Because it's irrelevant. The fact that we are having to borrow against future revenues, for players moved within the group is disgraceful. We are having to cut our cloth in our purchases, whilst we allow assets to flow freely to Udinese, THEN we have to borrow against the paltry fees we've agreed to sell them for, in order to manager our cashflow. It's dire stuff and only mental gymnastics would allow you to believe otherwise.
Well, it benefits Udinese to the detriment of Watford. That's what the misery guts will annoyingly point out.
Or we're choosing to because it makes sense. Where is the evidence of this so far this summer? The window hasn't even opened yet. Getting the cash from this loan now could even mean we'll have even more money to spend this summer than if we waited to transfer the cash from Italy. The cost of the loan is likely less than 3 months of Troy's wages spread over 1-2 years.
Right on cue. As has been shown numerous times over the last page or two, there are many circumstances where that might not be the case. Without knowing the Pozzos' finances you can't validly "point out" that the negative scenario, which for some odd reason you seem so desperate to be true, actually is the case. The Pozzos are employing a common practice among PL clubs with the same bank. You're surely not claiming that the reason why Leicester got a bridge loan from Macquarie against Chelsea's Chilwell purchase was in order to benefit Chelsea?!
I think the questions here then would be ' Why, if the finances between the two clubs are one big pot as has been suggested, weren't we paid for these players last summer? Or in January? Or this Summer? Why are we borrowing money against our own pot of money a year later? Do Udinese have cashflow problems?' You are quite right in saying there could be good reasons for all the above. But I don't think you should be so quick to dismiss the concerns either. If the deals were done with another outside club, I'd be more laid back about this. I just don't think the optics look great. I just don't think it can be easily suggested that ours and Udinese's finances are essentially the same pot AND we are being prudent in borrowing against our own money. I just don't think those two views are compatible. Just my opinion mind you.
But haven't you often said that we share the same finances as Udinese and we can move money around freely between the two to where it's needed at any one time? Has that viewpoint of yours been made knowing the Pozzo's finances? Again, not looking for an argument or insults - genuinely just trying to figure it out! Maybe some are quick to be negative - but surely you can see why some are questioning this???
I've been pointing out that it's possible, not that it's always 100% the case. There are other posters on here who will literally only consider that the worst possible scenario must be the true one.
As I've already mentioned, maybe it's true that the cash needed from Italy for the two signings wasn't immediately there last summer, but again that's not automatically a negative, as this structure of Udinese taking the players off us last summer and us getting the cash now from the bank rather than having to wait another 1 or 2 seasons could have meant that we've now got the money to spend sooner than if we'd had to wait until when Udinese could pay up front. As has been pointed out by @AndrewH63 in his helpful post the whole deal could have been structured in such a way in purpose from the beginning to quickly boost our cash flow sooner than would have otherwise been possible. The reason why the Pozzos may not have wanted to wait to transfer the money from Udinese may not have been simple cash-flow problems either - maybe it is that the money was being invested elsewhere, where it was getting a good return on investment already? It's possible, but we don't know. Maybe Udinese would have wanted to take out a loan but it would have been cheaper for us and the money saved benefits both clubs long-term. Perhaps the deal being done this way also means the Pozzos still get to keep the good quality players in the family, rather than having to panic-sell them in to the open market for significantly below their value last summer. As has already been clearly demonstrated, deals structured this way happen in football often for various reasons. Chelsea structuring their deal for deal for Chilwell in instalments doesn't necessarily mean they're skint, nor does Leicester taking out a loan against that future transfer fee mean they're skint either. I don't see the moaning posters on here accusing Chelsea and Leicester of being badly managed either, despite them doing the same things. The posts are clearly reactionary and driven by an unerring negative agenda, rather than being made after a considered evaluation of what is a pretty common practice in football. It would also be much simpler if people actually read these points the first time they're made and tried taking them on board, rather than me having to type them out repeatedly in this thread every time someone comes back throwing the same basic, low-level criticisms.
I’m looking forward to the Rous backflips when the next two sets of accounts come out. Everything will be fine because maybe this and maybe that. For some people it will take an administrator to come in before any questioning of the owners is tolerated.
For some people it seems as if they're wishing an administrator has to come in so they can actually have some justification for their endless negativity.
I think you make some decent points, but I think we come back to the point that the problem with your "one pot" analysis from my perspective is that decisions made in the interests of the "pot" are not necessarily decisions made in the interests of Watford FC. Gino's objective is keeping both clubs in the top flight. If siphoning funds from Watford to Udinese makes that easier for Udinese, and we are in a safe enough position to stay up without those funds, that is a decision I have no doubt he would take. At this point in time it looks like decisions were made in the interests of the group which have benefited Udinese (e.g. the undervalue GD and RP transfers, the Pussetto sale and leaseback, and the loans taken out against payments from them). I hope now that Serie A have agreed a new deal, and with the De Paul transfer on the cards, that some of these favours flow back our way but I am not sure given the fact the TV deal is even worse for them this time.
@Filbert do your fans try and crucify your owners for taking out a bridging loan of c.3% against the future income from the Chilwell transfer?
There’s very few, if any, people here ‘crucifying’ the owner. Most are just asking justifiable questions and aren’t really appeased by the vague answers. Should we wait until it becomes clearer? Yeah, I think we should. But it’s entirely fair to ask questions, both positive and negative.
Yes we've taken out a bridging loan with Macquarie, exactly the same thing as clubs like Leicester, West Ham, Southampton, Palace and Wolves have all done in recent years. That clearly means we're heading for administration.
But you are making as many assumptions as the people you are trying to take to task over their ‘negativity’. All your positive spins on it include the word ‘could’. So you’re guessing everything is alright as much as anyone is saying otherwise. And again, I don’t see what difference Leicester/Chelsea’s dealings make when they have billionaire benefactors who can bail them out. We don’t. If the Thai’s at Leicester and Abramovich want to take out millions of pounds worth of loans, then let them - their owners can write them a cheque immediately and pay it off. I’d strongly suggest our owners can’t do the same. And the point is that if Leicester and Chelsea had the same owner, I think their fans would be asking questions about why they are borrowing money against funds being passed between the two clubs. 100% they would! Everything we have done with this bank COULD be the right thing we have done. Probably is. But I don’t think it’s a bad thing that we have a percentage of fans who ask questions about such deals rather than just waving it through with both hands proclaiming everything is okay and the owner should be trusted over anything and everything. (Not suggesting you’ve said that yourself)
The difference actually is that I'm saying it "could," i.e. it's possible but not 100% certain. There's a bunch of negative posters on here who are literally only entertaining the idea that "it benefits Udinese to the detriment of Watford". They are 100% sure that it can only be negative and not allowing any room for the possibility that, because they don't know everything, it could also be that their reactionary assumptions are incorrect and there's nothing about this deal to get in to a major tizzy over.
Palace, West Brom, Wolves, Southampton - also clubs who have done exactly the same thing in recent years with Macquarie. All terribly run failures of clubs heading for administration! Sure, but I'd also wonder if they'd all 100% assume that the answer to that question can only be a negative one, rather than it also possibly being a deliberate decision that is most financially advantageous.
Fair enough. I’m not in the camp of universally criticising this loan. For sure there could be (and probably is) good reasoning and it’s nothing to worry about. I’m just naturally worried about the level of our borrowing regardless. And minor alarm bells ring when I see we are borrowing funds against money owed to us by a sister club, even if there is potential for it to be nothing of concern.
Poor line of argument. Our balance sheet after the cup final was loaded with external debt. The fact that since that point in time our activity has favoured the finances of Udinese is irritating but not especially troubling in isolation. The fact that they have done it and continue to do it given Watford’s financial starting position is what worries me.
Southampton for one reported a £76m loss (and if you read the article, despite the club blaming Covid it was actually largely not to blame) so just because they’ve done the same thing it doesn’t make it a blue print for excellent financial housekeeping. https://www.google.co.uk/amp/s/www....ton-financial-report-loan-carillo-4884427.amp
I believe the vast majority of all transfer deals are paid in installments. There's nothing unusual about Udinese paying us in installments - it's very much the status quo. Worth noting that they were also operating under reduced earnings due to Covid and almost certainly had cashflow issues of their own. No one else wanted to buy GD or RP, and we had to offload. Udinese don't pay massive transfer fees even at the best of times, being a selling club first and foremost. I'm not sure what people were expecting here. We got relegated at a really bad time and had no other options, so the club made the best of a bad situation. That doesn't make it a great state of affairs, but it almost certainly the best option available at the time. Us needing to offload doesn't make Udinese suddenly flush with cash; it doesn't work that way. They would have had significant financial challenges of their own, as did virtually every business outside of the home delivery and telecommuting industries. Considering that GD was recovering from a bad injury, RP had been crap for years, and the state of the decimated transfer market, 20 million (presumably plus sell-on clauses) for the pair doesn't seem unreasonable at particular time we were forced to sell. It's not peak value but anyone who is expecting a just-relegated club to sell two players at peak value in the midst of global financial meltdown is setting themselves up for disappointment.
How do we know noone else wanted to buy GD and RP? How do we know £18m for the pair of them was the best offer available? How do we know that Pozzo didn't transfer them to Udinese as he felt he could flog them when the market recovers? How do we know there were sell ons? You are making an awful lot of assumptions there. Noone is expecting them to be worth peak value, but I think the Gerard Deulofeu transfer does look like a measly sum for a very good player regardless of the injury. I don't really understand why it had to be converted to a permanent deal in January rather than waiting till summer and seeing what happened with Watford and the market more generally. I thought at the time it must have been for cash flow, but that doesnt seem to be the case given we have taken out a loan in respect of the instalment due from Udinese.
I can’t speak for what each and every person was ‘expecting’ here. But I imagine not many were expecting us to have to borrow more money against payments due from a club under the same ownership. Even more so that nearly a year on and they don’t seem to have paid a penny towards the acquisition of two assets from us.
Zero reporting of any interest, and the players would have wanted to go to those places over Udinese because they would have earned more money there, not to mention the reduced financial pressure on both clubs in financially uncertain times. Again, zero reporting on any interest, no agent talk. And more to the point, you can't prove a negative. If your stance is going to be that there were offers and we didn't take them, the burden of proof falls on you. If you only want to talk about things we KNOW to be true, I suspect we'll all be posting on here very little. It's a balance of probabilities. It makes no sense for the Pozzos to want to damage their own assets, so they'll take what appears to be the most prudent route to them given the options available. We will have already received some money from the deal in the form of existing installments that have been already paid. The loan is intended to let us take the rest of the money owed now we can strengthen ahead of the season ahead. That's not just a defensible move, it's an eminently sensible one.
Transfer installments are the norm, not the exception. If you were expecting Udinese to pay the entire balance upfront then your expectations may be misplaced. Payment via installments is very routine for large transfers and has been for years. The notion that clubs pay the full balance outright isn't accurate, and from past reading seems only to be the case in very small transfers (or when the selling club is trying to scare a buying club away from a player they don't want to sell). https://twitter.com/SwissRamble/status/1161168731583766528 Pay particular attention to the bit below the graph: There's nothing remotely unusual or untoward about the financing of these transfers, or us securing a loan for the balance against the pending installments.
I’m aware of absolutely all of that. But the fact that both clubs involved in the transfer are owned by the same people makes it a bit different from the ‘norm’ and raises some questions. I’m quite taken aback that anyone would think this isn’t worth questioning!
Speculation is fine, but you were stating it as truth. The lack of rumours means very little although there were definitely stories regarding GD. I am not suggesting they damaged their assets ... I am suggesting the opposite. I am suggesting that they might have moved them to Udinese (rather than selling them selling them on the open market last summer) because they may have thought they could sell them for more money when the markets got back to normal. That is beneficial to Pozzo, and the group, but is not necessarily beneficial to Watford FC I am not suggesting anything nefarious, but I do think both Pussetto (sale and leaseback) and the Deulofeu (loan then permanent transfer) raise some questions which I have not really seen a sensible explanation for on this thread at this moment. I just cannot see how those moves benefited Watford FC (rather than the Pozzo group).
Don’t want to be labelled as negative as I genuinely think it’s unlikely it’ll be as cut and dried as that - but I do expect it to be murky and not particularly favourable to Watford FC.
I don't see how it makes things any different at all. Surely you can't expect Udinese's finances to magically improve just because it's us involved? They're not a club capable of stumping up an enormous amount of money up front like that. Very few clubs are. We certainly couldn't, when it comes down to it. If the shoe was on the other foot and we'd taken RDP from them if they got relegated, no way would be paying the full whack in one payment either. We'd be paying installments and they would almost certainly borrow against that pending income. No great mystery here.
No. But if we took RDP off them and then didn’t pay a penny a year later and they took out a loan because of that, I’d expect their fans to question the detail and/or the relationship. By reversing the roles, it’s doesn’t make it any less open to scrutiny! And if Udinese’s financial situation was such that they couldn’t pay a penny on 2 attained assets of reasonable/high value for over 12 months, then again....there is questions to ask! You disagree. That’s fine. I’m not lambasting the owners over this - I’m just saying it shouldn’t be waved through as being okay just because other clubs have done it. Those other clubs aren’t owned by the same people and I don’t think you have explained at all why that shouldn’t be a concern. It’s not obviously a bad thing. But it’s not obviously a good thing either. It’s something that raises questions and I feel we need to see more detail on. That detail comes from accounts that so far the club have been reticent to publish.
I don't understand the "didn't pay a penny a year later" comment. They're going to pay. They're paying installments. They probably already have paid, too. How do we know they haven't paid anything thus far? All we know is the club took out a loan against the outstanding payments. That doesn't equate to them not having paid anything thus far (and it obviously doesn't equate to them not paying anything in the future). Furthermore, the advance on the outstanding fees owed isn't going to be given unless the paperwork is above board. No business is going to provide a loan secured against millions due on future payments unless they know the pending assets are secure. But let us assume Udinese haven't made a payment yet. So what? They don't need to pay us upfront for us to be able to arrange a loan against the pending payments. It doesn't change our position at all - we get the same money either way. There's no "taking out a loan because of that"; the loan was ALWAYS going to happen because there was never any chance the money was going to be stumped up in one lump sum in the midst of a pandemic. Not in the middle of a pandemic that has catastrophically impacted almost every industry. As far as football clubs go every club has been losing money hand over fist, including the famously financially tight clubs like Spurs. Virtually no one could afford to sign anyone. This is why we didn't sell GD or RP to anyone else. If we were a normal club without an ownership umbrella, we'd have been stuck with an unhappy GD, an unhappy RP, and been responsible for the sum total of their wages in a season that we know was an enormous financial challenge. No one budgeted for or expected Covid. Not just football clubs; it's true of almost every business. It was unprecedented. Football is already run on a very tight financial tightrope at the best of times, so I don't think it's remotely implausible to suggest that it immediately posed enormous cash flow issues on every club not bankrolled by a mega rich owner. [/quote]You disagree. That’s fine. I’m not lambasting the owners over this - I’m just saying it shouldn’t be waved through as being okay just because other clubs have done it. Those other clubs aren’t owned by the same people and I don’t think you have explained at all why that shouldn’t be a concern.[/quote] I think you've got it backwards. If you want to raise a concern about something that's a perfectly normal way of doing things in the business, you need to illustrate why. Thus far, no one has done that. I see no reason to be concerned about something the vast majority of other clubs do. For me, the only thing even worth questioning here is whether or not we got real market value for the players. Given that an asset is only worth what someone is willing to pay, and to the best of anyone's knowledge no one else was willing to pay anything, I'm not sure there's a lot of conversation to be had there. We managed to get around 20 million in a market where practically no one was buying (and apparently no one wanted our players), and the deal was structured in a way that wouldn't produce immediate or lasting financial damage for either club. That's as much of a win as I think you can get under the circumstances. The fact remains, however, that it's perfectly normal business practice in football. I just don't see any more to it than that. If we'd have been relegated a season earlier things would have been different, but we weren't. We had a crappy hand and we had to play it out in the least crappy way. Until someone presents a credible alternative solution this seems just about the best outcome that could have come from a terrible market. As it stands, all I see is the owners managed to come up with a way to get two highly paid players off our books, get us 20 million of income in an environment where no one was buying, and secure a loan against pending payments to allow us to strengthen ahead of the coming season. Here's a question for consideration, though: why would a club of Udinese's financial resources stump up around 20 million in one lump sum in the middle of a pandemic, given that during times of extreme economic hardship having cash reserves to meet business obligations is highly important?
