow"

 

The main difference now being the magnitude of the financial problems. At least when we were ****ed before, our debts didn't severely restrict who could take us over... Now we need an extremely rich owner just to buy the club! Thanks Gino.

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Ultimately the level of debt will just affect the price that Pozzo gets if and when they sell. Just deduct the net 3rd party debt that isn’t cleared pre sale from the value of the club.

 

How much is a championship club like us really worth though, surely nowhere near the value of our debt? Newcastle sold for £300m, our debt is about half that.

 

Why don't you start a new thread on the Luton site? I'm sure one of them will know

 

Funnily enough there is a whole thread on there about how dim they think you are, because of your comprehension of my post yesterday. Imagine being considered simple by Luton fans.

 

The elephant in the room, is that we have been spineless since Deeney left

 

Lol.

 

How much is our 3rd party debt (the Pozzo debt would be waived, effectively capital) ? How much would it be after netting off the sales of Pedro and Sarr plus a few others ?

 

"Hi there, Watford fan here..... well done for Saturday, you smashed us"
Puke! Hang your head in shame

 

I think you should probably do the same:



But you just couldn’t resist knowing what Luton fans were saying about you could you. People in glass houses, etc.

 

Wait, you're still regularly checking back in on a Luton forum? Be getting a season ticket soon!

 

Collaborater!!! You should be tarred and feathered and dragged through the forum! "Well done for Saturday"!!! How could you??!!

 

The riches of the PL does not suit our setup or Gino. If there’s one thing he does well, it’s getting successful players in on a shoestring budget. I truly believe that Gino doesn’t have a clue how to work with money and as such buys absolute craps and the last 4 years have been the result of being in our most successful financial period. we are basically going to have to start over, and I don’t doubt for one second we will be better off for it and will see some fan favourites come through again. Our biggest purchases are always the worst signings, yet we can sign Porteous for under half a million. We work best as the underachiever, the underdog and we will come back stronger

 

I think there is certainly some truth to that, but I also think a large part of it is just down to perspective. When Pozzo took over we were mainly a team full of cloggers who had to scrap for a mid table finish. Then we had jewels like Vydra, Abdi, Forestieri, Bato etc. Bestowed upon us who looked incredible by comparison. We probably have players now that on paper are more talented than any of them (none of the previously mentioned players ever cut it in the PL) but because we’ve created such a toxic culture, have a revolving door policy when it comes to the manager, and have been used to much better players in the last few seasons, not worse - it just doesn’t seem like it. We are coming from the position of looking at the squad now as a humongous downgrade from all of the past few seasons, as opposed to a huge upgrade from anything we’d seen for decades.

The major concern now is, do Udinese have players of a similar standard from first time around we can use? Even if they do, how can the toxic culture be reversed so that it will even make a difference? (Zola got a season a half and even then he supposedly resigned, that would be unimaginable for a Watford manager now) and I think most crucially, if we’re in the same position now as when Pozzo took over, but with players who are on paper significantly better than who Dyche had at his disposal, how the hell are we going to perform once they’re removed and the squad is degraded yet further?

And this is all against the backdrop of having about 10x the debt from when he took over.

 

This is true. Also bear in mind we didn’t spend a £ on transfer fees in that first championship period. I’m not sure they will be able to build such a complete team without a transfer fee being paid this time round even before considering the revolving manager door and debt that needs to be repaid.

 

Yep, I forgot to add that bit, our initial success was through loaning players from Udinese who we would otherwise have have no chance of signing. As you say, we never spent a penny on transfers, and it’s not like the ones we did pick up on free who weren't related to Udinese were always great, it was always a mixed bag, for every Ben Watson or Craig Cathcart you still had a Keith Andrews or Lloyd Dyer. The foundation of our success (at least on getting promoted) was always really the players we could funnel through from Udinese, and Grenada too.

 

I'm no accountant, so maybe I'm missing the point, but why would Pozzo waive his debt?

From my understanding he wants a return on his investment when he sells, so money owed to Gino would most certainly be in the takeover fee. It'd potentially be negotiable (although I doubt it), but it wouldn't be waived entirely.

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Maybe I'm misremembering but didn't Duxbury say something in one of the pre-season interviews with Andrew French about the debt owed to Pozzo being unlikely to ever be called in?

 

Because it's effectively sunk money. Say club was worth £50m and owed Gino £20m, Gino could either sell for £50m and waive the debt, or sell for £30m with the debt remaining inplace/repaid. Tax may dictate which is best.

 

I would assume the statement about the debt never being called in only applies while Gino owns the club and continues to do so on an ongoing basis. Even in those circumstances it may not be true, but there is no benefit in him or Duxbury saying otherwise, they want to present the club finances and the club as a whole as being in the most healthy state possible, that’s Duxbury’s job.

If Gino is selling up it stands to reason (like any normal human being) he’ll want to recover as much as he can, so any previous statements about debt not being called in will be redundant.

Making a promise that you won’t call in a debt that you are owed is an entirely meaningless statement in the wider scheme of things, things change. It makes little sense to not call in a debt if it will be to the detriment of the club you’re trying to run and make successful long term, if you’re selling it then that’s an entirely different situation.

 

Pozzo can't call their money in if we don't have the cash, and can't call it in ahead of 3rd party loans or football debts if we are going out of business. Loans would either be waived or come off the sale price in the event of a sale.

 

There are surely ways and means to try and get as much money out of the club as he can though, like Mel Morris selling the ground to himself and then putting Derby in admin. Not saying that’s what Gino would (or even could do) but at the same time you can’t really trust statements from Duxbury that Gino won’t ever recall any debt, it’s a meaningless statement designed to make our financial position look as healthy as possible.

 

I don't think there's much he can do. I think pretty much every asset and income source must be secured against 3rd party debts, and his debt would rank behind 3rd party debt, the 3rd party lender would have made sure of that. I think we can worry enough about the 3rd party debts !

 

Given he paid £0 for the club in the first place (new external loans refinanced the Ashcroft Loan in the Baz "era") then he will want as much as possible for his investment (loans) but as the Huddersfield town owner is finding out, getting all your loans back is an issue when the club isn't worth anything and you cannot (for whatever reason -I think that guy has health problems) fund any more. The HTFC owner is writing off £40m of his loans so the club is worth nil.

As to what our club is worth if and when Gino wants to sell I have no real idea. However
a) it has accumulated losses of £91m as at June 22 and
b) has a negative net worth of £35m ,assuming any new owner agrees that the ground is worth £83m remembering this is valued on a replacement cost basis (buying the land and building the stands today) which is different to its value on a going concern basis which I think would be the basis any new owner would see it

Added to which (making a stab) ;
c) we should make a profit on the sale of Pedro and maybe Sarr (given his purchase price has been amortised over the last 4 years) and have made a profit on Kamara
d) we will probably be making another trading loss in current year to June 23 given parachute income will not be enought to cover wages -£65m when last in EFL and "other costs" £28m also when last in EFL unless the commercial income seen last year is repeated this year.

So if the business cannot make a profit and there are no valuable players left to sell what is it worth

 

Anyone looking to buy us would want to clarify the situation regarding the debt owed to Pozzo before they even started entering into more in-depth negotiations.

 

There is little regular business "value" in owning a small footy club in P&L trading terms. Future performance is so unpredictable that traditional discounted cashflow is impractical. As you say we have no likelihood of being profitable in the near future.

2 years ago we had the intrinsic value of being a premier league club, based near London.
1 year ago we had the intrinsic value of being a champ club, with parachute monies and good prospects of returning to the premier league, based near London.
Today we have the intrinsic value of being a loss making champ club with huge debts based near London.

Someone will be interested in buying us but no idea how they would attribute a value. Balance sheet values of all of our assets will bear little resemblance to their true values.

They should have sold us when we were in the prem and bought a club like Charlton. I said it at the time and I will keep saying it. Unfortunately their egos allowed them to believe they could maintain top flight existence on a relative shoestring budget compared to their peers, presumably based on how easy it is for Udinese to survive in Serie A. They have missed out on selling at a huge profit.

 

The only possible hope we have is that some ultra-rich person fancies a toy to play with and can’t afford a big boy London club. I’m guessing we might be a slightly better proposition than Millwall. But not by much.

 

Just had an ultra fancy new training ground approved here in Kent I heard.

 

Or someone bonkers like Baz.
Careful what you wish for etc etc .

 

Them and MK Dons are both up for sale as well and are substantially cheaper (and have less debts) than us. Hard to see many buyers choosing us over them.

 

Just looked this up, Duxbury is quoted as saying:
'Is he ever going to call those loans in on himself? Never. If at some point in the future the club is sold than that debt is paid back as part of the purchase price. It’s a normal vehicle that is commonly used in business, not just in football. Gino put money in as a loan, which is what most clubs do these days.'
https://www.watfordobserver.co.uk/sport/20206732.watfords-debt-reduced-owner-will-never-call-loans/

So yeah, as we suspected he intends to claim back his money as part of any future sale. Which makes sense really. As others have said, he can only get that money back if somebody is willing to pay it and in our current state that seems unlikely.

Therefore in order to sell, Gino would have to sell for a loss, and realistically what reason does he have for doing that? So Gino has got us in a state where his asking price would be much higher than the club's value. The only hope we have is that he's losing so much money to the club that his best bet is to cut his losses and run. Unfortunately I see him more as a cling on in the blind hope that one day he'll make his money back type, and in doing so he'll drag us further and further down.

 

Most owners lose money over the period of their ownership of small clubs as they need to put their own money into the club on an ongoing basis, as Pozzo has. As I said before that is effectively sunk money. Some invest as capital, some invest as loans. It doesn’t really make a difference but often can be tax driven. I think Abramovich largely invested through loan finance (?). The bottom line is that the club is worth what it’s worth and the loans just change the way in which the consideration is paid.
Let’s say the club is worth £40m and Pozzo is owed £20m. He either receives £40m and waives his £20m loan or receives £20m and his loan is repaid.
If the club is worth £40m and he has loans of £80m he can sell for £0 and get £40m of his loans repaid or sell for £40m and and waive his loans …..which would leave him in exactly the same place as if he had input capital instead of loans.

Yes he could refuse to sell in the hope that status and profitability improve but as you say, as we continue to slide and operate at a loss, that value could drop further and that fictional £40m becomes £30m, £20m etc etc.

He should have sold while we were a prem side, and made a good profit. That opportunity has gone.

 

I think we’ve seen evidence with Sarr that Gino has the potential to be extremely pig headed regarding what he thinks something is worth, or what he wants it to be worth, and actual reality. But we probably don’t have long to find out. Looking at who could come down next season, combined with our two main assets going and our final PP reducing, baring some sort of miracle (like paying over the odds to get Cooper to manage us or something) we aren’t going up next season, so the season after next we will just be a completely bog standard championship club, with at best case scenario a debt to the owner probably far greater than the value of the club.

 

Very likely, though it's only the huge 3rd party debt we need to worry about.
The transition back to being a bog standard champ club was always going to be a painful one.