Watford's Premiership Cash Bonanza - 22/05/2006

It's been dubbed the £40m final and Watford's victory over Leeds in the Championship play-off final has certainly given them a massive cash boost. Even if they finish bottom of the Premiership, they are guaranteed £18 millon compared with the £1 million they received from the Football League. On top of that there is an estimated £18 million in gate receipts, merchandise and other commercial deals as well as a further £18 million in parachute payments for the next two seasons if they are relegated. One priority will to be build a new stand to boost their 19,500 capacity, but it doesn't look as if they will be splashing out on new players, at least until the January transfer window. Their story is even more remarkable given their fight back from the financial pit they were in a few years ago. In 2001-2 Gianliuca Vialli's £7.6 million spending spree as manager took the club to the brink of bankruptcy in the wake of the collapse of the ITV Digital deal. Even last season they still had £8.5m in debts, but that was before a cash injection by Lord Ashcroft, the billionaire deputy chairman of the Conservative Party and the club's new majority shareholder. Watford were already well on the way to financial recovery, having brought annual losses down from £10 million to £2 million. They had also brought back Vicarage Road for £7 million with the help of a £1.3 million fund raising concert by Sir Elton John, their honorary life president.

Leeds took £1.3m in gate receipts from the final. Ken Bates bought the club in a £10 million deal last January. The club's debts, £100 million after the Ridsdale era attempt to get into the Champions League, are under £10 million. Losses of £120,000 a week have been turned round into a modest profit of £16,000 a week. However, the stadium and training ground, sold off by the previous board to avoid administration, still have to be bought back. Defeat in the final meant a drop in income of £6.5 million with the end of parachute payments. However, the contracts of nine players, who last year accounted for £16 million of the £19 million payroll, have finally come to an end. Both clubs have learnt the lessons of prudent financial management the hard way.