Watford offer shares to fans in bid to raise funds for transfers

Watford have offered fans the chance to buy shares in the club, which the club say could be used to help fund transfer activity.

The Championship side are the biggest side yet to sell stock via the digital economy with 10 per cent of the club being sold off in a crowdfunder.

Executives have assured potential investors they would not have to pay in volatile cryptocurrency as the owners attempt to raise £17.5 million.

“Part of the funding will be channelled into recruitment to strengthen [head coach] Tom Cleverley’s playing squad as we seek a return to the Premier League,” the club said. “We believe this project can form a key strand of football’s future finance, where investors and supporters alike can enjoy the fruits of the club’s future success.”

Watford, owned by Italian Gino Pozzo since 2012, have been seeking investment for the last few years. The scheme has been detailed in a letter to supporters days after it emerged the club held unrelated exploratory investment talks with Anthony Joshua.

Shares, which effectively value the club at £175 million, will be available through online trading platform Republic, which has worked with AFC Wimbledon.

Those who do purchase digital equity could eventually acquire “tokens”, crypto-linked fan engagement schemes which have previously drawn scrutiny from MPs. However, those behind the deal say “there are several key differences” with other NFT or fan token schemes.

“The most important is that this offering enables true ownership of equity shares in the club, which is not the case for NFTs or fan tokens,” the club said.

Watford insist the digital equity sale, part of “innovations” to power the club’s attempted return to the Premier League, is safe and regulated.

“Having looked at a number of options, we have decided to take the exciting and innovative step of becoming the first major English club to offer true ownership through digital equity,” the letter to fans said. “Digital equity is an easy and practical way to access shares in the club.”

Having posted a pre-tax profit of £24.1 million for the last financial year – the highest in the EFL – the club maintains it is offering a “fair valuation”.

“With a digital equity proposition such as this, excitingly, there is an opportunity for fans to also be involved and own shares in the club, alongside other investors,” the club said. “In addition to the digital equity, there will be the option to receive tokens and access exclusive offers, with plans to facilitate the future trading of the tokens.”

Joshua puts potential investment on hold

Joshua’s potential involvement would have been part of a consortium proposition. His spokesman has said he has no plans to immediately get involved in football club ownership, however.

Under the new scheme, the price per share has been set at £12.44 and the minimum investment is four shares totalling £49.76 for investors purchasing through the Seedrs platform, and eight shares totalling £99.52 for investors purchasing their shares through the Republic platform. Once the shares have been purchased, there is a lock-up period of 12 months before trading is allowed.

Fan tokens have become increasingly popular in recent years, with Manchester City, Arsenal, Leeds United and Juventus entering deals with Socios. The Culture, Media and Sport Committee (CMS) warned last October about the volatility of prices and the risk of financial harm to supporters who are convinced to buy the tokens for club access and rewards.

At Watford tokens will eventually enable fans to have “exclusive benefits, such as access to special owners’ meetings and select stadium areas”.

Republic “has a robust investor vetting system that protects the club from illicit third parties by applying internationally accepted Know Your Customer and Anti-Money Laundering (KYC/AML) standards”, the club added.

“Furthermore, the platform is regulated by the relevant financial authorities in each jurisdiction, with accreditation rules in certain geographies where relevant.”