English club boosts transfer power by selling shares to fans
Championship side Watford is taking a bold approach by selling shares of the club to fans to quickly raise the club’s transfer budget. Watford has been stuck in neutral for the last two years after suffering relegation from the Premier League. In 2022/23 Watford finished 11th in the Championship. This past season, it fell to 15th, only six points above Birmingham City, which went down.
Part of the reason for Watford’s recent struggles is a lack of spending in the transfer market. Upon dropping down from the Premier League in the summer of 2022, Watford sold eight players on permanent deals. That included Hassane Kamara, Emmanuel Dennis and Cucho Hernandez, with the latter going to Major League Soccer. Watford did not make any splash signings, with the most expensive of the arrivals being Ismael Kone from Montreal.
One year later, it was the same story. Mid-table Watford spent just $5 million on transfers, while it sold a total of $60 million worth of players. That included the departures of Joao Pedro to Brighton for $37 million and Ismaila Sarr to Marseille for $15 million. Watford decided to hold onto that money instead of investing in more players. Watford remarkably had a goal differential of zero, which was far better than the teams around it in the table. Yet, the issues remained with an undermanned lineup to compete for promotion to the top flight.
Now, the Watford ownership group is looking for quick monetary success. Selling shares to fans raises funds, and it does so in a way that does not harm the future of the club. Watford is only making 10% of the club available, but it has a plan for how to use the money.
Watford shares give fans a piece of the club to help with funding
In an FAQ regarding the opening of shares in the club, Watford revealed where the new money would go.
“Capital raised from the sale will be used to fund initiatives that will improve the performance of the Club’s teams, particularly the men’s first team, in areas such as the recruitment of players, training and coaching, and will also help to further develop the Watford FC brand.”
Each share of the club costs $15.89. However, fans must purchase a minimum of four shares for $63.56. The club is selling $22.35 million worth of shares, which is 10% of the team’s $223.54 million valuation that it set. Therefore, Watford is selling about 1.4 million shares, which can be bought in packs of four at the minimum.
Watford later clarified that those who buy shares will have the opportunity to sell their ownership tokens at a later date while also receiving exclusive benefits. It is worth noting that these shares come without voting powers. That remains in the hands of the club’s hierarchy.
Watford says it is not in financial hardship
The club added that this is not a move of desperation. Watford has recorded strong pre-tac profits in each of the last two seasons. In the 2022/23 financial year, Watford reported over $30 million in pre-tax profit. That is the highest among clubs in England outside the Premier League.
The goal is to bring the club back into a position where it is a consistent Premier League side. Raising money and the financial standing currently is the club’s method to make that happen.
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