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Watford FC

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A historic opportunity to own shares in a top UK club.

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Funded 3 Nov 2024
£2,000,004 target
£4,313,421 from 0 investors
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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
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Investment summary

Type Equity
Valuation (pre-money) £175.1M
Equity offered 1.13%
Tax relief N/A
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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
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Key features

  • Nominee investment min. £49.76 +

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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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This webpage is issued by Seedrs Limited (trading as Republic Europe) ("Republic Europe"), and has been approved as a financial promotion for the purposes of s.21 of the Financial Services and Markets Act 2000 by Prosper Capital LLP ("Prosper") which is authorised and regulated by the Financial Conduct Authority with firm reference number 453007 on 4 June 2024. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Republic Europe platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Republic Europe platform. It is not for distribution in the United States of America and all investment activities take place within the United Kingdom. Any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

Neither Republic Europe nor Prosper provide advice or recommendations in relation to any investment on this site. No communications from Republic Europe, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Neither Republic Europe nor Prosper provides legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Republic Europe, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from £175,064,662

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

The investee business is responsible for setting its own valuation, it has not been prescribed by Seedrs.

Pitch type

Investing in a regular equity campaign is the simplest and most common way to invest in a startup. You decide which business you want to invest in, and if the campaign hits its funding target then you will become one of their shareholders. As the company becomes more valuable, so do your shares; allowing you the opportunity to share in the future success of the business.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Nominee investment

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Nominee investment.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Nominee investment). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Security Token

A security token is a digital asset that represents ownership or other rights. It is a digital form of traditional investments. In the future, you may be able to trade your investment through compatible exchanges.

Warning

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None of the information in constitutes part of the campaign and it has not been approved or reviewed by Seedrs.

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