Watford should be able to deal with the drop to the Championship better than following previous relegations. One part of the post-relegation coping strategy is an intrinsic part of the Pozzo model: player sales. The other is something new, and perhaps evidence of a lesson learned: not being lumbered with high wages in the second tier.
The big change this summer is the financial protection
afforded by the vast majority of the squad having significant wage cuts built
into their contracts. It is understood up to 80 per cent of the playing staff
will see a reduction of 50 per cent in their basic salaries, with the squad’s
lower earners seeing a drop of only around 30 per cent.
As Watford only spent one season back in the Premier League
(as opposed to five prior to that relegation) they only get two years of
parachute payments this time around. That roughly equates to 55 per cent of the
basic award (of approximately £100 million) in year one and 45 per cent in year
two. Clubs who stay in the top division for more than one season get a final
payment in year three at 20 per cent.
The fact that the club have been relegated again means that,
while outside investment would come in handy, it’s not deemed the best time to
negotiate. Informal discussions have taken place with various parties in recent
years — including one with Mexican football group Orlegi — but
internally, it’s accepted that seeking external help from a partner needs to be
brokered at the right time.
In November, a £50 million loan was taken out with
the Macquarie bank, which could be absorbed by a third-party investor if they
wanted to come on board, but it’s likely that getting people to the table when
Watford are upwardly mobile rather than down in the doldrums may be a smarter
negotiating position.
The controversial sponsorship deal signed last year with
crypto betting firm Stake.com saw the club earn £5 million up front, with
further bonuses due depending on their performance in the Premier League and
other competitions. If they’d stayed up, that is likely to have exceeded £6
million, but focusing on what the deal is now worth in the second tier is
clearly more pertinent after a disappointing season.
It’s understood that
— although part of the club’s 2022-23 budget — Watford will now receive closer
to £1 million for the forthcoming season. It highlights the instant drop in
revenue that comes with relegation.
The number of season tickets sold has already surpassed
12,000, with the target remaining above 14,000. Although the capacity is
21,000, the club are required to set a large chunk of tickets aside for away
supporters and hospitality sales.
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