Championship side Watford have managed to avoid administration, but the more general lesson that emerges from this episode is that clubs can be put at risk by feuds on the board or the decisions of an individual that is funding them. Earlier in December Watford Leisure said that it required a further £5.5m to cover cash flow needs until July 2010. The company made a pre-tax loss of £2m in the year to 30 June on revenues of £23.1m compared with a £400,000 profit in the previous 12 months.
Championship side Watford have managed to avoid administration, but the more general lesson that emerges from this episode is that clubs can be put at risk by feuds on the board or the decisions of an individual that is funding them. Earlier in December Watford Leisure said that it required a further £5.5m to cover cash flow needs until July 2010. The company made a pre-tax loss of £2m in the year to 30 June on revenues of £23.1m compared with a £400,000 profit in the previous 12 months.
Total liabilities amounted to £10.7m. The club’s shares on Aim had to be suspended after the Russo brothers (chairman and vice-chairman) stormed out before the annual general meeting, leaving former manager Graham Taylor to chair the meeting. Their business, Valley Grown Salads, demanded immediate repayment of a £4.9m loan to the company. VGS has 30 per cent of the shares, Lord Ashcroft’s Fordwat investment vehicle controls 37 per cent and he is backed by former chairman Graham Simpson who has 17 per cent. Lord Ashcroft, deputy chairman of the Conservative Party, stepped in to pay the £4.88m debt to Russo. Lord Ashcroft is viewed by his opponents as a controversial figure, but he managed to save the club for now. Sir Elton John who has had a long association with the Hornets plans to stage a fund raising concert in 2010.
Background: Watford face administration as former chairman Jimmy Russo refuses debt plea (Daily Telegraph)