Where Has All (or At Least Some Of) The Money Gone-£50m At Least

Discussion in 'The Hornets' Nest - Watford Chat' started by We hate 48, May 13, 2022.

  1. We hate 48

    We hate 48 Reservist

    After the euphoria of not losing a game at home and a new HC appointed, I return to the subject of our financial position and set out a factual extraction from the audited accounts of clubs similar in size of attendance, revenue and league positioning. All these clubs have player sales/purchases like us.

    These operating expenses are not wages, debt interest, player purchases or spend on the ground. It is cash out the door. All the clubs say they are “football related”

    The auditors also detail transactions between connected parties, so money to Gino or Udinese. Solidarity payments to Udinese amounted to c £6m in 2016 and maybe £1m in total to various connected parties of the directors since then so it’s not anything like £50m has gone directly to them. I understand we also add Agents fees to the cost of player purchases so it’s not that outlay.

    What is so unique to us that in comparison to clubs of similar standing we have spent at least £50m more than them since elevation to the PL and even last season?

    If we were run like Norwich or Burnley, the spend is c£100m more. Palace’s 21 accounts are not out yet but assuming similar to previous years they will be c £120m in the same period 16-21.

    We can’t ask the club directly as we are stakeholders not shareholders so it’s a private matter. I don’t know the answer but would be interested in any thoughts of others.

    upload_2022-5-13_9-42-49.png
     
  2. Jumbolina

    Jumbolina First Team

    It has been a long standing black hole. The accounts are audited so the auditors are happy they are legitimate but I can’t think any reason why are costs are so poorly controlled compared to our peers. A useful start point would be understanding what these “other operating costs cover” both at our club and other clubs. Presume it includes all manner of stuff like training cones, policing, stationary, walkie talkies, medical, whatever you can think of. But that brings us back to how on earth do we spend 50-100m more than everyone else!?? It’s half our debt.
     
  3. Jumbolina

    Jumbolina First Team

    And precisely the kind of questions the fans committee should be asking, alongside full clarification of the role of Mogi Bayat. We live in hope.
     
  4. hornetboy1

    hornetboy1 First Team Captain

    That will be a long way down the list.....behind vegan pies and the Hive Live content.
     
  5. Burnsy

    Burnsy First Team

    I fear you will die with that same hope being unfulfilled.

    Ucko being given guest treatment, chats with Duxbury and meeting players in the mix zone after the game - they going to start giving all fans that access?
     
  6. I Blame Pozzo

    I Blame Pozzo First Team

    I believe Fuxbury and Pozzo will answer in an Ernest Saunders way, if they ever do.
     
  7. Irishorn

    Irishorn Gael Force

    Very interesting stuff. The massively higher spend in this area over other clubs deserves an explanation. As Jumbolina suggests, at the very least we should know what these operating expenses comprise of and whether all clubs using the same definition. The bleak possibility is that it relates to interest payments on servicing debt, payments to agents, legal fees, compensation for managers, etc.
     
  8. UEA_Hornet

    UEA_Hornet First Team Captain

    I'd probably argue it's above their pay grade. Local journalists should be asking these questions really - the Wobby and AL and the like.
     
  9. a19tgg

    a19tgg First Team

    Unsurprising you coming out with comments like this, heaven forbid you face the real issue for once.
     
  10. a19tgg

    a19tgg First Team

    Has Gino got a giant Yellow and black themed fish tank like Peter Ridsdale?
     
  11. Jumbolina

    Jumbolina First Team

    That’s a good point actually. It could be a different criteria between clubs of what gets put in that bucket. As Mr 48 says, it’s not agent fees as they get capitalised alongside player fee I think as long as classed as directly related to transfer. Of course that doesn’t rule out general Bayat “consultancy” fees I guess!!
     
  12. AndrewH63

    AndrewH63 Reservist

  13. UEA_Hornet

    UEA_Hornet First Team Captain

    I'm sure some of it is perfectly harmless and in fact positive stuff. For example, it's pretty well-known our groundstaff are some of the best in England (won the PL award a few seasons ago), the pitches at the stadium and training ground are immaculate and the head honcho on Twitter seems to get new kit and the budget he needs to make the pitch perfect. That won't be cheap. But even if we spend £500k/year more than the other teams listed it's still only a tiny bit of the gap.
     
    Jumbolina likes this.
  14. a19tgg

    a19tgg First Team

    I know you’ve acknowledged it won’t be that much, but if it is then it would be a pointless vanity spend really. Yeah it’s great to have a lovely pitch, but it’s not essential, and if anything probably helps the opposition more than us. Having a pitch that looked the same as any other PL team wouldn’t have any sort of negative impact on us in any way.
     
  15. We hate 48

    We hate 48 Reservist

    Interest payments are not included in those operating expenses-they are shown separately and payments to agents are capitalised to the cost of buying players so its not those two.

    As to whether all clubs use the same definition well I am no accountant but its reasonable to think they are not least to comply with FFP rules

    Compensation to ex managers could well be in there -i think c £7m out in last two financial years but we also had £5m in from Everton re Silva
     
  16. Jumbolina

    Jumbolina First Team

    He'd be fine. I'm not expecting him to go full Ben Affleck in the Accountant and start writing formulae on Duxbury's walls, but if there are two areas of concern, someone can pose the questions and the answer would come out in the minutes.
     
    Eddie_Hitler likes this.
  17. Burnsy

    Burnsy First Team

    And we need that carpet for Edo Kayembe to spray 5yd sideway-passes with great accuracy.
     
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  18. ThePaperBoy

    ThePaperBoy No Longer Delivering

    Some will be money spent on projects such as Epic Africa, a subsidiary of Epic Sports who are an "international company that deals with sports brokerage, identification of young talents and career management."
    https://www.epicsportsafrica.com

    We're named as 1 of 7 partners, the others being Tottenham Hotspur, Real Betis, Benfica, Villarreal, Hertha Berlin and Marsaille. There are also a raft of developmental clubs so it's no small operation.

    Global Football Academy is another where we seem to be a main part of the set-up, in London at least - "Global Football Academy / TOS and Watford FC are proud to announce the New International Academy in London UK."

    They also have academies in Milan, Lisbon, Miami & Dubai.
    https://gfafootball.com

    Quite how up to date that information is I'm not so sure as the photo's of Watford players are a little dated, but even if it isn't a going concern in 2022 it shows monies have been spent here in the past.

    There are other organisations where we have been named but of a much smaller concern, one is a goalkeeping set-up in London, and I'm pretty sure we contribute to the academy Udinese have in Colombia seeing as we have at least one player there who has signed a pre-contract with us - Sebastián Cortés Perlaza.

    Another player, Ober Almanza, also came through Udinese Colombia and is currently playing youth football in Spain with Albacete Balompie. He is now contracted to Watford. So as I say, it's not inconceivable we're contributing in someway to that particular academy.

    There are other tenuous links I found on a search I did a while ago when speaking to Reids and I'm 100% positive I won't have found all partnerships we have when it comes to academies and outside player investments of this kind. But it's another expenditure which is nowhere near obvious or wholly accountable by way of the actual amount.
     
  19. Jumbolina

    Jumbolina First Team

    If us spending on overseas academies is included in this bucket of expense, then presumably the fact Palace (for example) spend a lot more on their category 1 youth academy would also be included so it nets out? Unless we are spending vast amounts over and above on these unproductive overseas projects, compared to the cost of having a top tier home youth set up?
     
    CarlosKickaballs likes this.
  20. cyaninternetdog

    cyaninternetdog Forum Hippie

  21. ThePaperBoy

    ThePaperBoy No Longer Delivering

    I've no idea either way, if I fully understand what you're saying.
    Are you suggesting we spend a lot more on overseas ventures such as the ones I've linked, therefore we possibly underfund our home academy and Palace, using your example, do it the other way round?

    If that is the case then it's anyones guess as to why. It's possibly cheaper investing as a partner in a number of academies & companies abroad than it is going all in as a Category 1 club in this country which, when you consider the cost of just setting up the thing, will run into over a million per season. I say that because a couple of years ago I read something along the lines of there being a minimum spend on coaching salaries which had to be over £1m, I think. Don't quote me on that! I just remember there being ridiculously high minimum spends which totalled over £1m per season on staff.

    Perhaps we also struggle to attract players due to the competition with other clubs nearby so look further afield? I'm guessing but it's possible.

    Without knowing which players have signed for Watford without ever setting foot at London Colney, it's impossible to know what the actual benefits are. I personally don't think it's a backdoor way of player trading because as soon as a player turns 18, he has to be registered and his name will appear in the contracted players list at the start of every season as well as in January. That hasn't been happening so I don't see the upside of how this operates in terms of players coming to the club, directly at least. It could be we sign kids who go to the development clubs and we have an option on them. I'm guessing again.

    All I know and the reason I posted the links/information was to show, 1: Here's where unknown, or not directly accounted for money is being spent & 2: None of us have a true picture of where the miscellaneous monies go, but it doesn't necessarily mean it ends up in someones back pocket. More likely straight into an offshore bank account but that's another Mogi. Not Mogi, I meant thing!

    As an add-on to my previous post, here's a link to a company we are/were partners with where the interest is centred in America.
    https://www.globalimagesports.com/partners/professionalfc/watford-fc

    I'm pretty sure this is no longer a going concern for Watford but I found it interesting we had 6 clubs directly linked as Affiliated Partners.
    This partnership seemed to come after our own academy in America appeared to close down which, if memory serves me right, happened when we were relegated from the EPL first time around.

    When I did the search I also found a competition we were running in America to find potential players but I didn't keep that particular link for some reason.
     
    Forzainglese likes this.
  22. Hogg-DEENEY!!!

    Hogg-DEENEY!!! Squad Player

    Tbf it probably helped us get out of the Championship, we really struggled on some away pitches that weren't quite perfect (or worse in some cases!), but we were imperious at home, and all this in a season where the difference between home and away was reduced to almost nothing across the country
     
  23. SkylaRose

    SkylaRose Administrator Staff Member

    Millwall away comes to mind.
     
  24. Hogg-DEENEY!!!

    Hogg-DEENEY!!! Squad Player

    First away game of the season at Hillsborough, Foster mentioned the pitch wasn't quite perfect, although it wasn't noticeable on Hive Live. We improved in the second half, but the first half of that game was pretty shambolic...
     
    SkylaRose likes this.
  25. Jumbolina

    Jumbolina First Team

    Only observation I was making was that we have spent £60m more than palace on other operating expenses over the years. As you say some of this is accounted for by our overseas networks. But equally palace must spend a lot more than us on their domestic academy, unless it is somewhere else in their accounts. So even with this factor the £60m figure seems bonkers.
     
    ThePaperBoy likes this.
  26. UEA_Hornet

    UEA_Hornet First Team Captain

    Well, to explain Watford's massive inflated costs in this category we have to look for points of difference with the other clubs listed. If we're spending more than Palace on youth scouting/development then fine but there's nothing in the output we see to suggest that's the case.
     
    Chiswell and ThePaperBoy like this.
  27. ThePaperBoy

    ThePaperBoy No Longer Delivering

    Yeah, there's no way we spend more on youth development/scouting & infrastructure than any Cat.1 academy.

    A quick search tells me back in 2012, when we applied for Cat.1 but ultimately went down to Cat.3 status, running an elite academy was recommended at £2.3m per year. I imagine that has inflated somewhat in the 10 years since.

    But as I said to Jumbolina, I was just adding to the discussion of where an unknown amount of money is spent but which isn't obvious to supporters or detailed in the club accounts. A bit like the costings of groundskeeping equipment you put forward earlier. That's not to say they excuse the ridiculous amount which isn't accounted for in a detailed way but, hopefully, may point to areas of club spending which are just simply not known about.
     
    UEA_Hornet likes this.
  28. Chiswell

    Chiswell Academy Graduate

    All this about the finances really irks me! A L*t*n friend said to me if they make the Premier League they are going to use the money to pay for their new stadium in one go. Sensible stuff. Yet, here are we, after a few years in the Premier League and, if I understand correctly, the stadium which we once owned outright, is now security for a £50m loan - so if we don't clear the loan we lose the stadium?
     
    Jumbolina likes this.
  29. luke_golden

    luke_golden Space Cadet

    Does anybody else smell that?

    This thread absolutely stinks of further legal threats.

    Who’ll eventually get this place shut down, do we reckon?

    Fuxbury? 1881? FTRE? I guess as they’re already sucking one another off, it’s plausible that all 3 combine and obliterate this sad corner of the internet.
     
    Chumlax likes this.
  30. Pozzo Out

    Pozzo Out Squad Player

    Allegedly.
     
    Chumlax likes this.
  31. Maninblack

    Maninblack Reservist

    Ongoing compensation payments to our dozens of sacked managers in the last ten years?
     
  32. GoingDown

    GoingDown "The Stability"

    Who cares? Certainly not our supporter base who hardly raised a titter of objection to becoming the first team in football history to lose 11 games in a row at home.

    Duxbury and Gino could put a Luton shirt on the GT statue whilst announcing our merger with Luton Town and you’d have the committee members with their cut and paste supporter notes for social media about what a great idea it is whilst the majority of our fans clapped the news and desperately signalled for the shirt to be given to them.

    Our fans don’t care about crap like finances and mortgages and all that. As long as they can sit at the Vic with their Sainsbury’s carrier bag and have a nice day outside the house, that’s the main thing.

    The sooner you all realise this, the better.
     
  33. Pozzo Out

    Pozzo Out Squad Player

    Don’t forget the vegetables.
     
  34. UEA_Hornet

    UEA_Hornet First Team Captain

    I think you'll find GD specifically mentioned them:
     
    Pozzo Out likes this.
  35. WillisWasTheWorst

    WillisWasTheWorst Its making less grammar mistake's thats important

    Amazing to think you’re never more than 6 feet away from an ex-Watford manager.
     

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