Debt Free In 12 Months (15 June 2024)

Problem is we borrowed against the transfer fees owed to us (I haven’t included those in the debt figure as they are self collapsing when the funds arrive). But we still need to find money for the fees owed - although presumably we paid a decent chunk in the last 12 months.

As you say even if they got the £77m to £29m that is some going. Just doesn’t seem feasible to me.

 

It would be two years though. From June 2022 (date of latest accounts) to June 2024. But still a Herculean task.

 

That sneaky little word 'technically'. No doubt hiding a multitude of nasties.

 

I think you mean a RE-mortgage!

 

Tick tock Gino.....

 

that was me following up on the accountant ignoring the question. So I wanted more detail. When asked how the debt had been taken down he shrugged, put on his best you wouldn’t understand face and started warbling about transfers, income etc. I asked the third time and Gino, not Scott, conformed the £29m balance by fiscal year end and debt free by 2024

 

Tik Tok sponsor Wrexham m8.

 

After last season’s accounts ended in June 22 we have executed security over future transfers fees due from the sales of Masina, Cucho. Pereya and Dennis-this debt was presumably used to meet wages/operating costs and transfer fees payable.

We have executed additional security over parachute monies due up until June 2024 (and the boiler !!)

A potential scenario is ;
Income
Match day £7m
Commercial £10m
TV £55m
Transfer income-£20m per above 4 players this season and now pedro so overall £50m
Kamara sale (net) £13m
Total £135m
Cash out
Transfer fees payable-£54m at June 22 (no dates for payment-assume) £25m
Wages-were £72m in PL and £65m when in EFL 20/21-assume £55m
Operating costs-£44m last season/£28m in EFL 20/21-assume £25m
Total £105m

Obviously big assumptions but maybe £30m of that £48m reduction from £77m to £29m can be seen-as for the other £18m maybe those wages and operating costs are lower and/or transfer fees payable longer in duration-as would be new purchases –Bayo/Okoye/Kone etc-SD ignores these cash flow commitments aka "football related costs" as debt because they are not classified as such even though they must be paid to stay in the football league/PL.

I have ignored interest on the debt hoping this is met by loan fees/other sales eg Samir/WTE

 

Was that the one that they diverted to the used car salesman / accountant who said "you don't need to worry about the finances"?

I did wonder if you were going to flip the table at that point.

 

Whether the debt to Pozzo would be paid back or written off simpy affects the price paid to buy us. The underlying asset, ie the trading football club is worth what it is worth. Say the club was worth £100m and £50m was owed to Pozzo, a buyer would either pay £100m for the club and Pozzo would write off his debt, or pay £50m for the club and repay the £50m loans. The decision is often tax driven.

 

no that one was diverted and followed up by the ladies discussing a well known person online starting fights at the qpr away. I then asked the next question and bought it back to finances which at least was given some numbers back from Gino

in hindsight I wish more people had followed up on their question to get more intricate answers then some of the waffle that they received

 

Debt free in 12 months will not age well this time next year. Perhaps we'll do the supermarket/oil thing and find a war to blame for not reaching the target.

 

Undoubtedly. And looked pretty urgent given the £16m was reportedly paid upfront.

16/08/22 - Spurs sign Udogie from Udinese, immediately announce he's being loaned back for the season
22/08/22 - Villa pull out of £25m Sarr deal
23/08/22 - Kamara sold for £16m and gets loaned back to us

The obvious inference is that they were expecting a fair chunk of the Sarr fee upfront so cooked up this Kamara wheeze to make up for that shortfall.

 

Brexit mate.

 

This bit from Andrew French’s transcript is pretty unequivocal:

 

I wonder if this calculation is based on an assumption that we get £10m+ for Sarr this summer

 

It must be. Or they have money trees at the training ground.

 

I think they are (again) pulling the “club” v “”holding company” trick.

 

Yeah, that's the most likely. Although Gino has seemingly closed off that avenue too:

https://www.watfordobserver.co.uk/s...k-watford-debt-directorship-pre-season-trips/

I'm highly dubious and clearly they know as well as we do we're 9 months away from seeing the June 2023 year end results. Would be good if the WST (or someone qualified) could get a confidential look the books and be permitted to either confirm or deny the current position.

 

As you say. Seems Pozzo has confirmed it’s holding company as well. Wonder if Scott was squirming though and in his head thinking “Gino, no!”

Well done on whoever asked the question so specifically by the way.

 

Yes. Worse case he’s binned off to Udinese for £20m

 

I don’t think anyone would lend to Hornets Investment Ltd - the holding company anymore - other than Gino. All secured debt taken out of late has been secured against assets of Watford FC be they transfer fees due or TV money- or boilers !.
In the past XV Capital did lend to the holding company but that was always a bit odd as it has no assets only it’s shares in the trading entity - Watford FC who has pledged its assets to other secured lenders. We can monitor filings at companies house to show those current lenders releasing their charges over time to show debt being repaid

 

Unless it’s an old story and I’m late, it seems we’ve just been awarded £2.3 million compensation for the Gueye controversy

 

Disgusting that Marseille needed to be dragged through a FIFA arbitrated process in order to finally pay what they owe for a player of African descent

 

New loan taken out on the Sarr transfer fee, runs until end of December 2025.

Be interesting how this is spun given the unequivocal statements that we'd be debt free in about seven months time!

 

Indeed.
Transfermarket looks to have it right as €13.5m fee with now c€11.5 m due per that transaction which we have borrowed against via Macquarie.

So a cash loss of over £20m based on cash paid less resale- let’s forget about the amount of annual write down as non cash accounting requirement.

Maybe Gino has a small cash flow problem in being able to inject more funds to leave us with no external debt by next June. Or we are open to selling someone like Asprilla once the season ends in May to repay Macquarie to fulfill the “ promise”

 

I think we get the full transfer fee immediatly instead of waiting for the installments to come through. However, in doing they charge a large interest rate and that's where they make their money back.

 

I’m by no means an accountant, but I *assume* it’s taking out a loan and promising to pay it back using the money gained from the sale of Sarr.

As I understand it, Marseille are paying in instalments. So in other words, the club still needs money and loans to secure/generate that cash flow, and the funds from Sarr’s transfer are our guarantee to pay off the loans.

However, I’m sure someone will correct me on all of this.