Watford FC Looks to Sell 10% of Club by Offering Stake to Fans

(Bloomberg) -- Second tier English football team Watford FC is looking to sell 10% of the club to fans and other investors, in a rare example of a larger UK club selling a stake to supporters.

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The club has partnered with the digital-asset investment firm Republic to facilitate the sale. In 2022, New York-based Republic bought London-based crowdfunding platform Seedrs, which has raised money for small teams including AFC Wimbledon and Dorking Wanderers FC.

Sports teams have sporadically turned to asking fans for capital, historically in the form of debt. Teams including Bolton Wanderers and Queens Park Rangers have borrowed from fans in recent years. Allowing fans to own equity in a team, while once common, has become increasingly rare in the UK.

Watford FC, a former Premier League team, had revenue in the year to June 2023 of £66.2 million ($84.6 million), and is being valued at £175 million as part of the equity offering. The club made a profit of £24 million in the year after taking into account player trading.

Fans will not have any voting rights with their investment but the digital shares will pay out any dividends, a rare occurrence for football clubs.

Watford is owned almost 100% by the Pozzo family, who also own the Italian team Udinese Calcio. They are early proponents of the multi-club model, where players are often exchanged between teams of the same group. An earlier attempt to raise money in 2022 for the group never materialized.

“We are always looking at ways we can help grow Watford FC to deliver on our plans,” said Watford FC chairman and chief executive Scott Duxbury. Duxbury says he is determined to take the club back to the Premier League, where it has spent six out of the past ten seasons.

Andrew Durgee, Republic President, said the sale would be the largest digital equity offering of shares in an English football club.

Republic is backed by investors including Michael Novogratz’s Galaxy Digital, Broadhaven Ventures and Prosus NV. The firm allows so-called retail investors a chance to invest in companies — often startups — with as little as $10.

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