The Sweeper: The Watford Gap
The news this week that Watford’s financial crisis means a team in the Premier League as recently as 2007 are headed for administration, and the ten point deduction that would result and put their position in the Championship in serious jeopardy, came as a considerable surprise to most.
The best explanation of the backstory to what happened to cause this situation comes from Supporters’ Trust chief Graham Sterry, who explains why two members of Watford’s board, brothers Jimmy and Vince Russo, resigned at the AGM this week and demanded immediate repayment of the millions they were owed, the decision that has forced Watford into this immediate crisis.
My own interpretation of events is that the 3 directors representing the interests of Valley Grown Salads (Vince and Jimmy Russo and their nominee director Robin Williams) resigned because it was clear to them that they would inevitably be voted off the Board. A major shareholder had ensured that voting be on the basis of shareholdings of those voting. That is normal practice in a formal poll. Since the Russos between them own less than 30% of shares and the counter parties own in excess of 50% of shares, there could be only one result. The VGS directors resigned rather than be voted off the Board.
However, at the same time, they demanded the immediate repayment of loans made to the Club by VGS. That immediately would force the Club into administration since it would be unable to meet its commitments. Were that to happen, the Club would immediately be docked 10 points by the Football League [ .. ]
This is all about the outright ownership of the Club. We have two groups of people who have invested in the past – one for many years – both claiming to have the funds and, crucially, the desire to continue funding the Club. We should be comfortable but for their inability to work together. Instead we are being pitch forked into administration as a device to wrest control of the Club. The Supporters Trust can only regret and abhor such destructive behaviour. We should not be facing administration.
The Russos have turned down a further £7.5m rights-issue rescue package from that competing investor, majority shareholder Michael Ashcroft, offered on Wednesday, after the AGM. Independent director Graham Taylor concurs with the conclusion that Watford are facing crisis more out of what is increasingly appearing like malice than necessity. “Yesterday I saw an interview with Jimmy and he said he has not become a bad man overnight. I accept there is always more than one side to a story. But Jimmy, you walked into the AGM earlier this week, nobody knew what you were going to do, you resigned, you demanded immediately your £4.88m, payable within 48 hours. That’s when you did become a bad man. It was not in the interests of Watford Football Club.”
Edit: I recommend you read Twohundredpercent’s take on the Watford situation for an alternate view on Taylor’s comments that’s quite frankly much more informed than this round-up. Excellent stuff, and puts it into the important context of shareholder democracy at football clubs.
- There is of course plenty on the Champions League draw this morning, which was in no way rigged as the “dream returns” of Mourinho to Stamford Bridge and Beckham to Old Trafford mean we have two months of build-up to that to look forward to.
- Sometimes I just love the hyperbolic wording of the Sun. “Tottenham’s senior players have heaped shame on the club by organising a secret Christmas party in Dublin behind the back of manager Harry Redknapp.” Another piece in the paper adds more by saying “It was an audacious plot planned with military precision.”
- The Daily Mail has a worthwhile piece on Arsenal’s youth academy, with the best part probably the superb picture gallery. It’s all fluff, but there are some superb shots by Graham Chadwick inside the “talent factory”.
- There is plenty on the pressure mounting on Mark Hughes at Man City. David Conn says Hughes has no excuses left, Guus Hiddink is name-dropped again, and at the same time, there’s plenty of speculation that Hughes (even though his position is in apparently in severe doubt) will be allowed to go out and spend many more millions in the January transfer window, which doesn’t make a lot of sense to me.
The Sweeper appears every weekday, and once at the weekend. For more rambling and links throughout the day every day, follow your editor Tom Dunmore @pitchinvasion on Twitter.