• On Talking About Football Finance on Social Media

    It turns out that 280 characters of not carefully worded chunks is not a great medium to talk about football finance. Specifically, getting folks to understand what you’re trying to say requires a level of precision that I’m not willing to invest when firing off takes on a mobile phone, especially when there is an opinion embedded in said takes that some folks don’t agree with.

    This began first thing Friday morning, when I checked my email to see that Companies House has sent me a notification about Watford registering a new charge. It turns out that the club had arranged loan with Macquarie in which we get an immediate cash injection secured on the remaining payments for Ismaila Sarr due from Olympique Marseille over the course of the next couple of calendar years.

    I yawned, fired off a tweet about how I was surprised we haven’t done it yet and wondered what we needed the cash for, then didn’t think much of it. This is the type of transaction we’ve been quite used to given the aggressive loan repayment schedule and our revenue and cashflow being dramatically reduced thanks to relegation. Getting what football finance expert Kieran Maguire calls “posh payday loans” is par for the course: we need cash now, so we’ll pay a bank like Macquarie a cut of those future receivables in order to get the money now so we can meet our financial obligations. It’s not great, but this is what a relegated club has to do if it wants to pay down debt as well as field a competitive squad.

    The next day, right before the Leicester game, I saw some concerns online (or what I perceived as concerns) about this, and how the club (via Scott Duxburry) said over the summer we’d be debt free by the end of the year, and taking this loan out puts into doubts the validity of that statement. I, perhaps stupidly, replied (this was someone I followed and whose opinion I respected) saying that this wasn’t a new loan per se, just exchanging future receivables for a smaller lump sum now to get additional cashflow for whatever reason.

    What followed was odd. I had a couple of people relying to me, apparently annoyed at me for saying this wasn’t a new loan. One of them was has been replying to my posts for a couple years at least, always with something critical or nit-picky to say. If you’re a Watford fan on Twitter, he might have done it to you too. He kept saying I was wrong without actually addressing my points, and then started his usual tone-policing. He even corrected my grammar on an unrelated posted for improper conjugation on a collective noun! The last straw came when he replied to another tweet I sent asking folks to mute or block me if they don’t want to see my tweets (thanks, algorithm), saying I was playing the victim card. I then took my advice and blocked him so he won’t ever have to be annoyed by my arrogance or whatever. Funny thing: his replies probably made the algorithm inject more of my tweets into his timeline, which made it more likely he sees tweets from me that he won’t like. Like Thom Yorke said, you did it to yourself.

    The other person replying was actually pretty reasonable. He said I was wrong for saying it’s not a new loan, and he’s right. I mean, it’s a new charge on Companies House, so of course it’s an new loan in the technical sense.

    What I was trying to say that it’s not as if Gino rang up Macquarie and got them to wire £10M that is secured on something we don’t want to part with – like Vicarage Road. This is a new financial obligation, but we already know how we’ll pay for it – the future transfer fee instalments for Sarr from Marseille. We don’t have to find new cash to pay for it – it’s already on the books. It matters that the security isn’t Vicarage Road. Now THAT would be a problem, as defaulting on a loan like that means the stadium is Macquaries. This? The worst that can happen is that Macquarie takes the legal rights to those instalments, which is effectively where that cash is going to anyway.

    What I *should* have said instead is that in my opinion, this new loan isn’t something I’d be overly concerned about given this specific charge will be settled by payments owed to us from a Champions League club over the next two years, which is pretty safe IMO given that Macquarie is also willing to accept it as collateral.

    The reason I said what I said is because if someone concerned about the club’s financial situation reads that “Watford has borrowed £10M from Macquarie”, they might have a bit of a panic. And rightfully so if this means we are adding to our financial burden materially. But knowing that we are a club that has cash obligations greater than what we bring in, partly due to debt repayment to this very bank, I’m not surprised that we need money due to us in 2025 right now.

    I was expecting this, in fact, given Scott said we’d be “debt free” by this year’s end, which I take for clearing the refinanced consolidated loan from Macquarie that was once worth £50M, and it doesn’t include payables or Gino’s loan. The club, like me, was imprecise with their language, and as a result, has drawn the ire of some fans, much as I have, to a much, much smaller degree.

    So what did I learn? Be very, very precise when talking about technical details of something that people feel passionately about (Watford FC). If someone can blow pass your general sentiment and focus on aspects that you have verifiably gotten wrong, they will, especially when they disagree with your general sentiment, which I’d much rather they focus on instead. Whether this is or isn’t a loan isn’t the crux of what most people will have a problem with – whether we should be worried that Gino will piss this money away instead of paying down debt and effectively add to our future financial burden is.

    For me, I’ll need to see more to be worried about this, like splashing out £10M+ for players in January, or refinancing the existing Macquarie loan to extend the payment schedule. If those things happen, then I’ll inch closer to the panic button.

  • On 23/34, Success, and Expectations

    Let’s get my spiciest prediction out of the way: if Valerien Ismael keeps Watford in mid-table or above and stays out of the relegation fight all season, he will finish 23/34 as the club’s Head Coach.

    I could very well be proven wrong before Christmas, but the vibe I get is that expectations from Gino are at the lowest it’s ever been since he and his family took control of the club. Recruitment has been sensible and frugal, focused more on the out-goings than the in-comings, and there’s been no insinuation of promotion being our ambition this season. Ben Manga talks about having a 5-year contract and hoping to be in the Premier League by the end, so this doesn’t seem like a one-year project for him or Gino.

    This is why I believe that success this year for the club from management’s perspective won’t be defined by whether or not we are promoted. Given that, I think Ismael will be given more slack than any previous Watford head coach under Gino in terms of achievements on the pitch. It’s not that the owner’s trigger will be any less quick – it’s just that the criteria that he will judge Ismael by will be a lot different. Simply put, I believe mid-table will be good enough this year if his other expectations are met.

    What may those be? Perhaps consolidation in the league with a lower budget? A distinct playing style? Growth of young players? A star emerging that can be sold for a big fee? Not being in a relegation scrap? Look, I can’t read their minds, but for me, while I don’t dare expect these things, whether or not we achieve them will be how I define success this year. And the single biggest litmus test for success this year for me may be this: if Ismael is in the dugout at the Riverside on May 4th for our last match of the season, it would almost certainly have been a successful season to me, one that must have resulted in some manner of progress for the club and the players.

    But no, I don’t expect that we achieve most of these things. My only expectation is that Watford plays at least 48 league and cup matches. Aside from that, I can see us achieving none of these things given how the last two years have gone. Part of me knows it’s not rational, but I’m just steeling myself to be hurt again. The first match against QPR, the one that all the pundits have us winning handedly? I think it’ll be a draw. Not because of some thorough analysis of squad strength or how our tactics match up, but just pure, unbridled pessimism.


    Phew. That feels better. With Watford’s Championship season kicking off merely hours away, I’ve purged my bad vibes with this post. I’m ready to be hurt again.

    Come on you ‘orns!

  • On Hollywood Diversity and Authenticity

    That Oppenheimer has generated a lot of discussion from the Very Online should not be surprising. It is a treasure trove of delicious imperfections that can be ripped open and expounded on. Much of the discourse centre around Nolan and what he chose to include or exclude about the life and work of a, shall we say, “complicated” figure. Setting aside the fact that it’s an adaption of an opinionated biography, which provides a scaffold on which the film was built, who Nolan is and what his film-making tropes are should give you a pretty good idea of what the movie is going to be.

    Justifiably, folks have pointed out aspects of that period of history that were glossed over and the pro-Oppenheimer point of view the film takes: the existence and treatment of local indigenous people who were displaced by the Manhattan Project, the suffering of the Japanese people as the direct result of Oppenheimer and his team’s work, and the problematic behaviour of the titular man himself. I even read a tweet about how it takes 20 minutes into the movie before a woman speaks, which is then quickly followed by a sex scene.

    All of these points are true – though I couldn’t verify that last one since I didn’t time it myself so I’ll just take OP’s word on it. I think pointing these wrinkles out adds useful context to the discourse around a film that is critically lauded but only depicts one version of a complicated story. Props to the folks who raised these points. This is where the Very Online shine – providing space for sharing underrepresented perspectives.

    Where I start getting uncomfortable is when other folks yes-and these tweets and articles but takes it a step further, making sweeping declarations based on what they perceive as unforgivable sins. “You can’t support a movie that erases *fill in the blank*!” “Oh of course a white male auteur is once again filling his movies with white men – trash!” “Do we need to see ANOTHER film that centre the American perspective in WWII?”

    While I think folks are free to pass judgement and choose how they spend their money using whatever criteria they feel are appropriate, there’s a contradiction at the centre of some of these critiques that kind of blows past what I think is a bigger problem. Namely, do they expect Christoper Nolan, a cishet white man with some amount of privilege growing up, to tell this story from a POV other than his own? Filmmakers and other creatives are given some latitude to take on other perspectives when telling a story, but with the drive for authenticity in story-telling being a thing, how far out of his lane is too far for him to stray?

    If he were to tell this story from the point of view of the displaced local indigenous people, would that be something he can do authentically, no matter how much research he does? And would he be accused of appropriating a story that isn’t his to tell? And if he simply mentioned their treatment in the movie without making it into a core theme, would it be seen as tokenism or pandering?

    It’s Not Always About White People

    Hollywood at its core is a profit-making industry. Ensuring that movies and TV shows they put out make a profit overall is the overarching driving force behind studios and executives decisions. They may be dumb and shortsighted in how they are pursuing a profit-maximizing strategy, as their recent labor disputes show, but that is always their ultimate goal (besides lining their own pockets, I suppose).

    Now, the pursuit of profit does not justify the traditional biases they have in selecting what kinds of stories they tell and what kinds of storytellers they hire to tell those stories. Hiring white people (mostly men) to produce stories that cater to white people (mostly men of a certain age) it not a winning strategy, not for representation, and not for profit. The kinds of narrow biases of Old Hollywood rooted in conscious and unconscious prejudices often lead them to suboptimal decisions, doing the same old thing to appeal to a changing and diversifying set of consumers. Realizing nerds can be monetized and that superhero movies can be made to have broad four quadrant appeal has certainly not hurt the studios.

    As such, Hollywood will always make movies that the likes of Christopher Nolan want to make. Bankable, generational talents can turn virtually any idea into reality, and if he wants to do an adaption of a favourable biography of a scientist with a problematic track record around one of the biggest atrocities in human history, someone’s going to give him $100M to make that movie. And that’s what you get with Oppenheimer – a Nolan joint complete with the tropes, stylistic flairs, and themes that you’d normally associate with one of his movies. Like it or not, it is very authentically from his perspective. And it’s making bank.

    To hyper-focus on what Nolan did and did not get right in terms of representing a diverse set of perspectives and narratives is kind of besides the point: cishet white man gonna cishet white man. The problem with diversity in Hollywood isn’t about Nolan movies – it’s about all the other ones, the ones from creators who are not white men, especially the ones that aren’t made that should be, on merit. You’re never going to achieve a truly fair and equal Hollywood as long as those who are in charge stay within the same demographics when hiring filmmakers and showrunners. Pushing them towards a more inclusive world is about asking for other types of movies from other types of creators, not from a disproportionate fixation on and the boycotting of blockbusters from white people that didn’t do everything right with respect to representation.

    Should we expect better and shine a light on what Nolan missed in his telling of the Oppenheimer story? Definitely. This is the raison d’etre of online discourse. I’d take some fringy and cringey hit pieces in exchange for some nuggets of genuine insight from perspectives that aren’t often represented. All that is fair and good and I look forward to reading all of it because it’s interesting and most of those take-havers are my people. But don’t overly fixate on the lack of diversity of one white man’s point of view. That’s just who he is.

    In fact, I don’t need or want people like Nolan to be the direct conduit for increasing the diversity of stories told by Hollywood. I’m very happy with him telling his own authentic stories from his own point of view. What I want is for other creators to given the opportunity to do the same. I want more stories about the Chinese diaspora that doesn’t involve kung fu, generational trauma, or rebelling against parents. I want to see perspectives and people I haven’t seen on screen before – but I want those telling the stories to be from those diverse backgrounds, not from the same people we’ve always gotten. I don’t want to see James Gunn tackle the Chinese Head Tax. Guardians of the $50? No thanks.

  • On the Exploitation of Millionaires

    Running back value is at an all time low. The best backs in the league aren’t getting long contract extensions, and very good backs are let go for nothing, then sign short terms contracts worth 1/10th of what their quarterbacks get paid. This is partly due to the sheer supply of new blood in that position, that you can get 90% of the same production for 1/10th of the cost. But this is not the free market at work, but rather the rational outcome of the economic system set up by the NFL so that billionaires can exploit millionaires.

    American pro sports has evolved to be a money generating machine where profit is virtually guaranteed due to the pinning its largest expense – player compensation – to a percentage of sports-related revenues. This is similar to the wage cap being implemented in UEFA competitions in the coming years, the biggest difference is that in American sports, the cap is the same for all teams and calculated based on league revenues, so you don’t have the built in competitive imbalance (beyond local tax structures) that the UEFA system has where teams that make more money can spend more money.

    NFL, Exploiter Supreme

    In America, no league has been able to squeeze the players more than the NFL. Whereas all other leagues have guaranteed contacts (i.e. the terms of a contract is binding and will always been paid out regardless of injury or performance, unless there’s a material breach or a buy-out is negotiated), NFL teams can release players without fulling their end of the bargain at a whim. It’s absolutely wild for that to be a thing for a sport rife with major injuries that can derail or end careers on the field. But the NFL Players’ union doesn’t have enough leverage to wait out the owners, as the earning window for American football players are so narrow, withholding labour for a year plus is a hard-sell for much of the rank-and-file who don’t have a lot of time in the league.

    This brings us to the running back, a position that is crucial for entertaining the fans as well as making the team successful on offense. Running backs are some of most dynamic, explosive players on the field, so-called “weapons” that can devastate the opponent with their speed, power, and agility. Unfortunately, the position is also one that is stocked with viable replacements for star players. The likes of Walter Payton, Barry Sanders, and Marshall Faulk may be the stars of their day and got paid as such, but if they were still playing, they’d be the ones that are disproportionately hurt by the current economic system in the NFL.

    Thanks to a combination of age restrictions, maximum rookie contracts (i.e. caps for how much new players to the league can earn each year), and the franchise tag (i.e. designations that prevent out of contract players from signing with any team by forcing them to accept a salary that is relatively high *for the position*), the system artificially restricts the earning power of players up to their first seven years in the league. Unlike most positions, this happens to be the physical prime of running backs due to physical nature of the position, and the tolls their bodies take from being literally pounded into the ground 20-25 times each game. What this means is that other than for some truly special players, the best years a running back has to offer are the ones in which their wages suppressed, which is a wild and unfair paradox.

    This is why neither Josh Jacobs, the NFL’s leading rusher last year, nor Saquon Barkley, the New York Giant’s best offensive player, were able to come to an agreement on long contract extensions this off season. Barkley is reportedly signing a 1-year deal for a bit over the value of the tag, which is probably the most he can get. Despite his importance to the team, he’s projected to be paid only the 6th best. So even for the best players at the position, ones that are centrepieces of their teams offenses, they can’t get commitments from teams to pay them at the top of the market, which is falling as a result.

    The Name of the Game is Efficiency

    From the team’s perspective, this is entirely rational given the economic system in place. When you have a hard salary cap, it’s important to allocate resources efficiently, and the marginal gains from having a superstar running back instead of a rookie or cheap free agent is just not going to be worth the opportunity cost of being able to reallocate the excess cap room elsewhere on the roster. The risk of forgoing a known quantity to go with a cheaper alternative makes sense given the large amount of cap space that can be saved. And that’s not counting the high rate of injury that can torpedo a running back’s entire season, costing a team that player anyway.

    In a capped league, the name of the game is “excess value” – that is, getting more value from players than what you are paying them. In other words: exploitation. Rookie contracts are the best way of doing that: you get to have superstars on the field, but only pay them a predetermined, suppressed wage not based on how good they are, but where they were drafted. The idea for the players is that when these rookie contracts expire, the ones that have a demonstrated track record of high performance can sign big free agent deals and get paid what they are worth then.

    Barring injury, this generally works out OK for the players. Most of them get their second contracts in their prime at pretty close to market value, when they are in their mid to late 20s, and teams are willing to pay higher salaries in exchange for reducing the risk of not getting the production they are paying for. Players that get franchise tagged will make the mean salary of the top 5 highest paid players at that position (for the first year) or 120% of their previous salary, whichever is higher, so they are guaranteed to be compensated in line with the highest paid at that position while on the tag. They may not get the long term guarantees they want, but at least they’ll be paid like a star during the time they are on the franchise tag, and they can sign that long term deal a year (or two) later and still get paid.

    But for running backs, their production falls off much quicker than for other positions, as their prime get mostly used up during the time their wages are suppressed. When their rookie deals expire, teams are unwilling to commit to more than a year or two to them because they (rightly) fear their production will drop off. And if they are franchise tagged, the wage they get won’t be that high relative to other positions given that no running backs make a lot. It’s a vicious circle that ensures that players who play one of the most exciting positions in American football don’t get fairly compensated for the value they bring to fans.

    Old school analysts bemoan the devaluing of the running back and blame analytics for figuring out that drafting them high and signing them to hefty contracts is inefficient given the expected performance drop off starting in their late 20s. But the real blame goes to the league (and the union) for allowing such a financial structure to be created and maintained where it objectively rarely makes sense to pay even Hall of Famers the kind of money they arguably deserve. Simply put, the system is broken if the franchise tag value for a running back is the lowest of all non-special team positions.

    With the current setup, teams are given the incentive, due to wage suppression, to make bets on young, unproven players because of the potential excess value they can get. Even if you sign a known quantity in free agency, the one thing you’re unlikely to get is more than what you pay for, even if you sign superstars (because you’ll be paying them superstar salaries). Until the incentives change (e.g. eliminating the rookie wage scale), teams will always favour young players because you don’t have to pay according to talent or expect performance – and running backs, being largely replaceable and having short shelf-like, will suffer disproportionate as a result.

    The lesson to be learned here is that putting restrictions in place in terms of how money within a system is distributed, like a salary cap and limits on how much young players earn, can have unexpected and undesirable effects, creating winners and losers that may not be obvious at the get-go. Did the league and union collude to suppress running back pay? Probably not, but what’s done is done and now, it’s hard to reverse given that the total amount of money the players get is fixed. So the real lesson to be learned is this: be really careful when you do something that is hard to undo.

  • On Sarr and An Opportunity Lost

    It looks like Ismaila Sarr’s time at Watford is about to come to an end. It was probably at least a year too late, but whatever fee the club can wrangle from Marseille or whoever, it’ll be best for all parties to get this done. Getting his wage off the books and getting something for his registration will speed up the rebuild/loan repayment process and perhaps allow us to invest in other areas of the squad, even if it’s just opening up some room in the wage budget. For him, going to a club playing in Europe next season, one that should know how to use a pacy winger with a bit of specialness, can hopefully get him back to playing his best and reach that next level many of us believed he could when he first pulled on a Watford shirt.

    Out wide in space with the ball at his feet, Sarr can be devastating. He has made many Premier League and Championship left backs look silly with his dribbling, his pace, and on occasion, his finishing. Once he gets around you, all you can do is foul. Most people remember the brace against Liverpool that ended their super-long unbeaten league run, but there were many more. While fan sentiment around him soured in the last couple years because of his consistency and perceived lack of effort (the latter I don’t agree with), the high highs he had playing in yellow cannot be denied.

    Sarr was an exciting player when we signed him, and I think he’s still got that in him if he’s played in the right system. But from the very beginning, he was the wrong player for us. An out and out winger like him did not fit Javi Gracia’s system, nor really any of the (many) head coaches’ that came after. He didn’t often play out of position, per se, other than when he was asked to play centrally as a lone striker, but the roles he was given and the tactics he was playing under didn’t utilize his skillset optimally.

    Like the Liverpool match, his time with us was a mixed bag overall. We lost Gerard Deulofeu to a season-ending injury in that massive win, which I still think was the difference between relegation and survival for us that year. Sarr, while giving us some genuinely electrifying moments, can also be seen as an inflection point that changed the course of the club. With the margins between 17th and 18th being so fine, what would have happened if we had gotten greater value from the investment we made in him? Rather than spending that sum on a puzzle piece that didn’t quite fit, what if we had instead brought in another player (or three) that bolstered other areas we were lacking?

    Oh, the Opportunity Cost

    A club like Watford does not have a lot of money to spend on transfer fees. While the TV money from the Premier League was very nice, once a club establishes itself in the division, most of it will need to go to wages. After the first few seasons where the wage-to-turnover ratio is still reasonably low and there’s excess cash for transfers, the bulk of the money to bring in new players after that have to come from (additional) owner investment, profit from selling existing players, or loans, deferrals, and other means to increase the funding available to the club. Some time before Sarr was brought in, Gino invested an additional £35M into the club so we can continue upgrading the squad. Without this, there would’ve been no money for Sarr.

    Look. I understand that not all transfers are going to work out. Players we buy will not always perform at the level we expect them to. Sometimes, our scouting is just going to be wrong. But the least we can do is spread out our risks and only buy players whose skillsets and positions match the style we want to play. With Andre Gray, at least the intention of buying a striker was correct, even though the player did not play at a level commensurate with his cost. With Sarr, not only did we put all our eggs in one basket, we didn’t even really like eating eggs. It was wrong-headed from the start.

    Sarr the player arguably matched the scouting and merited the fee we paid given his age, especially in that first year. But it’s like buying a Ferrari for city driving – it looks cool, but we really couldn’t fully utilize its power. It wouldn’t matter if we were Man Utd, Arsenal, or a big side with more money to spend. For us, that was our one big bullet. Spending all that on him meant other areas were neglected. It’s like using all of your disposal income for a year to buy a car – even if it works as well as advertised, you’ve used up all your money and can’t do all the fun stuff you were planning to do with the car, so you end up just using it to go buy groceries. But hey, those trips are shorter now!

    The opportunity cost of bringing Sarr in – tying up so much money on a player in a position/role we arguably can’t get full value from given the head coach in place – prevented us from reinforcing in other areas. That creaky defense, other attacking players that better fit Javi’s 4-2-2-2 system, a goalkeeper who is better at distribution, etc. – I suspect we could’ve gotten the extra point and goal difference needed to get us to 17th that year had we utilized that money in other ways. Even if that weren’t the case, our squad overall would’ve been stronger with other positions fortified. We might have actually stood a chance of staying up after we got promoted again.

    Bah. We could talk what-could-have-been all day, but the real failure was in the process. Even if we weren’t relegated in 19/20, Sarr would’ve still been the wrong player to bring in at that time for that fee. It’s one thing to buy opportunistically regardless of position when you’re dealing with South American teenagers who aren’t expected to contribute right away (and who don’t cost £30M). But if you’re buying for the present, breaking your transfer record fee by over 50%, it’s really odd to spend that on a player who doesn’t tick all the boxes, the most important being whether he fits in with your current squad’s needs.

    You can even say that for a club with our budget, spending that much on a single player is risky and inefficient even if he were the perfect fit. Making multiple smaller bets creates a higher floor in terms of expected value, defusing the risk among several players, and likely avoiding the boom-or-bust extremes of making such a large wager on a single player.

    To me, the purchase of Sarr – once again, a player that I rate – has been Gino’s biggest mistake thus far in his tenure as the owner of Watford Football Club. The opportunity we squandered to more evenly and appropriately strengthen the squad while we were still doing well in the Premier League might not be one we’ll have again in a long time, given how well-funded and well-run many of the clubs outside the (financial) top six are these days. Even if Gino’s strategy works to perfection, buying young and selling high, we will at best have a puncher’s chance of going up again. And to stay up for more than a year? It’ll take a near miracle.

    We had our chance to entrench ourselves in the Premier League, but we lost it. But hey, at least the car was fun to drive!