Discussion in 'The Hornets' Nest - Watford Chat' started by We hate 48, Sep 1, 2020.
Wonder how a contract extension works then wrt asset value
That is some land revaluation!
Amazing what you can do with 5 minutes on Zoopla.
Interesting question. Do they start again and amortise whats left over the remaining contract, or rework it from the original purchase? One for Duxbury at the next At Your Place. I'm sure everyone would be rivetted.
Sacking and paying off three managers in a year probably doesn't help
I am no valuer but the below is an extract from one on the DRC method which the club is now using. My highlights in bold. Normally used for Schools or hospitals or other public sector assets. Football clubs are of course sold from time to time or go bust. The historical cost of vicarage road is £42m so as you say some revaluation which has turned the balance sheet from one where it would have been technically insolvent to the tune of £50m this revaluation means we have positive assets of £9m
By comparison Brightons Amex stadium is in their books at £110m on a cost basis.
Depreciated Replacement Cost (DRC) method. This is used for subjects which are rarely, if ever, sold on the market. It is in effect the existing use value to the establishment and not an alternative market value, in other words, the cost for the establishment to buy land and develop a modern equivalent on the site, less economic and functional obsolescence. Certain properties are often of a specialist nature arising from their construction, arrangement, size and location, or a combination of these factors. From this we arrive at a build cost rate and deduct for age, condition and obsolescence factors. The value of the land will also be dependent upon the location of the subjects and the relevant planning permission/zoning that the subject has in the Local Development Plan. i.e where the land value is underpinned by residential values.
In summary, for loan security purposes a valuation based on market value is appropriate. For financial statements, where the property is unusual in terms of nature and design, a DRC valuation is required.
Glad that we dispensed of half our 111m of player assets to Udinese for 2m and some reserves.
I wonder how much it cost to sack Pearson when his contract was due to end that week!
Good job we got promoted?
To be fair it would be about the most interesting question asked in about 5 years
Re value of the Vic, if the club have seriously been looking at alternate sites for a new home they would be mad not to have had a recent valuation of the Vic
Accounts struck at 30/6/20 so a few weeks before Pearson was sacked and our relegation confirmed
Accounts signed on March 2nd-just after losing away to BMuff so before promotion was confirmed
Key points IMHO
Wages up 15% to £96m
Duxbury salary up 25% to £878k
Loss £35m-but the non cash expense of amortisation (player write downs over their contract length) was £44m so the debt went up as we spent money on players (and took on the obligation to pay the balance of their transfer cost) and the ground/London Colney.
We also spent £29m on other expenses which was down from the £39m in 2019 but in comparison to C Palace in 2019 (their 2020 accounts are not out yet) they spent £20m a year in both 2018 and 2019 on other expenses.
Total Debt £103m up from £88m as cash £15m held in 2019 gone and replaced with £15m overdraft
Total Transfer fees still owed are £69m up from £50m in 2019
Total amounts owed £170m v £140m in 2019
Other points (bar ground valued on a specialised basis)
player purchases (at cost) £66m-given we only bought Pussetto £7m, Pedro £4m and Dawson £4m what was the £50m spent on if Sarr only cost £30m?
player sales post y/e £51m -accords to Transfermarket figures-Doucs £22m, Pervis £16m, Suarez £7m, with 3x £2m each for Capoue,Dawson and Foulquire.
No reference to the other post year end event of borrowing against the 20/21 parachute money in July 2020.
No reference to the parent company (owned by Gino) Hornets Investment Ltd "HIL" writing off the £5.6m they are owed -only that they are not going to demand it back if it will cause problems.
Of the £103m of debt c £98m is owed (via HIL) to third parties including £70m to XXIII Capital
This is the backdrop to the season and financial year just ended. Those accounts due out by end March 2022 under PL rules (assuming no change to existing rules).
No accounts filed yet for HIL
If the accounts are from June 2020 then those player sales are from after then? Who did we sell the season before?
Maybe should have looked at the document before asking!
Better or worse than predicted? Obviously promotion is a massive plus but what's the situation now. All clubs have debt I believe but assets cover this. Are we covered?
There's also a breakdown in The Athletic. Interesting to note that Watford were paid £4.5m in compensation for Everton's poaching of Marco Silva.
Termination of contracts cost Watford £6.7m, for the dismissals of QSF and Gracia. Pearson is not included in this figure but it should be a small sum seeing as he only had a week of contract left.
Overall debt is £111m. Duxbury is paid £948k and Gino takes a £66k salary.
When did Dux get his pay rise?
Especially when u consider we made about £60m from player sales after being relegated while holding on to our 2 most p5rized assets in terms of future value and saw the values of Sarr, JP, Bachmann and Sierralta increase by a combined total of at least £20m.
So can we spunk £40m on a top class striker or not?
He's earnt every penny to be fair. Can't be easy keeping a straight face while a torrent of bullcrap escapes your mouth constantly.
It will be 6 years in the prem and 2 promotions from the champ in his 10 years as CEO by the end of this season He deserves more !!
On balance probably better than expected albeit the accounts reflect the period to June 20 when we had around 75% of the seasons income as normal. What we owed increased to £170m (i include transfer fees still to be paid as they have to be met in cash) and since then we have sold c£70m worth of players and spent next to nothing which in isolation would have reduced that number to around £100m
However the unknown is what we received in income whilst in EFL-parachute money and peanuts in media/TV and no gate receipts. Expenditure being wages and whats called other expenses whatever they are. With wages c £90m and other expenses (guess work £m) then the relief of promotion v Millwall and what it meant financially was the pictures of/comments from Duxbury. We can speculate on what the debt might have risen to in the financial year just ended but now we can borrow against PL money to help with that.
The club believe that the balance sheet cost of the players at £111m understates their transfer value so in that sense we do have assets (and the ability to borrow against PL TV money) to help secure the debt even if the valuation of the ground is excluded.
It took us 5 years in the EPL to buy Sarr at a reported 35m so it will be a while I think before we go big again. Probably if the Pozzo's find a partner to invest.
I am not buying the fact that only 2 teams had a lower wage bill than Wolves.
Duxberry takes home a cool £9183 a week.
They have some rather illustrious players, but a small squad, so I could see that tbf
Swiss Ramble's done his in depth analysis of our financial results on Twitter. Well worth a read as it benchmarks us against other PL clubs:
Worst owners ever!!!
Yes.....Swiss Ramble are very good. Lots of detail in their reporting and it's usually pretty reliable.
Bournemouth's wages to turnover ratio is (was) 113%?! Staggering.
Not an issue if your mega-wealthy owners are prepared to bankroll the club as has hapepned in their case for years.
The myth of the loan fees finally smashed?
Clearly meant £84m not £84k. Easy mistake to make when the K is right above the M. Just a typo.
Confident we have the funds to sign Mbappe and Messi now.
Get it done Gino.
I agree with their analysis bar one point now the accounts for the parent (Hornets Investment Ltd "HIL") are filed-they are the entity who fund Watford Football club. Swiss Ramble says there is £76m of loans from Group Undertakings. This is true but only half the story as HIL have borrowed £70m from a third party XXiiiCapital secured against the assets of the football club-that's not the same as the implication this support is all from the owners .
Nothing unusual in that per se, bar again
1/ As the original post on this thread said, XXiii Capital are no longer funding football clubs as they did with us when first promoted to PL
2/ Of the £70m owed, £40m of it was due to be repaid within 12m of 30/6/20 so should have been repaid by now or extended
This may-or may not- have a bearing on what we can spend. We did borrow c £18m against the transfers to Udinese of GD and RP and we should also be able to borrow against this years PL money from the arrangement we have with Barclays. XXXiii Capital still have their security in place but then were still owed £30m if the £40m has been repaid.
Two other observations
-Gino via his ultimate owning entity increased his loan to £9m from <£5m so he is digging into his pockets.
-we paid £66m for players in our last season in PL. These included (per Transfer market/media sources) Pusetto £7m, Dawson £4m and Pedro c£5m. That leaves £50m for Sarr unless there is a player I have missed out on.