Kinda timely, that Goalfood sees fit to ask for a run-down of Watford’s financial precariousness, this week of all weeks. I write with the club apparently on the verge of a precipice, with creditors Valley Grown Salads, the company of erstwhile chairman Jimmy Russo and brother Vince, also a director until last night’s AGM, having called in loans totalling almost £5million with immediate effect. The effect of this could be more dramatic even than the seemingly inevitable administration (staved off, at least temporarily, since this piece first published – Ed).
The seeds of this were sown long since; in 2001, in the wake of a relatively prudent failure to take on the Premiership in 1999/2000, Watford’s board sanctioned the appointment of Gianluca Vialli as manager and permitted him to commit the club to contracts that were to prove unsustainable when the anticipated promotion didn’t follow. The scramble to fill the hole in the budget saw the Vicarage Road stadium, the club’s principal asset, sold off and the majority of the board sidle quietly off into the sunset; Graham Simpson hung around, and as chairman oversaw a challenging period under Ray Lewington’s management which gradually saw the salary budget brought under control as Watford edged towards financial stability.
Simpson also presided over the appointment of Adrian Boothroyd in succession to Lewington, under whose management an unexpected promotion was achieved in 2006. This should have finally sorted out the money situation, but alas it’s never that easy. The ground’s freehold was repurchased, but relegation followed and again, reckless decisions were made in pursuit of promotion. Admittedly, some of these gambles were made to shore up wobbly form whilst nine points clear at the Championship summit in the January of 2008, but there was no such excuse for the long, expensive contract awarded to Nathan Ellington the previous August (5 goals in Watford colours to date). We didn’t get promoted, and the wheels really started to come off.
Several culls of the playing staff later, Watford are implausibly still mid-table in the Championship under the impressive guidance of Malky Mackay. Behind the scenes however, things are far from calm. A split between the major shareholders came to a head a year ago at an EGM, where Jimmy Russo made unspecified threats to Simpson that saw the latter resign as chairman whilst retaining his shareholding. Russo took over as chairman with a minority stake and no support from an understandably reticent Simpson and the other major shareholder, Tory peer Lord Ashcroft, and propped up the club’s balance sheet with loans. Last week, in anticipation of being voted off by Simpson and Ashcroft’s majority shareholding, the Russos resigned and demanded immediate repayment of the ~£5m that they have loaned the club.
With a much publicised shortfall of similar size already needed to meet the club’s commitments between now and the end of the season, the carrying out of this threat would inevitably lead to administration. Whilst the suspicion is that in this game of wink murder neither Russo (whose shares would be devalued) nor Ashcroft (in the run up to a general election in a key marginal seat) can afford to see Watford go into administration, let alone receivership. Watching from a distance, one feels powerless, nauseous and frustrated. The exaltation that greeted Lloyd Doyley’s marvellous first goal in Watford colours feels a lot more than ten days ago.
