The Political Economy of Football V2

Watford’s 2023/24 financial results covered their second season in the Championship following relegation from the Premier League.   Boosted by parachute payments, relegated clubs often bounce back quite quickly, though the Hornets have struggled. Despite going through managers like a hot knife through butter, Watford have actually done pretty well on the pitch, at least until the recent blip, as they have played in the Premier League in six out of the last nine seasons. Watford’s pre-tax profit almost halved from £24.1m to £12.8m, mainly due to a significant reduction in profit on player sales from £59m to £29m, though revenue also fell £8.6m (13%) from £66.2 to £57.6m. This was partially compensated by a £25m (27%) decrease in operating expenses from £94m to £69m, as the club “implemented several cost saving initiatives and made efficiencies across the business”.   As a result, Watford posted a large profit for the second year in a row, though this was again driven...

Watford have had 13 coaches in five seasons, unless I’ve lost count, which doesn’t exactly inspire confidence in the club’s executive leadership. Watford swung from a pre-tax £16m loss to a £24m profit in 2022/23, despite revenue dropping by £62m (48%) from £128m to £66m following relegation to the Championship. Operationally, this was largely offset by the club cutting expenses by £58m (38%) from £152m to £94m, but another big reason for the improvement in the bottom line was a significant increase in profit on player sales from £15m to £59m. Excluding player trading, Watford still made a substantial £28m operating loss, which was actually £4m worse than the previous season. The main driver of Watford’s £62m revenue decrease was broadcasting, which nearly halved in the Championship, falling £37m from £85m to £48m. Commercial income was also slashed by £26m (71%) from £36m to £10m.   However, match day was flat at £6.8m, while player loans actually increased from £0.5m to £...

From his Zurich base the tireless Swiss Ramble analyses another set of club accounts, this time Watford. Despite impact of relegation and COVID, the pre-tax loss reduced from £36m to £22m, even though revenue fell £63m (52%) from £120m to £57m, as profit on player sales shot up from £18m to £56m and expenses were cut £35m (21%). Other income included £2.5m insurance claim. Poor record on losses Even though the Hornets narrowed their loss to £22m, it was still one of the worst in the Championship, only “beaten” in 2021 by Bristol City £38m, Reading £36m and Boro £31m. Also worth noting that the other clubs relegated from PL in 2020 posted profits: Norwich £21m and Bornemouth £17m. Watford have now reported losses in three out of the last four seasons, even though they spent all but the last one in the Premier League. Their total loss over this period amounted to £79m. Overall, they had broken-even in the preceding 6-year period. The operating loss (i.e. excluding player sales ...

The authoritative Swiss Ramble reviews the 2019/20 financial results for Watford that covered a season that the club described as “unique and challenging”, as it ended in relegation after they finished 19th in the Premier League and they had three managers: Javi Gracia, Quique Sanchez. The Hornets swung from £10m pre-tax profit to £36m loss, as revenue decreased £28m (19%) from club record £148m to £120m and profit on player sales fell £4m to £18m, while expenses increased £9m (6%). Prior year boosted by £4.5m Marco Silva compensation. During their time in the Premier League Watford reported profits in 3 out of 5 seasons, though there is an overall deficit of £49m in this period, due to the hefty losses in 2018 and 2020. In the Championship, they tended to lose money, though the losses were quite small. One reason for   the club swinging from profit to loss in 2020 is exceptional items. Prior year was boosted by £4.5m compensation for Marco Silva’s move to Everton, while 2020...

Watford chief executive Scott Duxbury is confident about their financial situation, but in reality their accounts for 2016/17 show a mixed picture: Reason for optimism? Revenue was up from £95m to £124m but, as is the case for most Premiership clubs, this was almost entirely due to increased television income from the Premier League. It is the second lowest revenue figure of the 15 top flight clubs to have reported so far. 88 per cent of their income comes from television, but this is a typical figure for Premiership clubs outside the top six. There was a modest increase in pre-tax profit from £3.6m to £4m, but there would have been a £18m loss if it had not been for player trading, in particular the £20m sale of Odio Ighalo to Chinese club Changchun Yataiai. Gino Pozzi's business model is based on discovering rough diamonds and selling them on for profit and either Doucoure (attracting big interest from top clubs) or Richarlison may be sold on in the summer too keep the club...