A historic opportunity to own shares in a top UK club.
Business overview
| Location | Watford Hertfordshire, United Kingdom |
|---|---|
| Social media | |
| Website | www.watfordfc.com |
| Sectors | Entertainment Mixed Digital/Non-Digital B2C |
| Company number | 00104194 |
| Incorporation date | 22 Jul 1909 |
Investment summary
Business highlights
- 239% commercial revenue growth between 2018-22*
- Pre-tax profit of £24.1m in 2022/23 season*
- 6 seasons in the Premier League over last decade
- Partnerships with global brands American Airlines & ASUS
Pitch
About the Campaign
Under the direction of Owner Gino Pozzo and Chairman Scott Duxbury, Watford Football Club has undergone a transformation in recent years.
Watford’s facilities at Vicarage Road are award-winning. The renowned international recruitment and transfer network has proven itself by generating record profits. Strategic partnerships led to what is reported to be the largest increase in commercial revenues across all European clubs between 2018-22*, and the Club has continued to build a strong community.
The Club believes it now has the foundations in place to push for promotion into the Premier League and re-establish itself as a member of England’s top flight.
As part of this push, Watford is launching an offering where investors will not only have the opportunity to own shares, but may also be provided tokens and other exclusive offers, at the discretion of Watford FC.
*According to Off the Pitch Analysis.
Market Opportunity
During the 2022/23 season, Watford returned pre-tax profits of £24.1m, reported by SwissRamble to be the largest figure for a Championship club since 2010*.
Now, thanks to the development of new young players, planned additions to the squad and new team management, the Club believes promotion to the Premier League is within reach during the 2024/25 season.
Playing in the Premier League can bring significant incremental revenue in the first year alone thanks to TV and commercial revenues. Alongside this, the League’s reach across 188 countries allows activation of a larger international fan base, and clubs are better positioned to establish more lucrative sponsorship deals.
All 20 Premier League clubs are reportedly among the 30 richest football clubs in the world. As a result, promotion into the Premier League has been known to result in a club’s valuation growing 2x to 3x within a few years according to data collected by Transfermrkt.
Traction & Key Accomplishment
• Pre-tax profit of £24.1m in 2022/23 season*.
• 239% commercial revenue growth over five seasons (2018-22), reported to be the highest of any European football club over the period*.
• Six seasons in the Premier League during the last decade.
• Partnership deals with global brands including American Airlines, ASUS, Sega and Corpay (part of Fleetcor).
• Vicarage Road previously named Premier League Pitch of the Year, with Matchday hospitality voted best in the Premier League.
• Awarded the Advanced Level for the Premier League’s Equity, Diversity, and Inclusion Standard.
• Former players include Brazilian stars Richarlison and Joao Pedro, Troy Deeney, Gerard Deulofeu, Roberto Pereyra, Ismaila Sarr, Cucho Hernandez, Abdoulaye Doucoure, Emmanuel Dennis, and Odion Ighalo.
• Once owned by rockstar and superfan Elton John who is now Honorary Life President.
• Strong online presence with over five million followers worldwide, placing the club at #16 across England (ranking by OLGB.com).
• During Covid, the stadium was turned into a sanctuary for NHS staff with more than 40,000 free meals provided, bedrooms and meeting rooms, as well as a scrubs-washing service.
Team
• Gino Pozzo – Owner with over 35 years' experience in European football. Mastermind behind international scouting network and player development programme.
• Scott Duxbury – Chairman and CEO with extensive industry experience building and leading some of the UK's top clubs. Leader in Vicarage Road redevelopment which has been transformed since 2012, including awards for best pitch and Hospitality in the Premier League.
• Gianluca Nani – Sporting Director with experience internationally and work with multiple clubs in England.
• Tom Cleverley - Recently appointed Manager of Watford FC. Formerly England international and Manchester United, Cleverley served seven years as a player at Watford, including time as Club Captain.
• Paul O’Brien - Commercial Director with extensive experience in sports, joining Watford in 2015. Outstanding record in commercial development, overseeing what is reported to be the highest commercial revenue growth across Europe (2018-22).
• Emiliano Russo - CFO, has worked throughout his career in international finance across London and Dubai. Joining Watford in 2017, Emiliano has overseen what is reported to be the largest profit for a Championship Club since 2010.
Business Model
The Club has four key streams of revenue: Broadcast and Media rights, matchday revenue, commercial revenue, and player trading.
Broadcast and media rights comprises the highest percentage of ongoing revenue. Looking forward, this figure also has the greatest potential for growth; with significant potential uplift annually should the Club progress to the Premier League.
Matchday revenue increased significantly with the development of Vicarage Road (between 2012 to 2019), and has been maintained at a high level post-covid (2022-23).
The rate of commercial revenue growth set records and is reported to be the highest growth of any European club between 2018-2022*.
Player trading has a remarkable track record thanks to the club’s ability to leverage its scouting network to discover, attract and then sell young elite talent at a higher value. Over the past four years, the club calculates that player sales have generated £204m in proceeds with £146m realised as profits*.
*Financial information taken from Watford FC’s financial accounts. Profits from football clubs are highly dependent on team performance which can vary from year to year. Past financial performance is not an indication of future performance.
Use of Funds
Watford FC intends to use the proceeds to fund initiatives to improve the performance of the club’s teams, particularly its first team. The Club expects that such initiatives would include recruiting and training top players and coaching staff, and developing the brand of the club. These plans however are not set in stone and the Club reserves the right to change the use of proceeds from time to time as determined by the board of Directors of the Company in its sole discretion.
Key Information
Material Debt:
The company has the following outstanding loans:
1. Approximately £50M of intercompany loans within the group structure at interest rates ranging from 2.5% to 6% per annum. These loans are repayable with mixed dates in October 2024 and in October 2025, but have existed in the business for many years and are expected to be renewed on a yearly basis.
2. Approximately £19M of factoring loans from Macquarie bank relating to player transfers. The factoring loans relate to advanced funding for transfer fees receivable by the Club and are secured against the debt. There are various repayment dates which span from the time of this campaign until Dec 2025 with interest rates ranging between 6-9%. With most of the loans the amounts will still be receivable by the club and then onward paid to Macquarie bank. These loans include fixed charges over the company.
3. £119k loan from the Watford Trust at an interest rate of 1.5% above BOE rate (5.25%) per annum. The loan is to be repaid in August 2024.
A portion of the proceeds from this funding round will be used to fund the operations and growth of Watford’s teams and initiatives with a stronger balance sheet, as well as to meet general working capital commitments, including short term creditors.
Share Classes:
The Company has three classes of shares: Ordinary, A Ordinary and B Ordinary Shares.
All share classes rank pro rata and pari passu for the purposes of dividends and returns of capital. Ordinary Shares and A Ordinary shares confer voting rights, whereas B Ordinary Shares are non voting.
All Seedrs investors are receiving B Ordinary Shares.
Corporate Structure:
Investors in this round are investing in and will become shareholders of The Watford Association Football Club Limited (00104194).
The Watford Association Football Club Limited is a majority owned subsidiary of Hornets Investment Limited (08112624).
Hornets Investment Limited (08112624) is a wholly owned subsidiary of Hornet Management S.A.R.L. (a Luxembourg Company), which is in turn a wholly owned subsidiary of Diversify Sport Investment S.A.R.L. (a Luxembourg Company).
In addition to the intragroup and related party loans listed above, we understand that the Company is party to certain other contracts with other entities within its corporate group and/or related parties outside of the perimeter of this investment. Details of these contracts have not been provided to Seedrs.
Conversion Rate:
This campaign is part of a global funding raise across the Republic and Seedrs platforms. Any investment raised in USD on the Republic platform will be reflected in the Seedrs campaign at an FX rate of $1 USD = £0.78 GBP.
Investor perks
Investor perks
Watford FC is thrilled to unveil this unique campaign, offering investors the chance to not only own shares, but also to enjoy a range of exclusive perks. These perks are linked to your investment amount in the campaign.
* In the event Watford FC mints tokens, these perks require investors to receive tokens to their wallets, subject to the terms associated with the offering, the equity, and the tokens (if any). Terms and conditions may apply.
Important Information
• All perks offered by Watford FC in its campaign are subject to availability and any terms and conditions applied by Watford FC.
• All perks are eligible only for the 2024/2025 season, unless otherwise noted. - It is Watford’s responsibility to honour such perks.
• Seedrs and Republic disclaim any responsibility for the perks, and any purchasers of shares agree to hold harmless and release Seedrs and Republic from any liability.
• Tokens may be offered to investors at Watford FC’s discretion following this campaign. If tokens are offered, receiving tokens will be optional for any purchasers of shares. Watford FC aims to reward any purchasers using the token functionality with the above-mentioned additional perks, which are intended to enhance the existing perks offered in this campaign rather than replace them.
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