Generic clubs in financial crisis Thread

[Super_horns]

Watford receive a stay of execution over the repayment to the Russo family.

A deal has been proposed by Lord Ashcroft to put in 7.5 million which will cover the Russo loan etc..

Now its up the brothers to accept this deal.

[Bucks Dave]

Not quite. The £7.5 M is a rights issue and will cover the £4.8M owed to the Russos but not all the further £5.5M Watford must find by June. Selling Scott Loach in Jan may cover that shortfall. However, the motives of Ashcroft and Simpson in owning and running the club are still unclear. Ashcroft is not a Watford supporter but a businessman who likes to see a return. Ownership of Vicarage Road at a knockdown price could be lucrative. At the AGM as I understand it there was not even a representative of Ashcroft's identified.

At Reading we have one ego controlling things but quite open about his motives, at Watford they have competing egos battling for control with the fans way down the pecking order on knowing what's happening.Watford even sued their local paper when it was getting close to what was really going on.

Their supporters trust also seem to be completely supine.

[Super_horns]

That is the worry.

Graham Taylor has been named intermin chairman so at least that is one person who has the club and fans at interest/heart first rather than their ego/bank balance.

[Bucks Dave]

To make it even more interesting at Watford there is one other ego with money who is a Watford supporter and that is Elton John. However, EJ cannot stand and does not trust Ashcroft/Simpson and flounced off when they were in charge, refusing to put any more money in. It's a real soap opera and fascinating to watch if you are not a Watford fan.

[Super_horns]

Watford heading into Administration as Russo rejects clubs rescue proposal.

Seem you at the bottom.

[Row Z Royal]

Watford heading into Administration as Russo rejects clubs rescue proposal.

Seem you at the bottom.

Well Russo is just a cock then.

[PieEater]

As I understand it Lord Ashcroft has underwritten the rights issue so Russo was guaranteed his money albeit some time later than he wanted it. If he's not accepted the rights issue then there must be another motive, like getting ownership of the ground. Surely it can't just be ego brinkmanship?

[handbags_harris]

Not quite. The £7.5 M is a rights issue and will cover the £4.8M owed to the Russos but not all the further £5.5M Watford must find by June. Selling Scott Loach in Jan may cover that shortfall. However, the motives of Ashcroft and Simpson in owning and running the club are still unclear. Ashcroft is not a Watford supporter but a businessman who likes to see a return. Ownership of Vicarage Road at a knockdown price could be lucrative. At the AGM as I understand it there was not even a representative of Ashcroft's identified.

At Reading we have one ego controlling things but quite open about his motives, at Watford they have competing egos battling for control with the fans way down the pecking order on knowing what's happening.Watford even sued their local paper when it was getting close to what was really going on.

Their supporters trust also seem to be completely supine.

That highlighted bit, that is where the Russo's were clever in that they secured the loans on Vicarage Road. WFC cannot afford to repay the money back by the deadline given, so the stadium effectively is about to be owned by the Russo's,via Valley Grown Salads.

[Super_horns]

Watford heading into Administration as Russo rejects clubs rescue proposal.

Seem you at the bottom.

Well Russo is just a cock then.

The loan guys and players like Loach/DeMerit are going now plus even a few youngsters!

Anyone worth dosh I reckon.

Feel so sorry for Malky and the players.

We were looking at the play-offs but now its relegation.

Now we don't even owe the ground but Russos and their company do so goodness knows what they might do.

[handbags_harris]

Watford heading into Administration as Russo rejects clubs rescue proposal.

Seem you at the bottom.

Well Russo is just a cock then.

The loan guys and players like Loach/DeMerit are going now plus even a few youngsters!

Anyone worth dosh I reckon.

Feel so sorry for Malky and the players.

We were looking at the play-offs but now its relegation.

Now we don't even owe the ground but Russos and their company do so goodness knows what they might do.

My take on things is a touch more positive. Speaking to my mate Watford Tom and given the info he's provided, I honestly believe that the Russo's have done what they have done in the best interests of the club. Firstly, they knew they wouldn't be re-elected at the AGM, so left it until the last minute to resign. They then immediately call in the loans (secured on Vicarage Road) knowing full well that the holding company or Watford FC had no way of paying it by the deadline they had set. This leaves Vicarage Road in the Russo's hands, and away from Simpson and Ashcroft. Not only that, administration means that the club is put up for sale, and seeing as the Russo's already effectively own Vicarage Road, it leaves them in an incredibly strong position when it comes to buying the club. It is my guess that Jimmy Russo will be chairman at Watford Football Club by the end of the season, and Simpson and Ashcroft will be nowhere to be seen.

Of course, I could be well wide of the mark, but this is my gut feeling.

[Royal Rother]

But the Russos are little and foreign so you'd have to be surprised if they weren't doing it all out of self-interest.

[wolsey]

But the Russos are little and foreign so you'd have to be surprised if they weren't doing it all out of self-interest.

I've met Jimmy - bit like Danny De Vito's character in Taxi, but without his social graces - the foreign bit is irrelevant, but the rest of your sentence is about right.

[handbags_harris]

But the Russos are little and foreign so you'd have to be surprised if they weren't doing it all out of self-interest.

I've met Jimmy - bit like Danny De Vito's character in Taxi, but without his social graces - the foreign bit is irrelevant, but the rest of your sentence is about right.

Could the self-interest bit be that they want full control of Watford FC without the isue of having Ashcroft and Simpson on board?

[Bucks Dave]

Ashcroft/Simpson are majority shareholders. The rights issue was clever in that it would have increased their ownership of the club and reduced the value of the Russos shares, potentially losing them millions.What you have to realise is that the battle is not just over assets(mostly Vicarage Road) to be got on the cheap but between people who genuinely detest each other. Poor old Graham Taylor is simply an honest football man out of his depth. And Elton John is seething on the sideline.

The fans of course are nowhere in any of this and I do feel for them. Apart from the few school age muppets who kept coming onto our sites taunting us whenever Brendan lost another match they are a decent bunch.

[The whole year inn]

what is the likely punishment for all this?

[Royal Rother]

Russo getting flogged with a stick of his own celery.

[(.)Boobies(.)]

what is the likely punishment for all this?

A 10 points deduction (?), and a freeze on Watford's buying of players. If Watford don't come out of administration by the seasons end, I think they gain another points deduction that will be carried into next season?

[Dirk Gently]

what is the likely punishment for all this?

A 10 points deduction (?), and a freeze on Watford's buying of players. If Watford don't come out of administration by the seasons end, I think they gain another points deduction that will be carried into next season?

If they can't agree s CVA with the creditors - which usually happens when tax money is owed to HMRC, as they oppose agreements on principle - then they get another 15 points. Don't think Watford owe to HMRC so they should be Ok on that score.

[handbags_harris]

It sounds like Watford are in deep shit no matter what. This sort of conflict is likely to drag on for years. I can't see ether party backing down.

My understanding is that that's not strictly true though. If/when the club enter administration, that leaves the financial side of things in the hands of independent administrators, and the club is also up for sale. If I understand the situation correctly, my prediction is that with the Russo's now effectively owning Vicarage Road, they will be in a much stronger position to buy the club when it goes into administration. This would leave Simpson and Ashcroft out in the cold and also out of pocket as they would have to sell their shares at a valuation negotiated by the Russo's and the administrators, and leaves the Russo's engineered position intact.

For a pretty well balanced article on the matter, this has been forwarded to me:

http://www.twohundredpercent.net/?p=4096

[Dirk Gently]

It sounds like Watford are in deep shit no matter what. This sort of conflict is likely to drag on for years. I can't see ether party backing down.

My understanding is that that's not strictly true though. If/when the club enter administration, that leaves the financial side of things in the hands of independent administrators, and the club is also up for sale. If I understand the situation correctly, my prediction is that with the Russo's now effectively owning Vicarage Road, they will be in a much stronger position to buy the club when it goes into administration. This would leave Simpson and Ashcroft out in the cold and also out of pocket as they would have to sell their shares at a valuation negotiated by the Russo's and the administrators, and leaves the Russo's engineered position intact.

For a pretty well balanced article on the matter, this has been forwarded to me:

http://www.twohundredpercent.net/?p=4096

Yep - the administrator's job is to run the club and get in offers to purchase it. Then there's a vote amongst all of the creditors as to what offer to accept - if there's more than one, with votes allocated according to the size of debt for each creditor. Usually, this vote goes in favour of sale to the highest bidder (as creditors get most back that way), but not always. The Leeds "rescue" from administration was to a buyer offering less than a rival consortium, but was swung by the votes of a local digital radio station owned by a K Bates of Leeds - this "debt" was substantial and was discovered very late in the proceedings..... but I digress.

So what this mean at Watford is that if they went into administration Russo would have the most debt and so the most votes in deciding who gets to purchase the company from the administrators.